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CIVIL APPELLATE JURISDICTION Civil Appeal No. 28 of 1966. Appeal by special leave from the judgment and Order dated September 27, 1962 of the Bombay High Court in Income-tax Reference No. 39 of 1961. T. Desai, Gopal Singh and R. N. Sachthey, for the appellant, K. Sen, O. P. Malhotra, Y. P. Tarvei and Ravinder Narain for the respondent. The Judgment of the Court was delivered by Ramaswami, J. This appeal is brought, by special leave, from the judgment of the High Court of Bombay dated September 27, 1962 in income-tax Reference No.39 of 1961. The respondent- Godavari Sugar Mills Ltd.-is a Public limited companypany. The assessment year in this case is 1949-50. The relevant accounting year ended on May 31, 1948. The Annual General Meeting of the respondent was held on December 30, 1948. At that meeting a sum of Rs. 3,68,433/- was declared as the dividend. Since the dividend fell short of the requisite percentage under s. 23A of the Income-tax Act hereinafter called the Act the Income-tax Officer passed an order, on March 11, 1955 under the provisions of s. 23A of the Act that the undistributed portion of the assessable income of the respondent of the previous year as companyputed for incomE- tax purposes and reduced by the amount of income-tax and super-tax payable by the companypany in respect thereof shall be deemed to have been distributed as dividend amongst the shareholders as at the the following, namely, reserves, profits and appreciation of assets, or b the average annual dividend of the companypany determined in the manner specified in sections 5 to 7, whichever is higher. Section 12 provided Any Director, Managing Agent, Manager or other Officer or employee of a companypany who companytravenes or attempts to companytravene or abets the companytravention of or attempt to companytravene any of the provisions relating to the distribution of dividend or the issue of preference shares, companytained in this Ordinance or in any rule, numberification or order issued thereunder, shall be punishable with imprisonment for a term which may extend to two years, or with fine, or with both. Section 2 b of the Ordinance defines a Company to mean A public companypany as defined in clause 13-A of section 2 of the Companies Act. It is number disputed by the parties that the respondent-company was a companypany within the meaning of the Ordinance and that the provisions of the Ordinance applied to it. It was also admitted that the dividend declared by the respondent companyplied with the requirements of the Ordinance. It was companytended by the respondent that the Ordinance prohibited it from declaring any larger amount as dividend than that already declared by it. The companytention was rejected by the Income Tax Officer. The order of the Income-tax. Officer dated March 11, 1955 was companyfirmed by the Appellate Assistant Commissioner in appeal and, on further appeal, by the Tribunal. At the instance of the respondent the Tribunal referred the following question of law for the determination of the High Court Whether on the facts of this case, an order under section 23A for the assessment year 1949-50 was validly made in the case of this companypany to which the provisions of the Public Companies Limitation of Dividends Ordinance, 1948, applied on the date of the Annual General Meeting but to which the Act replacing the Ordinance ceased to apply within the period of 6 months referred to in Section 23A 1 ? By its judgment dated September 27, 1962, the High Court answered the question of law in favour of the respondent. In support of this appeal Mr. S. T. Desai put forward the argument that s. 23A of the Act companytemplated a declaration of dividend number only on the date of the Annual General Meeting 802 . but also at any further point of time within a period of 6 months from the date of the Annual General Meeting. It was pointed out that the Ordinance was repealed by the Public Companies Limitation of Dividends Act Act No. 30 of 1949 hereinafter referred to as the 1949 Act which came into force on April 26, 1949. S. 2 3 1 of the,1949 Act removed the restriction imposed by the Ordinance with regard to Public Companies to which the provisions of sub-s. 1 of s. 23A of the Act applied. It was submitted that it was possible for the respondent-company to declare further dividends within the said period of 6 months companytemplated by s. 23A of the Act. The Annual General Meeting was held on December 30, 1948 and the six months period from that date expired on June 30, 1949. The restrictions imposed by the Ordinance were lifted on April 26, 1949 and so during the period from April 26, 1949 to June 30, 1949 it was possible for the respondent companypany to declare further dividends and to companyply with the requirements of s. 23A of the Act. It was argued that as the respondent-company failed to do so the Income-tax Officer was legally justified in making the order under s. 23A. On behalf of the respondent Mr. Sen companytended that s. 23A 1 of the -Act did number companytemplate declaration of further dividend after the holding of the Annual General Meeting and, in any event, the provisions of the Companies Act did number permit the declaration of any further dividend after the holding of the Annual General Meeting. Mr. Sen referred to the decision of the Calcutta High Court in Raghunandan Neotia v. Swadeshi Cloth Dealers . Ltd. in support of this argument. It is number, in our opinion, necessary to express any companycluded opinion on this aspect of the case, because we companysider that, in any event, in view of the fact that the Ordinance was in force on the date of the holding of the Annual General Meeting of the respondent the Income tax Officer had numberpower to pass any order under s. 23A of the Act. The Ordinance was in force on December 30, 1948 on which date the Annual General Meeting of the respondent took place and a sum of Rs. 3,68,433/- was declared as dividend. Section 23A provides that on the fulfilment of certain companyditions set out therein the Income-tax Officer shall make an order in writing that the undistributed portion of the assessable income of the respondent of the previous year as companyputed for income-tax purposes and reduced by the .amount of income-tax and supertax shall be deemed to have been distributed as dividend amongst the shareholders as at the date of the General Meeting aforesaid. It is clear therefore that the order which the Income-tax Officer is empowered to make under s. 23A of the Act is that the undistributed income shall be deemed to have been distributed amongst the shareholders as at the date of the Annual General Meeting. Now, the question is whether 1 34 Com. Cu. 570. it was legally permissible for the Income-tax Officer to make the order which he has made on March 11, 1955 in the present case. The legal fiction as enacted under s. 23A of the Act is that the undistributed portion of the assessable income is deemed to have been distributed as dividend amongst the shareholders as at the date of the Annual General Meeting. In other words, the numberional distribution is number by the Income-tax Officer but is by the Company itself at its Annual General Meeting. Since the provisions of the Ordinance imposed the restriction on the declaration of dividend beyond a particular limit that restriction will equally be binding for the Income-tax. Officer and if the respondent is prevented from declaring a higher dividend than that declared on the date of the Annual General Meeting, the Income-tax Officer would be likewise prohibited by the Ordinance from passing an order that a higher dividend than that actually declared shall be deemed to have been declared at the date of the respondents Annual General Meeting. To put it differently, if in actuality a higher dividend companyld number lawfully have been declared by the respondent, the Income-tax Officer companyld number pass an order that such higher dividend should be deemed to have been declared, for the deemed declaration will suffer from the same legal restrictions which an actual declaration is subject to. In our opinion, the prohibition imposed by s. 3 of the Ordinance applies number only to the actual dividend declared but also to numberional dividend deemed to have been declared under s. 23A of the Act. There is a manifest repugnancy between the provisions of the Ordinance and of s. 23A of the Act and it must be taken that there is an implied repeal of s. 23A of the Act to the extent of that repugnancy created by s. 3 of the Ordinance and so long as the Ordinance remains in force. In view of the provisions of ss. 3 and 12 of the Ordinance the fiction created by s. 23A cannot, therefore, be brought into existence and the Incometax Officer cannot pass an order under the provisions of that section. As observed by Lord Asquith of Bishopstone in East End Dwellings Co. Ltd. v. Finsbury Borough Council If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the companysequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. One of those in this case is emancipation from the 1939 level of rents. The statute says that you must imagine a certain state of affairs it does number say that having done so, you must cause or permit your imagination to boggle when it companyes to the inevitable companyollaries of that state of affairs. 1 11952 A.C. 109, 132. It is, indeed, true that as a result of the order of the Income-tax Officer there is numberfactual distribution of dividend but it is only a fictional or numberional distribution of dividend which was number, in fact, received by the shareholders. The section merely enacts that numberional dividend is deemed to have been distributed as at the date of the Annual. General Meeting, but even for bringing Into existence that legal fiction there must be numberstatutory prohibition as the Ordinance in the present case. We proceed to companysider the next companytention of the appellant that s. 13 of the 1949 Act repealed the Ordinance companypletely and the effect of this section was that the Ordinance was obliterated from the Statute Book as if it never existed and, therefore, there was numberbar in the way of the Incometax Officer to make. the order on March 11, 1955. Section 13 of the 1949 Act provides as follows 13 1 . The Public Companies Limitation of Dividends Ordinance 1948 XXIX of 1948 is hereby repealed. Notwithstanding such repeal, any rules made, action taken or thing done in exercise of any power companyferred by or under the said ordinance shall be deemed to have been made, taken or done in exercise of the powers companyferred by or under this Act as if this Act had companye into force on the 29th day of October 1948. We are unable to accept this argument as companyrect. In the first place, the repeal of the Ordinance under s. 13 of the 1949 Act is immaterial, for, as we have already stated, s. 23A has created a fiction of distribution of the undistributed income as dividend and the section further states that it would be deemed as if it was distributed on the date of the Annual General Meeting. Since the numberional distribution companytemplated by s. 23A of the Act is as if the numberional distribution took place at the date of the Annual General Meeting it is the law which prevailed as on the date of the Annual General Meeting which has to be taken into account in companysidering the issue as to the legal validity of the order made by the Income-tax Officer. In the second place, Mr. S. T. Desai is number right in his companytention that the effect of s. 13 of the 1949 Act is to obliterate the Ordinance companypletely from the Statute Book. Section 6 of the General Clauses Act Act 10 of 1897 states as follows Where this Act, or any Central Act or Regulation made after the companymencement of this Act, repeals any enactment hitherto made or hereafter, to be made, then, unless a different intention appears, the repeal shall number- .lm15 a revive anything number in force or existing at the time at which the repeal takes effect or b affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder or c affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed or d affect any penalty, forfeiture or punishment incurred in respect of any offence companymitted against any enactment so repealed or e affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid and any such investigation, legal proceeding or remedy may be instituted, companytinued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had number been passed. The reason for enacting S. 6 of the General Clauses Act has been described by this Court in State of Punjab v. Mohar Singh as follows Under the law of England, as it stood prior to the Interpretation Act of 1889, the effect of repealing a statute was said to be to obliterate it as companypletely from the records of Parliament as if it had never been passed, except for the purpose of those actions, which were companymenced, prosecuted and companycluded while it was an existing law. A repeal therefore without any saving clause would destroy any proceeding whether number yet begun or whether pending at the time -of the enactment of the Repealing Act and number already prosecuted to a final judgment so as to create a vested right. To obviate such results a practice came into existence in England to insert a saving clause in the repealing statute with a view to preserve rights and liabilities already accrued or incurred under the repealed enactment. Later on, to dispense with the necessity of having to insert a saving .clause on each occasion, section 38 2 was inserted in the Interpretation Act of 1889 which provides that a repeal, unless the companytrary intention appears, does number affect the 1 1955 I S.C.R. 893, 897. previous operation of the repealed enactment or anything duly done or suffered under it and any investigation, legal proceeding or remedy may be instituted, companytinued or enforced in respect of any right, liability and penalty under the repealed Act as if the Repealing Act had number been passed. Section 6 of the General Clauses Act, as is well known, is on the same lines as section 38 2 of the Interpretation Act of England. |
P. NAOLEKAR, J. The accused-appellants belong to Sakkanwali Village, Police Station Sadar Muktsar, District Muktsar, Punjab. The deceased Harbans Singh was the neighbour of the appellants. There was a dispute on the demarcation of the Shamlat land. Some portion of this land is claimed by the accused-appellants and some of the land was being claimed by Harbans Singh, the deceased. The Shamlat land has number been demarcated number a particular portion of the land was in exclusive possession of either the appellants or the companyplainant party. As per the First Information Report lodged by Harvinder Kaur at 10.30 P.M. on 23rd February, 1996, the prosecution story unfolded is, that on 23rd February 1996 at about 5.30 P.M., the companyplainant Harvinder Kaur PW-1 along with Jasvinder Kaur PW-2 , wife of Jaspal Singh, were making company-dung cakes in the Shalmat land. Harbans Singh after providing fodder to the cattle was talking to Jaspal Singh. In the meantime, Mohinder Singh A-1 and Nasib Singh A-3 , armed with licensed 12 bore double barrel guns, Naginder Singh A-6 armed with dang, Sukhdev Singh A-5 armed with kassia, Beant Singh A-2 armed with kirpan and Nirbhai Singh A-4 armed with kassruli came to the spot. Mohinder Singh A-1 raised lalkara that the companyplainant party be taught a lesson for grabbing and making addition of the land of the accused with that of the land of the companyplainant party. Then Mohinder Singh fired shot from his licensed gun at Harbans Singh, which hit him on the left side of the chest. When the companyplainant PW-1 ran towards her husband to save him, Nasib Singh A-3 fired a shot from his double barrel 12 bore gun, which hit her on the ankle of left foot. At that time Mohinder Singh fired another shot, which hit on the interior side of the right thigh of Harbans Singh, the deceased. At the same time Naginder Singh A-6 gave dang blows to Jaspal Singh and Nasib Singh again fired shot on the right leg of Jasvinder Kaur. An alarm was raised which attracted Gurbans Singh and Mander Singh sons of Gurdev Singh, Pritam Singh and Gurmit Singh sons of Bhag Singh, Madan Singh son of Avtar Singh and Mukhtiar Singh son of Mehar Singh, residents of Sakkanwali Village. When they tried to intervene and rescue the members of the companyplainant party, Mohinder Singh and Nasib Singh fired shots at them hitting the right flank of Madan Singh and left leg of Pritam Singh. Similarly, Sukhdev Singh, Beant Singh and Nirbhai Singh caused injuries to Mander Singh, Gurbans Singh, Mukhtiar Singh and Gurmit Singh. After causing the aforesaid injuries, all the accused ran away with their respective weapons. Thereafter, Gurmit Singh arranged for the vehicle and took the injured to the Civil Hospital, Muktsar. However, Harbans Singh succumbed to his injuries on his way to the hospital. The remaining injured were got admitted to the Civil Hospital at Muktsar. The inquest report of the dead body of Harbans Singh was prepared in the presence of Jaspal Singh and Mander Singh. The special report reached the Illaqa Magistrate at 5.00 A.M. on 24th February, 1996. After the investigation the accused persons were arrested and prosecuted. Appellants Mohinder Singh, Sukhdev Singh and Naginder Singh had taken the plea of alibi stating that on the date of occurrence they along with Bachittar Singh and Harmanjit Singh had gone to the village Jharriwala to see a match for the grand daughter of Naginder Singh and had returned late in the night. As such they were number present on the date at the place of occurrence and had been falsely implicated by the companyplainant side. The other appellants while admitting the incident asserted that Harvinder Kaur had given wrong version of the facts, in fact, Nasib Singh was present at his house. Nirbhai Singh and Beant Singh came to know that Harbans Singh deceased , Jaspal Singh PW-9 , Gurdev Singh, Mander Singh armed with gandasas along with some other persons were placing company-dung cakes in their plot land to take forceful possession of the land and when Nirbhai Singh and Beant Singh went to the spot to make enquiries, the aforesaid persons attacked them and caused injuries. Nasib Singh, Gurmail Singh and Angrez Singh intervened to save Nirbhai Singh and Beant Singh. Gurmail Singh and Angrez Singh caused injuries to the companyplainants side. It was further asserted that in the meanwhile, some other persons companylected there and Nasib Singh in self-defence of his property and person fired shots which hit the companyplainants side. The prosecution has mainly based its case on the eye witnesses account of the incident deposed by Harvinder Kaur PW-1 , Jasvinder Kaur PW-2 , Jaspal Singh PW-9 and Pritam Singh PW-10 , the injured witnesses. The postmortem of the deceased Harbans Singh was companyducted by Dr. Kirandeep PW-4 and she had found fire-arm injuries on the person of the deceased. In her opinion, the cause of death was shock and haemorrhage as a result of injury to pericardium and heart, which was sufficient to cause death in the ordinary companyrse of nature. Dr. M.G. Sharma PW-3 had examined Mukhtiar Singh and Jaspal Singh. On 23rd February, 1996, Dr. Tarlochan Singh PW-15 examined Harvinder Kaur PW-1 , Gurmit Singh, Pritam Singh, Jasvinder Kaur PW-2 and Mander Singh. The doctors found the injuries on the person of the persons examined by them. Nirbhai Singh A-4 and Beant Singh A-2 were also examined by Dr. APS Kochar DW-1 who had found some injuries on the person of A-4 and A-2. At the instance of the accused Mohinder Singh and Nasib Singh, licensed guns were recovered from their possession. After appreciation of the evidence on record, the trial companyrt companyvicted all the accused persons as under i Mohinder Singh Beant Singh Nasib Singh Nirbhai Singh Sukhdev Singh Naginder Singh U s 148 of the P.C. To undergo rigorous imprisonment for a period of one year, each. ii Mohinder Singh U s 302 of the P.C. To undergo rigorous imprisonment for life and to pay a fine of Rs. 10,000/- and in default of payment of fine to further undergo rigorous imprisonment for a period of one year for companymitting the murder of Harbans Singh. iii Beant Singh Nasib Singh Nirbhai Singh Sukhdev Singh Naginder Singh U s 302 r w S. 149 P.C. To undergo rigorous imprisonment for life and to pay a fine of Rs. 10,000/- each and in default of payment of fine to further undergo rigorous imprisonment for a period of one year each for companymitting the murder of Harbans Singh. iv Nasib Singh Mohinder Singh U s 307 P.C. To undergo rigorous imprisonment for a period of seven years and to pay a fine of Rs. 2000/- each, and in default of payment of fine to further undergo rigorous imprisonment for six months each, for attempting to murder Harvinder Kaur, Jasvinder Kaur, Modan Singh Pritam Singh by causing gun shot injuries. v Beant Singh Nirbhai Singh Sukhdev Singh Naginder Singh U s 307 r w S. 149 P.C. To undergo rigorous imprisonment for a period of seven years and to pay a fine of Rs. 2000/- each and in default of payment of fine to further undergo rigorous imprisonment for six months, each for attempting to murder Harvinder Kaur, Jasvinder Singh, Modan Singh and Pritam Singh by causing fire arm injuries. vi Beant Singh Sukhdev Singh U s 326 P.C. To undergo rigorous imprisonment for a period of three years and to pay a fine of Rs. 1500/- each and in default of payment of fine to further undergo rigorous imprisonment for 3 months each, for causing grievous hurt to Gurbans Singh Mukhtiar Singh. vii Mohinder Singh Nasib Singh Nirbhai Singh Naginder Singh U s 326 r w S. 149 P.C. To undergo rigorous imprisonment for a period of three years and to pay a fine of Rs. 1500/- each and in default of payment of fine to further undergo rigorous imprisonment for three months, each for causing grievous hurt to Gurbans Singh and Mukhtiar Singh. viii Naginder Singh Sukhdev Singh U s 325 P.C. To undergo rigorous imprisonment for a period of two years and to pay a fine of Rs. 1000/- each and in default of payment of fine to further undergo rigorous imprisonment for 3 months, each for causing grievous hurt with blunt weapon to Jaspal Singh and Mukhtiar Singh. ix Mohinder Singh Nasib Singh Nirbhai Singh Beant Singh U s 325 r w S. 149 P.C. To undergo rigorous imprisonment for a period of two years and to pay a fine of Rs. 1000/- each and in default of payment of fine to further undergo rigorous imprisonment for 3 months, each for causing grievous hurt with blunt weapon to Jaspal Singh and Mukhtiar Singh. x Beant Singh Sukhdev Singh U s 324 P.C. To undergo rigorous imprisonment for a period of one year and to pay a fine of Rs. 500/- each and in default of payment of fine to further undergo rigorous imprisonment for two months each for causing simple hurt to Mander Singh Mukhtiar Singh. xi Mohinder Singh Nasib Singh Nirbhai Singh Naginder Singh U s 324 r w S. 149 P.C. To undergo rigorous imprisonment for a period of one year and to pay a fine of Rs. 500/- each and in default of payment of fine to further undergo rigorous imprisonment for 2 months, each for causing simple hurt to Mander Singh Mukhtiar Singh. xii Naginder Singh Beant Singh Nirbhai Singh Sukhdev Singh U s 323 of P.C. To undergo rigorous imprisonment for a period of six months and to pay a fine of Rs. 200/- each and in default of payment of fine to further undergo rigorous imprisonment for 15 days, each for causing simple hurt to Jaspal Singh, Mander Singh, Jasvinder Kaur, Gurmit Singh Mukhtiar Singh. xiii Mohinder Singh Nasib Singh U s 323 r w S. 149 P.C. To undergo rigorous imprisonment for a period of six months and to pay a fine of Rs. 200/- each and in default of payment of fine to further undergo rigorous imprisonment for 15 days, each for causing simple hurt to Jaspal Singh, Mander Singh, Jasvinder Kaur, Gurmit Singh Mukhtiar Singh. The entire sentence was directed to run companycurrently. However, the period of detention already undergone by the accused companyvicts during investigation or trial was directed to be deducted from the period of their substantive sentences. Aggrieved by the order of companyviction and sentence an appeal was preferred in the High Court of Punjab and Haryana. It was urged before the High Court that there was a delay in lodging the FIR, which was lodged at 10.30 P.M. whereas the alleged incident took place at 5.30 P.M. on 23rd February, 1996 and the report to the Illaqa Magistrate had reached at 5.00 A.M. on 24th February, 1996, which goes to show that the companyplainant party had companysumed time in companyning up a story of their choice in companynivance with the police. That number-explanation of the injuries on the person of Beant Singh and Nirbhai Singh, dented the prosecution case and because of number-explanation of the injuries by the witnesses on the person of the accused, it can be inferred that the companyplainants side was suppressing the genesis of fight. That there was a discrepancy between the eyewitnesses version and medical evidence. That the plea of alibi taken by Sukhdev Singh, Naginder Singh and Mohinder Singh was proved by the defence and as such they companyld number have been companyvicted. It was lastly submitted that their presence at the spot was number unnatural as the houses of the appellants were adjoining to the place of occurrence and unlawful assembly with a companymon object to companymit the murder of Harbans Singh and cause injuries to other persons, cannot be inferred. The High Court recorded the findings that in the circumstances of the case, merely because there was some delay in lodging the FIR, it cannot be said that the prosecution had manufactured a story to falsely implicate the appellants, particularly so when the occurrence was admitted by the appellants, maybe with the denial of the presence of Mohinder Singh, Sukhdev Singh and Naginder Singh at the spot. The so called delay would at best call for more care and caution while scanning the entire evidence so that there would number be chances of false implication. The element of delay in registering the companyplaint or sending the same to the jurisdictional Magistrate by itself would number be fatal to the prosecution, if the evidence adduced by the prosecution was worthy of credence. The High Court found the eyewitnesses version credible and trustworthy. As for number-explanation of the injuries on the appellants Beant Singh and Nirbhai Singh, the High Court has found that there were numberinjuries on their person by gandasa, which was claimed in defence. According to the High Court, the injuries were superficial in nature except one on the person of Beant Singh which was in the shape of diffused swelling and the doctor had opined that there was numbervisible injury mark seen, which showed that numberinjury was caused by the blunt side of the gandasa otherwise it would have left some mark of violence. The effect of the number-explanation of the injuries on the person of the accused had to be judged from the entire factual position, and having done so, in view of the High Court, the prosecution had number suppressed the genesis of fight. The High Court opined that the appellants in the shape of aggressors formed an unlawful assembly causing the murder of Harbans Singh and caused injuries to nine persons. As per the High Court, there was numberdiscrepancy in the medical evidence and the eye-witnesses account for the injuries caused by the use of firearm. The distance between the assailants and the injured, as per the prosecution witnesses was 7-8 karams, whereas according to the medical evidence the shots fired were number from more than a distance of 4 ft. from the muzzle end of the gun. This is on account of blackening around the wound. The High Court has held that the witnesses are rustic villagers from whom accuracy about the exact distance cannot be expected. All the four injured witnesses examined have categorically stated in one voice that Mohinder Singh along with Nasib Singh armed with licensed guns came and fired at Harbans Singh, the deceased. On perusal of the site plan, it is clear that the place of occurrence is of very small in dimension. Five persons from the companyplainants side including the deceased were present on the plot, whereas the other five persons, who had received injuries, had also reached the spot after hearing the companymotion. From the appellants side, six persons entered the said plot. Thus, in all 16 persons were present at the time of incident and in such a situation it would number be possible for the witnesses to make the companyrect assessment of the distance, from where the shots were fired and in these circumstances the gun fires and the resultant injuries thereof, witnessed by the witnesses present and injured, cannot be disbelieved. Coupled with the fact that the licensed guns of the accused persons were recovered at the instance of the accused and the user of the same being companyfirmed by Forensic Science Lab, the witnesses version cannot be disbelieved. It was obvious that two guns had been used in the occurrence. The plea of alibi was disbelieved by the High Court on the grounds that the onus to prove the same heavily rests on the accused which they failed to discharge. On these findings, the High Court has reached an irresistible and unequivocal companyclusion that the appellants companyviction as recorded by the learned trial companyrt on different companynts deserves to be upheld and accordingly the appeal was dismissed. Aggrieved by the same, the present appeal by special leave is preferred before us. It may be mentioned that the accused appellant Mohinder Singh has been released by the State companysidering his age and his appeal is number being pressed by the companynsel for the appellant. The other accusedappellant Nasib Singh has been informed to have died, by the companynsel for the appellant and as such his appeal stands abated. Thus, we are companysidering the appeal as regards Beant Singh, Nirbhai Singh, Sukhdev Singh and Naginder Singh. It is companytended by the learned companynsel for the appellants that the prosecution has failed to explain the injuries caused to Nirbhai Singh A-4 and Beant Singh A-2 and, therefore, the prosecution has failed to establish the genesis of offence. The failure of the prosecution to offer any explanation regarding the injuries found on the accused would mean that the evidence led by the prosecution relating to the incident is number true or at any rate is number wholly true and thus reliance companyld number have been placed on that evidence to companyvict the accused persons. To prove the fact that Beant Singh and Nirbhai Singh have received injuries, the defence has examined Dr. APS. Kochar, District B. Officer, Civil Surgeon Office, Faridkot. The doctor stated that he had examined Beant Singh at 10.30 P.M. on 23rd February, 1996 at Faridkot and found four injuries on his person. The injuries were caused by a blunt weapon. Injury No.4 was declared as simple. On X-Ray examination report, injury Nos. 1 and 2 were also found as simple in nature and injury No.3 was grievous in nature. On the same day at 11.00 P.M., he examined Nirbhai Singh and found three injuries on his person. Injury No.1 was caused by a sharp weapon and rest of the injuries were caused by a blunt weapon. Injury Nos. 1 and 2 were simple and after getting X-Ray examination report injury No.3 was found to be grievous in nature. On cross-examination, it was admitted by him that he attached numberX-Ray report on his record. Similarly X-Ray report and skiagraph report were number on the judicial file. Injury on the person of Beant Singh companyld possibly be caused as a result of falling on the hard surface. Injury No.1 on the person of Nirbhai Singh companyld be caused with the blade of a razor. Injury No.2 companyld be caused if the nail struck at a hard surface. Injury No.3 on the person of Nirbhai Singh companyld be caused by falling on the hard surface. From the evidence of DW-1 , it is apparent that the injuries were simple in nature and the grievous nature of injury companyld number be proved by the doctor by producing the X-Rays and skiagraph, on the basis of which he had formed the opinion of the grievous nature of the injury on Beant Singh as well as on Nirbhai Singh. In the case of Lakshmi Singh and Ors. vs. State of Bihar 1976 4 SCC 394, it is observed that any numberexplanation of the injuries on the accused by the prosecution may affect the prosecution case. But such number-explanation may assume greater importance where the evidence companysisted of interested or inimical witnesses or where the defence gives a version which companypetes in probability with that of the prosecution. But where the evidence is clear, companyent and credit-worthy and where the Court can distinguish the truth from the falsehood, the mere fact that the injuries are number explained by the prosecution, cannot itself be a sole basis to reject such evidence and companysequently the whole case. In Rizan and Anr. vs. State of Chhattisgarh 2003 2 SCC 661, this Court has held that number-explanation of the injuries sustained by the accused at about the time of occurrence or in the companyrse of altercation is a very important circumstance. But mere number-explanation of the injuries by the prosecution may number affect the prosecution case in all cases. This principle applies to a case where the injuries sustained by the accused are minor and superficial or where the evidence is so clear and companyent, so independent and disinterested, so probable, companysistent and creditworthy, that if far outweighs the effect of the omission on the part of the prosecution to explain the injuries. This principle was discussed in Sekar alias Raja Sekharan vs. State represented by Inspector of Police, T.N. 2002 8 SCC 354 and was reiterated in Anil Kumar vs. State of U.P., 2004 13 SCC 257. All the three aforesaid judgments have approved the statement of law enunciated in Lakshmi Singhs Case supra . In the present case, there is a creditworthy evidence of PW-1, PW-2, PW-9 and PW-10 viz., Harvinder Kaur, Jasvinder Kaur, Jaspal Singh and Pritam Singh, who have vividly described the incident and the part played by each of the accused-appellants. All the four witnesses are injured witnesses and their presence at the spot cannot be doubted. The evidence led by the defence at best shows minor injuries suffered by Beant Singh and Nirbhai Singh which would number dislodge the prosecution case, which is established by the evidence of creditworthy witnesses and number-explanation of the injuries by the prosecution, if any, sustained by the accused-appellants would number result in disbelieving the prosecution version. To prove the case, the prosecution has examined four eye-witnesses. Harvinder Kaur PW-1 , w o Harbans Singh deceased has deposed that on the relevant day, her husband and Jaspal Singh were present at the place of incident where they were preparing company-dung cakes. She saw the accused-appellants proceeding towards the shamlat land. Mohinder Singh and Nasib Singh were armed with licensed 12 bore guns, Naginder Singh with dang, Sukhdev Singh with Kassia, Beant Singh with Kirpan, Nirbhai Singh with Kassruli. Mohinder Singh raised a lalkara that they would teach us a lesson for adding their land with our land. Mohinder Singh accused fired from his 12 bore gun towards her husband Harbans Singh which hit him on the left side of his chest. She ran towards her husband and Nasib Singh fired at her by his gun which hit her on her left ankle. Mohinder Singh fired another shot which hit her husband on his right thigh while lying on the ground. Naginder Singh-accused gave dang blows to Jaspal Singh by hitting him but she companyld number tell the place of injuries on the person of Jaspal Singh. Nasib Singh then fired from his 12 bore gun hitting Jasvinder Kaur on her right leg above her right ankle on the front side. Nirbhai Singh-accused caused injuires to Jasvinder Kaur with kassruli. They raised alarm. On hearing numberse Mander Singh, Gurbans Singh, Gurmit Singh, Pritam Sikngh, Madan Singh and Mukhtiar Singh came to the spot to rescue them from the accused. At that time Mohinder Singh fired from his gun hitting on the right flank of Madan Singh and left leg of Pritam Singh. Then Naginder Singh, Beant Singh, Sukhdev Singh and Nirbhai Singh with their respective weapons caused injuries to Mander Singh, Gurbans Singh, Gurmit Singh and Mukhtiar Singh. She has further stated in cross-examination that she was present at the spot 25-30 minutes prior to the occurrence and she had seen the accused at a distance of 7- 8 karams. The accused persons came carrying guns with them. The other accused were also with them and they came together. Mohinder Singh accused fired with the gun from a distance of 7-8 karams at Harbans Singh. Nasib Singh was at a distance of 7-8 karams from Jasvinder Kaur when he fired. Nasib Singh and Mohinder Singh had fired from 7-8 karams at Madan Singh and Pritam Singh. Further, Jasvinder Kaur PW-2 , another injured eyewitness, fully supports the version given by PW-1 of the incident. She specifically stated that Nasib Singh fired from his 12 bore gun towards her which hit her on her right leg above the ankle and the pellets hit her on abdomen and Nirbhai Singh gave kassruli blows on her left foot. Jaspal Singh PW-9 is another injured eye-witness examined by the prosecution who had described the incident and the participation of the accused persons in the incident as described by PW-1 and PW-2. He had specifically deposed that accused-Naginder Singh gave three dang blows to him, first blow hit on his shoulder and second blow was received by him on the back side at right hand. Pritam Singh PW-10 , another injured eye-witness, had supported the statements of the eye-witnesses in toto. The cross-examination of these witnesses companyld number show any companytradiction or discrepancy in their version in regard to the participation of the accused-appellants in the crime and the part played by them. The ocular version of the witnesses find support from the medical evidence of Dr. Kirandeep PW-4 who has companyducted the post-mortem on the deceased Harbans Singh. Statement of Dr. M.G. Sharma PW-3 , who examined Mukhtiar Singh and Jaspal Singh and statement of Dr. Tarlochan Singh PW-15 , who examined Harvinder Kaur Gurmit Singh, Pritam Singh, Jasvinder Kaur and Mander Singh, fully companyroborated the ocular version of the eye-witnesses. We find that the eyewitnesses were wholly reliable and supported the case of the prosecution to the hilt. The companynsel then has urged before us that the appellants before us have number caused any injury to Harbans Singh, the deceased, and, therefore, they companyld number have been companyvicted under Section 302 read with Section 149 of IPC for causing homicidal death of Harbans Singh. The companyviction under Section 302/149 companyld number be supported on the basis of the evidence led by the prosecution. The scope and ambit of Section 149 of IPC was the subject of discussion in various authorities of this Court. In Sukhbir Singh v. State of Haryana, 2002 3 SCC 327, it is held by this Court that an accused is vicariously guilty of the offence companymitted by other accused persons only if he is proved to be a member of an unlawful assembly sharing its companymon object. Once the existence of companymon object of unlawful assembly is proved, each member of such an assembly shall be liable for the main offence numberwithstanding his actual participation in the companymission of the offence. It is number necessary that each of the accused, forming the unlawful assembly, must have companymitted the offence with his own hands. The members of the unlawful assembly can be held liable under Section 149 IPC, if it is shown that they knew beforehand that the offence actually companymitted was likely to be companymitted in prosecution of the companymon object. It is true that the companymon object does number require prior companycert and a companymon meeting of mind before the attack. It can develop even on spot but the sharing of such an object by all the accused must be shown to be in existence at any time before the actual occurrence. In Rajendra Shantaram Todankar v. State of Maharashtra and Ors., 2003 2 SCC 257, this Court has held that Section 149 of the Indian Penal Code provides that if an offence is companymitted by any member of an unlawful assembly in prosecution of the companymon object of that assembly, or such as the members of that assembly knew to be likely to be companymitted in prosecution of that object, every person who at the time of the companymitting of that offence, is a member of the same assembly is guilty of that offence. The two clauses of Section 149 vary in degree of certainty. The first clause companytemplates the companymission of an offence by any member of an unlawful assembly which can be held to have been companymitted in prosecution of the companymon object of the assembly. The second clause embraces within its fold the companymission of an act which may number necessarily be the companymon object of the assembly, nevertheless, the members of the assembly had knowledge of likelihood of the companymission of that offence in prosecution of the companymon object. The companymon object may be companymission of one offence while there may be likelihood of the companymission of yet another offence, the knowledge whereof is capable of being safely attributable to the members of the unlawful assembly. In either case, every member of the assembly would be vicariously liable for the offence actually companymitted by any other member of the assembly. A mere possibility of the companymission of the offence would number necessarily enable the companyrt to draw an inference that the likelihood of companymission of such offence was within the knowledge of every member of the unlawful assembly. It is difficult indeed, though number impossible, to companylect direct evidence of such knowledge. An inference may be drawn from circumstances such as the background of the incident, the motive, the nature of assembly, the nature of the arms carried by the members of the assembly, their companymon object and the behaviour of the members soon before, at or after the actual companymission of the crime. Unless the applicability of Section 149 either clause is attracted and the companyrt is companyvinced, on facts and in law, both, of liability capable of being fastened vicariously by reference to either clause of Section 149 IPC, merely because a criminal act was companymitted by a member of the assembly, every other member thereof would number necessarily become liable for such criminal act. The inference as to likelihood of the companymission of the given criminal act must be capable of being held to be within the knowledge of another member of the assembly who is sought to be held vicariously liable for the said criminal act. In State of Rajasthan v. Nathu and Ors., 2003 5 SCC 537, this Court has held that if death had been caused in prosecution of the companymon object of an unlawful assembly, it is number necessary to record a definite and specific finding as to which particular accused out of the members of the unlawful assembly caused the fatal injury. Once an unlawful assembly has companye into existence, each member of the assembly becomes vicariously liable for the criminal act of any other member of the assembly companymitted in prosecution of the companymon object of the assembly. It is held in Parsuram Pandey and Ors. v. State of Bihar, 2004 13 SCC 189 that to attract Section 149 IPC the prosecution must prove that the companymission of the offence was by any member of an unlawful assembly and such offence must have been companymitted in prosecution of the companymon object of the assembly or must be such that the members of the assembly knew that it was likely to be companymitted. Unless these three elements are satisfied by the prosecution the accused cannot be companyvicted with the aid of Section 149 IPC. In Rabindra Mahto Ors., v. State of Jharkhand, JT 2006 1 SC 137, this Court has held that under Section 149 IPC, if the accused is a member of an unlawful assembly, the companymon object of which is to companymit a certain crime, and such a crime is companymitted by one or more of the members of that assembly, every person who happens to be a member of that assembly would be liable for the companymission of the crime being a member of it irrespective of the fact whether he has actually companymitted the criminal act or number. There is a distinction between the companymon object and companymon intention. The companymon object need number require prior companycert and a companymon meeting of minds before the attack, and an unlawful object can develop after the assembly gathered before the companymission of the crime at the spot itself. There need number be prior meeting of the mind. It would be enough that the members of the assembly which companystitutes five or more persons, have companymon object and that they acted as an assembly to achieve that object. In substance, Section 149 makes every member of the companymon unlawful assembly responsible as a member for the act of each and all merely because he is a member of the unlawful assembly with companymon object to be achieved by such an unlawful assembly. At the same time, one has to keep in mind that mere presence in the unlawful assembly cannot render a person liable unless there was a companymon object and that is shared by that person. The companymon object has to be found and can be gathered from the facts and circumstances of each case. The prosecution has established that all the accusedappellants came to the spot of incident together. All the accused-appellants were carrying deadly weapons. Two of them had carried 12 bore guns. Immediately on reaching the spot Mohinder Singh one of the accused had opened fire followed by firing by another accused-appellant Nasib Singh and in the same transaction the accused-appellants had caused several injuries to various persons, number only to the persons who were present at the spot but also to the persons who had reached the spot after hearing the companymotion. The facts found in the case clearly established the companymon object of the assembly. The knowledge of assembly that grievous hurt or death would be caused can be safely attributed to the members of the unlawful assembly because of the fact that two of the members of the assembly have carried the licensed guns. An inference can be drawn of the knowledge of companymon object and formation of companymon object from the behaviour of the members of the assembly of the accused persons, who came together with deadly weapons and immediately started attacks indiscriminately on the persons present there. As many as nine persons have received 31 injuries, which clearly establishes the companymon object of the unlawful assembly to do away with Harbans Singh and cause injuries to any person who tried to intervene. We are satisfied with the evidence led by the prosecution that companymon object of all the accused appellants of causing death of Harbans Singh was established beyond any doubt and, therefore, the accusedappellants were rightly companyvicted under Section 302 IPC with the aid of Section 149 of IPC apart from other companyvictions under other Sections of IPC for causing injuries to other persons. |
civil appellate jurisdiction civil appeal number 14 of 1959.
appeal by special leave from the award dated february 21
1958 of the central government industrial tribunal nagpur
at bombay in reference cgit number 12 of 1957.
sachin chaudhury s. n. andley j. b. dadachanji and
rameshwar nath for the appellant. s. r. chari and y. kumar for the respondents. 1960.
april 4. the judgment of the companyrt was delivered by
wanchoo j.-this is an appeal by special leave in an
industrial matter. the appellant is the chartered bank
bombay hereinafter called the bank . there was a dispute
between the bank and its workmen regarding the termination
of the service of one companysavala hereinafter called the
respondent who was working as an assistant cashier in the
bank. the system of working in the cash department of the
bank is that there is a chief cashier and under him are
about thirty assistant cashiers. the chief cashier has to
give security for the work of the cash department. companysequently all assistant cashiers are employed upon the
introduction of the chief cashier who guarantees each such
employee. by virtue of this guarantee the chief cashier
alone is unconditionally responsible to the bank for any
shortage which might occur in the cash department and no
security is taken from the assistant cashiers working
therein. in view of this guarantee by the chief cashier
there has been a longstanding practice in the bank that at
the end of the day when the cash is locked up under the
supervision of the chief cashier all the assistant cashiers
have to be present so that the cash may be checked before
being locked up. assistant cashiers therefore can only
leave the bank before the locking up of the cash after
obtaining permission of the chief cashier. on january 4 1957 the chief cashier reported to the
management that the respondent had been leaving the bank
without his permission for some time past before the cash
was checked and locked up in spite of the issue of a
departmental circular in that behalf on december 24 1956
by which all assistant cashiers including the respondent
were reminded of the longstanding practice that numberassistant
cashier should leave the bank without the permission of the
chief cashier before the cash was checked and locked tip. the chief cashier therefore stated that he was unable to
continue to guarantee the respondent and that unless the
respondents service was dispensed with his companyduct will
affect the security of the cash department. as the bank
wasnumber prepared to change the system in force in the cash
department the management decided to dispense with the
service of the respondent in accordance with the mode of
termination prescribed by paragraph 522 1 of the all india
industrial tribunal bank disputes award of march 1953
hereinafter referred to as the bank award . the bank was
also unable to employ the respondent in any other
department. it therefore informed the respondent on march
29 1957 that as the guarantee companyering his employment had
been withdrawn by the chief cashier the bank was unable to
continue to employ him. the numberice required under paragraph
522 1 was given and the amount due to the respondent
including retrenchment companypensation was paid to him and his
service was terminated. thereupon a dispute was raised by
the workmen of the bank and a reference was made by the
central government to the industrial tribunal with respect
to the alleged wrongful termination of the services of shri
d. companysavala by the chartered bank bombay and the
relief if any to which he is entitled. the case on behalf of the respondent was that he had been
working in the bank since september 1 1937 honestly and
efficiently as an assistant cashier in the cash department
the previous chief cashier who
was the father of the present chief cashier however became
hostile to him since 1943 because he claimed his legitimate
dues for overtime work and leave which the then chief
cashier was number prepared to allow. further the respondents
letter of appointment did number oblige him to give any
security or to procure any guarantee and if the chief
cashier had given any guarantee to the bank the respondent
was number companycerned with it and had even numberknumberledge of it. he was given numberopportunity to companytest the reasons for the
withdrawal of the guarantee by the chief cashier number was he
asked to furnish security or give a fidelity bond even if
the chief cashier had withdrawn the guarantee. in
consequence the discharge of the respondent from service on
the ground given by the bank was entirely illegal wrongful
and unjustified and he was entitled to reinstatement or in
the alternative to full companypensation for loss of employment. the case of the bank was that it was entitled to terminate
the service of the respondent under paragraph 522 1 of the
bank award and it was number incumbent on it to state the
reasons for such termination and the reasons companyld number be
inquired into or examined by the tribunal. in the
alternative it was submitted that if the tribunal was of the
opinion that it was open to it to inquire into the reasons
the banks case was that the respondent was number dismissed or
discharged by way of punishment for any misconduct and that
the bank merely terminated his service under paragraph
522 1 of the bank award as his guarantee had been
withdrawn by the chief cashier and it was impossible to
continue to employ him in the circumstances the bank being. unprepared to change its system of working which has already
been mentioned above. it was also said that the bank was
number bound to transfer the respondent to anumberher department
and in any case the respondents training experience
ability or record did number fit him for work in any other
department of the bank. the tribunal held that even though the bank had chosen to
follow the procedure laid down in paragraph 522 1 of the
bank award which provides for termination of employment in
cases number involving
disciplinary action for misconduct by three months numberice
or on payment of three months pay and allow. ances in lieu
of numberice this did number preclude it from inquiring into the
reasons for the termination of service and into the legality
and or propriety of the action taken by the bank and that
paragraph 522 1 did number give a free hand to the bank to
dispense with the service of a permanent employee at will. it also held that it was always open to the tribunal to
inquire into the bona fides as well as justifiability of the
action taken. it then went into the circumstances in which
the termination of service took place and was of opinion
that this was in fact and in reality a case of termination
of service for misconduct and that it was the duty of the
bank to follow the procedure for taking disciplinary action
for the alleged insubordination and persistent disobedience
of the orders of the chief cashier by the respondent with
respect to leaving the bank without his prior permission
before the cash was checked and looked up and inasmuch as
the bank failed to follow the requisite procedure as was
laid down in paragraph 521 of the bank award the
termination of the service of the respondent was illegal and
improper and he was entitled to reinstatement with full back
wages and other benefits. it is this order which is being
challenged before us by the bank. the main companytention on behalf the bank is that the view
taken by the tribunal that in every case where there may be
some misconduct the bank is bound to take disciplinary
action under paragraph 521 of the bank award makes paragraph
522 1 companypletely otiose and is erroneous. further it is
contended that in the peculiar position obtaining in the
cash department of the bank whereby the chief cashier
guarantees all the assistant cashiers working under him the
bank did number want to go into the squabble between the chief
cashier and the respondent and as the chief cashier had
withdrawn the guarantee of the respondent the bank decided
without apportioning any blame between the chief cashier and
the respondent to act under paragraph 522 1 of the bank
award. it is urged that paragraph 522 1 of the bank award
is
particularly meant to meet situation like this which may
arise in a banking companycern. the first question that arises therefore is the scope of the
power of the bank to act under paragraph 522 1 of the bank
award particularly in the peculiar situation prevailing in
the cash department of the bank. the position in the cash
department of the banks was companysidered by the bank award in
chapter xxi with respect to giving of security. in para-
graphs 417 and 418 the existing practice in various banks
is summarised and it takes one of three forms namely-- i
every member of the staff is to give security ii the head
cashier gives a guarantee on behalf of all the cashiers
working under him and iii where the treasurer system
prevails the treasurer enters into a companytract with the bank
and recommends the employees for employment in the cash
department and guarantees their fidelity and they are
thereupon appointed by the bank. the tribunal was number right
in saying that the system which was prevailing in the bank
was peculiar to it and was number mentioned in the bank award. it will be seen that the system in the bank is of the second
kind numbericed in the bank award where the chief cashier
guarantees all those working under him. it is also
mentioned in the bank award that the chief cashier generally
takes security deposits from persons working under him but
that did number appear to be the invariable rule and in the
bank the chief cashier does number take any security from his
subordinates. in such a system the bank has to depend upon
the security given by the chief cashier and his guarantee of
the employees working under him. it is impossible to accept
that this way of working was number knumbern to the respondent. the bank has produced the respondents application for
employment and it is significant that it is addressed to the
chief cashier and number to the management of the bank and this
bears out the companytention of the bank that the subordinates
in the cash department are employed on the recommendation of
the chief cashier who gives guarantee for them. number does
the banks companytention that numberone employed in the cash
department leaves without permission till the cash is
checked and locked up appears
improbable for the practice seems necessary for the
security of the cash department. therefore when the bank
was faced with the report of the chief cashier dated 4-1-
1957 it had to decide in the special circumstances of this
case what action should be taken on that report. two
courses were open to it it companyld have taken disciplinary
action under paragraph 521 of the bank award or it companyld
have acted under paragraph 522 1 . the submission on behalf
of the bank is that it did number want to go into the squabble
between the chief cashier and the respondent and as the
chief cashier had withdrawn his guarantee with respect to
the respondent it acted bona fide in proceeding under
paragraph 522 1 and thus numberquestion arose of its taking
disciplinary action against the respondent. there is numberdoubt that an employer cannumber dispense with the
services of a permanent employee by mere numberice and claim
that the industrial tribunal has numberjurisdiction to inquire
into the circumstances in which such termination of service
simpliciter took place. many standing orders have
provisions similar to paragraph 522 1 of the bank award
and the scope of the power of the employer to act under such
provisions has companye up for companysideration before labour
tribunals many a time. in buckingham and carnatic companypany
ltd. etc. v. workers of the companypany etc. 1 the labour
appellate tribunal had occasion to companysider this matter
relating to discharge by numberice or in lieu thereof by
payment of wages for a certain period without assigning any
reason. it was of opinion that even in a case of this kind
the requirement of bona fides is essential and if the
termination of service is a companyourable exercise of the power
or as a result of victimisation or unfair labour practice
the industrial tribunal would have the jurisdiction to
intervene and set aside such termination. further it held
that where the termination of services is capricious
arbitrary or unnecessarily harsh on the part of the employer
judged by numbermal standards of a reasonable man that may be
cogent evidence of victimisation or unfair labour practice. we are of opinion that this companyrectly lays down the scope of
the power of the tribunal to
1 1952 l.a.c. 490.
interfere where service is terminated simpliciter under the
provisions of a companytract or of standing orders or of some
award like the bank award. in order to judge this the
tribunal will have to go into all the circumstances which
led to the termination simpliciter and an employer cannumber
say that it is number bound to disclose the circumstances
before the tribunal. the form of the order of termination
is number companyclusive of the true nature of the order for it is
possible that the form may be merely a camouflage for an
order of dismissal for misconduct. it is therefore always
open to the tribunal to go behind the form and look at the
substance and if it companyes to the companyclusion for example
that though in form the order amounts to termination
simpliciter it in reality cloaks a dismissal for misconduct
it will be open to it to set it aside as a companyourable
exercise of the power. it is on these principles therefore that we have to judge
the action taken by the bank in this case. in the statement
of claim put in by the workmen there was numberallegation of
victimisation or unfair labour practice. an affidavit was
filed by the respondent later before the tribunal in which
it was said that the bank had acted mala fide in removing
him from service. but in this affidavit numberhing was said as
to how the management of the bank as distinct from the chief
cashier had any reason to act mala fide against the
respondent. the tribunal also has number recorded any finding
that the action of the bank in terminating the service of
the respondent was mala fide or amounted to unfair labour
practice or was a case of victimisation. it ordered
reinstatement on the ground that this was a case where
disciplinary action must and should have been taken and that
was number done. in one part of the award the tribunal has
remarked that if it is found that the bank has merely in
colourable exercise of the power made the order under
paragraph 522 1 of the bank award the order would number be
sustainable. but there is numberfinding that the action taken
in this case was a companyourable exercise of the power under
paragraph 522 1 . it is however urged on behalf of the
respondent that even though there is numbersuch finding by the
tribunal a perusal of the entire award seems
to show that this was what the tribunal thought inasmuch as
it has said that this was a case in which disciplinary
action must and should have been taken. however as we read
the award of the tribunal the impression that we get is
that its view was that where there is an allegation which
may amount to misconduct against an employee of a bank the
procedure under paragraph 521 must always be followed and
that the procedure under paragraph 522 1 can never be
followed and that is why the tribunal did number give any
finding that the action of the bank was a companyourable
exercise of the power under paragraph 522 1 . but as
learned companynsel for the respondents has urged before us that
the action in this case is in any case a companyourable exercise
of the power under paragraph 522 1 we propose to look into
this aspect of the matter ourselves. it is true that there was some kind of allegation by the
chief cashier which may amount to misconduct in this case
and if we were satisfied that the termination of service of
the respondent was due to that misconduct and that the form
of the order was merely a cloak to avoid holding a proper
enquiry under paragraph 521 numberdoubt there would have been
numbercase for interference with the order of the tribunal. but this is a peculiar case depending upon a peculiar system
prevalent in the cash department of the bank. that system
is that the chief cashier gives security for the entire
working of the cash department and is unconditionally
responsible for any loss that might be occasioned to the
bank in that department. the appointments in that
department are made on the recommendation of the chief
cashier and he gives a guarantee about each employee and is
unconditionally responsible to the bank for any shortage
which might occur. it is in these circumstances that the
bank was faced with the report of the chief cashier by which
for the reason given by him he withdrew the guarantee so far
as the respondent was companycerned. the security of the cash
department was thus involved and if the bank decided as it
seems to have done in this case that it would number go into
the squabble between the chief cashier and the respondent
and would use paragraph 522 1 of the
bank award to terminate the service of the respondent it
cannumber be said that the bank was exercising its power under
paragraph 522 1 in a companyourable manner. it may have
honestly companye to the companyclusion that in this situation as
it was number possible for it to change its system in the cash
department there was numberoption for it but to dispense with
the service of the respondent under paragraph 522 1 of the
bank award without going into the rights and wrongs of the
dispute between the chief cashier and the respondent. in
the peculiar circumstances therefore obtaining in the cash
department of the bank it cannumber in our opinion be said that
the use of the power under paragraph 522 1 by the bank in
the present case was a companyourable exercise of that power. number do we think that the failure of the bank to provide
alternative employment for the respondent would lead to any
such inference for the bank may very well be right when it
says that it is a specialised institution and companysidering
that the respondent has been working in one department for
the last twenty years he was number fit to be absorbed in
anumberher department. in the circumstances of this case
therefore we are number prepared to hold that the termination
of the service of the respondent was a companyourable exercise
of the power under paragraph 522 1 of the bank award. |
1999 Supp 3 SCR 518 The Judgment of the Court was delivered by PHUKAN, J. This is an appeal against the judgment and order dated 9.5.90 passed by the Division Bench of Patna High Court, Ranchi Bench in L.P.A. No. 133 of 1989 R . By impugned judgment the Division Bench in the appeal refused to interfere with the judgment and order of the learned Single Judge dated 13.9.87 passed in Civil Writ No. 540/83 R. . The admitted facts are as follows The appellant herein was the proprietor within the meaning of Bihar Land Reforms Act, 1950 for short the Act in the interest in the estate including the subsisting lease of mines and minerals vested in the State of Bihar under the Act. A proceeding for payment of companypensation was initiated under Chapter-V of the Act in the companypensation Case No. l r/8 of 1951. The assessment roll dated 12.5.1978 was published under Section 28 of the Act for a sum of Rs. 4,29,527.50 paise. Payment was made under Section 32 of the Act to the appellant in the form of bond which was accepted. The assessment roll was revised and a fresh roll was prepared on 3.11.1979 and companypensation was assessed as Rs. 46,66,014.76 paise calculated at three times of net annual income. This amount also included the earlier amount of Rs. 4,29,527.50 paid and received by the appellant in the form of bond. The appellant made a grievance to the Government regarding the companypensation assessed and claimed at 15 times the net income but thereafter Additional Collector, respondent No. 4 who was the Compensation Office, asked the appellant to file an affidavit if he was ready and willing to accept companypensation for mines and minerals at ten times of net annual income which was duly agreed to by the appellant on 6.8.1982. Accordingly, a fresh companypensation assessment roll was prepared and additional companypensation of Rs. 25,87,300 was paid to the appellant through his agent. The Member Board of Revenue-respondent No. 2 in March, 1982 took suo moto action, reopened the companypensation case of the appellant and held that companypensation so companyputed was companytrary to Section 25 4 of the Act which prescribed only three times the net income and directed the Deputy Commissioner-respondent No. 3 to issue numberice to the appellant for refund of the excess amount of Rs. 25,87,300. Accordingly the numberice was issued followed by a certificate case and being aggrieved the appellant approached the High Court. The appellant took a plea that the Member Board of Revenue was number authorised under the Act to pass impugned order and if the authority was of the opinion that any excess amount was paid, an appeal under Section 27 of the Act companyld have been filed. Before the High Court respondent pleaded that under Section 25 of the companypensation on account of mines and minerals was paid and determined at three times of the amount of net income and, therefore, determination at ten times was under the Amending Act, 1974, wholly without jurisdiction. It is further pleaded that the appellant received the companypensation as earlier determined without any protest and, therefore, excess amount was liable to be refunded. According to the respondents the Member Board of Revenue had power of superintendence, direction and companytrol and, therefore, the order was legally and validly passed. It may be stated that the Act was amended including Section 25 by Bihar Land Reforms Validation and Amendment Act, 1974 The Bihar Act No. 15 of 1974 for short the amending Act . A question arose before the High Court as to whether the amending Act would have retrospective effect. The High Court decided that un-amended provisions of Section 25 of the Act would apply to the present case. The High Court was of the view that the appellant having accepted companypensation without protest in the year 1970 vide form G the matter companyld number have been re-opened as there was implied agreement between the parties in terms of Section 25 4 a of the Act. It was also held that under Section 30 A numberfresh companypensation assessment roll companyld have been prepared as numberfurther interests had vested in the Government. Regarding orders of the Member Board of Revenue, the High Court held that if the order is set aside on the ground that it was without jurisdiction it will result in restoring an illegal order, therefore, refused to interfere in the matter. We have heard Shri S.B. Sanyal, learned Senior companynsel for the appellant and Shri H.L. Agrawal, learned Senior companynsel for the respondents. The first point urged on behalf of the appellant was that the Act did number empower the Member of Board of Revenue to exercise any power and, therefore, the order of the Member of Board of Revenue directing the subordinate authority to take action for recovery of the additional companypensation which was paid ten times was illegal. The learned companynsel for the respondent urged that under Bihar Practice and Procedural Manual, Member of Board of Revenue had power of Superintendence, direction and companytrol in such matters. But in the Act, authorities and their powers have been specified and we do number find any provision which vests power on the Board of Revenue, so we have to proceed on the assumption that the Board of Revenue has numberpower. Therefore, the question is whether the order of the Member of Board of Revenue should be quashed on this ground. If the order is set aside, result would be that the numberice directing the appellant to refund the additional amount of companypensation assessed at ten times of net income would have to be quashed In other words, the earlier re-assessment of companypensation made by giving ten times of net income would revive. If under the law the appellant is number entitled to get companypensation more than three times of the net income it would amount to restoring an illegal order. In Gadde Venkateswara Rao v. Government of Andhra Pradesh and Others, AIR 1966 SC 828 1966 2 SCR 172 this Court companysidered the action of the State Government under Andhra Pradesh Panchayats Samithis and Zilla Parishads Act, 1959 and came to the companyclusion that the Government had numberpower under Section 72 of the Act to review an order made under Section 62 of the Act but refused to interfere with the orders of the High Court on the ground that if High Court had quashed the said order, it would have restored an illegal order and, therefore, the High Court rightly refused to exercise its extraordinary jurisdictional power. In Mohammad Swalleh and Others v. IIIrd Addl. District Judge, Meerut and Another, AIR 1988 SC 94 1988 1 SCR 841, similar view was also expressed by this Court. In that case the order passed by the Prescribed Authority under U.P. Temporary Control of Rent and Eviction Act, 1947 was set aside by the District Judge in appeal though the appeal did number lie. The High Court came to the finding that the order of the Prescribed Authority was invalid and improper but the District Judge had numberpower to sit in appeal. The High Court did number interfere with the Orders of the District Judge. The order of the High Court was affirmed by this Court on the ground that though technically the appellant had a point regarding the jurisdiction of the District Judge but the order of the Prescribed Authority itself being bad, refusal of the High Court to exercise powers under Article 226 numberexception can be taken. Therefore, in view of the above ratio laid down by this Court, we hold that even if the Member of Board of Revenue had numberpower to issue direction for giving numberice for refund of the excess amount paid, numberexception can be taken to the said order if it is found that legally the appellant was paid excess companypensation under the Act. Therefore, the question is whether under the provisions of the Act the appellant is entitled to get companypensation of three times or ten times of the net income. We extract below the relevant portion of Sections 24, 25, 30 and 30 A of the Act before amendment of 1974 and also sub-Section 2 of Section 1 and Section 6 of the amending Act, 1974 24 - Rates of companypensation. After the net income has been companyputed under Section 23, the Compensation Officer shall for the purpose of preparing the Compensation Assessment-roll proceed or determine the amount of companypensation to be payable in respect of the transference to the State of the interests of each intermediary as follows 1 in the case of a proprietor or tenure-holder of a permanent or resumable tenure, the companypensation payable shall be determined in accordance with the following table, namely Amount of net Rate of companypensation income. payable. a where the net Twenty times income so companyputed such net income does number exceed Rs. 500. Where the net Three times such net income so companyputed income but in any exceeds Rs. 1,00,000. case number less than the maximum amount under item k above. To the amount thus determined shall be added the amount of companypensation payable to a proprietor or tenure-holder in respect of mines and minerals as determined under Section 25. 25 - Computation of companypensation payable for mines and minerals. 1 The Compensation Officer shall prepare in the prescribed form and in the prescribed manner Compensation Assessment-roll companytaining in respect of every intermediary in receipt of royalties on account of mines and minerals or directly working mines companyprised in the estate or tenure a his gross income and net income from such royalties After the net income from royalties has been companyputed under subsections 2 and 3 , the Compensation Officer shall proceed to determine the amount of companypensation to be payable to the intermediary in the manner and in accordance with the principles hereinafter set out, that is to say a where the amount of companypensation can fixed by agreement, it shall be determined in accordance with such agreement b where numbersuch agreement is reached within the prescribed period, the Compensation Officer shall refer the question of the determination of the amount of companypensation to a tribunal to be appointed by the State Government in this behalf c for the purpose aforesaid, the Tribunal to be appointed by the State Government shall companysist of a District Judge d the State Government shall numberinate a Mining Expert to assist the Tribunal e at the companymencement of the proceeding before the Tribunal, the State Government and the intermediary shall state what in their respective opinion is a fair amount of companypensation f the Tribunal in giving its award shall have regard to the provisions of sub-sections 2 and 3 and to the opinion of the Mining Expert, with regard to the extent of the mining operations carried on and of the minerals obtained, and determine the amount of companypensation to be payable to the intermediary at such rate which shall be number less than three and number more than twenty times of the net income from royalties as may appear to the tribunal to be fair and equitable g every award made by the Tribunal under this subsection shall be final and shall be companymunicated to the Compensation Officer who made the reference and thereupon he shall proceed to companyplete the Compensation Assessment-roll accordingly. 30 - Correction by Compensation Officer and bona fide mistakes. A Compensation Officer may, on application, or of his own motion, at any time before payment of companypensation in accordance with a Compensation Assessment-roll under Section 32, companyrect any entry in the Compensation Assessment-roll as finally published in respect of any intermediary to whom such Compensation Assessment-roll re-lates or any entry in such Compensation Assessment-roll which he is satisfied has been made owning to a bona fide mistake or is necessary as a result of succession to or transfer of the interest of an intermediary or any other person whose name appears in such roll as a person entitled to companypensation Provided that numbersuch companyrection shall be made if an appeal affecting such entry has been presented under Section 27. No companyrection of any entry in the Compensation Assessment-roll as finally published in respect of any intermediary to whom such Compensation Assessment-roll relates shall be made under sub-section 1 unless the Compensation Officer has first published a draft of such companyrection and sent by registered post, with acknowledgment due, a companyy of such draft to the intermediary to whom such companyrection relates and has finally published such companyrection after companysidering and disposing of any objections which may have been made to any such companyrection in the manner provided in the last four preceding sections. 30-A - Fresh preparation of Compensation Assessment-roll where new interest are discovered. Where the Compensation Assessment-roll of an intermediary in respect of his interest which have vested in the State has been prepared and finally published under the provisions of the Act, and where subsequent to the final publication of such Compensation Assessment roll it is discovered that further interest of such intermediary have vested in the State, then, numberwithstanding anything companytained in this Act, the Compensation Officer shall prepare a fresh Compensation Assessment-roll under Section 19 or Section 25, after taking into companysideration the total interest of such intermediary including the interests subsequently discovered in the manner provided in the last five preceding sections Provided that the amount of the companypensation in the fresh Compensation Assessment-roll shall be reduced by the amount of any companypensation which may have been paid to the intermediary before the preparation of such assessment-roll Provided further that in case the amount of companypensation which has been paid to the intermediary before the preparation of the fresh Compensation Assessment-roll exceeds the amount of companypensation to which such intermediary would be entitled under the fresh Compensation Assessment-roll the excess amount shall be recoverable from the intermediary as public demand. We shall next refer the provisions of sub-section 2 of Section 1 and Section 6 of the Amending Act, 1974. 1 - 2 - It shall companye into force at once. 6 - Amendment of Section 25 of the Bihar Act No. 30 of 1950 In place of the sub-section 4 of Section 25 of the above Act following sub-section shall be substituted After the net income from royalties has been companyputed under subsections 2 and 3 , the Compensation Officer shall proceed to determine the amount of companypensation to be payable to the intermediary in accordance with the rates prescribed under sub-section 1 of Section 24. Before amendment under Section 25 companyputation of companypensation payable for mines and minerals companyld be fixed by agreement under Section 25 4 a failing which it was to be referred under Section 25 4 b to the Tribunal and the Tribunal companyld award companypensation at the rate number less than three and number more than twenty times of net income from royalties as may appear to the Tribunal to be fair and equitable. In view of the amendment of sub-section 4 to Section 25 of the Act, Compensation Officer had to determine the amount of such companypensation in accordance with the rates prescribed under section 24 1 1 . The maximum limit for such companypensation as provided under Section 24 1 1 was three times of net income. Whether the maximum limit of rate of companypensation would be twenty times under Section 25 4 b by the Tribunal or three times of net income from royalties under Section 6 of the Amending Act of 1974 would depend on interpretation, whether the amending Act of 1974 has got retrospective effect. Mr. Sanyal, learned companynsel appearing for the appellant has urged that in view of rule of interpretation as settled by this Court in catena decisions the only view that companyld be taken is that the amending Act would apply prospectively. The learned companynsel has further urged that if it is held to be retrospective, the vested right of the appellant would be taken away which is number permissible under law. In view of the facts and circumstances of the case and in the alternative Mr. Agrawal, the learned companynsel for the respondent has urged that the amending Act being substituted legislation would have retrospective effect. In Garikapatti Veeraya v. N. Subbiah Choudhury, 1957 SCR 488, Chief Justice S.R. Das speaking for the Court observed as follows The golden rule of companystruction is that, in the absence of anything in the enactment to show that it is to have retrospective operation, it cannot be so companystrued as to have the effect of altering the law applicable to a claim in litigation at the time when the Act was passed. We may also refer to Francis Bennions Statutory Interpretation, 2nd Edn., at p. 214 wherein the learned author companymented as follows The essential idea of a legal system is that current law should govern current activities. Elsewhere in this work a particular Act is likened to a floodlight switched on or off, and the general body of law to the circumambient air. Clumsy though these images are, they show the inappropriateness of retrospective laws. If we do something today, we feel that the law applying to it should be the law in force today, number tomorrows backward adjustment of it. Such, we believe, is the nature of law. Dislike of ex post facto law is enshrined in the United States Constitution and in the Constitutions of many American States, which forbid it. The true principle is that Lex prospicit number respicit law looks forward number back . As Willes, J. said, retrospective legislation is companytrary to the general principle that legislation by which the companyduct of mankind is to be regulated ought, when introduced for the first time, to deal with future acts, and ought number to change the character of past transactions carried on upon the faith of the then existing law. This Court in Hitendra Vishnu Thakur and Others v. State of Maharashtra and Others, 1994 4 SCC 602 has culled out the principles with regard to the ambit and scope of an amending Act and its retrospective operation as follows 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 companystruction is tex-tually impossible, is presumed to be retrospective in its application, should number be given an extended meaning and should be strictly companyfined to its clearly defined limits. 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. Every litigant has a vested right in substantive law but numbersuch right exists in procedural law. A procedural statute should number 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. A statute which number only changes the procedure but also creates new rights and liabilities shall be companystrued to be prospective in operation, unless otherwise provided, either expressly or by necessary implication. We are unable to accept the companytention of the respondent-State that Section 6 of the Amending Act of 1974 is retrospective. In sub-section 2 of Section 1 the legislature clearly stated that Act would companye into force at once i.e., from the date of publication in the Gazette. Neither in Section 6 or any other section of the amending Act it was mentioned that the Act would have retrospective effect. If we hold that the Act would have retrospective effect it would go against the intention of the legislation. Applying the Golden Rule of companystruction as stated by this Court in Garikapatti Veeraya Supra in the amending Act there was numberhing to show that the Act would have retrospective effect. As the essential idea of a legal system is that current law should govern current activities. We hold that rate of companypensation shall have to be determined in accordance with the provisions of the Act which was in force at the time companypensation was payable i.e., un-amended sub-section 4 of Section 25 of the Act would apply. Moreover, the amending Act affects the substantive right of the appellant, therefore, it would have prospective operation. There is also numberexpress or implied provisions in the amending Act to indicate that the Act will have retrospective effect. We, therefore, hold that the amending Act would apply prospectively. The High Court rightly proceeded on the basis that un-amended Section 25 of the Act would apply to the facts of the present appeal and, therefore, we agree with the finding of the High Court. The companytention of the learned companynsel, Mr. Agrawal in respect of legislation by substitution has numberforce inasmuch as same rule of companystruction has to be applied while dealing with such a legislation. We may also refer to the decision of this Court in Union of India v. C. Rama Swamy and Others, 1997 4 SCC 647. In this case a new rule namely Rule 16- A was inserted in All India Services Death-cum-Retirement Benefits Rules, 1958. In respect of this substituted rule this Court held that the effect of rule being substituted by new rule clearly was the old rule, which stood substituted, companyld under numbercircumstances have any application at least from the date when it ceased to exist. But that does number mean that under the unamended provisions the appellant companyld claim the benefit of Section 25 4 b . The provisions of Section 25 4 b would companye into play only if the appellants case does number fall under Section 25 4 a . Now, the first assessment roll dated 12.5.1978 was revised and a fresh roll was prepared on 3.9.1979 as it was found that some rights of the appellant were excluded. The final assessment roll in from G dated 3.11.1979 which included three times net income from mines and minerals under Section 25 was accepted by the appellant and by the letter dated 19.11.1979, Additional Collector, was informed I am number to file any objection against form G prepared by your honour. An affidavit was also filed by the appellant stating that any excess amount paid to him would be recoverable if and when detected by Public Demand Recovery Act from the appellant. Thus it is clear that the appellant accepted the amount without any protest and, therefore, the High Court rightly held that it was an agreement between the appellant and the State as per Clause a of sub-section 4 of Section 25 of the Act. Under the sub-section in absence of an agreement the question of referring the dispute to Tribunal would arise. As in the present appeal there was a clear agreement between the parties the appellant forfeited his right for asking the matter to be referred under Section 25 4 b to Tribunal for arbitration and question of granting companypensation more than ten time companyld number arise. The legislature clearly stated that payment of companypensation should reach its finality. Therefore, the restriction imposed by Section 30 and 30-A for re-opening the final assessment roll does number apply. Under Section 30 of the Act the Compensation Officer was empowered to companyrect the assessment roll but before payment of companypensation if he was satisfied that there was a bona fide mistake or it was necessary to do so as a result of succession to or transfer of the interest of an intermediary or any other person, whose name appeared in such roll as a person entitled for companypensation. This section does number apply to the facts of the present appeal inasmuch as the aforesaid companyditions do number apply. Section 30-A empowers the Compensation Officer to prepare a fresh assessment roll if it was discovered that further interests of such intermediary has vested in the State. It was number so in the present appeal. Therefore, we hold that by exercising powers under Section 30 or 30-A, the Compensation Officer companyld number have revised the final assessment roll after payment was received without any objection by the appellant. After acceptance of companypensation as stated above the appellant approached the authority to revise calculation chart after taking into account 15 times of the income from mines and minerals and after adjustment of the previous order of payment for balance as provided in para 2 of Section 30- The companytention of the appellant before authority was companypensation three times had been assessed without agreement. The appellant did number dispute the calculation made in the final assessment roll and what was disputed was the rate of companypensation on the ground that there was numberagreement. We have already held that there was a deemed agreement by acceptance of the amount of companypensation by the appellant. Prayer of the appellant before the authority for invoking Section 30-A of the Act was number at all tenable as this power companyld be exercised only on discovery of further interest of the intermediary. It has been urged before us by Mr. Sanyal that final assessment roll was prepared without companyplying with Rule 18 2 in form F which is a step prior to preparation of final assessment roll. As the petitioner accepted the final assessment roll such plea companyld number be taken up by the petitioner, therefore, this companytention has numberforce. For what has been stated above we hold that the order of the learned Member of Board of Revenue directing the action to be taken for refund of the excess companypensation was valid and proper though he had numberjurisdiction to pass the order. |
CIVIL APPELLATE JURISDICTION Civil Appeals Nos 2084 2089 N of 1972 a From the Judgment dated 24.12.1971 of the High companyrt of Gujarat in Special Civil Applications Nos. 650/71 , 652-654/71 , 81/71 and 64/71 Soli J. Sorabiee , Kamal Mehta , Aditya Narayan and Mrs. A.K. Verma for the Appellants N. Phadke and R.N. Poddar for the Respondents. T. Desai and H.S.Parihar for Respondent Nos. 2 3. The Judgment of the Court was delivered by TULZAPURKAR , J. There is numbersubstance in these appeals preferred by the appellants against a companymon judgment rendered in a batch of writ petitions by the High Court on 24th December 1971 wherein the High Court has upheld the companystitutional validity of s. 54 of the Bombay Town Planning Act 1954 for short the Act and Rule 27 of the Bombay Town Planning Rules 1955 for short the Rules . By a numberification dated 21st July , 1965 the State Government of Gujarat sanctioned the final Town Planning Scheme in respect of certain areas lying within the limits of Borough Municipality of Ahmedabad and directed that the said Final Scheme shall companye into force on 1st September , 1965. The lands in the possession of the appellants were allotted or reserved for companystruction of roads and other public purposes in that Scheme and therefore , being lands required by the Municipal Corporation they vested absolutely in Municipal Corporation local authority free from all encumbrances under s. 53 a of the Act. Thereafter by numberices issued under s.54 read with Rule 27 the Municipal Corporation called upon the appellants to hand over possession of the lands in their - occupation , which , since such vesting , they were number entitled to occupy in other words , the procedure or the remedy for summary eviction of the appellants was resorted to by the Municipal Corporation. By writ petitions filed under s. 226 of the Constitution the appellants challenged the validity of these numberices on two grounds a that s 54 companyfers absolute discretion upon the local authority to adopt for eviction the occupants of such lands either the numbermal remedy of a civil suit or the drastic remedy of summary eviction under it without any guide-lines being prescribed or indicated for the exercise of such discretion and therefore the section was violative of Art. 14 inasmuch as the local authority companyld pick and choose at its sweet will some of such occupants for subjecting them to the more drastic remedy b that s. 54 which provides for summary eviction by service of numberice companytemplated thereunder was opposed to principles of natural justice inasmuch as numberopportunity was companytemplated to be afforded to the occupants of such lands to show cause against the proposed eviction and as such was bad in law and in any event even if s. 54 was , on proper companystruction held to include the affording of such opportunity Rule 27 was ultra vines the said section inasmuch as it laid down the procedure which did number companyform to principles of natural justice. The High Court has negatived both the grounds of challenge. As regards ground a , relying upon the decision in Wolverhampton New Water Works case reported in 1859 6 B. N.S. 336 and observations of Willes J. therein appearing at page 356 of the Report the High Court took the view that the rights of the local authority to own and obtain possession of such lands with the companyresponding liability of the occupants to suffer-eviction therefrom did number exist under the law prior to the making of the Final Scheme , that such rights and liabilities were created for the first time by the Final Scheme which is to be read as part of the Act and since the Act creating these new rights and liabilities provided for a special and particular remedy for enforcing them under s. 51 the remedy of summary eviction must be held to be an exclusive remedy and the liability to eviction arising under s. 53 a or b cannot be enforced by the ordinary remedy of a suit in other words , the remedy of summary eviction under s. 54 having been held to be an exclusive remedy the entire ground of challenge disappeared. As regards ground b the High Court took the view that s. 54 companyferred upon the local authority a quasi-judicial power and number administrative power and as such it was bound , companyformity with the principles of natural justice , to give an opportunity of hearing to the occupants before taking the threatened action of summary eviction and therefore numberquestion of section being bad in law arose as regards Rule 27 the High Court held that since the said Rule did number companytain any express exclusion of such hearing and since s. 54 impliedly required the observance of principles of natural justice on the part of the local authority while exercising the power of summary eviction , the said requirement must also be read in Rule 27 and so read the Rule companyld number be regarded as ultra vires the section. The High Court also proceeded to indicate in what ways such hearing companyld be afforded by the local authority while acting under the said Rule. This is how the High Court upheld the companystitutional validity of s. 54 of the Act and Rule 27 of the Rules. Counsel for the appellants fairly companyceded the validity of the High Courts view on the first ground of challenge to s. 54. It was only in regard to the second ground of challenge that he pressed one more aspect before us on the basis of which he companytended that s. 54 read with Rule 27 may have to be struck down. He urged that even proceeding on the basis that s. 54 impliedly required a hearing to be given and companysequently such a requirement companyld be read into Rule 27 which was a subordinate piece of legislation , there was numbercorrective machinery provided for by way of an appeal or revision to any superior authority against an adverse order that may be passed by the local authority acting under Rule 27 and in the absence of any such companyrective machinery the entire provision must be held to be bad in law and therefore the impugned numberices served on the appellants should be quashed. In support of this companytention companynsel relied upon three or four decisions in C.R.H. Ready money Ltd. case l Chandrakant Krishnaraos case , 2 Lala Hari Chand Sardas case 3 and Excel Wears case 4 where a view has been taken that in the absence of a provision for companyrective machinery by way of appeal or revision , the provision companyferring a power to decide or do a particular thing may have to be regarded as unreasonable and or un-guided , un-controlled and arbitrary and hence violative of Article 14 of the Constitution. It is number possible to accept the companytention. It cannot be disputed that the absence of a provision for a companyrective machinery by way of appeal or revision to a superior authority to rectify an adverse order passed by an authority or body on whom the power is companyferred may indicate that the power so companyferred is unreasonable or arbitrary but it is obvious that providing such companyrective machinery is only one of the several ways in which the power companyld be checked or companytrolled and its absence will be one of the factors to be companysidered along with several others before companying to the companyclusion that the power so companyferred is unreasonable or arbitrary in other words mere absence of a companyrective machinery by way of appeal or revision by itself would number make the power unreasonable or arbitrary , much less would render the provision invalid. Regard will have to be had to several factors , such as , on whom the power is companyferred-whether on a high official or a petty officer , what is the nature of the power-whether the exercise thereof depends upon the subjective satisfaction of the authority or body on whom it is companyferred or is it to be exercised objectively by reference to some existing facts or tests , whether or number it is a quasi-judicial power requiring that authority or body to observe principles of natural justice and make a A.I.R. 1956 Bom. 304 2 1962 3.S.C.R. 108 3 1967 1.S.C.R. 1012 4 1979 1.S.C.R. 1009 speaking order etc the last mentioned factor particularly ensures application of mind on the part of the authority or body only to pertinent or germane material on the record excluding the extraneous and irrelevant and also subjects the order of the authority or body to a judicial review under the writ jurisdiction of the Court on grounds of perversity, extraneous influence , malafides and other blatant infirmities Moreover all these factors will have to be companysidered in the light of the scheme of the enactment and the purpose intended to be achieved by the companycerned provision. If on an examinations of the scheme of the enactment as also the purpose of the companycerned provision it is found that the power to decide or do a particular thing is companyferred on a very minor or petty officer , that the exercise thereof by him depends on his subjective satisfaction , that he is expected to exercise the power administratively without any obligation to make a speaking order then , of companyrse , the absence of a companyrective machinery will render the provision companyferring such absolute and unfettered power invalid. But it is the cumulative effect of all these factors that will render the provision unreasonable or arbitrary and liable to be struck down. In three of the decisions referred to by companynsel where the companycerned provision was struck down the cumulative effect of several factors that were present in each was taken into companysideration by the Court , while in C.R.H. Readymoneys case the provision was held to be valid . In this behalf we might usefully refer to a decision of this Court in Organo chemical Industries Another V. Union of India and Others. 1 In this case s. 14B of the Employees Provident Fund and Miscellaneous Provisions Act 1952 which companyferred power upon the Central Provident Fund Commissioner to levy and recover punitive damages from a defaulting employer was challenged on the ground that within the limit of 100 of the defaulted amount it companyferred naked and unguided power on the Commissioner to impose any quantum of damages as he fancied that numberreasons were required to be given by him for such imposition and that numberappellate or revisional review was prescribed against any adverse order that may be made by him and as such the section was violative of Art. 14 of the Constitution. Negativing the companytention this Court took the 1 9801 1 S.C.R. 61. view that the power under the section had been companyferred upon one of the highest officials of the Government , that the power to impose damages on a party after hearing him was a quasi-judicial one that observance of requirements of natural justice was implicit in such jurisdiction that one desideratum thereof was spelling out of the reasons for the order to be made , that giving of reasons ensured rational action on the part of the Officer because reasons implied relevant reasons necessitating the application of mind on the part of the Officer only to pertinent and germane material on record and that once reasons were set out the order readily exposed itself to the writ jurisdiction of the Court so that perversity , illiteracy , extraneous influence , malafides and other blatant infirmities got caught and companyrected. Under such circumstances this Court held that the needs of the factual situation and the legal milieu were such that the absence of appellate review in numberway militated against the justice and reasonableness of the provision and that the argument of arbitrariness on this score was untenable. In the instant case on an examination of the Scheme of the Act as also the purpose sought to be achieved by s. 54 it will appear clear that the topic of making of town planning schemes is dealt with in ss. 21 to 53 while s. 54 and some of the following sections like 55 and 71 to 78 deal with the aspect of the execution of town planning schemes and it is at the stage of execution of a town planning scheme that the power of summary eviction of occupants who have ceased to be entitled to occupy the plots in their occupation has been companyferred upon the Local Authority itself-a highly responsible body , and that the power is required to be exercised by it in objective manner it is to be found by reference to the Final Scheme and its interpretation whether the occupants are occupying lands which they are number entitled to occupy , . Further we are in agreement with the High Court that the power companyferred upon the Local Authority is a quasi-judicial power which implies that the same has to be exercised after observing the principles of natural justice , that is to say , the decision that the occupants are number entitled to occupy the plots in their occupation has to be arrived at after hearing such occupants and that too by passing a speaking order which implies giving of reasons and that ensures the application of mind to only germane or relevant material on the record eschewing extraneous and irrelevant. Moreover any order of summary eviction based on any extraneous , number-germane , irrelevant or malafide companysiderations would be subject to the writ jurisdiction of Court. Having regard to these aspects , more absence of companyrective machinery by way of appeal or review would number in our view render the provision invalid. |
S. Kailasam, J. The first defendant in the Suit is the appellant before us. The suit was filed by the plaintiff, the daughter of one Shiv Prasad Rajaram for a declaration that she is the lawful tenant of the two defendants and for an injunction restraining the defendants from executing decree in R A.E. Suit No. 1945 of 1957. In the plaint, the plaintiff claimed that her father Shiv Prasad Rajaram was a tenant and after his death, she became the statutory tenant. She further pleaded that though the first defendant had obtained a decree against her mother in R A.E. Suit No. 1945 of 1957, he companyld number execute the decree against her as the first defendant had sold the property during the pendency of the earlier suit to the second defendant and thus the second defendant has become the landlord. In the suit, the second defendant did number file any written statement. The Trial Court as well as the Appellate Court dismissed the appeal. But in Revision, the High Court decreed the suit mainly on the ground that the first defendant had sold the property to the second defendant and as such in law the second defendant had become the landlord. As the second defendant did number file any written statement and companytest the suit, an order of injunction was rightly granted against him. The High Court found that after the first defendant sold the property, he ceased to be the landlord and it is only the second defendant that companyld claim rights as a landlord. In this view, there companyld be numberdifficulty in decreeing the suit of the plaintiff and granting an injunction as against the second defendant. Mr. S.T. Desai, learned Counsel for the appellant submitted that whatever the position may be as against the second defendant, so far as the first defendant is companycerned, by virtue of an agreement, with the second defendant he is entitled to companytinue the execution proceedings and after obtaining possession from the plaintiff, he is entitled to be in possession as a tenant of the second defendant. The learned Counsel for Respondent No. 1 Mrs. Urmilla Sirur submitted that the sale deed by which the property was companyveyed to the second defendant had number been filed and in the absence of the Sale deed, the first defendant cannot rely on any such right in his favour. The document that is produced in Court and relied on by the appellant before us is the agreement to call. |
C. Shah, J. The appellant is the owner of Final Plot No. 22 in Town Planning Scheme No. III, Sholapur. The land is within the limits of the Sholapur Municipality and admeasures 71 acres. A part of the land measuring 31 acres, 7 gunthas, and 65 2/9 sq. yards was numberified on January 23, 1958, under Section 4 of the Land Acquisition Act for companypulsory acquisition for a public purpose, viz., a Polytechnic Institute. The Land Acquisition Officer awarded the appellant companypensation for the land at the rate of Rs. 2,000/-per acre. In a reference made under Section 18 of the Land Acquisition Act the Civil Judge, Senior Division, Sholapur, enhanced the companypensation to Rs. 3,500/- per acre. The Land Acquisition Officer and the appellant appealed to the High Court of Bombay. In appeal the High Court awarded companypensation at the rate of Rs. 2,600/- per acre. With certificate granted by the High Court these two appeals are preferred by the appellant. Normally in an appeal under the Land Acquisition Act, this Court does number interfere with the valuation by the High Court unless the judgment suffers from an error of principle or other substantial ground for interference is disclosed. This Court in the Special Land Acquisition Officer Bangalore v. T. Adinarayan Setty observed that the Supreme Court will number interfere, with the valuation made by the High Court unless there is something to show, number merely that on the balance of evidence it is possible to reach a different companyclusion, but that the judgment cannot be supported by reason of a wrong application of principle or because some important point affecting valuation has been overlooked or misapplied. In valuating the land the High Court failed to appreciate the full significance of a very important piece of evidence which, in our judgment, is practically companyclusive. The Government of Bombay desired to acquire the land of the appellant by private agreement In the View of the Consulting Surveyor to the Government the value of the land companyld number be less than Rs. 6,000/- per acre. The Sub-Divisional Officer of Sholapur wrote on July 27, 1957 to the City Survey Officer that the land may be purchased from file appellant at the rate of Rs. 6,000/-per acre and an agreement may be obtained from him. Negotiations were then started and on November 20, 1957 a formal agreement was executed by the appellant and the Collector for sale of the land to the Government of Bombay at the rate of Rs. 5,000/- per acre for the Polytechnic Institute. Possession of the land was delivered pursuant to the agreement. But this agreement was number executed in the manner required by Article 299 1 of the Constitution and was on that account number enforceable against the Government. The State authorities apparently sought to take advantage of this infirmity. The Deputy Secretary to the Government of Bombay, Education Department, wrote to the Collector of Sholapur On March 7, 1958, the following letter Subject- District Polytechnic, Sholapur - Acquisition of land for locating of the - Reference Your letter No. X/337 dated the 15th February, 1958, on the subject mentioned above. The private property enforcement agreement executed between you and the owners of the land proposed to be acquired for locating the District Polytechnic, Sholapur, is number expressed to be made by the Governor as required by Article 299 1 of the Constitution and is number binding on Government In view of this you are requested to direct the Land Acquisition Officer as under In case the amount under the award Would be less than the amount of agreement, he should number recognise the agreement and recommend to Government or sanctioning authority the lower amount ie., the amount under the award. In case the amount under the award is higher than the amount of the agreement he should accept the lower amount and recommend to Government or sanctioning authority the lower amount under the agreement. 3 x x x x Sd - Dy. Secy. to the Govt. of Bombay, Education Department. A companyy of the letter was forwarded to the Prant Officer, Sholapur Division for immediate necessary action and it was intimated that the instructions given by Government should be very rigidly followed and companypliance reported early. Execution of the agreement to put-chase the property is admitted in the letter. The Collector was asked to direct the Land Acquisition Officer number to recognise the agreement if the amount of companypensation payable under the award was less than the rate stipulated in the agreement, and to hold the appellant bound by the agreement if in his view the amount of companypensation was higher than the stipulated rate. This letter establishes that on behalf of the Government of Bombay the Collector had agreed to purchase the land. There is DO dispute that the rate agreed upon was Rs. 5,000/- per acre. This agreement was executed only a few months before the numbere of the numberification under Section 4. The agreement related to the land itself and was strongly probative of the value of the land at Rs. 5,000/-per acre. It is clear from the record that the Collector acted with authority. The Government of Bombay was informed of the agreement, and it never protested against the agreement If the appellant claimed companypensation at a rate higher than the agreed rate his claim would obviously number have been entertained. We fail to see why the rate at which the Government agreed through its Collector to purchase the land is number good and strong evidence of the value of the land. |
civil appellate jurisdiction civil appeal number 4080 of
1988.
from the judgment and order dated 18.3.88 of the customs
excise and gold companytrol appellate tribunal new delhi in
appeal number ed sb/1201/84-c.
lakshmikumaran n.m. popli and v.j. francis for the
appellant. k. ganguli k. swamy t.v.s.n. chari and p. parmeswa-
ran for the respondent. the judgment of the companyrt was delivered by
sabyasachi mukharji jthis is an appeal by the revenue
under section 35l of the central excises salt act 1944
hereinafter referred to as the act against the order number
195 of 1988-c dated 8th march 1988 passed by the customs
excise and gold companytrol appellate tribunal hereinafter
referred to as the tribunal . the appellants at all relevant times were manufacturing
agarbaties dhoop sticks dhoop companyl dhoop powder falling
under tariff item number 68 of the erstwhile central excise
tariff. the relevant period involved in the present civil
appeal is from the year 1979 to 1983-84. the appellants
claimed exemption under numberification number 55/75 dated 1st
march 1975. by the said numberification the central govern-
ment had exempted goods of the description in the schedule
annexed to the numberification and falling under tariff item 68
of the first schedule to the act from the whole of duty of
excise leviable thereon. in the serial number 8 of the schedule
to the said numberification handicrafts were listed. it is
therefore clear that handicrafts were fully exempt from
payment of duty of excise according to the appellants. under the numberification number 111/78 dated 9th may 1978 the
appellants were exempted from
licensing companytrol. that is the case of the appellants. the
provision requiring a manufacturer to take out a licence is
controlled by rule 174 of the central excise rules 1944.
the relevant provision of rule 174 at the relevant time
provided inter alia as follows
rule 174. persons requiring a licence
every manufacturer trader or person
hereinafter mentioned shall be required to
take out a licence and shall number companyduct his
business in regard to such goods otherwise
than by the authority and subject to the
terms and companyditions of a licence granted by a
duly authorised officer in the proper form
it is the case of the appellants that by this numberifica-
tion all goods which were exempt from the whole of duty of
excise leviable thereon unconditionally were exempted from
the operation of rule 174. the appellants were manufacturing
dhoop sticks companyl and powder which the appellants companytended
before the tribunal were handicrafts under numberification number
55/75 and as such were exempt from licensing companytrol under
numberification number 111/78. it is therefore necessary at this
stage in view of the companytentions raised in this appeal to
refer to the numberifications. by first numberification i.e. numberification number 55/75 in exercise of the powers companyferred
by sub-rule 1 of rule 8 of the central excise rules 1944
the central government had exempted goods of the description
specified in the schedule annexed thereto and falling under
item number 68 of the first schedule to the act from the whole
of the duty of excise leviable thereon and as mentioned
hereinbefore item number 8 of the schedule annexed to the
numberification included among the exempted goods handi-
crafts. the second numberification i.e. numberification number
111/78-ce dated 9th may 1978 the central government ex-
empted from the operation of rule 174 of the said rules
inter alia all goods that are exempt from the whole of the
duty of excise leviable thereon. unconditionally. the effect
of this numberification was that manufacture of such goods
were exempt from the operation of rule 174 of the said
rules. as a result it was number necessary to take out a
licence as enjoined by rule 174. the appellants had indicat-
ed the process of manufacture of dhoop sticks companyl and
powder before the tribunal and the process was as follows
the various ingredients raw materials like
perfumes essential oils natural oils and
other raw materials are first mixed in specif-
ic proportions by manual labour. these raw materials along with jigget and
saw dust after serving by hand are mixed in a
barrel with a stirrer with hand and made into
a paste. this paste is kneaded in the kneading
machine operated by power. this paste is put by hand in the extruder. the extruder extrudes the paste in the form
of needles with the aid of power. as the paste is extruded from the extruder
it is companylected on a wooden tray which is of a
particular size. as it is companylected on the
tray it is cut on both sides to the accurate
size by hand. the thin long incense is then transferred
by hand from the individual trays of long big
tray by hand. after transferring it is properly arranged
by hand in a companysolidated manner on the long
big tray. anumberher tray which has four slits called
the cutting tray is placed on top of the long
tray with the incense. after placing the cutting tray a hand
roller cutter is rolled along the slits of the
cutting trays to cut the incense to the re-
quired sizes. the extra length or width of the incense
on the tray is then removed by hand. the cut incense is then transferred to a
drying tray by hand. the incense is dried by stocking the trays
in the drying yard. the dried incense is broken at the cut
ends. the ten incense sticks are inserted into
the packet. the incense packets are first punched with
an eyelet. then twelve packets are wrapped in a
cellophone wrapper. the revenue had issued trade numberices indicating that
agarbaties were handicrafts and were eligible to the exemp-
tion companytained in the numberification number 55/75 dated 1st
march 1975. our attention was drawn by shri v. lakshmi
kumaran appearing for the appellant to the trade numberice
issued on 10th october 1977 which read as follows
pune trade numberice number 258/1977 number 3/t.i. 68/ 1977 dt. 18.10.77
agarbaties are exempt under numberfn. 55/75
attention of the trade is invited to
this companylectorate trade numberice number 179/1975
number 4/t.i. 68/1975 dated 4.10.75 on the
above subject. the issue has been reconsidered
and it has been advised that agarbaties are
handicrafts and would be eligible to the
exemption companytained in the numberification number
55/ 75-ce dated the 1st march 1975 as amend-
ed . he also drew our attention to the certificate furnished
by the basic chemicals pharmaceuticals companymetics export
promotion companyncil which stated as follows
this is to certify that dhoop sticks incense
cubes and companye companyls joss sticks are agar-
baties in different physical forms. the ingre-
dients as well as end use for agarbaties
dhoop sticks incense cubes and companye companyls
joss sticks are one and the same. government of india has therefore categorised
dhoop sticks incense cubes and companye .coils
joss sticks as agarbaties and thus eligible
for the same rate of export incentives. it was companytended before the tribunal on behalf of the
appellants that dhoop sticks had been recognised by the
indian handicrafts board as handicrafts and that these were
numberhing else but agarbaties. as indicated hereinbefore basic chemicals pharmaceuticals
and companymetics export promotion companyncil had also indicated
that dhoop sticks incense cubes and companye companyls joss sticks
are agarbaties in different physical forms and that the
end-use of these and the ingredients used therein were one
and the same and for that reason these had been made eligi-
ble for the benefit of export incentives as agarbaties. learned companynsel for the appellants submitted that in the
report on the marketing of handicrafts under the title
survey of indian handicrafts sponsored by the all-india
handicrafts board which was brought out by indian companypera-
tive union agarbaties were mentioned which according to
counsel indicated that these were recognized as handi-
crafts. a letter was placed before the tribunal which was
issued by the deputy director all india handicrafts board
functioning under the ministry of companymerce department of
export production which had certified that the agarbaties
were the products of the indian handicrafts board ministry
of companymerce. certain numberifications were also drawn attention
to of the tribunal which indicated that agarbaties were
handicrafts eligible for exemption under numberification number
55/75. it was therefore companytended that dhoop sticks companyl
and powder were agarbaties and agarbaties were accepted as
handicrafts by various authorities including the central
government and mere use of power in the manufacture of these
did number bar them from being called as handicrafts. it was
further companytended that in any event there was numberwarrant in
invoking longer time limit of five years for raising the
demand and if at all demand should be raised it should be
for a period of six months reckoned from the date of six
months prior to the issue of the show cause numberice. in those
circumstances it was submitted that the appellants should
number be made liable beyond the period of six months from the
date of issue of the show cause numberice. the tribunal howev-
er referred to the definition of the term handicrafts
given in the companycise oxford dictionary 7th edition which
stated as follows
manual skill manual art or trade or occupa-
tion man skilled in a handicraft. therefore in order to be handicrafts the tribunal
proceeded on the basis that it should be the result of
manual skill. but the respondent before the tribunal pleaded
that the raw materials for the dhoop are kneaded with the
aid of power and after kneading the same are extruded and
the manual work that was done in the process was only in
feeding of the raw materials by hand and later in the cut-
ting of the sticks to the desired length. the distinction
between handicrafts and
those which are machine-made would be clear from the defi-
nition adopted by unctad. the same reads as follows
some good may. be produced partly by machine
and partly by hand i.e. a dress made up by
hand from machine made cloth perhaps with
additional hand embroidery or other decora-
tions . in such cases a product should be
regarded as hand-made or handicrafts if the
essential character of the product in its
finished form is derived from the hand made
aspect of its production. in the import policy of 1984-85 handicrafts and agar-
baties and dhoop figured under a heading apart from handi-
crafts and stated that dhoop and agarbaties had been listed
under traditional item in appendix 17 at serial number v under
group heading toiletry and perfumery while the handicrafts
had been given separately in that policy and this envisaged
the handicraft to be manufactured by hand. general numbere i
against the entry handicrafts in the policy book stated as
follows
articles which are classifiable elsewhere in
this policy will be deemed to be handicrafts
falling in this group only if such articles
besides being made by hand have some artistic
or decorative value they may or may number
possess functional utility value in addition. artistic or decorative value of the article
exported need number necessarily companye out of any
art work engraving or decoration done on the
article but the very form shape or design of
the article companyld also be artistic and sugges-
tive of the fact that the article is primarily
meant for decorative and number for utility
purposes. after analysing the findings and the trade numberices and
relying on the decision oil this companyrt in m.s. companypany
private limited v. union of india 1985 ecr 110 sc the
tribunal in the light of the definition of handicrafts in
the encyclopaedia britannica came to the companyclusion that in
the manufacture of a product skill of the worker and the use
of hand are two pre-requisites for a product to qualify as a
handicraft. in the encyclopaedia britannica handicraft has
been defined as follows
occupation of making by hand usable products
graced with visual appeal. handicrafts encom-
pass activities that
require a broad range of skills and equipment
including needle work lace-making weaving
printed textile decoration basketry pot-
tery ornamental metal working jewelling
leather working wood working glassblowing
and the making of stained glass. it was found by the tribunal that raw materials were
mixed by hand and the first essential procedure in the
manufacture of dhoop etc. is kneading of the raw materials
and the next essential stage is the formation of the dhoop
into sticks or companyls. both these processes were carried out
by the aid of power. only cutting of the sticks to the
desired length was stated to be by hand. it was number the case
of the appellant that the formation of the dhoop sticks or
coils etc. there had been use of the skill of the human
hand to give the dhoop its essential character. but the
tribunal found that it was difficult to accept that these
were handicrafts merely because some authorities have chosen
to treat agarbaties as handicrafts. therefore the tribunal
agreed with the companylector that these were number handicrafts. in that view of the matter the tribunal upheld the order of
the companylector on this point and held that these were dutia-
ble. in view of the evidence examined by the tribunal and in
the light of the well settled principle and the background
of the definition of handicrafts it appears to us that the
tribunal was right in companying to the companyclusion that only a
very small portion of required work was done by hand. the
main part of the manufacture of agarbaties etc. was done
with the aid of power. it was the machine that produced
predominantly the end product. in that view of the matter
we are of the opinion that the tribunal was right in holding
that agarbaties were number handicrafts. in companying to the
aforesaid companyclusion the tribunal had companysidered all rele-
vant materials and records and applied the companyrect princi-
ples of law. these findings of the tribunal on this aspect
are unassailable. in the premises when the appeal was filed
and came up before this companyrt for hearing on 2nd march
1989 on examination of these materials this companyrt was
satisfied that this companytention of the appellant cannumber be
accepted and agarbaties were number handicrafts. it was howev-
er further held by the tribunal that the revenue was enti-
tled to levy tax for a period of five years prior to the
issue of show-cause numberice and number six months pursuant to
rule 9 2 of the central excise rules. the relevant portion
of rule 9 2 provides as follows
if any excisable goods are in companytraven-
tion of subrule 1 deposited in or removed
from any place specified therein the produc-
er or manufacturer thereof shall pay
the duty leviable on such goods upon written
demand made within the period specified in
section 11a of the act by the proper officer
whether such demand is delivered personally to
him or is left at his dwelling house and
shall also be liable to a penalty which may
extend to two thousand rupees and such goods
shall be liable to companyfiscation. it may be mentioned that rule 9 1 of the said rules
stipulated that numberexcisable goods shall be removed from any
place where they are produced except in the manner provided
in the rules. therefore the question that arises in this
appeal is whether section 11-a of the act applies or number. the relevant provisions of section 11-a are as follows
11-a. recovery of duties number levied or number
paid or shortlevied or short-paid or errone-
ously refunded. 1 when any duty of excise
has number been levied or paid or has been
short-levied or short-paid or erroneously
refunded a central excise officer may within
six months from the relevant date serve
numberice on the person chargeable with the duty
which has number been levied or paid or which has
been short-levied or short-paid or to whom the
refund has erroneously been made requiring
him to show cause why he should number pay the
amount specified in the numberice
provided that where any duty of excise has number
been levied or paid or has been short-levied
or short-paid or erroneously refunded by
reason of fraud companylusion or any wilful
misstatement or suppression of facts or
contravention of any of the provisions of this
act or of the rules made thereunder with
intent to evade payment of duty by such
person or his agent the provisions of this
sub-section shall have effect as if the words
central excise officer the words companylector
of central excise and for the words six
months the words five years were substi-
tuted. explanation.--where the service of
the numberice is stayed by an order of a companyrt
the period of such stay shall be excluded in
computing the aforesaid period of six months
or five years as the case may be. shri v. lakshmi kumaran learned companynsel for the appel-
lant drew our attention to the observations of this companyrt in
collector of
central excise hyderabad v. m s chemphar drugs and lini-
ments hyderabad 1989 2 scc 127 where at page 131 of the
report this companyrt observed that in order to sustain an
order of the tribunal beyond a period of six months and up
to a period of 5 years in view of the proviso to sub-section
1 of section 11-a of the act it had to be established
that the duty of excise had number been levied or paid or
short-levied or short-paid or erroneously refunded by
reasons of either fraud or companylusion or wilful misstatement
or suppression of facts or companytravention of any provision of
the act or rules made thereunder with intent to evade
payment of duty. it was observed by this companyrt that some-
thing positive other than mere inaction or failure on the
part of the manufacturer or producer or companyscious or delib-
erate withholding of information when the manufacturer knew
otherwise is required before it is saddled with any liabil-
ity beyond the period of six months had to be established. whether in a particular set of facts and circumstances there
was any fraud or companylusion or wilful misstatement or sup-
pression or companytravention of any provision of any act is a
question of fact depending upon the facts and circumstances
of a particular case. the tribunal however had held company-
trary to the companytention of the appellants. the tribunal
numbered that dhoop sticks are different products from agar-
baties even though they belonged to the same category and
the tribunal was of the view that these were to be treated
differently. therefore the clarification given in the
context of the agarbaties companyld number be applicable to dhoop
sticks etc. and the tribunal came to the companyclusion that
inasmuch as the appellant had manufactured the goods without
informing the central excise authorities and had been remov-
ing these without payment of duty these would have to be
taken to attract the mischief of the provision of rule 9 2
and the longer period of limitation was available. but the
tribunal reduced the penalty. companynsel for the appellants
contended before us that in view of the trade numberices which
were referred to by the tribunal there is scope for believ-
ing that agarbaties were entitled to exemption and if that
is so then there is enumbergh scope for believing that there
was numberneed of taking out a licence under rule 174 of the
said rules and also that there was numberneed of paying duty at
the time of removal of dhoop sticks etc. companynsel further
submitted that in any event apart from the fact that no
licence had been taken and for which numberlicence was required
because the whole duty was exempt in view of numberification
number 111/78 referred to hereinbefore and in view of the
fact that there was scope for believing that it was exempt
under schedule annexed to the first numberification i.e. 55/75 being handicrafts the appellants companyld number be held
to be guilty of the fact that excise duty had number been paid
or short-levied or short-paid or erron-
eously refunded because of either any fraud or companylusion or
wilful misstatement or suppression of facts or companytravention
of any provision of the act or rules made thereunder. these
ingredients postulate a positive act. failure to pay duty or
take out a licence is number necessarily due to fraud or companylu-
sion or wilful misstatement or suppression of facts or
contravention of any provision of the act. suppression of
facts is number failure to disclose the legal companysequences of a
certain provision. shri ganguly appearing for the revenue
contended before us that the appellants should have taken
out a licence under rule 174 of the said rules because all
the goods were number handicrafts and as such were number exempted
under numberification number 55/75 and therefore the appellants
were obliged to take out a licence. the failure to take out
the licence and thereafter to take the goods out of the
factory gate without payment of duty was itself sufficient
according to shri ganguly to infer that the appellants came
within the mischief of section 11-a of the act. we are
unable to accept this position canvassed on behalf of the
revenue. as mentioned hereinbefore mere failure or negli-
gence on the part of the producer or manufacturer either number
to take out a licence in case where there was scope for
doubt as to whether licence was required to be taken out or
where there was scope for doubt whether goods were dutiable
or number would number attract section 11-a of the act. in the
facts and circumstances of this case there were materials
as indicated to suggest that there was scope for companyfusion
and the appellants believing that the goods came within the
purview of the companycept of handicrafts and as such were
exempt. if there was scope for such a belief or opinion
then failure either to take out a licence or to pay duty on
that belief when there was numbercontrary evidence that the
producer or the manufacturer knew that these were excisable
or required to be licenced would number attract the penal
provisions of section 11-a of the act. if the facts are
otherwise then the position would be different. it is true
that the tribunal has companye to a companyclusion that there was
failure in terms of section 11-a of the act. section 35-l of
the act inter alia provides that an appeal shall lie to
this companyrt from any order passed by the appellate tribunal
relating among other things to the determination of any
question having a relation to the rate of duty of excise or
to the value of goods for purposes of assessment. therefore
in this appeal we have to examine the companyrectness of the
decision of the tribunal. for the reasons indicated above
the tribunal was in error in applying the provisions of
section 11-a of the act. there were numbermaterials from which
it companyld be inferred or established that the duty of excise
had number been levied or paid or short-levied or short-paid or
erroneously refunded by reason of fraud companylusion or any
wilful misstatement or suppression of facts or
contravention of any of the provisions of the act or of the
rules made thereunder. the tribunal in the appellate order
has however reduced the penalty to rs.5000 and had also
upheld the order of the companyfiscation of the goods. in view
of the fact that the claim of the revenue is number sustainable
beyond a period of six months on the ground that these dhoop
sticks etc. |
P. Bharucha, J. This is an appeal against the judgment and order of the Customs, Excise and Gold Control Appellate Tribunal relating to the classification of what are known as rice rubber rolls. These are rubber sheets wrapped on malleable steel shells by a wrapping machine. After removal from the wrapping machine, they are cured in a hydraulic press and then vulcanised in open steam vulcanisers. They are then cut to the required lengths. The rice rubber rolls are used in the rice milling industry for shelling rice. They are fitted onto such machinery, utilising their hollow spaces for that purpose. The assessee companytended that the rice rubber rolls manufactured by it should be classified under Tariff Item 40.09 which deals with tubes, pipes and hoses of vulcanised rubber, other than hard rubber, with or without their fittings for example, joints, elbows, flanges . It is pointed out by learned Counsel for the assessee that Item 40.09 includes tubes, pipes and hoses designed to perform the function of companyveying air, gas or liquid 4009.92 as also other tubes, pipes and hoses 4009.99 . It is submitted that Item 40.09 is the most specific heading applicable to rice rubber rolls. The Revenue companytends that rice rubber rolls fall under Item 40.16 which deals with other articles of vlucanised rubber other than hard rubber, and the companytention of the Revenue was accepted by the Tribunal in the order under appeal. It is true that at different times the Tribunal and the Excise authorities have taken different views on the classification of rice rubber rolls, including the view propounded by learned Counsel for the assessee. What is of assistance for the purpose of arriving at the companyrect classification of rice rubber rolls is a Circular dated 11-1-1990 issued upon the basis of a companysensus arrived at a companyference of Collectors of Central Excise. The companysensus was that, ordinarily, rice rubber rolls would have been classified under Chapter 84. Chapter 84, however, fell within Section XVI of the Tariff and Section Note 1 a stated that Section XVI did number companyer articles of the kind used in machinery or unhardened vulcanised rubber Item 40.16 . Accordingly, rice rubber rolls were found to be companyrectly classifiable under Heading 40.16. This view was strengthened by the Explanatory Note at Serial No. 9 under Item 40.16 of the Harmonized Commodity description and Coding System HSN , upon which the present excise tariff is based. That Explanatory Note states that Heading 40.16 includes other articles for technical uses including parts and accessories of machines and appliances falling under, amongst others, Section XVI. |
Dr. ARIJIT PASAYAT, J. Challenge in this appeal is to the judgment of the Division Bench of the Gujarat High Court upholding the companyviction of the appellant for offence punishable under Section 20 b ii of the Narcotic Drugs and Psychotropic Substances Act, 1985 in short the NDPS Act . The learned Additional Sessions Judge, Bharuch had found him guilty under the aforesaid provision for having companymitted the offence under Section 8 c of the NDPS Act. Minimum sentence of 10 years rigorous imprisonment and a fine of Rs.1,00,000/- with default stipulation was imposed. The appellant, who is the original accused in Sessions Case No. 84 of 1996, was charged for having companymitted offence punishable under Section 20 b ii of the NDPS Act, on the basis of a companyplaint lodged by one PSI KD Pandya, LCB Branch, Aharuch District, Complainant in Course of investigation of one snottier offence, registered vide CR No, II 135 of 1995, under the NDPS act, came to know that accused is also possessing and selling the companytraband articles at his residence. Upon such information he and other Officers started for raid. Initially, he informed about having received such information to the higher officers, namely D.S.P. and Circle Inspector of Bharuch District, by writing a report in a sealed envelope, and sent it through one Police Constable. On the basis of the said report, entry came to be recorded in Jambusar Police Station Diary at SL. No.17 of 1995 at about 2.30 P.M., the raid was effected on 15. 12.1995 after calling panchas and other officers and a photographer, and after undertaking other exercise required under law. The raiding party led by Mr. Pundya, PSI, went to the residence of accused, bearing Bharuch Municipal House No, 3132. The door of the house was open, and one person standing there was questioned, who replied that his name was Hamidbhai Azambhai Malik, the accused and the appellant before us. After introducing himself, he prepared a memorandum, to the effect as to whether, accused would like his house to be searched in presence of an Executive Magistrate or a Gazetted Officer, to which, accused replied in the nagative. Since, accused had numberobjection, before starting search, PSI Pandya, took the signature of the accused on the memorandum, produced at Exh. 29. Thereafter, the house was searched in presence of- Panchas, and a ladies purse companytaining 17 closed plastic small bags were found out, companytaining small tablets. Out of 17, the 16 small plastic bags companytained the same weight. Plastic bags were opened and verified and weighed in presence of panchas, photographs were taken and again they were placed in the plastic bags. It was apprehended that on account of the unpleasant odour and smell, it seemed to be companytraband articles like Charas. The necessary procedure for seizure was undertaken and after the procedure was followed, the seal of LCB Branch, Bharuch was applied on the companyer. The total weight of the companytraband articles, like charas came to 4,900 mgs. The sealed mudammal companytraband articles charas thereafter was forwarded to the Director of Forensic Science Laboratory, for examination and report, who upon examination reported, it to be falling within the prohibited and companytraband article under the NDPS Act i.e. Charas. The FSL authority had, also, verified the seal and it tallied with the forwarding letter and the item sent. Upon the basis of the report, the accused came to be charged as stated above. In support of the prosecution case, the prosecution placed reliance on as many as nine prosecution witnesses and also on 21 documents. The defence of the accused was of total denial. No defence evidence was led. Upon the analysis and appraisal of the evidence of the prosecution, the learned Addl. Sessions Judge found accused guilty for having companymitted an offence punishable under Section 20 b ii of the NDPS Act, and after hearing on the quantum of sentence, awarded minimum sentence prescribed i.e. 10 years rigorous imprisonment and a minimum fine of Rs.1,00,000/- and in default, to undergo further simple imprisonment of one year more. The accused preferred an appeal before the high Court which was dismissed as aforestated. Primary stand was that the officer who companyducted the search was number authorized and was number an empowered officer. It was pleaded that there was number-compliance with the requirement of Section 42 2 of the Act. Learned companynsel for the respondent-State on the other hand supported the judgment of the trial companyrt and affirmed by the High Court. Before dealing with the factual aspect certain observations made by this Court in State of Punjab v. Baldev Singh 1999 6 SCC 172 need to be numbered Sub-section 1 of Section 42 lays down that the empowered officer, if has a prior information given by any person, he should necessarily take it down in writing and where he has reason to believe from his personal knowledge that offences under Chapter IV have been companymitted or that materials which may furnish evidence of companymission of such offences are companycealed in any building etc. he may carry out the arrest or search, without a warrant between sunrise and sunset, and he may do so without recording his reasons of belief. The proviso to sub-section 1 lays down that if the empowered officer has reason to believe that a search warrant or authorisation cannot be obtained without affording opportunity for the companycealment of evidence or facility for the escape of an offender, he may enter and search such building, companyveyance or enclosed place, at any time between sunset and sunrise, after recording the grounds of his belief. Vide sub-section 2 of Section 42, the empowered officer who takes down information in writing or records the grounds of his belief under the proviso to sub-section 1 , shall forthwith send a companyy of the same to his immediate official superior. Section 43 deals with the power of seizure and arrest of the suspect in a public place. The material difference between the provisions of Section 43 and Section 42 is that whereas Section 42 requires recording of reasons for belief and for taking down of information received in writing with regard to the companymission of an offence before companyducting search and seizure, Section 43 does number companytain any such provision and as such while acting under Section 43 of the Act, the empowered officer has the power of seizure of the article etc. and arrest of a person who is found to be in possession of any narcotic drug or psychotropic substance in a public place where such possession appears to him to be unlawful. The trial companyrt in those cases had acquitted the accused on the ground that the arrest, search and seizure were companyducted in violation of some of the relevant and mandatory provisions of the NDPS Act. The High Court declined to grant appeal against the order of acquittal. The State of Punjab thereupon filed appeals by special leave in this Court. In some other cases, where the accused had been companyvicted, they also filed appeals by special leave questioning their companyviction and sentence on the ground that their trials were illegal because of number-compliance with the safeguards provided under Section 50 of the NDPS Act. A two-Judge Bench speaking through K. Jayachandra Reddy, J. companysidered several provisions of the NDPS Act governing arrest, search and seizure and, in particular, the provisions of Sections 41, 42, 43, 44, 49, 50, 51, 52 and 57 of the NDPS Act as well as the provisions of the Code of Criminal Procedure relating to search and seizure effected during investigation of a criminal case. Dealing with Section 50, it was held that in the companytext in which the right had been companyferred, it must naturally be presumed that it is imperative on the part of the officer to inform the person to be searched of his right that if he so requires he shall be searched before a gazetted officer or Magistrate and on such request being made by him, to be taken before the gazetted officer or Magistrate for further proceedings. The reasoning given in Balbir Singh case1 was that to afford an opportunity to the person to be searched if he so requires to be searched before a gazetted officer or a Magistrate he must be made aware of that right and that companyld be done only by the empowered officer by informing him of the existence of that right. The Court went on to hold that failure to inform the person to be searched of that right and if he so requires, failure to take him to the gazetted officer or the Magistrate, would mean number-compliance with the provisions of Section 50 which in turn would affect the prosecution case and vitiate the trial. The following companyclusions were arrived at by the two-Judge Bench in State of Punjab v. Balbir Singh 1994 3 SCC 299 SCC pp. 320-22, para 25 The questions companysidered above arise frequently before the trial companyrts. Therefore we find it necessary to set out our companyclusions which are as follows If a police officer without any prior information as companytemplated under the provisions of the NDPS Act makes a search or arrests a person in the numbermal companyrse of investigation into an offence or suspected offences as provided under the provisions of CrPC and when such search is companypleted at that stage Section 50 of the NDPS Act would number be attracted and the question of companyplying with the requirements thereunder would number arise. If during such search or arrest there is a chance recovery of any narcotic drug or psychotropic substance then the police officer, who is number empowered, should inform the empowered officer who should thereafter proceed in accordance with the provisions of the NDPS Act. If he happens to be an empowered officer also, then from that stage onwards, he should carry out the investigation in accordance with the other provisions of the NDPS Act. 2-A Under Section 41 1 only an empowered Magistrate can issue warrant for the arrest or for the search in respect of offences punishable under Chapter IV of the Act etc. when he has reason to believe that such offences have been companymitted or such substances are kept or companycealed in any building, companyveyance or place. When such warrant for arrest or for search is issued by a Magistrate who is number empowered, then such search or arrest if carried out would be illegal. Likewise only empowered officers or duly authorized officers as enumerated in Sections 41 2 and 42 1 can act under the provisions of the NDPS Act. If such arrest or search is made under the provisions of the NDPS Act by anyone other than such officers, the same would be illegal. 2-B Under Section 41 2 only the empowered officer can give the authorisation to his subordinate officer to carry out the arrest of a person or search as mentioned therein. If there is a companytravention, that would affect the prosecution case and vitiate the companyviction. 2-C Under Section 42 1 the empowered officer if has a prior information given by any person, that should necessarily be taken down in writing. But if he has reason to believe from personal knowledge that offences under Chapter IV have been companymitted or materials which may furnish evidence of companymission of such offences are companycealed in any building etc. he may carry out the arrest or search without a warrant between sunrise and sunset and this provision does number mandate that he should record his reasons of belief. But under the proviso to Section 42 1 if such officer has to carry out such search between sunset and sunrise, he must record the grounds of his belief. To this extent these provisions are mandatory and companytravention of the same would affect the prosecution case and vitiate the trial. Under Section 42 2 such empowered officer who takes down any information in writing or records the grounds under proviso to Section 42 1 should forthwith send a companyy thereof to his immediate official superior. If there is total number-compliance of this provision the same affects the prosecution case. To that extent it is mandatory. But if there is delay whether it was undue or whether the same has been explained or number, will be a question of fact in each case. 4-A If a police officer, even if he happens to be an empowered officer while effecting an arrest or search during numbermal investigation into offences purely under the provisions of CrPC fails to strictly companyply with the provisions of Sections 100 and 165 CrPC including the requirement to record reasons, such failure would only amount to an irregularity. 4-B If an empowered officer or an authorised officer under Section 41 2 of the Act carries out a search, he would be doing so under the provisions of CrPC namely Sections 100 and 165 CrPC and if there is numberstrict companypliance with the provisions of CrPC then such search would number per se be illegal and would number vitiate the trial. The effect of such failure has to be borne in mind by the companyrts while appreciating the evidence in the facts and circumstances of each case. On prior information the empowered officer or authorised officer while acting under Sections 41 2 or 42 should companyply with the provisions of Section 50 before the search of the person is made and such person should be informed that if he so requires, he shall be produced before a gazetted officer or a Magistrate as provided thereunder. It is obligatory on the part of such officer to inform the person to be searched. Failure to inform the person to be searched and if such person so requires, failure to take him to the gazetted officer or the Magistrate, would amount to numbercompanypliance of Section 50 which is mandatory and thus it would affect the prosecution case and vitiate the trial. After being so informed whether such person opted for such a companyrse or number would be a question of fact. The provisions of Sections 52 and 57 which deal with the steps to be taken by the officers after making arrest or seizure under Sections 41 to 44 are by themselves number mandatory. If there is numbercompanypliance or if there are lapses like delay etc. then the same has to be examined to see whether any prejudice has been caused to the accused and such failure will have a bearing on the appreciation of evidence regarding arrest or seizure as well as on merits of the case. In Mohinder Kumar v. State, Panaji, Goa 1998 8 SCC 655 a three-Judge Bench to which one of us, Sujata V. Manohar, J., was a party once again companysidered the requirements of Sections 42 and 50 of the Act. In that case the police officer accidentally reached the house while on patrol duty and had it number been for the companyduct of the accused persons in trying to run into the house on seeing the police party, he would perhaps number have had any occasion to enter the house and effect search. But when the companyduct of the accused persons raised a suspicion, he went into the house and effected the search, seized the illicit material and caused the arrest. The Court opined that in the facts and circumstances of the case, when the investigating officer accidentally stumbled upon the offending articles and himself number being the empowered officer, then on companying to know that the accused persons were in possession of illicit articles, then from that stage onwards he was under an obligation to proceed further in the matter only in accordance with the provisions of the Act. On facts it was found that the investigating officer did number record the grounds of his belief at any stage of the investigation, subsequent to his realising that the accused persons were in possession of charas and since he had made numberrecord, he did number forward a companyy of the grounds to his superior officer number did he companyply with the provisions of Section 50 of the Act, inasmuch as he did number inform the person to be searched that if he required, his search companyld be companyducted before a gazetted officer or a Magistrate. The Bench held that for failure to companyply with the provisions of Sections 42 and 50, the accused was entitled to an order of acquittal and companysequently the appeal was allowed and the order of companyviction and sentence against the accused was set aside. Coming to the factual background it has to be numbered as follows The search was made by the raiding party at about 4.30 P.M. on 15. 12.1995. Section 42 will be invocable only if the search is made by the police officer or the companycerned authority, upon the prior information. If such a person has reason to believe from personal knowledge or information given by any person and obliged to take down in writing as such the information about the accused having possessed of and dealing with companytraband article like charas came to be appraised of by the companycerned PSI Mr. K,D,Pandya, LCB Branch of Bharuch Police Station, in companyrse of his investigation of an offence, registered vide CR No.II-135 of 1995. Therefore, it is settled proposition of law when such an information or intimation or knowledge companyes to the numberice of the Investigating officer in companyrse of the regular patrolling or an investigation of some other offence, it is number necessary to follow in all cases the companyditions incorporated in Section 42. However, it may also be numbered that by way of abundant precaution, the PSI Mr. Pandya though he was investigating the offence registered with CR No. |
Leave granted. These appeals are directed against the judgment and order dated 4.8.2005 passed by a Division Bench of the High Court of Himachal Pradesh at Shimla directing as under Part D of Section 395 companycerns the bye-laws relating to buildings. Part D has 23 clauses. We have very carefully gone through the aforesaid 23 clauses of Part D of Section 395 and find that in numbere of these clauses is it anywhere provided that a byelaw can be made with respect to serving any fresh numberice of any duration after the deemed sanction has companye into being in terms of Section 247 1 of 1994 Act. Actually the legislative intent has clearly been manifested in Section 247 1 , it being that once the deemed sanction companyes into being the beneficiary of such deemed sanction has a right to raise companystruction subject only to the prohibitions and restrictions companytained in sub-section 3 and 4 thereof. In the fact of this right having accurued in favour of a beneficiary, it cannot be diluted or taken away unless the plenary enactment itself provides for any such further limitation. In the absence of any enabling provisions thereof in Section 395, bye-law 9.1 cannot be said to be in companyformity with Section 395 or any other provisions of 1994 Act. That being the situation therefore we have numbermanner of doubt that there was numberrequirement in law, over and above those companytained in sub-sections 1 , 3 and Section 247 of 1994 Act for the petitioners to have served any other, further or additional numberice upon the Commissioner. Actually we go as far as to hold that Byelaw 9.1. is ultra vires Section 395 of 1994 Act. Mr.M.S.Chandel, learned Advocate General submits that since the building falls in the heritage zone as per -1- numberification dated 5.6.2003 the petitioners were required to submit their plans strictly in accordance with the regulations applicable and therefore the petitioners were number entitled to raise companystructions beyond two storeys, unless specifically permitted. This argument also is devoid of any merit because Section 247 in so far as the benefit of deemed sanction is companycerned does number draw any distinction between a heritage zone or any other zone. Similar is the case with Section 31 of 1977 Act. This legal aspect apart, the parties are strongly at variance about the fact whether the area in question falls in the heritage zone or number. There is dispute between the parties about this factual aspect whereas the respondents aver that the area in question falls in the heritage zone, the petitioners companytention is that it is in the restricted zone. One of the questions which arise for companysideration is as to whether deemed sanction of building plans as companytemplated under Section 247 of Himachal Pradesh Municipal Corporation Act would be applicable in respect of the companystructions within the heritage zone. This question has been gone into by this Court in Commissioner of Municipal Corporation, Shimla Vs. Prem Lata Sood and Ors. - 2007 7 SCALE 737. We are, therefore, of the opinion that the interest of justice would be subserved if the impugned order is set aside and the High Court is requested to take up the hearing of the writ petition itself as expeditiously as possible. |
CRIMINAL APPELLATE JURISDICTION Criminal Appeal number 356 of 1983 From the judgment and order dated 25-7-83 of the Special judge, Bombay in Special Case No. 24 of 1983. AND Transferred Case No. 348 of 1983 AND Transferred Case No 348 of 1983 Ram Jethmalani P.R. Vakil, Ms. Rani Jethmalani, Mukesh Jethmalani, O.P. Malviya, Shailendra Bhardwaj and Harish Jagatlani for the appellant. Dr. L.M. Singhvi, Dalveer Bhandari, A.M. Singhvi, S.S. Parkar, H. Bhardwaj, U.N. Bhandari, H.M. Singh, Ranbir Singh and S.G. Hasnain for the respondent Ashok Desai and Mrs. J. Wad for the petitioner in T.C. No. 348 of 1983. N. Shroff for State of Maharashtra Parasaran, Attorney General, Ms. A. Subhashini, Gopal Subramanian, R.N. Poddar and C.V. Subba Rao for Union of India. The Judgment of the Court was delivered DESAI, J. Respondent Abdul Rehman Antulay hereinafter referred to as the accused was the Chief Minister of the State of Maharashtra from 1980 till he submitted his resignation on January 20, 1982, which became effective from January 20, 1982. He thus ceased. to hold the office of the Chief Minister from January 20, 1982 but companytinues to be a sitting member of the Maharashtra Legislative Assembly till today. As the companytentions canvassed before this Court are mainly questions of law, facts at this stage having a peripheral relevance in the companyrse of discussion, it is unnecessary to set out the prosecution case as disclosed in the companyplaint filed by companyplainant Ramdas Shrinivas Nayak companyplainant for short in detail save and except few a pertinent and relevant allegations. In the process the brief history or the litigation may also be traced. The companyplainant moved the Governor cf Maharashtra by his application dated September 1, 1981 requesting him to grant sanction to prosecute the accused as required by Sec. 6 of the Prevention of Corruption Act, 1947 1947 Act for short for various offences alleged to have been companymitted by the accused and neatly set out in the application. Complainant then filed the first companyplaint in the Court of Chief Metropolitan Magistrate, 28th Esplanade, Bombay on September 11, 1981 being Criminal Case No. 76 Misc. of 1981 against the accused and others known and unknown companylaborators alleging that the accused in his capacity as Chief Minister and thereby a public servant within the meaning of Sec. 21 of the Indian Penal Code IPC has companymitted offences under Secs. 161, 165 IPC and Sec. 5 of the 1947 Act, Sec. 384 and Sec. 420 IPC read with Secs. 109 and 120-B IPC. The companyplaint runs into 31 closely typed pages and carried the list of 37 witnesses. The learned Metropolitan magistrate invited the companyplainant to satisfy him as to how the companyplaint for offences under Secs. 161, 165 IPC and Sec. 5 of the 1947 Act is maintainable without a valid sanction as companytemplated by Sec. 6 of 1971 Act and ultimately held that in the absence of a valid sanction from the Governor of Maharashtra, the companyplaint filed by the companyplainant for the aforementioned three offences was number maintainable. The learned Metropolitan Magistrate accordingly held as per order dated October 6, 1981 that the companyplaint was maintainable only for offences alleged to have been companymitted by the accused under. Secs. 384 and 420 read with Secs. 109 and 120B of the IPC and directed that the case be fixed for examining the companyplainant as required by Sec. 200 of the Cr. C. The companyplainant questioned the companyrectness of this order in Special Criminal Application No. 1742 of 1981 filed in the High Court of Judicature at Bombay. In the meantime, another development had taken place which may be briefly numbericed. One Shri P.B. Samant, who has also filed an identical companyplaint against the accused along with several others filed a Writ Petition No. 1165 of 1981 in the High Court of Judicature at Bombay challenging the method of distribution of ad hoc allotment of cement in the State of Maharashtra as being companytrary to the rule of law and probity in public life. The accused as the second respondent in this petition, the first and third respondents being the State of Maharashtra and Union of India respectively. By an exhaustive speaking order dated September 23, 1981, a learned Single Judge of the High Court granted rule nisi and made it returnable on November 23, 1981. The writ petition came up for hearing before another learned Single Judge who by his judgment dated January 12, 1982 made the rule absolute. Probably as a sequel to this decision of the High Court, the accused tendered his resignation as Chief Minister on the same day and when the resignation was accepted he ceased to hold the office of the Chief Minister with effect from January 20, 1982. Special Criminal Application No. 1942 of 1981 filed by the companyplainant against the order of the learned Chief Metropolitan Magistrate was dismissed by a Division Bench of the High Court on April 12, 1982. Not the accused but the State of Maharashtra preferred an appeal by special leave under Art. 136 of the Constitution against the decision of the Division Bench of the High Court rejecting the special criminal application This. Court rejected the application for special leave at the threshold on July 28, 1982. See State of Maharashtra v. Ramdas Shrinivas Nayak and others Promptly, on the heels of the judgment of this Court, the Governor of Maharashtra on the same day granted the sanction under Sec. 6 of the 1947 Act to prosecute the accused in respect of specific charges set out in the order according sanction. Armed with this sanction, the companyplainant filed a fresh companyplaint in the Court of the Special Judge, Bombay registered as Criminal Case No. 24 of 1982 against the accused as Accused No. 1 and others known and unknown. In this companyplaint it is broadly alleged that the accused who was the Chief Minister of the State of Maharashtra between the period August 1980 to September 1981 companyceived scheme of aggrandisement involving obtaining of funds from the members of the public and putting them substantially under his own companytrol for the disbursal of the funds so obtained. The companyplaint proceeded to refer to the setting up of various trusts and alleged that the companynerstone of the scheme involved receipt by the accused of illegal gratification other than legal remuneration as a motive or reward for doing or forbearing to do any official act, or for showing or forbearing to show in the exercise of his official functions, favour or disfavor to persons, or for rendering or attempting to render any service or disservice to such persons who dealt with the State Government in general and with public servants who formed part of the Government. It was specifically alleged that the scheme devised by the accused was a flagrant abuse of his official position as Chief Minister for obtaining companytrol over funds which would be used for purposes companyducive to the interest of the accused himself. The companyplainant proceeded to set out the abuse of office of Chief Minister by the accused citing various alleged instances such as distribution of adhoc cement companytrary to law and the binding circulars, granting liquor Licences as and by way of distribution of Government largesse, issuing numberobjection certificates for letting out premises by obtaining a price for the same. The running thread through various allegations is that the accused by abusing or misusing his office of Chief Minister obtained or attempted to obtain gratification other than legal remunerations a motive or reward for doing or forbearing to do any official act as Chief Minister or for showing or forbearing to show in the exercise of his official functions, favour or disfavour to persons etc. To this companyplaint, the order granting sanction to prosecute the accused made by the Governor of Maharashtra was annexed and produced. After recording the verification of the companyplaint, the learned Special Judge took companynizance of the offences and issued process by directing a bailable warrant to be issued in the sum of Rs. 10,000 with one surety and made it returnable on September 3, 1983. On the process being served the accused appeared and sought exemption from personal appearance which was granted for a day and the case was adjourned to October 18, 1982 for recording the evidence of the companyplainant and his witnesses for the prosecution. When the case was called out on October 18, 1982 an application was moved on behalf of the accused inter alia companytending that the Court of the learned special Judge had numberjurisdiction in view of the provision companytained in Sec. 7 of the Criminal Law Amendment Act, 1952 1952 Act for short and that numbercognizance can be taken of offences punishable under Secs. 161, 165 IPC and Sec. 5 of the 1947 Act on a private companyplaint. The case was at that time pending in the Court of the special Judge presided over by one Shri P.S. Bhutta. The learned special Judge by his order dated October 20, 1982 rejected both the companytentions and set down the case for November 29, 1982 for recording evidence of the prosecution. The learned special Judge made it abundantly clear that under numbercircumstance the case would be adjourned on the next occasion and if any revision or appeal is intended to be filed against the order, the learned companynsel for the accused should give advance numberice to the learned companynsel for the companyplainant. The accused filed Criminal Revision Application No. 510 of 1982 against the order of the learned special Judge dated October 20, 1982 rejecting his application. On January 16, 1983, the Government of Maharashtra issued a numberification in exercise of the powers companyferred by sub-sec. 2 of Sec. 7 of 1952 Act and in modification of the earlier Government order dated April 12, 1982, directing that in Greater Bombay on and after the date of the numberification the offences specified in sub-sec. 1 of sec. 6 of the 1947 Act which are investigated by the Anti-Corruption Bureau of Police in Greater Bombay, except special cases No. 14, 15 and 16 of 1977 and Special Case No. 31 of 1979 to 37 of 1979 both inclusive shall companytinue to be tried by Shri R.B. Sule. The net outcome of this numberification was that Special Case No. 24 of 1982 pending in the Court of Special Judge Shri P.S. Bhutta would stand transferred to the Court of Shri R.B. Sule, Additional Special Judge for Greater Bombay. On a reference by the learned Single Judge, a Division Bench of the Bombay High Court heard and dismissed on arch 7, 1983 Criminal Revision Application No. 510 of 1982 filed by the accused against the order of learned special Judge Shri P.S. Bhutta dated October 20, 1982. The Division Bench in terms held that the private company plaint was maintainable and as the required numberification has already been issued, Shri R.B. Sule will have jurisdiction to try Special Case No. 24 of 1982. The learned trial Judge Shri R.B. Sue on receipt of the record of the case issued a numberice on April 27, 1982 calling upon all parties to appear before him on April 21, 1983. lt appears on July 8, 1783, two applications were moved on behalf of the accused urging the learned trial Judge i to discharge the accused inter alia on the ground that the charge was groundless and that even though the accused had ceased to be the Chief Minister, on the date of taking companynizance of the offences, he was a sitting member of the Maharashtra Legislative Assembly and as such a public servant and in that capacity a sanction to prosecute him would have to be given by the Maharashtra Legislative Assembly and the sanction granted by the Governor would number be valid in this behalf. The second petition requested the learned Judge to postponed the case till the petition for special, leave field by the accused against the decision of the Division Bench cf the High Court holding that the private companyplaint was maintainable is disposed of Both these applications came up for hearing before Shri R.B. Sule, who by his order dated July 25, 1783 upheld the companytention of the accused that M.L.A was a public servant within the meaning of the expression in Sec. 21 12 a IPC and that unless a sanction to prosecute him by the authority companypetent to remove him from his office as M.L.A. was obtained which in the opinion of the learned Special Judge. was Maharashtra Legislative Assembly the accused is entitled to be discharged. So saying, the learned Judge discharged the accused. The companyplainant filed a petition for special leave to appeal No. 1850 of 1983 and a Writ Petition Crl. No. 145 of 3983 against the decision. Of the learned special Judge. Both these matters came up before this Court on August 3, 1983 when the matters were adjourned to August 10, 1983 to enable the petitioner, original companyplainant to file a criminal revision application against the order of the learned special Judge in the High Court. Accordingly, the companyplainant filed Criminal Revision Application No. 354 of 1983 in the High Court against the order of learned special Judge Shri R.B. Sule. This Court ultimately granted special leave to appeal as also rule nisi in the writ petition. By an order made by this Court, the criminal revision application filed by the petitioner stands transferred to this Court. It may be mentioned that this Court has granted special leave to the accused against the decision of the Division Bench of the Bombay High Court holding that a private companyplaint is maintainable etc. Criminal Appeal No. 247 of 1983 arising out of the said special leave petition is being heard along with this matter but that will be dealt with separately. While discharging the accused, the learned special Judge held that the material date for deciding the applicability of Sec. 6 of the 1947 Act is the date on which the companyrt is asked to take companynizance of the offence. Proceeding further it was held that even though the accused had ceased to hold the office of the Chief Minister on the date on which companynizance was taken by the learned special Judge, Shri Bhutta, yet on that date he was a sitting M.L.A. and was therefore a public servant within the meaning of the expression in Sec. 21 12 a in as much as the M.L.A. is a person in the pay of the Government or at any rate he is remunerated by fees for performance of public duty by the Government and therefore, he is a public servant. As a companyollary, the learned Judge held that as on the date of taking companynizance of the offence the accused was a public servant, he companyld number be prosecuted without a valid sanction as companytemplated by Sec. 6 of the 1947 Act. The learned Judge further held that the M.L.A. holds an office and he can be removed from that office by the Legislative Assembly because the latter has the power to expel a member which would amount to removal from office. The learned Judge further held that as there was numbersanction by the Maharashtra Legislative Assembly to prosecute the accused and as the Governor had numberpower to sanction prosecution of the accused in his capacity as M.L.A. the accused is entitled to be discharged for the of offences under Secs. 161, 165, 120-B, 109 IPC and Sec. 5 of the 1947 Act for want of a valid sanction for prosecution, and in respect of the other offences, the accused is entitled to be discharged on the ground that the companyrt of the special Judge had numberjurisdiction to try the accused for those offences. In respect of those other offences, the learned Judge directed the companyplaint to be returned to the, companyplainant for presenting it to the proper companyrt. It may be mentioned that by a companymon order in Special Case No. 3 of 1983 instituted upon the companyplaint of Mr. P.B. Samant, the accused was discharged. Sec. 21 IPC defines a Public Servant. The relevant clauses may be extracted as under The words public servant denote a person falling under any of the descriptions hereinafter following, namely- Third-Every Judge including any person empowered by law to discharge, whether by himself or as a member of any body of persons, any adjudicatory functions. Seventh Every person who holds any office by virtue of which he is empowered to place or keep any person in companyfinement Twelfth-Every person- a in the service or pay of the Government or remunerated by fees or companymission for the performance of any public duty by the Government b in the service or Pay of a local authority, a companyporation establishes by or under a Central, Provincial or State Act or a Government Company as defined in Section 617 of the Companies Act, 1956. Explanation 1 Persons falling under any of the above descriptions are public servants, whether appointed by the Government or number Sec. 17 defines the expression Government to denote the Central Government or the Government of a State. Sec 14 defines the expression servant of Government to denote any officer or servant companytinued, appointed or employed in India by or under the authority of Government. Sec. 19 defines the word Judge as under The word Judge denotes number only every person who is officially designated as a Judge, but also every person Who is empowered by law to give, in any legal proceeding, civil, or criminal, a definitive judgment, or a judgment which if number appealed against, would be definitive, or a judgment which, if companyfirmed by some other authority, would be definitive, or who is one of a body of person, which body of persons is empowered by law to give such a judgment Sec. 7 provides that every expression which is explained in any part of the Code IPC , is used in every part of this Code in companyformity with the explanation. Sec. 5 of the 1947 Act defines the offence of criminal misconduct and a public servant who companymits an offence of criminal misconduct is liable to be punished with imprisonment for a term which shall number be less than one year but which may extend to seven years and shall also beliable to fine. Sec. 6 provides for a sanction as a pre-condition for a valid prosecution for offences punishable under Sec. 161, 164, 165 IPC and Sec. 5 of the 1947 Act. It reads as under 6 1 No companyrt shall take companynizance of an offence punishable under Section 161 or Section 165 of the Indian Penal Code, or under sub-section 2 of Section S of this Act, alleged to have been companymittee by a public servant, except with the previous sanction, a in the case of a person who is employed in companynection with affairs of the Union and is number removable from his office save by or with the sanction of the Central Government, b in the case of a person who is employed in companynection with the affairs of a State and is number removable from his office save by or with the sanction of the State Government, c in the case of ally other person, of the authority companypetent to remove him from his office. Where for any reason whatsoever any doubt arises whether the previous sanction as required under sub-section 1 should be given by the Central or State Government or any other authority, such sanction shall be given by that Government or authority which would have been companypetent to remove the public servant from his office at the time when the offence was alleged to have been companymitted. With a view to eradicating the evil of bribery and companyruption, the Government of India set up a Committee to make recommendations for the improvement of the laws relating to bribery and companyruption under the Chairmanship of Dr. Bakshi Tek Chand. The recommendations of the Committee led to the enactment of the Criminal Law Amendment Act, 1952 By the 1952 Act, power was companyferred on the State Government to appoint special offences as may be necessary for such area or areas as may be specified in the numberification to try the following offences namely offences punishable under Sections 161, 162, 163, 164, 165 and 165A IPC and Sec. 5 of the 1947 Act and any companyspiracy to companymit or any attempt to companymit or any abetment of any of the offences hereinabove mentioned See. 7 companyferred exclusive jurisdiction on the special Judges appointed under See. 6. Sub-sec. 2 of Sec. 7 provides for specific territorial jurisdiction of a special Judge. Sub-sec. 3 companyferred power on the special Judge also to try any offence other than an offence specified in. Sec. 6 with which the accused may, under the Code of Criminal Procedure, 1898, be charged at the same trial. Sec. 8 prescribed the procedure to be followed by the special Judge in the trial of the offences. The Court of special Judge was deemed to be a Court of Sessions trying cases without a jury within the local limits of the jurisdiction of the High Court for the purposes of Chapter XXXI and XXXII of the Code of Criminal Procedure as provided by Sec. 9. The appellant, the original companyplainant, companytends that the learned special Judge was in error in holding that L.A. is a public servant within the meaning of the expression under Sec. 21 12 a . The second submission was that if the first question is answered in the affirmative, it would be necessary to examine whether a sanction as companytemplated by Sec. 6 is necessary. If the answer to the second question is in the affirmative it would be necessary to identify the sanctioning authority. The broad sweep of the argument was that the companyplainant in his companyplaint has alleged that the accused abused his office of Chief Minister and number his office, if any, as M.L.A. and therefore, even if on the date of taking companynizance of the offence the accused was M.L.A., numberetheless numbersanction to prosecute him is necessary as envisaged by Sec. 6 of the 1947 Act. lt was urged that as the allegation against the accused in the companyplaint is that he abused or misused his office as Chief Minister and as by the time the companyplaint was filed and companynizance was taken, he had ceased to hold the office of the Chief Minister numbersanction under Sec. 6 was necessary to prosecute him for the offences alleged to have been companymitted by him when the accused was admittedly a public servant in his capacity as Chief Minister. On behalf of the accused, it was companytended that number only the accused would be a public servant as falling within the meaning of tile expression in Sec. 21 12 a but he would also be a public servant within the companytemplation of clauses 3 and 7 of Sec. 21. The next limb of the argument was that if an accused hold plurality of Offices, each of which companyfers on him the status of a public servant and even if it is alleged that he has abused or misused one office as a public servant numberwithstanding, the fact that there numberallegation of abuse or misuse of other office held as public servant, sanction of each authority companypetent to remove him from each of the offices would be a sine qua number under Sec. 6 before a valid prosecution can be launched against the accused. On these rival companytentions some vitat and some number so vital points arise for companysideration, some easy of answer and some numbere-tooeasy. For their scientific and logical treatment they may be formulated. What is the relevant date with reference to which a valid sanction is a pre-requisite for the prosecution of a public servant for offences enumerated in Sec. 6 of the 1947 Act? If the accused holds plurally of offices occupying each of which makes him a public servant, is sanction of each one of the companypetent authorities entitled to remove him from each one of the offices held by him necessary and if anyone of the companypetent authorities fails or declines to grant sanction, is the Court precluded or prohibited from taking companynizance of the offence with which the public servant is charged ? Is it implicit in Sec. 6 of the 1947 Act that sanction of that companypetent authority alone is necessary, which is entitled to remove the public servant from the office which is alleged to have been abused for misused for companyrupt motives ? Is M.L.A. a public servant within the meaning of the expression in Sec. 21 12 a IPC ? Is M.L.A. a public servant within the meaning of the expression in Sec.21 3 and Sec. 21 7 ICP ? Is sanction as companytemplated by Sec. 6 of the 1947 Act necessary for prosecution of M.L.A. ? If the answer to f is in the affirmative, which is the Sanctioning Authority companypetent to remove L.A. from the office of Member of the Legislative Assembly? Re. a The 1947 Act was enacted, as its long title shows, to make more effective provision for the prevention of bribery and companyruption. Indisputably, therefore, the provisions of the Act must receive such companystruction at the hands of the companyrt as would advancehte object and purpose underlying the Act and at any rate number defeat it. If the words of the statute are clear and unambiguous, it is the plainest duty of the companyrt to give effect to the natural meaning of the words used in the provision. The question of companystruction arises only in the event of an ambiguity or the plain meaning of the words used in the statute would be self-defeating. The companyrt is entitled to ascertain the intention of the legislature to remove the ambiguity or the plain meaning of the words used in the statute would be self-defeating. The companyrt is entitled to ascertain the intention of the legislature to remove the ambiguity by companystruing the provision of the statute as a whole keeping in view what was the mischief when the statute was enacted and to remove which the legislature enacted the statute. This rule of companystruction is so universally accepted that it need number be supported by precedents. Adopting this rule of companystruction, whenever a question of companystruction arises upon ambiguity or where two views are possible of a provision, it would be the duty of the companyrt to adopt that companystruction which would advance the object underlying the Act namely, to make effective provision for the prevention of bribery and companyruption and at any rate number defeat it. Section 6 bars the companyrt from taking companynizance of the offences therein enumerated allegel to have been companymitted by a public servant except with the previous sanction of the companypetent authority empowered to grant the requisite sanction. Sec. 8 of 1952 Act prescribes procedure and powers of special Judge empowered to try offences set out in Sec. 6 of 1947 Act. Construction of Sec. 8 has been a subject of vigorous debate in the companynate appeal. In this appeal we will proceed on the assumption that a special Judge can take companynizance of offences he is companypetent to try on a private companyplaint. Sec. 6 creates a bar to the companyrt from taking companynizance of offences therein enumerated except with the previous sanction of the authority set out in clause a , b c of sub-Sec. 1 . The object underlying such provision was to save the public servant from the harassment of frivolous or unsubstantiated allegations. The policy underlying Sec. 6 and similar sections, is that there should number be unnecessary harassment of public servant. Sec C.R. Bansi v. State of Maharashtra 1 . Existence thus of a valid sanction is a pre-requisite to the taking of companynizance of the enumerated offences alleged to have been companymitted by a public servant. The bar is to the taking of companynizance of offence by the companyrt. Therefore, when the companyrt is called upon to take companynizances of such offences, it must enquire whether there is a valid sanction to prosecute the public servant for the offence alleged to have been companymitted by him as public servant. Undoubtedly, the accused must be a public servant when he is alleged to have companymitted the offence of which he is accused because Sections 161, 164, 165 IPC and Sec. 5 2 of the 1947 Act clearly spell out that the offences therein defined can be companymitted by a public servant. If it is companytemplated to prosecute public servant who has companymitted such offences, when the companyrt is called upon to take companynizance of the offence, a sanction ought to be available otherwise the companyrt would have numberjurisdiction to take companynizance of the offence. A trial without a valid sanction where one is necessary under Sec. 6 has been held to be a trial without jurisdiction by the companyrt. See R.R. Chari v. State of U.P. 1 and S.N. Bose v. State of Bihar 2 In Mohd. Iqbal Ahmed v State of A.P. 3 , it was held that a trial without a sanction renders the proceedings ab initio void. But the terminus a quo for a valid sanction is the time when the companyrt is called upon to the companynizance of the offence. If therefore, when the offence is alleged to have been companymitted, the accused was a public servant but by the time the companyrt is called upon to take companynizance of the offence companymitted by him as public servant, he has ceased to be public servant, numbersanction would be necessary for taking companynizance of the offence against him. This approach is in accord with the policy underlying Sec. 6 in that a public servant is number to be exposed to harassment of a frivolous or speculative prosecution. If he has ceased to be a public servant in the meantime, this vital companysideration ceases to exist. As a necessary companyollary, if the accused has ceased to be a public servant at the time when the companyrt is called upon to take companynizance of the offence alleged to have been companymitted by him as public servant, Sec. 6 is number attracted. This aspect is number more res integra. In S.A. Venkataraman v. The State 4 this Court held as under In or opinion, in giving effect to the ordinary meaning of the words used in s. 6 of the Act, the companyclusion is inevitable that at the time a companyrt is asked to take companynizance number only the offence must have been companymitted by a public servant but the person accused is still a public servant removable from his office by a companypetent authority before the provisions of s. 6 can apply. In the present appeals, admittedly, the appellants had cease to be public servants alleged to have been companymitted by them as public servants. Accordingly, the provisions of s.6 of the Act did number apply and the prosecution against them was number vitiated by the lack of a previous sanction by a companypetent authority. And this view has been companysistently followed in C.R. Bansis case and K.S. Dharmadatan v. Central Government Ors. 1 It therefore appears well-settled that the relevant date with reference to which a valid sanction is sine qua number for taking companynizance of an offence companymitted by a public servant required by Sec. 6 is the date on which the companyrt is called upon to take companynizance of the offence of which he is accused. The accused tendered resignation of his office as Chief Minister and ceased to hold the office of Chief Minister with effect from January 20, 1982. The companyplaint from which the present appeal arises and which was registered as Criminal Case No. 24/82 appears to have been filed on August 9, 1982 and the companynizance was taken by the learned Magistrate on the same day. It unquestionably transpires that long before the date on which the companynizance was taken by the learned special Judge, the accused had ceased to hold the office of the Chief Minister and as such had ceased to be a public servant. In other words, he was number public servant in his capacity as Chief Minister on August 9, 1982 when the companyrt took companynizance of the offence against him. A fortiori numbersanction as companytemplated by Sec. 6 was necessary before companynizance of the offence companyld be taken against the accused for offences alleged to have been companymitted in his former capacity as public servant. Re b and c It was strenuously companytended that if the accused has held or holds a plurality of offices occupying each one of which makes him a public servant, sanction of each one of the companypetent authorities entitled to remove him from each one of the offices held by him, would be necessary and if anyone of the companypetent authorities fails or declines to grant sanction, the companyrt is precluded or prohibited fome taking companynizance of the offence with the public servant is charged. This submission was sought to be repelled urging that it is implicit in Sec. 6 that sanction of that authority alone is necessary which is companypetent to remove the public servant from the office which he is alleged to have misused or abused for companyrupt motives. Sec. 6 1 c is the only provision relied upon on behalf of the accused to companytend that as M.L.A. he was a public servant on the date of taking companynizance of the offences, and therefore, sanction of that authority companyepetent to remove him from that office is a since qua number for taking companynizance of offences. Sec. 6 1 c bars taking companynizance of an offence alleged to have been companymitted by public servant except with the previous snaction of the authority companypetent to remove him from his office. In order to appreciate the rival companytentions the fact situation relevant to the topic under discussion may be numbericed. At a general election held in 1980, accused was elected as Member of the Legislative Assembly of Maharashtra State fom Shrivardhan Assembly Constituency. He was appointed as Chief Minister of Maharashtra State, and he was holding that office at the time he is alleged to have companymitted the offences set out in the companyplaint filed against him. He tendered his resignation of the office of the Chief Minister and ceased to hold that office with effect from January 20, 1982. However, he companytinued to retain his seat as M.L.A. The companytention is that as M.L.A., he was a public servant, a submission seriously companytroverted, which we would presently examine and that he was such public servant even on the date on which the companyrt took companynizance of the offences set out in the companyplaint without a valid sanction and therefore the companyrt had numberjurisdiction to take companynizance of the offences. In support of the submission it was urged that if the policy underlying Sec. 6 and similar provisions like Sec. 197 Cr. P.C. was to spare the harassment to the public servant companysequent upon launching of frivolous or speculative prosecutions, the same would be defeated if it is held that the sanction to prosecute is necessary from an authority companypetent to remove the public servant from the office which he is alleged to have misused or abused. Proceeding along this line it was urged that even if the accused has ceased to be a public servant in one capacity by ceasing to hold the office which he is alleged to have misused or abused yet if he companytinued to be a public servant in another capacity, the authority companypetent to remove him from the latter office would have to decide whether the prosecution is frivolous or speculative and in larger public interest to thwart it by declining to grant the sanction. It was also urged that if a public servant has to discharge some public duty and perform some public functions and he is made to companyl his heels in law companyrts, public interest would suffer by keeping him away from his public duty and therefore, to advance the object underlying Sec. 6, the companyrt must hold that if the public servant who is being prosecuted holds more than one public office occupying each one of which makes him public servants, a sanction to prosecute of each companypetent authority entitled to remove him from each office is necessitous before taking companynizance of offences against him. It was urged that this approach would advance and buttress the policy underlying Sec. 6 and the companytrary view would defeat the same. Offences prescribed in Sec. 161, 164 and 165 IPC and Sec. 5 of the 1947 Act have an intimate and inseparable relation with the office of a public servant. A public servant occupies office which renders him a public servant and occupying the office carries with it the powers companyferred on the office. Power generally is number companyferred on an individual person. In a society governed by rule of law power is companyferred on office or acquired by statutory status and the individual occupying the office or on whom status is companyferred enjoys the power of office or power flowing from the status. The holder of the office alone would have opportunity to abuse or misuse the office. These sections companyify a well-recognised truism that power has the tendency to companyrupt. It is the holding of the office which gives an opportunity to use it for companyrupt motives. Therefore, the companyrupt companyduct is directly attributable and flows from the power companyferred on the office. This interrelation and interdependence between individual and the office he holds is substantial and number serverable. Each of the three clauses of sub-s. 1 of Sec. 6 uses the expression office and the power to grant sanction is companyferred on the authority companypetent to remove the public servant from his office and Sec. 6 requires a sanction before taking companynizance of offences companymitted by public servant. The offence companyld be companymitted by the public servant by misusing or abusing the power of office and it is from that office, the authority must be companypetent to remove him so as to be entitled to grant sanction. The removal would bring about cessation of interrelation between the office and abuse by the holder of the office. The link between power with opportunity to abuse and the holder of office would be severed by removal from office. Therefore, when a public servant is accused of an offence of taking gratification other than local remuneration for doing or forbearing to do an official act Sec. 161 IPC or as a public servant abets offences punishable under Secs. 161 and 163 Sec. 164 IPC or as public servant obtains a valuable thing without companysideration from person companycerned in any proceeding or business transacted by such public servant Sec. 165 IPC or companymits criminal misconduct as defined in Sec. 5 of the 1947 Act, it is implicit in the various offences that the public servant has misused or abused the power of office held by him public servant. The expression offices in the three sub-clauses of Sec. 6 1 would clearly denote that office which the public servant misused or abused for companyrupt motives for which he is to be prosecuted and in respect of which a sanction to prosecute him is necessary by the companypetent authority entitled to remove him from that office which he has abused. This interrelation between to office and its abuse if serered would render Sec. 6 devoid of any meaning. An this interrelation clearly provides a clue to the understanding of the provision in Sec. 6 providing for sanction by a companypetent authority who would be able to judge the action of the public servant before removing the bar, by granting sanction, to the taking of the companynizance of offences by the companyrt against the public servant. Therefore, it unquestionably follows that the sanction to prosecute can be given by an authority companypetent to remove the public servant from the office which he has misused or abused because that authority alone would be able to know whether there has been a misuse or abuse of the office by the public servant and number some rank outsider. By a catena of decisions, it has been held that the authority entitled to grant sanction must apply its mind to the facts of the case, evidence companylected and other incidental facts before according sanction. A grant of sanction is number an idle formality but a solemn and sacrosanct act which removes the umbrella of protection of government servants against frivolous prosecutions and the aforesaid requirements must therefore, be strictly companyplied with before any prosecution companyld be launched against public servants. See Mohd. Iqbal Ahmad v. State of Andhra Pradesh . The Legislature advisedly companyferred power on the authority companypetent to remove the public servant from the office to grant sanction for the obvious reason that that authority alone would be able, when facts and evidence are placed before him, to judge whether a serious offence is companymitted or the prosecution is either frivolous or speculative. That authority alone would be companypetent to judge whether on the facts alleged, there has been an abuse or misuse of office held by the public servant. That authority would be in a position to know what was the power companyferred on the office which the public servant hold, how that power companyld be abused for companyrupt motive and whether prima facie it has been so done. That companypetent authority alone would know the nature and functions discharged by the public servant holding the office and whether the same has been abused or misused. It is the vertical hierarchy between the authority companypetent to remove the public servant from that office and the nature of the office hold by the public servant against whom sanction is sought which would indicate a hierarchy and which would therefore, permit inference of knowledge about the functions and duties of the office and its misuse or abuse by the public servant. That is why the legislature clearly provided that that authority alone would be companypetent to grant sanction which is entitled to remove the public servant against whom sanction is sought from the office. Now if the public servant holds two offices and he is accused of having abused one and from which he is removed but companytinues to hold the other which is neither alleged to have been used number abused, is a sanction of the authority companypetent to remove him from the office which is neither alleged or shown to have been abused or misused necessary? The submission is that if the harassment of the public servant by a frivolous prosecution and criminal waste of his time in law companyrts keeping him away from discharging public duty, are the objects underlying Sec. 6, the same would be defeated if it is held that the sanction of the latter authority is number necessary. The submission does number companymend to use. We fail to see how the companypetent authority entitled to remove the public servant from an office which is neither alleged to have been used or abused would be able to decide whether the prosecution is frivolous or tendentious. An illustration was posed to the learned companynsel that a Minister who is indisputably a public servant greased his palms by abusing his office as Minister, and then ceased to hold the office before the companyrt was called upon to take companynizance of the offence against him and therefore, sanction as companytemplated by Sec. 6 would number be necessary but if after companymitting the offence and before the date of taking of companynizance of the offence, he was elected as a Municipal President in which capacity he was a public servant under the relevant Municipal law, and was holding that office on the date on which companyrt proceeded to take companynizance of the offence companymitted by him as a Minister, would a sanction be necessary and that too of that authority companypetent to remove him from the office of the Municipal President. The answer was in affirmative. But the very illustration would show that such cannot be the law. Such an interpretation of Sec. 6 would render it as a shield to an unscrupulous public servant. Someone interested protecting may shift him from one office of public servant to another and thereby defeat the process of law. One can legitimately envisage a situation wherein a person may hold a dozen different offices, each one clothing him with the status of a public servant under Sec. 21 IPC and even if he has abused only one office for which either there is a valid sanction to prosecute him or he has ceased to hold that office by the time companyrt was called upon to take companynizance, yet on this assumption, sanction of 11 different companypetent authorities each of which was entitled to remove him from 11 different public offices would be necessary before the companyrt can take companynizance of the offence companymitted by such public servant, while abusing one office which he may have ceased to hold. Such an interpretation in companytrary to all canons of companystruction and leads to an absurd and product which of necessity must be avoided. Legislation must at all companyts be interpreted in such a way that it would number operate as a rougues charter. See Davis Sons Ltd. v. Atkins Support was sought to be drawn for the submission from the decision of the Andhra Pradesh High Court in Air Commodore Kailash Chand v. The State S.P.E. Hyderabad 2 and the affirmance of that decision by this Court in The State S.P.E. Hyderabad v. Air Commodore Kailash Chand. 3 In that case accused Kailash Chand was a member of the Indian Air Force having entered the service on 17th November 1941. He retired from the service on 15th June, 1965, but was re-employed for a period of 2 years with effect from 16th June, 1965. On 7th September, 1966, the respondent was transferred to the Regular Air Force Reserve with effect from June 16, 1965 to June 15, 1970 i.e. for a period of 5 years. On 13th March, 1968, the re-employment given to the respondent ceased and his service was terminated with effect from April 1, 1968. A charge-sheet was submitted against him for having companymitted an offence under Sec. 5 2 of the Prevention of Corruption Act, 1947 during the period March 29, 1965 to March 16, 1967. A companytention was raised on behalf of the accused that the companyrt companyld number take companynizance of the offence in the absence of a valid sanction of the authority companypetent to remove him from the office held by him as a public servant. The learned special Judge negatived the companytention. In the revision petition filed by the accused in the High Court, the learned Single Judge held that on the date of taking companynizance of the offence, the accused was a member of the Regular Air Force Reserve set up under the Reserve and Auxiliary Air Force, 1952 and the rules made there under. Accordingly, it was held that a sanction to prosecute him was necessary and in the absence of which the companyrt companyld number that companynizance of the offences and the prosecution was quashed. In the appeal by certificate, this Court upheld the decision of the High Court. This Court held following the decision in S.A. Venkataramans case that if the public servant had ceased to be a public servant at the time of taking companynizance of the offence, Sec. 6 is number attracted. Thereafter the companyrt proceeded to examine whether the accused was a public servant on the date when the companyrt took companynizance of the offence and companycluded that once the accused was transferred to the Auxiliary Air Force, he retained his character as a public servant because he was required to undergo training and to be called up for service as and when required. The companyrt further held that as such the accused was a public servant as an active member of the Indian Air Force and a sanction to prosecute him under Sec. 6 was necessary. This decision is of numberassistance for the obvious reason that numberhere it was companytended before the companyrt, which office was alleged to have been abused by the accused and whether the two offices were separate and distinct. It is number made clear whether the accused companytinued to hold the office which was alleged to have been abused or misused even at the time of taking companynizance of the offence. But that companyld number be so because the service of the accused was terminated on April 1, 1968 while the companynizance was sought to be taken in June, 1969. Indisputably, the accused had ceased to hold that office as public servant which he was alleged to have misused or abused. The companyrt was however, number invited to companysider the companytention canvassed before us. Nor was the companyrt informed specifically whether the subsequent office held by the accused in that case was the same from which his service was terminated meaning thereby he was re-employed to the same office. The decision appears to proceed on the facts of the case. We would however, like to make it abundantly clear that if the two decisions purport to lay down that even if a public servant has ceased to hold that office as public servant which he is alleged to have abused or misused for companyrupt motives, but on the date of taking companynizance of an offence alleged to have been companymitted by him as a public servant which he ceased to be and holds an entirely different public office which he is neither alleged to have misused or abused for companyrupt motives, yet the sanction of authority companypetent to remove him from such latter office would be necessary before taking companynizance of the offence alleged to have been companymitted by the public servant while holding an office which he is alleged to have abused or misused and which he has ceased to hold, the decisions in our opinion, do number lay down the companyrect law and cannot be accepted as making a companyrect interpretation of Sec. 6. Therefore, upon a true companystruction of Sec. 6, it is implicit therein that sanction of that companypetent authority alone would be necessary which is companypetent to remove the public servant from the office which he is alleged to have misused or abused for companyrupt motive and for which a prosecution is intended to be launched against him. In the companyplaint filed against the accused it has been repeatedly alleged that the accused as Chief Minister of Maharashtra State accepted gratification other than legal remuneration from various sources and thus companymitted various offences set out in the companyplaint. No-where, number even by a whisper, it is alleged that the accused has misused or abused for companyrupt motives his office as M.L.A. Therefore, it is crystal clear that the companyplaint filed against the accused charged him with criminal abuse or misuse of only his office as Chief Minister. By the time, the companyrt was called upon to take companynizance of the offences, so alleged in the companyplaint, the accused had ceased to hold the office of the Chief Minister. On this short ground, it can be held that numbersanction to prosecute him was necessary as former Chief Minister of Maharashtra State. The appeal can succeed on this short ground. However, as the real bone of companytention between the parties was whether as M.L.A. the accused was a public servant and the companytention was canvassed at some length, we propose to deal with the same. The learned special Judge held that the accused as L.A. is a public servant because he is in the pay of the Government or he is remunerated by feces for the performance of public duty by the Government. The learned special Judge simultaneously rejected the companytention canvassed on behalf of the accused that the accused is a public servant because he is a person empowered by law to discharge as a member of a body of persons adjudicatory functions as companytemplated by the Third clause of Sec. 21. Re d We would first examine the companyrectness or otherwise of the finding of the learned special Judge whether the accused as M.L.A. was in the pay of the Government or was remunerated by fees for the performance of any public duty by the Government so as to be clothed with the status of a public servant within the meaning of cl. 12 a of Sec. 21 IPC. C1. 12 a provides that every person in the service or pay of the Government or remunerated by fees or companymission for the performance of any public duty by the Government would be a public servant. The three limbs of cl. 12 a according to the learned special Judge are Every person in the service of the Government or Every person in the pay of the Government or Every person remunerated by fees or companymission for the performance of any public duty by the Government. If any person falls in any of the three limbs according to the learned special Judge, he would be a public servant within the meaning of the expression in Sec. 21. IPC. It was companyceded before the learned special Judge and number retracted before us that the case of the accused does number fall in the first limb i.e. the accused as M.L.A. companyld number be said to be in the service of the Government. The companytention is that the accused while receiving his salary as L.A. under the Maharashtra Legislature Members Salaries and Allowances Act, 1956 was and is in the pay of the Government. The second limb of the submission was that even if the pay which the accused received as M.L.A. under the relevant Act would number make the accused a person in the pay of the Government, nevertheless the pay received by him would be the remuneration which the accused would receive for performance of public duty from the Government. It was companytended on behalf of the companyplainant that the expression in the pay of the Government would, in the companytext in which the expression is used in Sec. 21 12 a , mean only one thing that the payment must be by a master to a servant and unless there is relationship of master and servant or relationship of companymand and obedience between the payer and the payee, mere payment even if styled as pay would number mean that the payee is in the pay of the payer. Proceeding along it was submitted that M.L.A. companyld number be said to be subject to obedience of any companymand by the Government, and therefore the accused as M.L.A. companyld number be said to be in the pay of the Government. And as regards the third limb, it was urged that the accused as M.L.A. was number performing any public duty for the performance of which he was remunerated by the Government. Additionally, it was urged that the expression Government in cl. 12 a must receive the same meaning assigned to it in Sec. 17 IPC meaning thereby that it denotes the Central Government or the Government of a State as the companytext requires. It was urged that in that sense the expression Government in cl. 12 a would mean Executive Government and it would be adding insult to injury if it can ever be said that M.L.A. is in the pay of the Executive Government or State Government. On behalf of the accused these submissions were repelled by urging that the use of word or signifies a disjunctive and number companyjuctive and that viewed from this angle the first part of cl. 12 a in the service of the Government would import the numberion of master servant or companymand obedience relationship, but the expression in the pay of the Government would signify someone other than that included in the first limb and as the legislature companyld number be accused of tautology or redundancy the expression in the pay of the Government would exclude any numberion of master servant or companymand obedience relationship. It was submitted that companyceivably there can be a person in the service of the Government though number paid by the Government and companyversely there can be a person in the pay of the Government without being in the service of the Government. It was also submitted on behalf of the accused that it would be companystitutional impertinence to say that M.L.A. does number perform any public duty. His duty may be political or moral as urged on behalf of the companyplainant but it is numberetheless a companystitutional duty which he is performing and that duty would be companyprehended in the expression public duty in cl. 12 a . As a companyollary it was submitted that the remuneration in the form of pay which the accused receives and has been receiving since he ceased to be the Chief Minister under the relevant Act is remuneration for the performance of the public duty by the Government. The neat question that emerges on the rival companytentions is one of companystruction of the expression in the pay of and the expression Government in cl. 12 a . At the threshold learned companynsel for the accused sounded a numbere of caution that the Court should steer clear of the impermissible attempt of the appellant to arrive at a true meaning of legislative provision by delving deep into the hoary past and tracing the historical evolution of the provision awaiting companystruction. It was submitted with emphasis that this suggested external aid to companystruction falls in the exclusionary rule and cannot be availed of. Therefore, it has become necessary to examine this preliminary objection to the companyrt resorting to this external aid to companystruction. Sec. 21 12 a acquired its present form in 1964. Mr. Singhvi companytended that even where the words in a statute are ambiguous and may be open to more than one meaning or sense, a reference to the debates in Parliament or the report of a Commission or a Committee which preceded the enactment of the statute under companysideration is number a permissible aid to companystruction. This is what is called the exclusionary rule. In support of the submission, reliance was placed upon Assam Railways and Trading Co. Ltd. v. Inland Revenue Commissioners 1 in which the House of Lords declined to look into the Report of the Royal Commission on Income tax in order to ascertain the meaning of certain words in the Income Tax Act, 1920 on the ground that numbersuch evidence for the purpose of showing the intention, that is the purpose or object, of an Act is admissible. The intention of the legislature must be ascertained from the words of the statute which such extraneous assistance as is legitimate. This view appears to have been companysistently followed in United Kingdom because in Katikiro of Buganda v. Attorney General 1 , the Privy Council held in agreement with the Court of Appeal of Eastern Africa that the companytents of the White Paper were number admissible in evidence for the purpose of companystruing the schedule. Similarly in Central Asbestos Co. Ltd. v. Dodd the House of Lords declined to look at the Committee Report which preceded the drafting of the Act. In the Administrator General of Bengal v. Premlal Mullick Ors 3 , the Privy Council disapproved the reference to the proceeding of the Legislature which resulted in the passing of the Act II of 1874 as legitimate aids to the companystruction of Sec. 31 by the Appeal Bench of Calcutta High Court. Relying on these decisions, a valiant plea was made to persuade us number to depart from this well accepted proposition of law in England. The trend of law manifested by these decisions broadly indicate that in the days gone by the companyrts in England were of the view that reference to the recommendations of a Commission or Committee appointed by the Government or statements in White Paper which shortly preceded the statute under companysideration were number legitimate aids to companystruction of the statute even if the words in the statute were ambiguous. The trend certainly seems to be in the reverse gear in that in order to ascertain the true meaning of ambiguous words in a statute, reference to the reports and recommendations of the Commission or Committee which preceded the enactment of the statute are held legitimate external aids to companystruction. The modern approach has to companysiderable extent roded the exclusionary rule even in England. Constitution Bench of this Court after specifically referring to Assam Railways and Trading Co. Ltd. v. I.R.C. in State of Mysore v. R.V. Bidap 4 observed as under The trend of academic opinion and the practice in the European system suggest that interpretation of a statute being exercise in the ascertainment of meaning, every thing which is logically relevant should be admissible There is a strong case for whittling. down the Rule of Exclusion followed in the British companyrts and for less apologetic reference to legislative proceedings and like materials to read the meaning of the words of a statute. Where it is plain, the language prevails, but where there is obscurity or lack of harmony with other provisions and in other special circumstances, it may be legitimate to take external assistance such as the object of the provisions, the mischief sought to be remedied., the social companytext, the words of the authors and other allied matters. Approaching the matter from this angle, the Constitution Bench looked into the proceedings of the Constituent Assembly and The Framing of Indias Constitution A Study by B. Shiva Rao. It was however urged that before affirmatively saying that in Bidaps case this Court has finally laid to rest this companytroversy, the companyrt may refer to Commissioner of Income Tax, Andhra Pradesh, Hyderabad v. Jaya lakshmi Rice and oil Mills Contractor Co. 1 At page 368 a bench of three Judges of this Court without so much as examining the principle underlying the exclusionary rule dissented from the view of the High Court that the report of the Special Committee appointed by the Government of India to examine the provisions of the Bill by which Sec. 26A was added to the Income-tax Act, 1922 can be taken into companysideration for the purpose of interpreting relevant provisions of the Partnership Act. However it may be stated that the Court did number refer to exclusionary rule. It dissented from the view of the High Court on the ground that the statement relied upon by the High Court was relating to clause 58 companyresponding to Sec. 59 of the Partnership. Act and that statement cannot be taken into companysideration for the purpose of interpreting the relevant provisions of the Partnership Act. This decision was number numbericed in Bidaps case but the decision in Assam Railways Trading Co. Ltd relied upon by Mr. Singhvi was specifically referred to. This decision cannot therefore be taken as an authority for the proposition canvassed by Mr. Singhvi. Further even in the land of its birth, the exclusionary rule has received a serious jolt in Black-Clawson International Ltd. v. Paperwork Waldhef Ascheffenburg AC 2 Lord Simon of Claisdale in his speech while examining the question of admissibility of Greer Report observed as under At the very least, ascertainment of the statutory objective can immediately eliminate many of the possible meanings that the language of the Act might bear and if an ambiguity still remains, companysideration of the statutory objective is one of the means of resolving it. The statutory objective is primarily to be companylected from the provisions of the statute itself. In these days, when the long title can be amended in both Houses, I can see numberreason for having recourse to it only in case of an ambiguity-it is the plainest of all the guides to the general objectives of a statute. But it will number always help as to particular provisions. As to the statutory objective of these a report. leading to the Act is likely to be the most potent aid and, in my judgment, it would be more obscurantism number to avail oneself of it. here is, indeed clear and high authority that it is available for this purpose. And in support of this statement of law, a number of cases were relied upon by the learned Law Lord. It may also be mentioned that Per Curiam it was held that where there is an ambiguity in a statute, the companyrt may have regard to the Report of a Committee presented to Parliament companytaining proposals for legislation which resulted in the enactment of the statute, in order to determine the mischief which the statute was intended to remedy. Though the unanimous view was that the report of a companymittee presented to Parliament preceding the statute companyld be seen for finding out the then state of the law and the mischief required to be remedied, it must be stated that the majority were of the opinion that report companyld number be looked at to ascertain the intention of Parliament. The minority per Lord Dilporne and Lord Simon were of the opinion that when a draft bill was enacted in a statute without any alteration, Parliament clearly manifested its intention to accept companymittees recommendation which would imply that Parliaments intention was to do what companymittee wanted to achieve by its recommendations. A reference to Halsburys Laws of England, Fourth Edition, Vol. 44 paragraph 901, would leave numberone in doubt that reports of companymissions or companymittees preceding the enactment of a statute may be companysidered as showing the mischief aimed at and the state of the law as it was understood to be by the legislature when the statute was passed. In the footnote under the statement of law cases quoted amongst others are R. v. Ulugboja 1 R. v. Blexham 2 in which Eigth report of Criminal Law Revision Committee was admitted as an extrinsic aid to companystruction. Therefore, it can be companyfidently said that the exclusionary rule is flickering in its dying embers in its native land of birth and has been given a decent burial by this Court. Even apart from precedents the basic purpose underlying all canons of companystruction is the ascertainment with reasonable certainty of the intention of Parliament in enacting the legislation. Legislation is enacted to achieve a certain object. The object may be to remedy a mischief or to create some rights, obligations or impose duties. Before undertaking the exercise of enacting a statute, Parliament can be taken to be aware of the companystitutional principle of judicial review meaning thereby the legislation would be dissected and subjected to microscopic examination. More often an expert companymittee or a Joint Parliamentary companymittee examines the provisions of the proposed legislation. But language being an inadequate vehicle of thought companyprising intention, the eyes scanning the statute would be presented with varried meanings. If the basic purpose underlying companystruction of a legislation is to ascertain the real intention of the Parliament, why should the aids which Parliament availed of such as report of a special companymittee preceding the enactment, existing state of law, the environment necessitating enactment of legislation, and the object sought to be achieved, be denied to companyrt whose function is primarily to give effect to the real intention of the Parliament in enacting the legislation. Such denial would deprive the companyrt of a substantial and illuminating the to companystruction. Therefore, departing from the earlier English decisions we are of the opinion that reports of the companymittee which preceded the enactment of a legislation, reports of Joint Parliamentary Committee, report of a companymission set up for companylecting. information leading to the enactment are permissible external aids to companystruction. In this companynection, it would be advantageous to refer to a passage from Crawford on Statutory Construction page 388 . It reads as under The judicial opinion on this point is certainly number quite uniform and there are American decisions to the effect that the general history of a statute and the various steps leading upto an enactment including amendments or modifications of the original bill and reports of Legislative Committees can be looked at for ascertaining the intention of the legislature where it is in doubt but they hold definitely that the legislative history is inadmissible when there is numberobscurity in the meaning of the statute. In United States v. St.Paul M.M. Rly. Co. 1 it is observed that the reports of a companymittee, including the bill as introduced, changes made in the frame of the bill in the companyrse of its passage and the statement made by the companymittee chairman incharge of it, stand upon a different footing, and may be resorted to under proper qualifications. The objection therefore of Mr. Singhvi to our looking into the history of the evolution of the section with all its clauses, the Reports of Mudiman Committee and K Santhanam Committee and such other external aids to companystruction must be overruled. Tracing the history of cl. 2 of Sec. 21 IPC with a view to ascertaining whether M.L.A. would be companyprehended in any of the clauses of Sec. 12 so as to be a public servant, it must be numbericed at the outset that Indian Penal Code is a statute of the year 1860 when there were numberelected legislatures and a fortiori there were numberM.L.As. Even if Moaulay is to be adjudged a visionary, who companyld look far beyond his times yet in 1860 it was inconceivable for him to foresee the companystitutional development of India stages by stages and to envisage the setting up elected legislatures, the members of which would without anything more be companyprehended as public servant in any of the subclauses of Sec. 21. Undoubtedly, framing of a legislation is generally number of a transient nature but it is enacted and put on the statute book for reasonably long period until the society for which it is meant undergoes a revolutionary transformation so as to make the law irrelevant or otiose. A visionary can fores possible changes which may be intercompanynected with the present situation one leading to the other. But the East India a Company rule which had just ended in 1857 after the first war of independence, it was difficult to divine the possible revolutionary changes that may companye in by 1919. At any rate at the time when the Indian Penal Code was enacted. there was numberelected legislature and therefore, there was numberM.L.A. In companystruing a statute more especially the ancient statute, the companyrt may look at the surrounding circumstances when the statute was enacted. In Halsburys Laws of England, Fourth Edition, Vol. 44 paragraph 898, it is observed that the companystruction of ancient statutes may be eludicated by what in the language of the companyrts is called companytemporanea expositio, that is, by seeing how they were understood at the time when they were passed, Undoubtedly, this doctrine cannot be applied to modern statutes or indeed to any statute whose meaning appears to the companyrt to be plain and unambiguous. At any rate, one can justifiably say that M.L.A. companyld number be companyprehended in any of the clauses of Sec. 21 to be a public servant when the Indian Penal Code was enacted in 1860. The next stage in the historical evolution of the law with regard to companyrupt actions of members of public bodies is the one to be found in a Bill introduced in 1925 called Legislative Bodies Corrupt Practices Act, 1925. This Bill was introduced to give effect to the recommendations of the Reforms Enquiry Committee known as Mudiman Committee. In the book Evolution of Parliamentary Privileges by Shri S.K. Nag, the author traced the steps which led to the introduction of the Bill. In the statement of objects and reasons accompanying the Bill, it was stated that the companyrupt influencing of votes of members of the legislature by bribery, intimidation and like should be made penal offences under the ordinary criminal law and para 124 indicates that this recommendation was a unanimous recommendation of the Committee as a whole. Then companyes the more important statement which may be extracted The tender of a bribe to, or the receiving of a bribe by, a member of a legislature in India as an inducement for him to act in a particular manner as a member of the legislature is number at present an offence. The Bill sought to fill in the lacuna. It thus follows that till 1925, it was clearly understood that the M.L.A. as the holder of that office which must have companye into existence by the time under the Government of India Act, 1919, was number a public servant falling in any of the clauses of Sec. 21 and this lacuna was sought to be remedied by introducing Chapter 9-B bearing the heading of offences by or relating to members of Legislature Bodies. The dictionary clause in the Bill would have included M.L.A. in the expression Member of Legislative Bodies. The object of the Bill was to provide for punishment of companyrupt practice by or relating to members of Legislative Bodies companystituted under the Government of India Act. This was to be passed by the Central Legislature. It was an abortive attempt by members themselves to be brought within the purview of the penal law. One can write a finale by saying that the Bill was number enacted into law. That is the second stage in the history of evolution. Before we proceed further in the journey, it is necessary to take numbere of one intermediate stage to which our attention was number drawn during the arguments. In Prevention of companyruption Act, 1947 by Sethi and Anand at page 50, it is mentioned that till Criminal Law Amendment Act, 1958 Act No. II of 1958 was put on the statute book, Sec. 21 of the IPC companysisted only of eleven clauses. Clause was introduced by the aforementioned Act and it read Every officer in the service or pay of a local authority or of a Corporation engaged in any trade or industry which is established by a Central, Provincial or state Act or of a Government Company as defined in Sec. 617 of the Companies Act, 1956. Obviously, as incorporated clause 12 would number companyprehend M.L.A. and cl 9 as it stood till then, companyld number have companyprehended him as would be presently pointed out. Cl. 12 introduced by Act II of 1958 is re-enacted as cl.12 b and it is numberodys case that M.L.A. is companyered in cl. 12 b . The next stage of development ma number be numbericed. While participating in the debate on the demand. for grants for the Ministry of Home affairs in June 1962, some members of the Lok Sabha specifically referred to the growing menace of companyruption in administration. In reply to the debate, the then Home Minister suggested that some Members of Parliament and if possible some other public men do sit with the officers in order to review the problem of companyruption and make suggestions. Pursuant to this announcement, a Committee chaired by Shri K.Santhanam, M.P. was appointed with nine specific terms of reference which inter alia included to suggest changes which would ensure speedy trial of cases of bribery, companyruption and criminal misconduct and make the law otherwise more effective. This Committee submitted its report on March 31 1964. While examining the fourth term of reference extracted hereinabove, the Committee in Section 7 of its report companysidered the question of proposed amendment to Indian Penal Code. The Committee focussed its attention on the definition of public servant in Sec. 21. Paragraph 7.6 is most important for the present purpose. It reads as under 7.6 Section 21 defines public servant Twelve categories of public servants have been mentioned but the present definition requires to be enlarged. The ninth category describes a large variety of officers charged with the performance of different kinds, of duties relating to pecuniary interests of the State. The last sentence of this category, namely, every officer in the service or pay of the Government or remunerated by fees or companymission for the performance of any public duty should be put as a general definition. After the word government, he towards local authority, public companyporation, or government companypany should be added. The words engaged in any trade or industry may also be deleted from the twelfth clause of Section 21 as these words have a restrictive. effect. It should also be made clear that all Ministers, Ministers of State Deputy Ministers, Parliamentary Secretaries and members of local authorities companye under the definition of public servant A further category should be added to included all persons discharging adjudicatory functions under any Union or State Law for the time being in force. We also companysider it necessary to include the following categories within the definition of the term public servant- President, Secretary and all members of Managing Committee of a registered Co-operative Society Office bearers and employees of educational, social, religious and other institutions, in whatever manner established, which receive aid in any form from the Central or State Government. This recommendation led to three important amendments in cls. 3, 9 and 12 of Sec. 21. The unamended clauses and the effect of the amendment in 1964 must be brought out in sharp companytrast so as to appreciate the change made and its effect on the language employed. Clause as they stood prior to Amended by the 1964 the 1964 Amendment Amendment. ------------------------------------------------------------ Third Every Judge. Third Every Judge inincluding any person empowered by law to discharge, whether by himself or as a member of any body of persons, any adjudicatory functions Ninth Every officer whose duty Ninth Every officer it is, as such officer to take, whose duty it is, as such receive keep or expend any officer to take, receive, property of the Government, keep, or expend any property or to make any survey, on behalf of the Government, assessment, or companytract on or to make any survey, asbehalf of the Government or to sessment or companytract on beexecute any revenue-process, half of the Government or to or to report, on any matter affecting the pecuniary interest of execute any revenue-process, the Government or to make or to investigate, or to authenticate or keep any docureport, on any matter affecment relating to the pecuniary ting the pecuniary interest interest of the Government, of the Government or make or to prevent he infraction of authenticate or keep any any law for the protection of document relating to the of the pecuniary interests of pecuniary interests of the the Government, and every Government, or to prevent officer in the service or pay the infraction of any law of the Government or remuneratfor the protection of the ed by fees or companymission for pecuniary interest of the performance of any public Government. duty. Underlining ours Twelfth Every officer in the Twelfth Every person service or pay of a local auth- a in the service or pay of ority or of a companyporation the Government or remuneengaged in any trade or industrated by fees or companymission ry which is established by a for the performance of any Central, Provincial or State public duty by the Govern- Act or of a Government Company ment as defined in section 617 of the Companies Act, 1956. b in the service or pay of local authority, a companyporation established by or under Central, Provincial or State Act or a Government Company as defined in section 617 of the Companies Act, 1956. A bare companyparison of the two cls. 9 and 12 would reveal the change brought by the Amending Act 40 of 1964. The last part underlined portion in the unamended cl. 9 every officer in the service or pay of the Government or remunerated by fees or companymission for the performance of any public duty has been severed from the 9th clause and incorporated as an independent clause 12 a . The original clause 12 was deleted and has been re-enacted, as cl. 12 b with minor modifications. This history of development is numbereworthy for a very companypelling reason to be presently mentioned. discretionary power and this included Minister both Cabinet and State, Deputy Ministers and parliamentary Secretaries. L.As were number companysidered holding political offices capable of abuse of power. The Committee recommended amendment of the definition of the expression public servant in Sec. 21 IPC so as to include Ministers of all rank of Central and State level and Parliamentary Secretaries in the definition of public servant. The Committee did number recommend that the proposed amendment should companyprehend M.L.A. The Committee separately dealt with the M.L.As in paragraph 11.4 in Sec. 11 of the Report. After stating that, next to the Minister, the integrity of Members of Parliament and of legislatures in the State will be a great factor in creating a favourable social climate against companyruption It is desirable that a Code of Conduct for legislators embodying these and other principles should be framed by a special companymittee of representatives of Parliament and the legislatures numberinated by the Speakers and Chairman. This Code should be formally approved by resolutions of Parliament and the legislatures and any infringement of the Code should be treated as a breach of privilege to be inquired into by the Committee of privileges, and if a breach is established, action including termination of membership may be taken. Necessary snactions for enforcing the Code of Conduct should also be brought into existence. The Government minutely examined the Report. The recommendations of the Committee which were accepted by the Government led to the introducing of The Anti-Corruption Laws Amendment Bill 1964 Bill No. 67 of 1964 in the Parliament. The salient features of the Bill worth-noticing are that cl. 3 of Sec. 21 was proposed to be amended as recommended with minor structural change. Cl. 9 of Sec 21 was dissected as recommended and its last part and every officer in the service are pay of the Government or remunerated by fees or companymission for the performance of any public duty was detached and re-enacted as cl. 12 a and the original cl. 12 was renumbered as Cl. 12 b with slight modification. This would imply that numberattempt was made to bring in M.L.A. within the companyspectus of clause in Sec. so as to make him public servant. The position of the Minister was slightly fluid but a clear picture emerged during the debate on the Bill in the Lok Sabha. Mr. Hathi Minister-incharge while piloting the Bill, on November 7, 1964 amongst others stated that the will number deal with those recommendations which had number been accepted by the Government, but would explain them later, if any point is raised in that behalf, See Lok Sabha Debates Third that he will number deal with those recommendations which had number been accepted by the Government, but would explain them later, if any point is raised in that behalf. See Lok Sabha Debates Third Series , Vol. XXXV, Col. 245 While replying to the debate, Mr. Halhi stated that the companye of companyduct has already been evolved for Ministers because the recommendation of Santhanam Committee for including Ministers of all ranks and Parliamentary Secretaries in the definition of public servant was number accepted by the Government. But there is an interesting caveat to this statement to which we would presently revert He further stated that the specific recommendations about the definition public servant to include Ministers has number been accepted and included in the Bill because Ministers are number merely public servants but they have a greater moral and social responsibility towards the people. Later on in the debate it was companyceded that the Minister is already included in the definition of public servant even before the proposed amendment in view of the decision of the Supreme Court in Shiv Bahadur Singhs case in which Minister was held to be a public servant. It was further stated that in view of this judgment, the Government was advised that the recommendation of the Santhanam Committee for inclusion specifically of Ministers of all rank and Parliamentary Secretaries was redundant. Sec Lok Sabha Debates Third Series Vol. 35 companys. 729 and 731 . Whatever that may be the companyclusion is inescapable that till 1964 at any rate M.L.A. was number companyprehended in the definition of public servant in Sec. 21. And the Santhanam Committee did number recommend its inclusion in the definition of public servant, in Sec. 21. Bill No. 47 of 1964 was enacted as Act 40 of 1964. Now if prior to the enactment of Act 40 of 1964 M.L.A. was number companyprehended as a public servant in Sec. 21, the next question is did the amendment make any difference in his position. The amendment keeps the law virtually unaltered. Last part of cl.9 was enacted as cl. 12 a . If M.L.A. was number companyprehended in clause 9 before its amendment and dissection, it would make numberdifference in the meaning of law if a portion of cl. 7 is re-enacted as cl. 12 a . It must follow as a necessary companyollary that the amendment of Cls. 9 and 12 by Amending Act 40 of 1964 did number bring about any change in the interpretation of cl. 9 and cl. 12 a after the amendment of 1964. In this companynection, it would be advantageous to refer to G.A. Monterio v. The State of Ajmer 1 followed and approved in The State of Ajmer v. Shiji Lal 2 in both of which cl. 9 as it stood prior to its amendment came up for companystruction. In the first mentioned case, the accused was a chaser in the Railway Carriage Workshop at Ajmer. He was held to be an officer in the pay of the Government, companyprehended in the last part of cl. 9 of Sec. 21 as it then stood. In the second case, accused was a teacher in a railway school at Phulera. His companytention had found favour with the learned Judicial Commissioner but in reaching the companyclusion, he appeared to have ignored the last part of cl. 9 prior to its amendment in 1964. In the appeal by the State, this Court held that the case of the accused would be companyered by the last part of cl. 9 because the accused fulfilled the twin companyditions of either being in the service or pay of the Government and was entrusted with the performance of a public duty. It may also be mentioned that the last three words by the Government found in cl. 12 a after the amendment were number there in the last part of cl. 9. The question was whether addition of words by the Government made any difference in the interpretation of last part of cl. 9 which is substantially re-enacted as cl. 12 a . The Gujarat High Court in Manshanker Prabhashanker Dwivedi and Anr. v. The State of Gujarat 1 trace the history of amendment that payment by the Government was implicit in cl. 9 through the words by the Government were number there and were added to cl. 12 a after re-enacting the last part of cl. 9 as 12 a . This becomes clear from the decision of this Court in the appeal against the judgment of the Gujarat High Court in the State of Gujarat v. Manshanker Prabhashnker Dwivedi. 2 The accused in that case was charged for having companymitted offences under Sec. 161 IPC and Sec. 5 2 of the 1947 Act. The facts alleged were that the accused respondent before this Court was an examiner appointed by the University for the first year B.Sc. examination. He was alleged to have accepted gratification of Rs. 500 other than legal remuneration for showing favour to a candidate by giving him more marks than he deserved in the Physics practical examination. The learned special Judge companyvicted him. In the appeal, the High Court after taking numbere of cl. 9 and cl. 12 of Sec. 21 prior to their amendment by Act 40 of 1964 held that for cl. 9 to apply the person should be an officer in the service or pay of the Government or remunerated by fees or companymission for the performance of any public duty and that such pay or remuneration or companymission must companye from the Government. It was further held that the companytext of the whole of the Ninth Clause, as remuneration or in respect of the performance of public duty. It was further held that the use of the word officer read in the companytext of the words immediately preceding the last part would indicate that the remuneration companytemplated was remuneration by Government. The High Court further held that the amendment made in 1964 and in particular the addition of the words by the Government in sub-cl. a of clause Twelfth showed the legislative interpretation of the material portion of clause Ninth as it stood before the amendment under companysideration, After extraction these reasons which appealed to the High Court, this Court observed than the reasoning of the High Court does number suffer fro many infirmity. It would transpire that payment by the Government was implied without the use of the expression, by the Government in cl. 9. The words by the Government are added in cl. 12 a amended. This apparently does number make any difference. It would therefore necessarily follow that the amendment of cls 9 and 12 did number bring about any change in the companyerage and companystruction of the two clauses prior to and since their amendment. If that be so, it would follow as necessary companyollary that if M.L.A. was number a public servant with in the meaning of the expression prior to Act 40 of 1964, since the Act, the law, legal effect and on average of expression public servant remains unaltered and hence, M.L.A. is number a public servant companyprehended in cl. 12 a . Thus looking to the history and evolution of Sec. 21 as traced, it is clear that till 1964 M.L.A. companyld number have been companyceivably companyprehended in expression public servant and the law did number undergo any change since the amendment. On the companytrary, the recommendation of the Santhanam Committee which recommended inclusion of Ministers and Parliamentary Secretaries but number of M.L.A. separately recommended a companye of companyduct for M.L.A for seving them from the spectre of companyruption would clearly and unmistakably show that till 1964 M.L.A. was number companyprehended in expression public servant in Sec. 21 IPC and the amendment by Amending Act 40 of 1964 did number bring about the slightest change in this behalf companycerning the position of M.L.A. Therefor, apart from anything else, on historical evolution of Sec. 21 adopted as an external aid to companystruction, one can companyfidently say that M.L.A. was number and is number a public servant within the meaning of the expression in any of the clauses of Sec. 21 IPC. Assuming that it would number be legally sound or companyrect according to well-accepted canon of companystruction of a statute to companystrue Sec. 21 12 a by mere historical evolution of the section and the companystitutionally valid approach would be to look at the language em- Sec. 21 12 a by mere historical evolution of the section and the companystitutionally valid approach would be to look at the language employed in the section and upon its true companystruction, ascertain whether M.L.A. is a public servant within the meaning of the expression in that sub-clause. The learned special Judge held that M.L.A. is a public servant because he is either in the pay of the Government or is remunerated by fees for the performance of any public duty by the Government. A person would be a public servant under cl. 12 a if i he is in the service of the Government or ii he is in the pay of the Government or iii he is remunerated by fees or companymission for the performance of any public duty by the Government. On behalf of the companyplainant-appellant, it was companytended that in order to make a person a public servant on the ground that he is in the pay of the Government, there must exist a master-servant relationship or a companymandobedience relationship, and if these elements are absent even if a person is in the pay of the Government, he would number be a public servant. On behalf of the respondent, it was companyntered asserting that the companycept of master servant relationship or companymand-obedience relationship is companyprehended in the first part of cl. 12 a which provides that every person in the service of the Government would be a public servant. It was urged that if even for being companyprehended in the second part of the clause namely, a person would be a public servant if he is in the pay of the Government, their ought to be a master-servant or companymand-obedience relationship, the Legislature would be guilty of tautology and the disjunctive or would lose all significance. The use of the expression or in the companytext in which it is found in cl. 12 a does appear to be a disjunctive. Read in this manner, there are three independent categories companyprehended in cl. 12 a and if a person falls in any one of them, he would be a public servant. The three categories are as held by the learned special Judge i a person in the service of the Government ii a person in the pay of the Government and a person remunerated by fees or companymission for the performance of any public duty the Government. One can be in the service of the Government and may be paid for the same. One can be in the pay of the Government without being in the service of the Government in the sense of manifesting master-servant or companymand-obedience relationship. The use of the expression or does appear to us to be a disjunctive as companytended on behalf of the respondent. Depending upon the companytext, or may be read and but the companyrt would number do it unless it is so obliged because or does number generally mean and and and does number generally mean or. See Green v. Premier Glyrhonwy State Company Ltd. 1 Babu Manmohan Das Ors. v. Bishun Das, 2 Ramta Prasad Aggarwal etc. Executive Engineer, Balladgarh Anr. 3 and several other which we companysider it unnecessary to enumerate here. Once it is accepted that a person in the pay of the Government companynotes a specific and independent category of public servant other than a person in the service of the Government does number inhere a master-servant or companymandobedience relationship between the Government as the payer and the public servant as the payee, numberpart of the section is rendered superfluous. Each part will receive its own companystruction. We therefore companysider it unnecessary to refer to those decisions, which were cited on behalf of the respondent that the companyrect canon of companystruction to be adopted in such a situation is that effect must be given, if possible, to the words used in the statute, for the Legislature is deemed number to waste its words or to say anything in vain. What then is the true interpretation of the expression in the pay of the Government. In other words, is M.L.A. a person In the pay of the Government so as to be public servant within the meaning of the expression in Sec. 21 12 a . The expressions that call for companystruction are i in the pay of and ii Government. Art. 195 of the Constitution provides that Members of the Legislative Assembly and the Legislative Council of a State shall be entitled to receive such salaries and allowances as may from time to time be determined by the Legislature of the State by law and, until provision in that respect is so made, salaries and allowances at such rates and upon such companyditions as were immediately before the companymencement of the Constitution applicable in the case of members of the Legislative Assembly of the companyresponding Province. Armed with this power, the Maharashtra State Legislative Assembly has enacted The Maharashtra Legislature Members Salaries and Allowances Act, 1956 Bombay Act XLIX of 1956 . Sec. 3 1 provides that there shall be paid to each member during the whole of his term of office a salary at the rate of Rs. 450/-per month and sub-sec. 2 provides that there shall be paid to each Member during the whole of his term of office per month a sum of Rs. 400/- as a companysolidated allowance for all matters number specifically provided or by under the provision of the Act. Sec. 4 provides for daily allowances to be paid to Members. Sec. 5 provides for travelling allowance to be paid to Members. Sec. 5AC provides for a free travel by railway and steamer by a Member subject to the companyditions therein prescribed. Members are also eligible for some allowances as specified in various sections of the Act. The Maharashtra Legislature Members Pensions Act, 1976 makes provision for payment of pension with effect from April 1, 1981 at the rate of Rs. 300 per month to every person who has served as a Member of the State Legislature for a term of 5 years subject to other companyditions prescribed in the section. There is a similar Act which makes provisions for salaries and allowances of the Ministers of Maharashtra State. Undoubtedly, M.L.A. receives a salary and allowances in his capacity as M.L.A. Does it make him a person in the pay of the Government? Our attention has been drawn to the meaning of the word pay in different dictionaries and to the decision in M. Karunanidhi v. Union of India 1 where after ascertaining the meaning of the word pay given in different dictionaries, the Court observed that the expression in the pay of does number signify master-servant relationship. The word pay standing by itself in open to various shades of meaning and when the word is used in a phrase in the pay of. it is more likely to have a different companynotation than when standing by itself. Before referring to the various shades of meaning set out in the dictionaries, it would be advisable to caution ourselves against an unrestricted reference to dictionaries. Standard dictionaries as a rule give in respect of each woad as meanings in which the word has either been used or it is likely to be used in different companytexts and companynections. While it may be permissible to refer to dictionaries to find out the meaning in which a word is capable of being used or understood in companymon parlance, the well-known canon of companystruction should number even for a minute be overlooked that the meaning of the words and expressions used in a statute ordinarily take their companyour from the companytext in which they appear. In Dy. Chief Controller of Imports Exports, New Delhi v. R.T. Kosalam Ors. 2 this Court observed as under It is number always a safe way to companystrue a statute or a companytract by dividing it by a process of etymological dissection and after separating words from their companytext to give each word some particular definition given by lexicographers and then to reconstruct the instruments upon the basis of those definitions. What particular meaning should be attached to words and phrases in a given instrument is usually to be gathered from the companytext, the nature of the subject matter, the purpose of the intention of the author and the effect of giving to them one or the other permissible me aning on the object to be achieved. Words are after all used merely as a vehicle to companyvey the idea of the speaker or the writer and the words have naturally, therefore, to be so companystrued as to fit in with the idea which emerges on a companysideration of the entire companytext. Each word is but a symbol which may stand for one or a number of objects. The companytext, in which a word companyveying different shades of meanings is used, is of importance in determining the precise sense which fits in with the companytext as intended to be companyveyed by the author. In State Bank of India v. N. Sundara Money, Krishna Iyer, J. speaking for the Court observed in his inimitable style that dictionaries are number dictators of statutory companystruction where the benignant mood of a law, may furnish a different denotation. With this caution, we may briefly refer to the meaning of the expression pay and in the pay of given by different dictionaries. As far as the expression pay is companycerned, a Constitution Bench of this Court in Karunanidhis case referred to various dictionaries and companycluded that the word ordinarily means salary, companypensation, wages or any amount of money paid to the person who is described as in the pay of the payer. Serious exception was taken on behalf of the appellant that numbercanon of companystruction would permit picking out shades of meaning of word pay and then read the phrase in the pay of as synonymous with the word pay. On the other hand, it was asserted that the point is companycluded by the observation of the Constitution Bench that so far as the second limb of the clause, in the pay of the Government is companycerned, that appears to be of a much wider amplitude so as to include within its ambit even a public servant who pay of the other person and yet there may number be a master servant relationship between them. The companyrt did number ascertain the meaning ascribed to phrase in the pay of in different dictionaries. The phrase in the pay of would ordinarily import the element of employment or paid employment or employed and paid by the employer. In Concise Oxford Dictionary, 7th edition at page 753, the meaning assigned to the expression in the pay of is in the employment of. In New Collins Concise English Dictionary at page 831, in the pay of carries one meaning as one in paid employment. In Websters New World Dictionary, the phrase in the pay of carries the meaning employed and paid by. Relying on all these shades of meaning, it was urged that the phrase in the pay of does necessarily import the element of master-servant relationship and its absence cannot be companyntenanced. It was submitted even if A is paid by B a sum styled as pay unless B is servant of A, it cannot be said that B is in the pay of A. We see force in this submission. However, it is number implicit in the expression in the pay of that there ought to exist a master-servant relationship between payer and payer. One can be in the pay of another without being in employment or service of the other. We are number inclined to accept the submission that in the pay of must in the companytext, imply master-servant relationship for the obvious reason that the companyrt has to companystrue the phrase in the pay of in its setting where it is preceded by the expression in the service of the Government and succeeded by the expression remunerated by fees or companymission for the performance of any public duty by the Government. The setting and the companytext are very relevant for ascertaining the true meaning of the expression. In order to avoid the charge of tautology, the phrase in the pay of the Government in cl. 12 a may companyprehend a situation that the person may be in the pay of the Government without being in the employment of the Government or without there being a master-servant relationship between the person receiving the pay and the Government as payer. It was however, companytended that the question whether a person in the pay of the Government is ipso facto a public servant is numbermore res integra and companycluded by the decision of the Constitution Bench in Karunanidhis case? In that case before adverting to the dictionary meaning of the expression pay, the Constitution Bench speaking through Fazal Ali, J. observed as under at page 282 We are of the opinion that so far as the second limb in the pay of the Governments is companycerned, that appears to be of We are of the opinion that so far as the second limb in the pay of the Government is companycerned, that appears to be of a much wider amplitude so as to include within its ambit even public servant who may number be a regular employee receiving salary from his master. The Court further observed that the expression in the pay of companynote that a person is getting salary, companypensation, wages or any amount of money. This by itself however, does number lead to the inference that a relationship of master and servant must necessarily exist in all cases where a person is paid salary. We are also of the opinion that the phrase in the pay of the Government does number import of necessity a master-servant relationship. It is perfectly possible to say that a person can be in the pay of the Government if he is paid in companysideration of discharging an assignment entrusted to him by the Government without there necessarily being a master-servant relationship between them. It is number unusual in companymon parlance to speak of a person being in the pay of another if he is paid for acting at the behest or according to the desire of the other without the other being his master and he the servant, that is to say without the companytrol over the manner of doing the work which a master-servant relationship implies. It is such a category in addition to the one in the service of the Government that is sought to be companyprehended in cl. 12 a . In respect of the extracted observation of the Constitution Bench, there is numberattempt to distinguish the decision in Karunanidhis case and therefore, it is number necessity to companysider the decisions cited in support of the submission that a judgment of the Supreme Court especially of the Constitution Bench cannot be distinguished lightly and is binding on us and unless questions of fundamental importance to national life are involved, need number be by us. We must however point out that the ratio of the decision in Karunanidhis case is number what is extracted hereinbefore but the ratio is to be found at page 290 where the Constitution Bench held the Chief Minister to be a public servant as companyprehended in cl. 12 s of Sec. 21 on the finding That a Minister is appointed or dismissed by the Governor and is, therefore, subordinate to him whatever be the nature and status of his companystitutional functions. That a Chief Minister or a Minister gets salary for the public work done or the public duty performed by him. That the said salary is paid to the Chief Minister or the Minister from the Government funds. It would appear at glance that numberargument was advanced and numbere has been examined by the Constitution Bench bearing on the interpretation of the expression Government in cl. 12 a . It was assumed that salary and allowances paid to the Chief Minister are by Government. What does expression Government in the clause companynote was number even examined. And it is on the aforementioned finding that the Chief Minister was held to be a public servant but that does number companyclude the matter. This is number the end of the matter. The question may be posed thus Even if M.L.A. receives salary and allowances under the relevant statute, is he in the pay of the Government? In other words, what does the expression Government companynote? There is a short and a long answer to the problem. Sec. 17 IPC provides that the word Government denotes the Central Government or the Government of a State. Sec. 7 IPC provides that ever expression which is explained in any part of the Code, is used in every part of the Code in companyformity with the explanation. Let it be numbered that unlike the modern statute Sec. 7 does number provide unless the companytext otherwise indicate a phrase that prefaces the dictionary clauses of a modern statute. Therefore, the expression Government in Sec. 21 12 a must either mean the Central Government or the Government of a State. Substituting the explanation, the relevant portion of Sec. 21 12 a would read thus Every person in the pay of the Central Government or the Government of a State or remunerated by fees or companymission for the performance of any public duty by the Central Government or the Government of a State. At any rate, the Central Government is out of companysideration. Therefore, the question boils down to this whether M.L.A. is in the pay of the Government of a State or is remunerated by fees for the performance of any public duty by the Government of a State ? In the debate between the Presidential form and Parliamentary form of democracy, during the early days of the Constituent Assembly, the balance tilted in favour of Parliamentary form of Government. Mr. K. M. Munshi, one of the members of the Drafting Committee spoke in this companynection as under We must number forget a very important fact that, during the last hundred years, Indian public life has largely drawn upon the traditions of British Constitutional Law. Most of us have looked up to the British model as the best. For the last thirty or forty years, some hind of responsibility has been introduced in the governance of the companyntry. Our companystitutional traditions have become parliamentary and we have number all our Provinces functioning more or less on the British model. In Rai Sahib Ram Jawaya Kapur Ors. v. The State of Punjab a Constitution Bench of this Court observed as under 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 companydition precedent to the exercise of this responsibility is its retaining the companyfidence of the legislative branch of the State. It was further observed that in the Indian Constitution executive as in England and the Council of Ministers we have the same system of parliamentary companysisting, as it does, of the members of the legislature is, like, the British Cabinet a hyphen which joins, a buckle which fastens the legislative part of the State to the executive part. In Shamsher Singh Anr. v. State of Punjab, a seven Judges Bench unanimously overruled the decision in Sardari Lal v. Union of India and Ors. and held that our Constitution embodies generally the Parliamentary or Cabinet system of Government of the British Model both for the Union and the States. This view has number been departed from. Now in parliamentary form of Government modelled on British model, the executive, legislature and judicial powers are in the main entrusted to separate instruments of the State. It is number for a moment suggested that there is strict or water-fight division of powers, but the functions are certainly divided. In Halsburys Laws of England, Fourth Edition, Vol. 8 para 813, separation of executive, legislative and judicial powers in the Westminster Model have been adverted to. It reads as under It is clear that the powers of government are divided. The executive, legislative and judicial powers are in the main entrusted to separate instruments of the State and local government is further administered separately. Thus the original companycentration of power in the Sovereign numberlonger exists in the eighteenth century this division of the powers of government seemed to be such an essential characteristic of the English Constitution that it was made the basis for the doctrine of separation of powers. This doctrine, which is to the effect that in a nation which has political liberty as the direct object of its companystitution on one person or body of persons ought to be allowed to companytrol the legislative, executive and judicial powers, or any two of them, has never in its strict form companyresponded with the facts of English government mainly because, although the functions and powers of government are largely separated, the membership of the separate instruments of state overlap. Only in one aspect of the companystitution can it be said that the doctrine is strictly adhered to, namely, that by tradition, companyvention and law the judiciary is insulated from political matters. Parliament that is the Legislature exercises companytrol over the executive branch of the Government because it is a postulate of Parliamentary form of Government that Executive is responsible to the Legislature. In other words the Government of the companyntry is companytrolled by a ministry and Cabinet chosen by the electorate which while remaining responsible to the electorate is responsible directly to the Legislature and such effective means of exercising companytrol is that any expense from. Consolidated Fund of the State must have been earlier placed before the Legislature. In Halsburys Laws of England, Fourth Edition, Vol. 34 para 1005, it is stated that Parliament exercises companytrol over the actions of the executive government and the administration of the laws it has enacted in various ways, one such being by the doctrine of the companystitution by which supply is granted annually by the House of Commons and must receive legislative sanction each year and the supply granted must be appropriated to the particular purposes for which it has been granted. It may also be numbericed that the staff of the House of Commons is appointed by the House of Commons Commission companyprising the Speaker, the Leader of the House of the Commons, a member of the House numberinated by the Leader of the opposition and three other members appointed by the House. This Commission is charged with a duty to determine the number and remuneration and other terms and companyditions of service. This Commission is also responsible for laying before the House an estimate of the expenses of the House departments and of any other expenses incurred for the service of the House of Commons. ibid para 1155 . Let us turn to relevant provisions of the Constitution. Part VI of the Constitution provides that the executive power of the State shall be vested in the Governor and shall be exercised by him either directly or through officers subordinate to him in accordance with the Constitution. Chapter III in Part VI provides for State Legislature. Every State is to have a Legislature which shall companysist of the Governor and it can be unicameral or bicameral as the case may be Where the State has a unicameral legislature, the assembly is called Legislative Assembly. Art. 170 provides for members of the Legislative Assembly being chosen by direct election from territorial companystituencies in the State. Arts. 178 to 186 provide for officers of the State Legislatures such as the Speaker and Deputy Speaker of the Legislative Assembly and Chairman and Deputy Chairman of Legislative Council as the case may be, their powers, functions and their either vacating the office or removal from the office. Art. 187 1 provides that the House or each House of the Legislature of a State shall have a separate secretarial staff. Marginal numbere of the article is Secretariat of State Legislature. Sub-art. 2 of Art. 187 provides that the Legislature of a State may by law regulate the recruitment, and the companyditions of service of persons appointed, to the secretarial staff of the House or Houses of the Legislature of the State. Art. 266 obliges the State to set up its Consolidated Fund. Art. 203 prescribes the procedure with respect to estimates. The estimates as relate to expenditure charged upon the Consolidated Fund of a State shall number be submitted to the vote of the Legislative Assembly but the discussion in the Legislature is permissible thereon. However, so much of the said. estimates as relate to other expenditure shall be submitted in the form of demands for grants to the Legislative Assembly, and the Legislative Assembly shall have power to assent, or to refuse to assent, to any demand, or to assent to any demand subject to a reduction of the amount specified therein. In other words, Legislative Assembly has companyplete power of purse. Art. 204 casts an obligation to introduce a Bill to provide for appropriation out of the Consolidated Fund of the State of all moneys required to meeta the grants so made by the Assembly and b the expenditure charged on the Consolidated Fund of the State but number exceeding in any case the amount shown in the statement previously laid before the House or Houses. A companyspectus of these provisions clearly indicate that the Legislature enjoys the power of purse. Even with regard to expenses charged on the Consolidated Fund of the State to be set up under Art. 266, an appropriation bill has to be moved and adopted, undoubtedly, the same would be number-votable. And it is number disputed that salaries and allowances payable to M.L.A. are number charged on the Consolidated Fund of the State. This probably is an emulation of the situation in England where salary and allowances of the members of the Parliament are number charged on the Consolidated Fund. As a necessary companyollary, it would be a votable item. There thus is a broad division of functions such as executive, legislative and judicial in our Constitution. The Legislature lays down the broad policy and has the power of purse. The executive executes the policy and spends from the Consolidated Fund of the State what Legislature has sanctioned. The Legislative Assembly enacted the Act enabling to pay to its members salary and allowances. And the members vote the grant and pay themselves. In this background even if there is an officer to disburse this payment or that a pay bill has to be drawn up are number such factors being decisive of the matter. That is merely a mode of payment, but the M.L.As. by a vote retained the fund earmarked for purposes of disbursal for pay and allowances payable to them under the relevant statute. Therefore, even though M.L.A. receives pay and allowances, he is number in the pay of the State Government because Legislature of a State cannot be companyprehended in the expression State Government. This becomes further clear from the provision companytained in Art. 12 of the Constitution which provides that for purposes of Part III, unless the companytext otherwise requires, the State includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the companytrol of the Government of India. The expression Government and Legislature, two separate entities, are sought to be included in the expression State which would mean that otherwise they are distinct and separate entities. This companyclusion is further reinforced by the fact that the executive sets up its own secretariat, while Art. 187 provides for a secretarial staff of the Legislature under the companytrol of the Speaker, whose terms and companyditions of the service will be determined by the Legislature and number by the executive. When all these aspects are pieced together, the expression Government in Sec. 21 12 a clearly denotes the executive and number the Legislature. M.L.A. is certainly number in the pay of the executive. Therefore, the companyclusion is inescapable that even though M.L.A. receives pay and allowances, he can number be said to be in the pay of the Government i.e. the executive. This companyclusion would govern also the third part of cl 12 a i.e. remunerated by fees for performance of any public duty by the Government. In other words, M.L.A. is number remunerated by fees paid by the Government i.e. the executive. It was also companytended that M.L.A. is number performing any public duty. It is number necessary to examine this aspect because it would be rather difficult to accept an undly vide submission that M.L.A. is number performing any public duty. However, it is unquestionable that he is number performing any public duty either directed by the Government or for the Government. He numberdoubt performs public duties cast on him by the Constitutional and his electorate. He thus discharges companystitutional functions for which he is remunerated by fees under the Constitution and number by the Executive. It was further companytended that on the analogy of the decision in His Majesty the King v. Boston Ors., M.L.A. would be a public servant. In Bostons case, the allegation was that Harrison and Mitchel more paid to defendant Boston in his official capacity as a Member of the Legislative Assembly of New South Wales and the latter companyruptly accepted in that capacity as inducement to him in violation of his official duty to use his position as such member a to secure the acquisition by the Government of the State of New South Wales of certain estates and the payment for such estates out of the public funds of the State and b to put pressure upon the Minister for Lands and other officers of the Crown to acquire and pay for such estates. The companytention was that the agreement between the defendants might have been to pay money to Boston to induce him to use his position exclusively outside Parliament, and number by vote or speech in the Assembly, and that the transaction in companynection with which he was to use his position to put pressure on the Minister might companysistently with the information, be one which would never companye before Parliament and which, in his opinion and in the opinion of those who paid him, was highly beneficial to the State that such an agreement would number amount to a criminal offence, and that companysequently the information is bad. Negativing this companytention, it was held that it is settled law that an agreement or companybination to do an act which tends to produce a public mischief amounts to a criminal companyspiracy. It was further held by the majority that the payment of money to, and the receipt of money by, a member of Parliament to induce him to use his official position, whether inside or outside Parliament, for the purpose of influencing or putting pressure on a Minister or other officer of the Crown to enter into or carry out a transaction involving payment of money out of the public funds, are acts tending to the public mischief, and an agreement or companybination to do such acts amounts to a criminal offence. The question has been examined in the light of the settled law that an agreement or companybination to do an act which tends to produce a public mischief amounts to a criminal companyspiracy. Isaacs and Rich, JJ posited the question how far a member of the Legislative Assembly of New South. Wales can, without incurring any real personal responsibility-that is-other than political rejection, make his public position the subject of profitable traffic by engaging in departmental intervention on behalf of individuals in return for private pecuniary companysideration to himself ? The companycurring judgment examined the general position of a member of Parliament and then proceeded to examine the special provisions of the relevant clause. On this point it was companycluded that the fundamental obligation, which is the key to this case, is the duty to serve and, in serving, to act with fidelity and with a simplemindedness for the welfare of the companymunity. It was further observed that a member of Parliament is, therefore, in the highest sense, a servant of the State his duties are those appertaining to the position he fills, a position of numbertransient or temporary existence, a position forming a recognized place in the companystitutional machinery of government. It was also held that he holds an office. In the third companycurring judgment of Higgins, J, while companyceding that the member of Parliament has to discharge a duty in which the public is interested, but after-examining provisions of the public Service Acts, it Was held that he is number public officer within the meaning of that Act because he is number required to obey the companymands of the King or of the departmental heads. It was however companycluded that as a member of Parliament, he holds a fiduciary relation towards the public, and that is enough. The minority judgment of Gavan Duffy and Starke, JJ. clearly proceeds on their holding that a member of Legislative Assembly of New South Wales is number the holder of a public office within the meaning of the companymon law and even if he companyld be regarded as the holder of such an office, the acts charged as intended to be done by the defendant Boston, however improper they may be, would number be malversation in his office or acts done in his office or acts done in his office unless they were done in the discharge of his legislative functions. As we are companycerned with a legislative enactment- Sec. 21 12 a , this decision based on the companycept of companymon law and some of the statutes as prevailing in Australia would number be very helpful. It may be mentioned while companyparing M.L.A. and M.P. in India with M.P. in U.K. that the M.P. in U.K. is neither companyered by the Prevention of Corruption Act, 1906 number the Prevention of Corruption Act, 1916. It may also be mentioned that The Public Bodies Corrupt Practices Act, 1889 does number companyer M.P. in U.K. The acceptance by any member of either House of Parliament of a bribe to influence him in his companyduct as such member or of any fees, companypensation or reward in companynection with the promotion of, or opposition to any bill, resolution, matter or thing submitted or intended to be submitted to the House or any companymittee thereof is a breach of privilege. Attempts to bring M. P. in U.K. either under the provisions of the Prevention of Corruption Act or the public Bodies Corrupt Practices Act have number met with success. Even such modicum of decency in public life as disclosing relevant, pecuniary interest or benefit of whatever nature whether direct or indirect that he may have had or may be expecting to have while participating in a debate or proceeding in House by M.P. in U.K. was stoutly resisted in 1974. But Paulson Affair stirred many and Royal Commission on Corruption in Public Life headed by Lord Justice Salmon was set up. The Commission inter alia recommended in 1976 that Ps. should be brought within the scope of the companyruption laws regarding their actions inside as well outside Parliament. No follow up legislative action appears to have been taken since then. If M.L.A. is number in the pay of the Government in the sense of Executive government or is number remunerated by fees for performance of any public duty by the Executive Government, certainly he would number be companyprehended in the expression public servant within the meaning of the expression in cl. 12 a . He is thus number a public servant within the meaning of the expression in cl. 12 a . This companyclusion reinforces the earlier companyclusion reached by us after examining the historical evolution of cl. 12 a . Mr. Singhvi, however, strenuously companytended that M.L.A. would be companyprehended in cl. 3 or cl. 7 of Sec. 21 IPC to be a public servant He went so far as to suggest that, his emphasis would have been more on cl. 3 companyparatively and number on cl. 12 a . Therefore, it may number. be examined whether M.L.A. is companyprehended either in cl. 3 or cl. 7 of Sec. 21 IPC. Re e Cl. 3 of Sec. 21, as it at present stands, takes within its purview every Judge including any person empowered by law to discharge whether by himself or as a member of any body of persons, any adjudicatory functions. Prior to its amendment by Act 40 of 1964 the cl. 3 read simply Every judge. Cl. 3 was amended to read, as it at present stands, pursuant to the recommendations of the Santhanam Committee. In Para 7.6 of the Report, it was recommended that a further category should be added to include all persons discharging adjudicatory functions under any Union of State Law for the time being in force. With this end in view, the Committee recommended that cl. 3 should read Every Judge including any person entrusted with adjudicatory functions in the companyrse of enforcement of any law for the time being in force. At the Bill stage, the clause was recast so as to give full effect to the recommendation of the Committee and this equally becomes clear from the Statement of objects and Reasons accompanying Bill No. 67 of 1964 which when adopted became Act 40 of 1964. In para 2 a of the Statement of objects and Reasons it is stated that the definition of public servant in Sec. 21 of the Indian Penal Code is proposed to be amended so as to bring within its purview certain additional categories of persons such as persons performing adjudicatory functions under any law, liquidators, receivers, companymissioners etc. If we recall the earlier discussion about the history of evolution of cl, 12 a and the entire range of recommendation of the Santhanem Committee, it can be companyfidently said the M.L.A. was never intended to be brought within the companyspectus of clauses of Sec. 21 so as to clothe him with the status of a public servant. Independent of this historical evolution and focussing attention on the language of cl. 3 it is difficult to hold that M.L.A. as a member of a body of persons such as the Legislative Assembly performs any adjudicatory functions empowered by law to discharge that function. In fact, Santhanam Committee companytemplated companyering such officers like liquidators, receivers, companymissioners etc. each of whom is empowered by different statutes to discharge such adjudicatory functions as prescribed by the companycerned law. It was however, companytended that expression Judge has been defined in Sec. 19 IPC to denote number only every person who is officially designated as a Judge, but also every person who is empowered by law to give, in any legal proceeding, civil or criminal, a definitive judgment, or a judgment which, if number appealed against, would be definitive, or a judgment, if companyfirmed by some other authority, would be definitive, or who is one of a body of persons which body of persons is empowered by law to give such a judgment and in cl. 3 this definition cannot be substituted because it is an inclusive definition which means it is extensive in character. Accepting the position that inclusive definition extends the specific meaning of the expression which it would number otherwise bear, it is necessary to determine whether this extension of the expression Judge is so wide as to companyer within its umbrella M.L.A. on the ground that while voting upon a motion for breach of privilege or for companytempt of the House, he is discharging adjudicatory functions and that he is so empowered by law to do so. When with the permission of the Speaker, a motion for breach of privilege is moved in the Legislative Assembly or a motion for taking action for companytempt of the House is moved, undoubtedly, every member of the House has a right to participate and after the motion is debated upon, the majority vote is recorded as a decision of the House. Does that make M.L.A. a person as a member of a body persons who discharges adjudicatory functions? The definition of expression Judge companyprehends adjudication in any legal proceeding, civil or criminal and in which the person as a Judge is empowered to give a definitive judgment. It is difficult to accept the submission that the proceedings before the House either upon a motion for breach of privilege or for companytempt is a civil or criminal proceeding, as these terms ordinarily companynote. A motion for breach of privilege or for companytempt of the House is brought before the House when the mover feels that the powers, privileges and immunities of the House have been violated. The House has the power to punish for companytempt and the penal jurisdiction of the House is number companyfined to their own Members number to offences companymitted in their presence, but extends to all companytempts of the Houses, whether companymitted by Members or by persons who are number Members, irrespective of whether the offence is companymitted within the House or beyond its walls. See Earskine May Parliamentary Practice 20 ed. p. 122 . This power of companymitment is truly described as a key-stone of Parliamentary Practice. It was pointed out that the origin of the power which is judicial in its nature is to be found naturally in the medieval companyception of Parliament as primarily a companyrt of justice-the High Court of Parliament ibid page 124 . It is however, difficult to say that a State Legislature functioning under our Constitution can be described as High Court of Legislative Assembly. In blindly tailoring our Constitutional Law to the Parliamentary Practice in U.K., one is apt to overlook the obvious fact that House of Lords always possessed the judicial power as any Court of Westminster Hall. ibid p. 124 . In this companynection in Special Ref. No. 1 of 1964 1 it was clearly stated that the result of the provision companytained in the latter part of Art. 194 3 was number intended to be companyfer on the State Legislatures in India the status of a superior Court of Record. It was further observed that the House and indeed all Legislative Assemblies in India never discharged any judicial functions and their historical and companystitutional back ground does number support the claim that they can be regarded as Court of Record in any sense Undoubtedly, the Legislative Assembly in view of the provisions companytained in Art. 194 3 has the power to inflict punishment for breach of privilege and for companytempt of the House And when a motion is moved companyplaining breach of privilege or for taking action for the companytempt of the House, the members would participate in the debate analyse evidence and absence thereof in support of the motion and against the motion and ultimately decide as a body by a democratic process whether the motion is affirmed or rejected. The question is whether this process can be styled as an adjudicatory process discharged by M.L.A. as empowered by law. If the expression law were to include the Constitution, certainly this power is enjoyed by M.L.A. but expression law ordinarily does number include the Constitution. Art 13 1 of the Constitution provides that all laws in force in the territory of India immediately before the companymencement of the Constitution in so far as they are companysistent with the provision of Part III shall to the extent of inconsistency be void. Sub-Art. 2 imposes a restriction on the legislative power of the State to make any law which takes away or abridges the rights companyferred by Part III and any law made in companytravention of sub-Art 2 shall to the extents of the companytravention, be void Expression law as used here would be law other than Constitution. in other words law enacted in exercise of the legislative power. The majority view in I.C. Golaknath v. State of Punjab 1 that amendment of the Constitution is part of the legislative process does number survive as valid any longer because it was admitted that Constitution Twenty Fourth Amendment Act, 1971 in so far as it transfers the power to amend the Constitution from the residuary entry or Article 248 of the Constitution to Article 368 is valid. After so saying the trend of discussion in various judgments in H.H. Keshvnand Bharathi Sripadanaga galavaru v. State of Kerala and another 2 shows that when the power amend the Constitution is exercise by Parliament it exercises Constituent power and this is independent of the ordinary legislative process. And this approach is borne out by a reference to the definition of expression Indian law in the General Clauses Act which does number include the Constitution. A passing reference may also be made to the form of oath prescribed for a Judge of the Supreme Court and the Judge of the High Court in the Third Schedule which separately refer to the Constitution and the laws. Participation in a debate on a motion of breach of privilege or for taking action for companytempt of the House and voting thereon is a companystitutional function discharged by the members and therefore, it cannot be said that such adjudicatory function if it can be so styled, companystitutes adjudicatory function undertaken by M.L.A. as empowered by law. Viewed from this angle it is number necessary to examine the companytention that adjudication and a resultant judgment presupposes a lis between persons other than adjudicator, and M.L.A. has numberlis before him as a body of persons when passing upon the motion for companytempt or breach of privilege. Accordingly the submission that the accused would be a public servant within the meaning of the expression in cl. 3 of Sec. 21 IPC must be rejected. The last limb of the submission was that at any rate, the accused would be a public servant within the meaning of cl. 7 of Sec. 21 IPC, which takes within its ambit every person who holds any office by virtue of which he is empowered to place or keep any person in companyfinement. This limb of the submission was number placed for companysideration of the learned trial Judge. And it has merely to be stated to be rejected. We, however, did number want to reject it on this narrow ground. Expanding this companytention, it was urged that L.A. is empowered to adjudge a person guilty of breach of privilege or companytempt of the House and when prison sentence is imposed to keep him in companyfinement. Assuming for the purpose of this argument that M.L.A. holds an office, is he a person empowered to place or keep any person in companyfinement. Power to impose punishment is independent of the power to keep a person in companyfinement. First is the power to impose a prison sentence. but second is the power flowing from the execution of the sentence to place or keep any person in companyfinement meaning thereby, there is an execution of warrant Persons whose duty it is to deprive a person directed to be imprisoned to deprive him of his liberty to remain free and to keep or place him in companyfinement in due execution of the warrant would be companyprehended in cl. 3 . It is difficult to accept the submission that M.L.As. as a body can keep or place any person in companyfinement. Reference was, however, made to some of the passages in Parliamentary Practice by Earskine May, 20th Edn. as also to Practice and Procedure of Parliament, Third Edition by Kaul and Shakdher, p. 208. The authors observed at page 208 that each House of the Legislature of State, has the power to secure the attendance of persons on matters of privilege and to punish for break of privilege or companytempt of the House and companymit the offender to custody or prison. At page 212, it is observed that each House has the power to enforce its orders including the power for its officers to break open the doors of a house for that purpose, when necessary, and execute its warrants in companynection with companytempt proceedings. We fail to see how these observations assist us in understanding the expression empowered to place or keep any person in companyfinement. Broadly stated, the expression companyprehends Police and Prison Authorities or those under an obligation by law or by virtue of office to take into custody and keep in companyfinement any person. In M Dwivedis case, this Court observed that Seventh and Eighth clauses of Sec. 21 deal with persons who perform mainly policing duties. To say that M.L.A. by virtue of his office is performing policing or prison officers duties would be apart form doing violence to language lowering him in status. Additionally, cl. 7 does number speak of any adjudicatory function. It appears to companyprehend situations where as preliminary to or an end product of an adjudicatory function in a criminal case, which may lead to imposition of a prison sentence, and a person in exercise of the duty to be discharged by him by virtue of his office places or keeps any person in companyfinement. The decisions in Homi D. Mistry Shree Nafisul Hussan Ors. 1 . Harendra Nath Barua v. Dev Kanta Barua Ors 2 and Edward Kelley v. William Carson, John Kent Ors. 2 hardly shed any light on this aspect. Therefore, the submission that M.L.A. would be companyprehended in cl. 7 of Sec. 21 so as to be a public servant must be rejected. Having meticulously examined the submission from diverse angles as presented to us, it appears that M.L.A. is number a public servant within the meaning of the expression in cl. 12 a , cl. 3 and cl. 7 of Sec. 21 IPC. Re f g The learned Judge after recording a finding that M.L.A. is a public servant within the companyprehension of cl. 12 a and further recording the finding that as on the date on which the Court was invited to take companynizance, the accused was thus a public servant proceeded to examine whether sanction under Sec. 6 of the 1947 Act is a pre-requisite to taking companynizance of offences enumerated in Sec. 6 alleged to have been companymitted by him. He reached the companyclusion that a sanction is necessary before companynizance can be taken. As a companyollary he proceeded to investigate and identify, which is the sanctioning authority who would be able to give a valid sanction as required by Sec 6 for the prosecution of the accused in his capacity as M.L.A.? We have expressed our companyclusion that where offences as set out in Sec. 6 are alleged to have been companymitted by a public servant, sanction of only that authority would be necessary who would be entitled to remove him from that office which is alleged to have been misused or abused for companyrupt motives. If the accused has ceased to hold that office by the date, the companyrt is called upon to take companynizance of the offences alleged to have been companymitted by such public servant, numbersanction under Sec. 6 would be necessary despite the fact that he may be holding any other office on the relevant date which may make him a public servant as understood in Sec 21, if there is numberallegation that office has been abused or misused for companyrupt motives. The allegations in the companyplaint are all to the effect that the accused misused or abused his office as Chief Minister for companyrupt motives. By the time the Court was called upon to take companynizance of those offences, the accused had ceased to hold the office of Chief Minister. The sanction to prosecute him was granted by the Governor of Maharashtra but this aspect we companysider irrelevant for companycluding that numbersanction was necessary to prosecute him under Sec. 6 on the date on which the companyrt took companynizance of the offences alleged to have been companymitted by the accused. Assuming that as M.L.A. that aspect becomes immaterial. Further Sec. 6 postulates existence of a valid sanction for prosecution of a public servant for offences punishable under Secs. 161, 164, 165 IPC and Sec. 5 of the 1947 Act, if they are alleged to have been companymitted by a public servant. In view of our further finding that M.L.A. is number a public servant within the meaning of the expression in Sec. 21 IPC numbersanction is necessary to prosecute him for the offences alleged to have been companymitted by him. In view of the companyclusions reached by us, we companysider it unnecessary to ascertain which would be the authority companypetent to sanction prosecution of M.L.A. as envisaged by Sec. 6 thought it must be frankly companyfessed that companysiderable time was spent in the deliberations in search of companypetent sanctioning authority. The vital question has become one of academic interest. We propose to adhere to the accumulated wisdom which has ripened into a settled practice of this Court number to decide academic questions. The question is left open. Before we companyclude let it be clarified that more often in the companyrse of this judgment, we have used the words office of M.L.A. It was debated whether the M.L.A. holds seat or office? Our use of the expression office should number be companystrued to mean that we have accepted that the position of M.L.A. can be aptly described. as one holding public office or for that matter. To sum up, the learned special Judge was clearly in error in holding that M.L.A. is a public servant within the meaning of the expression in Sec. 12 a and further erred in holding that a sanction of the Legislative Assembly of Maharashtra or majority of the members was a companydition precedent to taking companynizance of offences companymitted by the accused. For the reasons herein stated both the companyclusions are wholly unsustainable and must be quashed and set aside. This appeal accordingly succeeds and is allowed. The order and decision of the learned Special Judge Shri R.B. Sule dated. July 25, 1983 discharging the accused in Special Case No. 24 of 1982 and Special Case No.3/83 is hereby set aside and the trial shall proceed further from the stage where the accused was discharged. The accused was the Chief Minister of a premier Statethe State of Maharashtra. By a prosecution launched as early as on September 11, 1981, his character and integrity came under a cloud. Nearly 2/1/2 years have rolled by and the case has number moved an inch further. An expeditious trial is primarily in the interest of the accused and a mandate of Art. 21. Expeditious disposal of a criminal case is in the interest of both, the prosecution and the accused. There, fore, Special Case No. 24 of 1982 and Special Case. No 3/83 pending in the Court of Special Judge, Greater Bombay Shri B. Sule are withdrawn and transferred to the High Court of Bombay with a request to the to the learned Chief Justice to assign these two cases to a sitting Judge of the High Court. On being so assigned, the learned Judge may proceed to expeditiously dispose of the cases Preferably by holding the trial from day to day. |
CIVIL APPELLATE JURISDICTION Civil Appeal No. 938 of 1963. Appeal from the judgment and decree dated December 19, 1960 of the Allahabad High Court in Income-tax Reference No. 1588 of 1956. N. Rajagopala Sastri, R. H. Dhebar and R. N. Sachthey, for the appellant. V. Viswanatha Sastri and Naunit Lal, for the respondent. The Judgment of the Court was delivered by Subba Rao J. This appeal by certificate raises the question whether loss of cash by dacoity is an admissible deduction under S. 10 1 of the Indian Income-tax Act, 1922, hereinafter called the Act, in companyputing the assessees income in a banking business. The facts relevant to the question raised may be briefly state . The assessee is the Nainital Bank Limited. It is a puplic limited companypany which carries on the business of banking. It has various branches and one of them is situated at Ramnagar. In the usual companyrse of its business large amounts were kept in various safes in the premises of the Bank. On June 11, 1951, at about 7 P.m. there was a dacoity in the Bank and the dacoits carried away the cash amounting to Rs. 1,06,000 and some ornaments etc. pledged with the Bank. For the assessment year 1952-53 the Bank claimed the said amount as a deduction in companyputing its income from the banking business on the ground that it was a trading loss. The Income-tax Officer disallowed the claim on the ground that it was number a loss incidental to the banking business. On appeal, the Appellate Assistant Commissioner of Income tax, and on further appeal, the Income-tax Appellate Tribunal, companyfirmed that finding. On a reference to the High Court of Judicature at Allababad, a Division Bench of that Court held that the loss by dacoity was incidental to the banking business and was, therefore, a trading, loss and that the assessee was entitled to a deduction of the same under s. 10 1 of the Act. Hence the appeal. Mr. Rajagopala Sastri, learned companynsel for the appellant, argued that the Bank lost the money by burglary number in its capacity as a bank but only just like any other citizen, that the risk of L2Sup./64-9 burglary was number incidental to the business of banking and that, therefore, the amount burgled companyld number be deducted as a trading loss. Mr. A. V. Viswanatha Sastri, on the other hand, companytended that the money lost by burglary was the stock in-trade of the banking business, that it was kept in the Bank in the usual companyrse of its business and that the risk of its loss was incidental to the carrying on of the said business and, therefore, the amount lost was a trading loss liable to be deducted under s. 10 1 of the Act. Before we companysider the law on the subject, it would be companyvenient at the outset to numberice briefly the scope of the activities of banking business. Under S. 5 1 b of the Banking Companies Act, 1949, banking is defined to mean the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or Otherwise and under s. 5 1 c , banking companypany means any companypany which transacts the business of banking in India under S. 5 1 cc , branch or branch office in relation to a banking companypany, means any branch or branch office, whether called a pay office or sub-pay office or by any other name, at which deposits are received, cheques cashed or money lent, and for the purposes of section 35 includes any place of business where any other form of business referred to in subsection 1 of section 6 is transacted, Therefore, a banking business companysists mainly in receiving deposits, making advances, realizing them and making fresh advances. It is a companytinuous process which requires maintenance of ready cash in the bank premises. The Nainital Bank Ltd., is a public limited companypany incorporated for carrying on such banking business and Ramnagar branch is one of its branches doing such business. Unlike an individual, a limited companypany like a banking companypany companyes into existence for the purpose of carrying on only the banking business and ordinarily there cannot be any scope for attributing different characters to that business. We therefore, start with the fact that the Ramnagar branch of the Bank had kept large amounts in the Bank premises in the usual companyrse of its business in order to meet the demands of its companystituents. It is settled law, and indeed it is number disputed, that cash is the stock-in-trade of a banking companypany. In Arunachalam Chettiar v. Commissioner of Income-tax Madras 1 , the Judicial Committee was companysidering the basis of the right of an assessee to 1 1936 4 I.T.R. 173, 83 P.C. . deduct irrecoverable loans before arriving at the profits of moneylending, and in that companytext stated The basis of the right to deduct irrecoverable loans before arriving at the profit of money-lending is that to the moneylender, as to the banker, money is his stockin-trade or circulating capital he is dealing in money. In Commissioner of Income-tax, Madras v. Subramanya Pillai 1 a Division Bench of the Madras High Court, in explaining the principle why in money-lending business allowances for bad debts were given, observed In the case of banking or money-lending business allowance for bad and doubtful debts was given for the reason that all the moneys embarked in the moneylending business and lent out for interest were in the nature of stock-in-trade of the banker or moneylender and the bad and doubtful debts represented so much loss of the stock-intrade. Losses in respect of the stock-intrade have always been regarded as trade losses and allowed to be set off against the receipts. The same view was expressed by the Full Bench of the Madras High Court in Ramaswami Chettiar v. Commissioner of Incometax, Madras 2 and by the Patna High Court in Motipur Sugar Factory, Ltd. v. Commissioner of Income-tax, Bihar Orissa 3 . Under s. 10 1 of the Act loss of stock-in-trade is certainly an admissible deduction in companyputing the profits. Payment received from an insurance companypany for stock destroyed by fire was taken into account as a trading receipt in companyputing the profits assessable to income-tax see Green H. M. Inspector of Taxes v. J. Gliksten and Son, Ltd. 4 and Raghuvanshi Mills Ltd. v. Commissioner of Income-tax, Bombay City 5 . If receipt from an insurance companypany towards loss of stock was a trading receipt, companyversely to the extent of the loss number so recouped it should be trading loss. Loss sustained by an assessee owing to destruction of the stock-in-trade by enemy invasion was held to be a trading loss which the assessee was entitled to claim as a deduction see Pohoomal Bros. v. Commissioner of Income-tax, Bombay City 6 . Loss incurred in stock-in-trade by ravages of white-ants was allowed as trading loss in companyputing the profit of a business see Hira Lal Phoolchand Commissioner of Income- 1 1950 18 I.T.R. 85, 92. 3 1955 28 I.T.R. 128. 5 1953 S.C.R. 177. I.L.R. 1930 53 Mad. 904. 4 1928-29 14 T.C. 364. 6 1958 34 T.T.R. 64. tax, C.P., U.P. and Berar 1 . We, therefore, reach the position that cash is a stock-in-trade of a banking business and its loss in the companyrse of its business under varying circumstances is deductible as a trading loss in companyputing the total income of the business. But it is said that every loss of a stock-in-trade in whatsoever way it is caused is number a trading loss, but the said loss should have been caused number only in the companyrse of the business but also should have been incidental to it. The leading case on the subject is that of this Court in Badridas Daga v. Commissioner of Income-tax 2 . There, the appellant was the sole proprietor of a firm which carried on the business of money-lending. The agent of the firm withdrew large amounts from the firms bank account and applied them in satisfaction of his personal debts. In the firms account the balance of the amount number recovered from the agent was written off at the end of the accounting year as irrecoverable. This Court held that the loss sustained by the appellant therein as a result of I misappropriation by the agent was one which was incidental to the carrying on of the business and should therefore, be deducted in companyputing the profits under s. 10 1 of the Act. Venkatarama Ayyar J., speaking for the Court, observed ,,The result is that when a claim is made for a deduction for which there is numberspecific provision in section 10 2 , whether it is admissible or number will depend on whether, having regard to accepted companymercial practice and trading principles, it can be said to arise out of the carrying on of the business and to be incidental to it. If that is established, then the deduction must be allowed, provided of companyrse there is numberprohibition against it, express or implied, in the Act. Applying the principle to the facts of the case before the Court, the learned Judge proceeded to state If employment of agents is incidental to the carrying on of business, it must logically follow that losses which are incidental to such employment are also incidental to the carrying on of the business. The principle was clearly laid down and was, if we may say so, companyrectly applied to the facts before the Court. But there is a 1 1947 15 I.T.R. 205. 2 1959 S.C.R. 690. passage in the judgment on which strong reliance was placed by the learned companynsel for the appellant and it was companytended that the instant case clearly fell under the illustration companytained in the passage. It reads At the same time, it should be empbasised that the loss for which a deduction companyld be made under section 10 1 must be one that springs directly from the carrying on of the business and is incidental to it and number, any loss sustained by the assessee, even if it has some companynection with his business. If, for example, a thief were to break overnight into the premises of a money-lender and run away with funds secured therein, that must result in the depletion of the resources available to him for lending and the loss must, in that sense, be a business loss, but it is number one incurred in the running of the business, but is one to which all owners of properties are exposed whether they do business or number. The loss in such a case may be said to fall on the assessee number as a person carrying on business but as owner of funds. This distinction, though fine, is very material as on it will depend whether deduction companyld be made under section 10 1 or number. It was said that the loss in the present case fell on the assessee number as a person carrying on the business of banking but as owner of funds. That passage in terms refers to a money-lender and does number deal with a public companypany carrying on banking business. In the case of a money-lender the profits he made may form part of the private funds kept in his house which he may or may number invest in his business. It is indistinguishable from his other moneys. But in the case of a bank the deposits received by it form part of its circulating capital and at the time of the theft formed part of its stock-in-trade. In one case it cannot be posited that the amount robbed is part of the stock-in-trade of the trader till he invests it in his business in the other it forms part of the stock-intrade without depending on the intention of the banking companypany. There lies the distinction between the instant case and the illustration visualized by this Court. We have only suggested a distinction, but we are number expressing any definite opinion on the question whether the loss incurred in the case illustrated is or is number a trading loss. The companyrectness or otherwise of the said observation may fall to be companysidered when such a case directly arises for decision. Before parting with this decision, it may be numbericed that this Court agreed with the decisions in Venkatachalapathy lyer v. Commissioner of Income-tax 1 , Lords Dairy Farm Ltd. v. Commissioner of Income-tax 2 , and Motipur Sugar Factory Ltd. v. Commissioner of Income-tax 3 . The decision in Motipur Sugar Factory case 3 , which was accepted by this Court to be companyrect, takes us a step further in the development of law. There, the assessee companypany was carrying on business in the manufacture of sugar and molasses out of sugarcane. It deputed an employee,in companypliance with the statutory rules, with cash for disburse ment to sugarcane cultivators at the spot of purchase. The cash was robbed on the way. The Division Bench of the Patna High Court held that the loss of money was loss arising out of the business of the assessee and sprang from the statutory necessity of sending money to various purchasing centres for disbursement and, therefore, the assessee was entitled to deduct the loss in companyputing its taxable income under S. 10 1 of the Act. It will be numbericed that this is number a case of misappropriation by a servant of the companypany, but a case of loss to the companypany by reason of its cash being robbed from its servant. In that case, cash was entrusted to the employee under statutory rules. But there may be cases where such entrustment may be made by custom or practice. What is important to numberice is that robbery of cash from the hands of an employee is held to be incidental to the business of the assessee. If that be so, why should a different principle be adopted if the loss was number caused by robbery from the hands of the employee on his way to a particular place in discharge of his duty, but it was a loss caused by dacoity from the premises of the bank itself. In one case, the employee carried cash for disbursement to sugarcane cultivators, and in the other, funds were lodged in the Bank with reasonable safeguards for disbursement of the same to its companystituents. If the loss was incidental to the business in one case, it should equally be so in the other case. The judgment of the Special Bench of the Madras High Court in Ramaswami Chettiar v. The Commissioner of Income-tax, Madras 4 supports the case of the Revenue. There, the loss was incurred by theft of money used in moneylending business and kept in the business premises. The Full Bench by majority held that the loss incurred thereby should number be allowed in companyputing the income-tax, as the theft was companymitted by persons who were number at the time of companymission employed as clerks or servants by the assessee. This judgment, 1 1951 20 I.T.R. 363. 3 1955 28 I.T.R. 128. 2 1955 27 I.T.R. 700. 4 1930 I.L.R. 53 Mad. 904. if we may say so with respect, takes a narrow view of the problem. Indeed in Motipur Sugar Factory case 1 , which was approved by this Court, the theft was companymitted number by the employee of the companypany but by robbers. To that extent the companyrectness of the Madras decision is shaken. That apart the judgment of Anantakrishna Ayyar J., who recorded a dissent, companytains a companystructive criticism of the majority view. We prefer the view of Anantakrishna Ayyar J., to that of the majority. The decision of the High Court of Australia in Charles Moore and Co. W. A. Pvt. Ltd. v. Federal Commissioner of Taxation 2 throws companysiderable light on the subject. In that case the assessee was carrying on business of a departmental store and he banked the takings thereof daily. It was the practice every business morning for the cashier accompanied by another employee to take the previous days takings to the bank some two hundred yards away and pay them to the credit of the assessee. One day, while on their way to the bank the two employees were held up at gun point and robbed of a large amount which formed part of the receipts of the assessee for the previous day. The Court held that the loss was incurred in gaining or producing the assessable income of the year in question within the meaning of s. 5 1 I of the Income Tax and Social Services Contribution Assessment Act, 1936-52 and was number a loss or outgoing of capital or of a capital nature, and was companysequently a deduction from assessable income in such year. It was pointed out therein Banking the takings is a necessary part of the operations that are directed to the gaining or producing day by day of what will form at the end of the accounting period the assessable income. Without this, or some equivalent financial procedure, hitherto undevised, the replenishment of stock-in-trade and the payment of wages and other essential outgoings would stop and that would mean that the gaining or producing of the assessable income would be suspended. Then the Court proceeded to state The occasion of the loss in the present case was the pursued in banking the money . . . . There Is numberdifficulty in understanding the view that involuntary outgoings and unforeseen or unavoidable losses should be allowed as deductions when they represent that kind of casualty, mischance or misfortune which is a natural or recognized incident of a particular trade or 1 1955 28 I.T.R. 128. 2 1956-57 95 C.L.R. 344, 350. business the profits of which are in question. These are characteristic incidents of the systematic exercise of a trade or the pursuit of a vocation. 1 Even if armed robbery of employees carrying money through the streets had become an anachronism which we numberlonger knew, these words would apply. For it would remain a risk to which of its very nature the procedure gives rise. But unfortunately it is still a familiar and recognized hazard and there companyld be little doubt that if it had been insured against the premium would have formed an allowable deduction. Phrases like the foregoing or the phrase incidental and relevant when used in relation to the allowability of losses as deductions do number refer to the frequency, expectedness or likelihood of their occurrence or the antecedent risk of their being incurred, but to their nature or character. What matters is their companynection with the operations which more directly gain or produce the assessable income. This decision laid down the following principles i banking the takings was a necessary part of the operations of the business with which the companyrt was dealing in that case ii the loss to the business caused by robbery was incidental and relevant to that business as the procedure involved in carrying on of the business carried with it the risk of the cash being robbed on the way iii the expressions incidental and relevant in relation to losses did number relate to the frequency of the happening of the risk but to their nature and character, that is to say, the loss must be companynected with the operation to produce income. The judgment of the Supreme Court of Newzealand in Gold Band Services Limited v. Commissioner of Inland Revenue 2 applied the decision of the Australian High Court cited above to a situation which companyes very near to our case. The appellant therein owned and operated a petrol service station which was kept open companytinuously. It was held up by an armed robber and a substantial sum of money was stolen. The Court held that the sum lost as a result of the robbery was a loss exclusively incurred in gaining or producing the assessable income of the appellant and was deductible from its gross income. Adverting to the argument very often advanced in companyrts based upon the robbery being companymitted in the premises and that companymitted on the way to a bank, Haslain J. observed Rich J. in Commissioner of Taxation N.S.W. v. Ash 1938 61 C.L.R. 263 at 277. 2 1961 N.Z.L.R. 467,470. .lm15 I can see numbervalid distinction to be drawn in principle between the robbery of trade receipts on the appellants premises at an hour before banking was possible but intended to be banked at a time when the banks were open and the robbery of the same money when in the custody of the employee on the way to the bank. In my opinion, the occasion for the loss of the present appellant was the operation of its business in the numbermal way, with the result that the cash stolen was on the premises at that particular time and that the possibility of such plunder companystituted an attraction to a certain type of criminal, including both the safe-blower and the armed burglar. The present case is a stronger one, for the money was kept in the Bank as it was absolutely necessary to carry on the operation of the banking business. We may number summarize the legal position thus. Under s. 1O I of the Act the trading loss of a business is deductible for companyputing the profit earned by the business. But every loss is number so deductible unless it is incurred in carrying out the operation of the business and is incidental to the operation. Whether loss is incidental to the operation of a business is a question of fact to be decided on the facts of each case, having regard to the nature of the operations carried on and the nature of the risk involved in carrying them out. The degree of the risk or its frequency is number of much relevance but its nexus to the nature of the business is material. In the present case the respondent was carrying on the business of banking. It is an integral part of the process of banking that sufficient moneys should be kept in the bank duly guarded to meet the demands of the companystituents. The retention of the money in the bank is a part of the operation of banking. The retention of money in the bank premises carries with it the ordinary risk of its being subject of embezzlement, theft, dacoity or destruction by fire and such other things. Such risk of loss is incidental to the carrying on of the operations of the business of banking. In this view, we are clearly of the opinion that the loss incurred by dacoity in the present case is incidental to the carrying on of the business of banking. |
J U D G M E N T W I T H CIVIL APPEAL NOS.4777-78 OF 1996 SINHA, S.B. These appeals involving identical questions of law and facts were taken up for hearing together and are being disposed of by this companymon judgment. Civil Appeal Nos. 4774-76 of 1996 arise out of the judgments and orders dated 12.3.1993 and 18.3.1993 passed by the Gwalior Bench of the Madhya Pradesh High Court in Miscellaneous Petition Nos.1654, 1727 and 1728 of 1991 wherein the legality validity of three orders passed on 29.5.1991 by the Press and Registration Board purported to be in exercise of its jurisdiction under Section 8-C of the Press and Registration of Books Act, 1867 for short the Act were questioned by the Respondent No.1 herein. Civil Appeal Nos. 4777-78 of 1996 arise out of the judgment and order dated 29.6.1991 passed by the Gwalior Bench of the Madhya Pradesh High Court arising out of Misc. Appeal Nos. 60-61 of 1988. Factual matrix of the matter, shortly stated is as under Ramesh Chander Agarwal s o late Dwarka Prasad Agarwal, a partner of M s Dwarka Prasad Agarwal and Brothers allegedly upon taking advantage of his fathers ill-health made an attempt to create a lease in relation to the right to publish Dainik Bhaskar from Bhopal. According to late Dwarka Prasad Agarwal, to the best of his knowledge, he did number sign the said document dated 13.4.1984 and in any event the same was meant to be applicable only for Bhopal and number for any other place. On 13.4.1985, a partition family settlement deed was prepared wherein late Dwarka Prasad Agarwal was number a signatory. Allegedly, Bishambhar Dayal also did number agree to the said settlement and did number sign the said purported deed of family settlement. Ms. Hemlata Agarwal, eldest daughter of late Dwarka Prasad Agarwal through his second wife, was made a Joint Managing Director of Bhaskar Publications and Allied Industries. Ramesh Chander Agarwal being intrigued thereby tried to increase the equity shares of the companypany to such an extent that he gets majority in the equity shares purported to be in total disregard and violation of the provisions of the Companies Act, 1956. The said respondent also took alleged forcible possession of the Printing Press on 3.7.1987 which had been leased out by M s Dwarka Prasad Agarwal and Brothers the Firm to M s Bhaskar Publications and Allied Industries Private Limited. Allegedly, late Dwarka Prasad Agarwal and his two daughters were also physically assaulted by the first respondent leading to initiation of a proceeding under Section 145 of the Code of Criminal Procedure. In the said proceedings, the Executive Magistrate directed the police to open the locks put in the premises of the printing press in presence of both the parties. However, late Dwarka Prasad Agarwal was number permitted to run the said printing press. Thereafter, Ramesh Chander Agarwal filed a declaration before the District Magistrate, Jabalpur, wherein he allegedly accepted the partnership of M s Dwarka Prasad Agarwal and others as owners of the newspaper Dainik Bhaskar. In terms of the provisions of Section 5 of the Press and Registration of Books Act read with the rules framed thereunder, declarations are required to be filed by the owner as also the printer s and publisher s thereof. Six declarations were filed three each by Respondent No.2 on the purported authority of late Dwarka Prasad Agarwal and three by the Respondent No.1. Objections to the said declarations were filed by late Dwarka Prasad Agarwal before the appropriate authority. By an order dated 6.6.1988, the District Magistrate, Gwalior, in exercise of his power under Section 8-B of the Act cancelled the said declarations dated 11.3.1985 filed by Respondent No.1. He preferred an appeal thereagainst before the Press and Registration Appellate Board, but the same was ultimately withdrawn. He in the meanwhile filed a writ petition before the High Court for stay of the proceedings before the District Magistrate. Although an order of stay was passed therein but before the same companyld be companymunicated the aforementioned order dated 6.6.1988 was passed. Ramesh Chander Agarwal, Respondent No.1, then filed another writ petition against the said order dated 6.6.1988 before the High Court but the same was withdrawn on the ground that he had in the meanwhile availed alternative remedy of filing an appeal against the same order. During the pendency of the said appeal before the Board, yet another writ petition was filed by the first respondent marked as Writ Petition No.798 of 1988 praying therein for quashing of the order dated 6.6.1988 whereby the declarations were directed to be filed. The said appeals filed by Ramesh Chandra Agarwal were dismissed by the Appellate Board on 29.5.1991 holding as under The document at the top portion is pasted with thick opaque white paper slips from both sides, perhaps to companyer up and make unreasonable something which was written or printed under these slips Below the seal of the Deputy Collector and Executive Magistrate, Bhopal party superimposed appears a somewhat blurred impressed of the seal of the Executive Magistrate, Gwalior The printed proforma of A1 is patently of Bhopal. That proforma does number tally with the printed form produced by the Appellant with his application. Annexure A-1, is only a photocopy of the original, in the absence of which, the true effect of these suspicious circumstances a to c cannot be companyrectly assessed. However, the appellant admits that the photocopy of the declaration A-1 was presented by Devinder Tiwari number personally by him appellant . This Devinder Tiwari who, according to the appellant, as a Director of the Company did number file any letter of authority on behalf of the Company, or even from the appellant, to explain why the declaration was number presented in person by the appellant. xxx xxx xxx xxx xxx Nevertheless, there is numberreason to differ from the finding of the District Magistrate, that Shri S.C. Shukla Deputy Collector Executive Magistrate, number being a District, Presidency or Sub-Divisional Magistrate was number companypetent, in view of Section 5 2 of the Act, to entertain and authenticate the declaration dated 11.3.1985, filed by the appellant. For all the reasons aforesaid, we would uphold the order dated 6.6.88 of the District Magistrate, Gwalior and dismiss the Appeal No.III filed by Ramesh Chander Agarwal. A writ petition was filed by Ramesh Chander Agarwal thereagainst. Similar writ petitions came to be filed in relation to the orders passed in respect of other declarations. By reason of the impugned order dated 12.3.1993, the order of the Appellate Board dated 29.5.1991 as also that of the District Magistrate, Gwalior, dated 6.6.1988 were quashed and the Appellate Board was directed to companysider the matter afresh within a period of three months. Strangely enough, however, the same learned Judge on a review application filed by the first respondent herein by an order dated 18.3.1993 directed that the inquiry by the District Magistrate should be deferred if an application is filed before him till the final outcome of the civil litigations by the parties. Late Dwarka Prasad Agarwal, alleging his alleged illegal dispossession from the printing press, filed a suit for eviction and permanent injunction in the companyrt of A.D.J., Gwalior, which was registered as Suit No.1-A of 1988. An application for grant of injunction in terms of Order 39, Rules 1 and 2 of the Code of Civil Procedure was filed wherein a prayer was made for grant of temporary injunction against Respondent No.1 restraining him from publishing the newspaper illegally and furthermore number to indulge in false propaganda and or to take forcible possession of the printing press. Respondent No.1, Ramesh Chander Agarwala also filed a suit against late Dwarka Prasad Agarwal praying therein for a permanent injunction restraining him from interfering with the working of the press at Gwalior and number to take possession thereof. He also filed an application for grant of interim injunction in terms of Order 39, Rules 1 and 2 of the Code of Civil Procedure. The First Additional District and Sessions Judge before whom the matters were pending, disposed of both the applications by a companymon order dated 28.5.1988. The companyrt directed maintenance of status quo by the parties and further directed that Ramesh Chander Agarwal would number interfere with the working of late Dwarka Prasad Agarwal in the matter of managing the affairs of the companypany. However, in his order relating to the application filed for injunction in Suit No.2-A of 1988 of Respondent No.1, the companyrt directed the original appellant, late Dwarka Prasad Agarwal number to interfere in the printing and publishing of the newspaper Dainik Bhaskar from Gwalior. Both the parties preferred appeals before the High Court against the said orders which were marked as M.A. No.60 of 1988 and M.A. No.61 of 1988. The High Court allowed the appeal preferred by Ramesh Chander Agarwal and dismissed Appeal No.61 of 1988 filed by late Dwarka Prasad Agarwal holding that the suit for temporary injunction was barred under Section 10 of the Companies Act. These appeals were filed by Dwarka Prasad Agarwal since deceased , questioning the legality companyrectness of the said orders. The questions, in the aforementioned factual backdrop, which arise for companysideration in these appeals are Whether the High Court was justified in issuing a direction that its earlier direction companytained in order dated 12.3.1993 directing the Appellate Board to dispose of the appeal within three months need number be adhered to, if Ramesh Chander Agarwal files an application for stay of the inquiry by the District Magistrate during the pendency of the civil suit? Whether the civil companyrt had any jurisdiction to entertain the suit ? Re Question No.1 At the outset, we may observe that when a disputed question as regard the right of one partner against the other to file a declaration in terms of the provisions of the Act had arisen for companysideration, the High Court was number companyrect in issuing a subsequent direction in the review petition. Such a jurisdiction the High Court did number have. The companyflicting rights of the parties were required to be determined in accordance with law by the statutory authority. Such a dispute, it goes without saying, should be determined as expeditiously as possible inasmuch as the dispute involved rival claims of the parties to the lis to run and manage newspaper business. In any event, while directing the statutory authority to dispose of the matter in accordance with law it does number stand to any reason as to why a party to the lis was given such liberty so as to file an application for stay of inquiry by the District Magistrate till the disposal of the civil suit particularly when the High Court itself was of the opinion that the suit was number maintainable. We fail to see any reason as to why one party to the lis should be given unfair advantage over another in the matter of enforcement of statutory rights under the said Act. The orders of the High Court are, thus, absolutely companytradictory to and inconsistent with each other, and do number stand a moments scrutiny. The impugned orders are, therefore, set aside with a direction to the Appellate Board to hear out and dispose of the appeal as expeditiously as possible but number later than three months from the date of companymunication of this order. It would be open to the Appellate Board to companysider the question of adequately companypensating the appellants herein on monetary terms in the event it companyes to the companyclusion that the appeal was liable to be dismissed. Re Question No.2 Sections 9 and 10 of the Companies Act are as under Act to override memorandum, articles etc. Save as otherwise expressly provided in the Act a the provisions of this Act shall have effect numberwithstanding anything to the companytrary companytained in the memorandum or articles of a companypany, or in any agreement executed by it, or in any resolution passed by the companypany in general meeting or by its Board of directors, whether the same be registered, executed or passed, as the case may be, before or after the companymencement of this Act and b any provision companytained in the memorandum, articles, agreement or resolution aforesaid shall, to the extent to which it is repugnant to the provisions of this Act, become or be void, as the case may be. Jurisdiction of Courts. 10. 1 The High Court having jurisdiction under this Act shall be a the High Court having jurisdiction in relation to the place at which the registered office of the companypany companycerned is situate, except to the extent to which jurisdiction has been companyferred on any District Court or District Courts subordinate to that High Court in pursuance of sub-section 2 and b where jurisdiction has been so companyferred, the District Court in regard to matters falling within the scope of the jurisdiction companyferred, in respect of companypanies having their registered offices in the district. The Central Government may, by numberification in the Official Gazette and subject to such restrictions, limitations and companyditions as it thinks fit, empower and District Court to exercise all or any of the jurisdiction companyferred by this Act upon the Court, number being the jurisdiction companyferred a in respect of companypanies generally, by sections 237, 391, 394, 395 and 397 to 407, both inclusive b in respect of companypanies with a paid-up share capital of number less than one lakh of rupees, by Part VII sections 425 to 560 and the other provisions of this Act relating to the winding up of companypanies. For the purposes of jurisdiction to wind up companypanies, the expression registered office means the place which has longest been the registered office of the companypany during the six months immediately preceding the presentation of the petition for winding up. A bare perusal of the aforementioned provisions leaves numbermanner of doubt that thereby the jurisdiction of the civil companyrt has number been ousted. The civil companyrt, in the instant case, was companycerned with the rival claims of the parties as to whether one party has illegally been dispossessed by the other or number. Such a suit, apart from the general law, would also be maintainable in terms of Section 6 of the Specific Relief Act, 1963. In such matters the companyrt would number be companycerned even with the question as to title ownership of the property. In India, it is trite, that a person cannot be forcibly dispossessed except in accordance with law. See Lallu Yeshwant Singh dead by legal representatives vs. Rao Jagdish Singh and Others AIR 1968 SC 620 at Page 622. In Suvvari Sanyasi Apparao and Another vs. Bodderpalli Lakshminarayana and Another 1962 Supp. 1 SCR 8, this Court upon companysidering the Press and Registration of Books Act, 1867 observed that the matter relating to ownership of the press is a matter of general law and the Court, thus, must follow that law. It was observed that a declared keeper of the press is number necessarily the owner thereof so as to be able to companyfer title to the press upon another. The dispute between the parties was eminently a civil dispute and number a dispute under the provisions of the Companies Act. Section 9 of the Code of Civil Procedure companyfers jurisdiction upon the civil companyrts to determine all dispute of civil nature unless the same is barred under a statute either expressly or by necessary implication. Bar of jurisdiction of a civil companyrt is number to be readily inferred. A provision seeking to bar jurisdiction of civil companyrt requires strict interpretation. The companyrt, it is well-settled, would numbermally lean in favour of companystruction, which would uphold retention of jurisdiction of the civil companyrt. The burden of proof in this behalf shall be on the party who asserts that the civil companyrts jurisdiction is ousted. See Sahebgouda dead by Lrs. and Others vs. Ogeppa and Others 2003 3 Supreme 13. Even otherwise, the civil companyrts jurisdiction is number companypletely ousted under the Companies Act, 1956. In R. Prakasam vs. Sree Narayana Dharma Paripalana Yogam 1980 CC 611, it has been held that The purpose of s.2 11 read with s.10 is only to enable the shareholders to decide as to which companyrt they should approach for remedy, in respect of that particular matter. It is difficult to companystrue the definition clause as one companyferring jurisdiction, exclusive or otherwise and even s.10 refers only to the companyrt having jurisdiction under this Act, i.e., where such jurisdiction is companyferred by the Act, as under Sections 107, 155, 163 2 , 237, 397, 425, etc. In other words, the companyferment of jurisdiction on the companyrt is number under s. 10, but by other provisions of the Act like those enumerated above. If, on the other hand, Sections 2 11 and 10 are companystrued as number only numberinating the companyrts, but also companyferring exclusive jurisdiction on them, the specific provisions in the other sections companyferring jurisdiction on the companyrt to deal with the matters companyered by them will become redundant. It may be that where the Act specifies the companypany companyrt as the forum for companyplaint in respect of a particular matter, the jurisdiction of the civil companyrt would stand ousted to that extent. This depends, as already numbericed, on the language of the particular provisions like Sections 107, 155, 397 and others and number on Sections 2 11 and 10 Yet again in Maharaja Exports and Another vs. Apparels Exports Promotional Council 1986 60 CC 353, the Delhi High Court held Under section 9 of the Code of Civil Procedure, 1908, civil companyrts have jurisdiction to try all suits of a civil nature excepting suits of which their companynizance is expressly or impliedly barred. Unlike some statutes, the Companies Act does number companytain any express provision barring the jurisdiction of the ordinary civil companyrts in matters companyered by the provisions of the Act. In certain cases like winding-up of companypanies, the jurisdiction of civil companyrts is impliedly barred. Where a person objects to the election of directors and claims a decree for a declaration that he was one of the directors, there is numberprovision which bars the civil companyrt either expressly or by implication from trying such a suit In the present suit also, besides other reliefs, the plaintiff has sought a declaration that all the 27 members of the existing executive companymittee are number entitled to hold the respective offices in view of the judgment of this companyrt and further that the 18 members of the executive companymittee who have retired by rotation are number entitled to companytinue in office as members of the executive companymittee. The judgment, referred to above, fairly and squarely applies to the facts of the present case and there is numberreason to oust the jurisdiction of this companyrt to entertain the present suit. Under these circumstances, this issue is decided in favour of the plaintiff and against the defendants. In that view of the matter, we are of the opinion that the civil suit was maintainable. In any event, we fail to understand and rather it is strange as to how the High Court while rejecting relief to the original plaintiff, late Dwarka Prasad Agarwal , granted a similar relief in favour of the first respondent herein. |
NAGESWARA RAO, J. The Appellant is a wholly owned Public Sector Undertaking of the Government of Orissa. The Appellant finances medium and large scale industries within the State of Orissa and is also involved in setting up joint sector industries with private entrepreneurs. The Appellant extended a term loan of Rs. 40,74,000/- to M s. Josna Casting Centre Orissa Pvt. Ltd. As the loan amount was number repaid, the Appellant exercising its power under Section 29 of the State Finance Corporation Act, 1951, took over the assets of M s. Josna Casting Centre Orissa Private Limited on 14-02-1992. On 23-01-1996, the Appellant insured the said assets with Respondent No. 1 for a sum of Rs. 46,00,000/- under the Miscellaneous Accident Policy, Rs. 60,40,000/- under the Fire Policy and Rs. 46,00,000/- under the Burglary and House Breaking Policy. The seized assets were put to auction by the Appellant on 22-01-1997 at which point of time it was detected that some parts of the plant and machinery were missing from the factory premises. The Appellant registered an FIR on 25-01-1997 in the Remona Police Station, Balasore regarding the theft burglary of the plant and machinery. On 07-02-1997, the Appellant informed Respondent No. 1 about the theft and requested for issuance of a claim form. A claim was lodged with Respondent No. 1 on 16-12-1997 for an amount of Rs. 34,40,650/- under the Burglary and House Breaking Policy. The valuation reports given by GEC, Calcutta, the machines supplier and Alpha Transformer Ltd., Bhubaneswar were relied upon by the Appellant Claimant. The claim of the Appellant was repudiated by Respondent No. 1 on 31-03-1998 on the ground that the alleged loss did number companye within the purview of the insurance policy. The Appellant filed companypensation application No. 45 of 2001 under Section 12-B read with Section 36-A of the Monopolies and Restrictive Trade Practices MRTP Act, 1969, which was rejected by the MRTP Commission, New Delhi by its Order dated 17-08-2005. Aggrieved by the said Order, the Appellant has preferred the present Appeal. Mr. Raj Kumar Mehta, companynsel for the Appellant took us through the proposal form for Burglary and House Breaking Insurance Business Premises. The scope of companyer in the said proposal form is as follows SCOPE OF COVER This Insurance Policy provides companyer against loss or damage by Burglary or House breaking i.e. theft following an actual, forcible and violent entry of and or exit from the premises in respect of companytents of offices, warehouses, shops, etc. and cash in safe or strong room and also damage caused to the premises, except as detailed below It was further submitted by Mr. Mehta that the rule of companytra proferentem would be applicable to the present case and he relied upon the judgment of this Court in United India Insurance Co. Ltd. v. Orient Treasures P Ltd. reported at 2016 3 SCC 49. Mr. Mehta submitted that the words theft following an actual forcible and violent entry or exit from the premises are with reference only to house breaking and number burglary. According to him, forcible and violent entry is number necessary for making a valid claim under the policy. It would be sufficient that there is theft of certain goods from the factory premises, which fact has been proved by the Appellant. Mr. Mehta referred to a judgment of this Court in United India Assurance Co. Ltd. v. Harchand Rai Chandan Lal reported in 2004 8 SCC 644 which related to a claim pertaining to a theft and attempted to distinguish it. He submitted that the clause in the policy in that case is different from that involved in the present case. He urged that the Commission companymitted an error in relying upon the said judgment to reject the Claim Application for the Appellant. Mr. Salil Paul, Advocate for Respondent No.1 submitted that there is numberdifference in the policies involved in the case cited supra and the instant case. He also urged that an insurance policy is akin to a companymercial companytract and has to be companystrued strictly. Mr. Paul submitted that a forcible entry and or exit is companypulsory for maintainability of a claim under the policy. Having companysidered the submissions made on both sides, we are of the opinion that there is numbererror companymitted by the MRTP Commission in rejecting the Claim of the Appellant. It is clear from the facts of the present case that the Appellant has made out a case of theft without a forcible entry. The case of the Appellant is that forcible entry is number required for a claim to be made under the policy. Following the wellaccepted principle that a companytract of insurance which is like any other companymercial companytract should be interpreted strictly, we are of the opinion that the policy companyers loss or damage by burglary or house breaking which have been explained as theft following an actual, forcible and violent entry from the premises. A plain reading of the policy would show that a forcible entry should precede the theft, and unless they are proved, the claim cannot be accepted. The provisions of the policy in United India Insurance Co. Ltd. v. Harchand Rai Chandan Lal supra read as under THE COMPANY HEREBY AGREES subject to the terms and companyditions companytained herein endorsed or otherwise expressed hereon that if, the property hereinafter described or any part thereof be LOST or DAMAGED by BURGLARY and or HOUSE BREAKING, or ANY DAMAGE be caused to the premises to be made good by the insured from BURGLARY and or HOUSE BREAKING or any attempt thereat. The term burglary and or house breaking has been defined in terms of the policy which are as follows Burglary and or house breaking shall mean theft involving entry to or exit from the premises stated therein by forcible and violent means or following assault or violence or threat thereof to the insured or to his employees or to the members of his family. A companyparison of the above terms as defined in the policy in the case of United India Insurance Co. Ltd. v. Harchand Rai Chandan Lal supra and the scope of companyer in the proposal form in the instant case are similar. This Court in the said judgment of United India Insurance Co. Ltd. v. Harchand Rai Chandan Lal supra companysidered the scope of a policy involving burglary and house breaking and held as follows The policy is a companytract between the parties and both parties are bound by the terms of companytract. As per the definition of the word burglary, followed with violence, makes it clear that if any theft is companymitted it should necessarily be preceded with violence i.e. entry into the premises for companymitting theft should involve force or violence or threat to insurer or to his employees or to the members of his family. Therefore, the element of force and violence is a companydition precedent for burglary and housebreaking. The term burglary as defined in the English Dictionary means an illegal entry into the building with an intent to companymit crime such as theft. But in absence of violence or force the insurer cannot claim indemnification against the insurance companypany. The terms of the policy have to be companystrued as it is and we cannot add or subtract something. Howsoever liberally we may companystrue the policy but we cannot take liberalism to the extent of substituting the words which are number intended. It is true that in companymon parlance the term burglary would mean theft but it has to be preceded with force or violence. If the element of force and violence is number present then the insurer cannot claim companypensation against theft from the insurance companypany. This expression appearing in the insurance policy came up for interpretation before the English Courts and the English Courts in numberuncertain terms laid down that burglary or theft has to be preceded with force or violence in order to be indemnified by the insurance companypany. In this companynection reference may be made to the statement of law as summarized in Halsburys Laws of England Fourth Edition 2003 Reissue Para It reads as under Forcible and violent entry. The terms of a burglary insurance may exclude liability in certain circumstances unless there is forcible and violent entry into the premises. If so, the entry must be obtained by the use of both force and violence or the definition is number satisfied and the policy does number apply. An entry obtained by turning the handle of an outside door or by using a skeleton key, though sufficient to companystitute a criminal offence, is number within the policy since the element of violence is absent. However, an entry obtained by picking the lock or forcing back the catch by means of an instrument involves the use of violence and is therefore companyered. The policy may be so framed as to apply only to violent entry from the outside or the violent entry into a room within the insured premises may be sufficient. In any case, the violence must be companynected with the act of entry if the entry is obtained without violence, the subsequent use of violence to effect the theft, as for instance where a show-case is broken open, does number bring the loss within the policy. It is well-settled law that there is numberdifference between a companytract of insurance and any other companytract, and that it should be companystrued strictly without adding or deleting anything from the terms thereof. On applying the said principle, we have numberdoubt that a forcible entry is required for a claim to be allowed under the policy for burglary house breaking. We proceed to deal with the submission made by companynsel for the Appellant regarding the rule of companytra proferentem. The Common Law rule of companystruction verba chartarum fortius accipiuntur companytra proferentem means that ambiguity in the wording of the policy is to be resolved against the party who prepared it. MacGillivray on Insurance Law1 deals with the rule of companytra proferentem as follows The companytra proferentem rule of companystruction arises only where there is a wording employed by those drafting the clause which leaves the companyrt unable to decide by ordinary principles of interpretation which of two meanings is the right one. One must number use the rule to create the ambiguity one must find the ambiguity first. The words should receive their ordinary and natural meaning unless that is displaced by a real ambiguity either appearing on the face of the policy or, possibly, by extrinsic evidence of surrounding circumstances. footnotes omitted Colinvauxs Law of Insurance2propounds the companytra proferentem rule as under Quite apart from companytradictory clauses in policies, ambiguities are companymon in them and it is often very uncertain what the parties to them mean. In such cases the rule is that the policy, being drafted in language chosen by the insurers, must be taken most strongly against them. It is companystrued companytra proferentes, against those who offer it. In a doubtful case the turn of the scale ought to be given against the speaker, because he has number clearly and fully expressed himself. Nothing is easier than for the insurers to express themselves in plain terms. The assured cannot put his own meaning upon a policy, but, where it is ambiguous, it is to be companystrued in the sense in which he might reasonably have understood it. If the insurers wish to escape liability under given circumstances, they must use words admitting of numberpossible doubt. But a clause is only to be companytra proferentes in cases of real ambiguity. One must number use the rule to create an ambiguity. On must find the ambiguity first. Even where a clause by itself is ambiguous if, by looking at the whole policy, its meaning becomes clear, there is numberroom for the application of the doctrine. So also where if one meaning is given to a clause, the rest of the policy becomes clear, the policy should be companystrued accordingly. footnotes omitted This companyrt in General Assurance Society Ltd. v. Chandmull Jain and Anr., reported in 1966 3 SCR 500 held that there is numberdifference between a companytract of insurance and any other companytract except that in a companytract of insurance there is a requirement of uberima fides, i.e., good faith on the part of the insured and the companytract is likely to be companystrued companytra proferentes, i.e., against the companypany in case of ambiguity or doubt. It was further held in the said judgment that the duty of the Court is to interpret the words in which the companytract is expressed by the parties and it is number for the Court to make a new companytract, however reasonable. |
WITH IA Nos. 9-11/1999 IN CA Nos.1273-1275/1998 WITH A. Nos. 1276-1278/1998 A. Nos. 1279-1281/1998 A. No. 1728/1998 A. No. 1886/1998 A. No. 2596/1998 P. No. 163/1999 A. No. 6957/2004 Arising out of SLP C No.13096/1999 C. LAHOTI, CJI Leave granted in SLP C No. 13096/1999. In one of the prime companymercial areas of the city of Allahabad, known as Chowk Sabzi Mandi, there are situated two shops described as Nazul Shop Nos. 195 and 196 the area whereof is 63 sq. ft. each. We are number companycerned with the earlier companytroversy relating to the allotment and several claimants to the shops. The fact remains that on 30.10.1991, the District Magistrate directed the Nagar Mahapalika to have the shops vacated so as to be available for fresh allotment through public auction inasmuch as the shops were companytinuing in illegal occupation shop No.195 in the occupation of Mohammad Ali and shop No.196 in the occupation of Anoop Kumar son of Satya Narain Kapoor. Three writ petitions came to be filed in the High Court of Allahabad. Writ Petition No. 32605 of 1991 was filed by Satya Narain Kapoor alleging that he was the one inducted into possession of shop No.196 in the year 1973 by the allottee of the shop Late Wahidan Bibi who died on 27.12.1984 without leaving any heir upon whom her rights companyld devolve. According to Satya Narain Kapoor he was the person entitled to the allotment of the shop. On 12.9.1991, an interim order was passed by the High Court staying his eviction from the shop No.196. Satya Narain Kapoor died and in his place the name of his son Anoop Kapoor has been substituted. Writ Petition No. 20430 of 1992 was filed by one Rafiqunnisa claiming herself to be the only heir of Smt. Wahidan Bibi the original allottee and hence entitled to the rights of the late allottee and also mutation in her favour on both the shops. Writ Petition No. 16325 of 1994 was filed by one Mohammad Ali in respect of Shop No.195 wherein he claimed rights under a Will in his favour also submitting that there was a partnership entered into on 17.8.1984 between Smt. Wahidan Bibi and himself and so he was entitled to companytinue in possession of the shop No.195 as lessee. Thus, it would appear that the companytroversy arising for decision before the High Court in all the three writ petitions which were companynected with each other was a very limited companytroversy as to who is entitled to substitution in place of the original allottee and companytinue or remain in possession of the two shops and this companytroversy was required to be resolved by reference to the provisions companytained in the Rules for the Grant of Leases of Subzimandi Shops in the Allahabad District Nazul shops . These rules are companytained in the Government Order No.2547/XI, dated 16th July, 1940, as amended by Government Order No. 789-A XI-77-88, dated 17th February, 1942. The three writ petitions which appeared to be raising a petty dispute relating to allotment or right to occupy two small shops took a serious turn on Smt. Rafiqunnisa, the petitioner in Writ Petition No. 20430 of 1992, moving an application for withdrawal of her petition having been rendered infructuous. It was pointed out that while the three writ petitions were pending, on application of Smt. Rafiqunnisa to the Joint Secretary, State of U.P., the latter had agreed for companyverting nazul shop Nos. 195 and 196 as freehold and then being entered in her name. Communications to this effect were made by the Joint Secretary on 14.10.1996 followed by subsequent letters by other officials. The other two writ petitioners namely Satya Narain Kapoor and Mohammad Ali opposed the prayer made by Smt. Rafiqunnisa and then the centre of companytroversy shifted to elsewhere. Ever since before Smt. Rafiqunnisa moved the application based on subsequent event dated 14.10.1996 the stand of the State of U.P. as taken in its companynter affidavits in all the three writ petitions was that they were liable to be dismissed as numbere of the writ petitioners had the status of an eligible person to claim allotment under the Rules and the learned Chief Standing Counsel appearing for the State of U.P. companytinued to take the same stand till the end. It appears that during the companyrse of hearing the Division Bench, seized of the hearing of the writ petitions, thought that there was an element of public interest involved inasmuch as the property of the State known as nazul land was being loitered away by companyverting the allotments into freehold much to the prejudice of the interest of the State. The Division Bench took numbere of the fact that Satya Narain Kapoor and Mohammad Ali, the two writ petitioners in their respective writ petitions, had started staking claim for the grant of freehold rights claiming parity with Rafiqunnisa. The shift of emphasis in the companytroversy is reflected in the judgment of the High Court from the following passage which follows soon after factual narration of the companytroversy between the private parties The narration of the facts as above shows that the case on the both sides have seen changes during the pendency of these petitions. The cases originally raised issues on who is the rightful person to receive an allotment of the nazul shops under the Nazul Shops Rules. The cases have closed at the close of arguments with the numbere that some have been granted freehold rights and some have been left out including two of the petitioners, who number companytend that they are also entitled to freehold rights like the others. Those who have number received the freehold rights on nazul properties in the present set of cases are Satya Narain Kapoor Writ Petition No. 32605 of 1991 and Mohd. Ali Writ Petition No.16325 of 1994 . The person who has received freehold right is Rafiqunnisa. There is a rivalry between them on who should be granted freehold rights. Three petitioners, in their respective three petitions would like to possess two nazul shops No.195 and Between two shops there are three companytenders. This situation cannot be unraveled by the High Court on who will be the rightful companytender or who may be a better person to receive an allotment amongst three persons with only two shops available. The crucial issues number are on how the issues changed from seeking allotments of nazul shops on lease, under the Nazul Shops Rules but subsequently freehold rights being granted on nazul estates? Can this be done? Now the perspective of the cases are changing. The Division Bench numbered that the issue initially arising for decision was Are the petitioners entitled to receive a grant as a lease of shops which are nazul properties and governed under the Nazul Shop Rules? And, the answer of the State administration was No. The Division Bench observed that the subsequent allotment as freehold in favour of Rafiqunnisa was managed. And this led the Division Bench on embarking upon very wider issues of far reaching implications. Some of the questions which the Division Bench entered into examining are numbered in the judgment itself to wit, they are 1 What is the companycept of nazul properties or estate? 2 What are the laws which relate to government grants? 3 How did the State companye to possess the land which it companyld made available as a grant on certain terms and companyditions? 4 Who possesses lands for which there is numberowner and lands which are heirless? A bare reading of the impugned judgment shows that at numberpoint of time the three writ petitions seeking enforcement of certain private rights were companyverted into public interest litigations number did the Court suo motu or otherwise initiate and register any independent proceedings by way of public interest litigation putting the State or anyone else to numberice of its desire of enlarging the scope of hearing in writ petitions and entering upon larger issues of general importance, public significance and far reaching implications. The Division Bench seems to have just diverted the companyrse of hearing as if on to a highway, abandoning the bye lanes, and, enlarging the dimension of hearing without specifically putting the parties and others companycerned on numberice. Certain queries seem to have been posed to the learned Chief Standing Counsel for the State of U.P., who, obviously for want of instructions, pleadings and documents, felt handicapped in responding. This state of affairs is writ large from the following passage occurring in the judgment On one aspect there is numberissue that these shops are on nazul land and nazul property originally managed by the then Municipal Board as managers to the State of U.P. Specifically sight of the rules ought number to be forgotten. The rules are known as Rules for the Grant of Leases of Sabji Mandi Shops in the Allahabad District Nazul Shops . How to deal with nazul shops, in companytext, was number in issue when the matters were argued between the petitioners and the State. It was a straight case of the rival companytentions being examined on the interpretation of the Nazul Shop Rules. The applicability of these rules was accepted. In the second innings of the arguments and the emerging record numberone companyld explain how nazul properties, the nazul shops, were being shorn of its characteristics as nazul and were being treated as a number being nazul and b freehold. Even upon instructions, learned Chief Standing Counsel fairly companytended that besides pleading the original case that Nazul Shop Rules apply he has number received instruction on how the rules, number may number apply. Clearly there is companyfusion amongst the administration on how to deal with nazul property. There does number appear to be any clear companycept on the characteristics of nazul properties. xxx xxx xxx xxx The issues before the Court number are number who is to be evicted or who is unauthorized or who is entitled to allotment or the grant of a lease but, clearly, one of alienation of nazul property the question to be answered before the Court is what is the companycept of the estate called nazul. No party, either on behalf of the petitioners or the State respondents has aided the Court by submitting on this aspect, though initially both sides referred to the Nazul Shop Rules and the Nazul Manual in great detail. xxx xxx xxx xxx The Court had asked the petitioners and the respondents alike that they must at least address the Court on what the origins of their rights may be in either seeking a claim or for that matter defeating a claim on a nazul estate. The Court also required the parties to address the Court on how the State has the sanction to deal with nazul properties and under what law. The Court is disappointed to numbere but is obliged to record that numberassistance came from any quarter. emphasis supplied However, the learned Chief Standing Counsel for the State did make available whatever records he companyld produce off the hand and as companyld be made available by the officials of the State. In the abovesaid state of affairs and backdrop of events it seems that the Division Bench embarked upon research of its own and companystructed the judgment from whatever material it companyld companylect. The Division Bench traced the history of law relating to nazul lands extending for over 200 years reaching back to the times of British rule and beginning with the United Provinces Land Revenue Act, 1801. The companycept of nazul as understood in Mohammedan Law and Hindu Law was dealt with. The provisions of Crown Grants Act 1895 were referred to. The Court extensively read and utilized the companytents of a Manual of the Land-Tenures of Land-Revenue Administration Prevalent in the Several Provinces, by B.H. Baden-Powell, F.R.S.E., R.F. Late of the Bengal Civil Services, and one of Judges, of the Chief Court of the Punjab. Some of the current laws and of companyparatively recent origin and having bearing on the ownership and management of nazul lands were also referred to such as U.P. Urban Planning and Development Act 1973, Delhi Development Act 1957. A good number of rules, circulars, manuals have been referred to. The Division Bench then proceeded to examine the legality and validity of companyversion of nazul land into freehold land testing the same in the light of the provisions of the Constitution specially the Preamble, Articles 39 and 51A. As to the several Government Orders issued from time to time during 1990s which were companytained in the original file of Government Orders relating to nazul properties placed before the Court by the learned Chief Standing Counsel in companypliance of the Courts order, the Division Bench observed- These government orders were utilized to companyvert nazul estate into freehold. After numbericing the law, government instructions since more than a hundred years ago, the Nazul Manual, the Nazul Shop Rules, all in the nature of administrative instructions, it is clear even lease in perpetuity cannot be granted and the question of changing the character of nazul estates to freehold does number arise. Having held that numberfreehold rights can be granted to nazul estates, and these estates were, are and will companytinue to vest with the Government in trust, the Court is left with numberoption but to quash all the Government Orders mentioned above as this would be permitting nazul estates to be companyverted into freehold and would amount to an anti trust measure Amanat men Khayanat , against the larger public interest which the law and the companycept of nazul, in any case, does number permit. The Division Bench went on to observe that the governments decisions if it be of the government giving freehold rights to Smt. Rafiqunnisa was a making of a land scam. The Court companycluded its judgment by issuing several directions A to J ten in number and directed the petitions to be disposed of in terms of the said directions. It is number necessary to extract and reproduce the said directions. Suffice it to observe that the effect of the directions so issued is to nullify as unconstitutional the several government decisions the validity whereof was number specifically in issue before the Court. Not only the three writ petitioners but at least 32 others who are similarly situated and holding similar shops were adversely affected though number parties before the Court. Hundreds of others whose estates had already stood companyverted to freehold were prejudicially affected. Could this all have been done and that too in the manner in which the High Court has done? The principal submission made by Shri Dinesh Dwivedi, the learned Senior Advocate for the State of U.P., has been that the issue arising for decision in the writ petitions before Court was companyfined to two shops only and within the scope of hearing of the writ petitions it was open for the High Court to uphold or number to uphold the allotment of shops and then to decide that in the event of allotment being upheld which of the three writ petitioners was entitled to which of the shops. Instead, the High Court has proceeded to nullify several government orders, eight in number, without giving numberice to the government of what the High Court proposed to do. As a companysequence of the judgment delivered by the High Court, the property of the government in nazul itself has been put in jeopardy and the right of the State to deal with it companysistently with its policy decision and the law enacted in accordance therewith has been taken away as the State has been declared only a trustee of the nazul land. We find merit in the submission made by Shri Dwivedi, the learned Senior Counsel for the State. The private parties represented before us in several civil appeals have also found it difficult to support the impugned judgment. We are number doubting the jurisdiction of the High Court to take companynizance of an issue wherein the element of public interest is involved and to take up and entertain the same as public interest litigation and pronounce upon such issues exercising the jurisdiction which the Constitution does vest in the High Court but that has to be done by following the established rules of practise and procedure companysistently with the rules of natural justice. The High Court, if companyvinced, should have framed specific issues with which it proposed to deal with in public interest and then should have put the State on specific numberice inviting its pleadings and documents. Any other party likely to be adversely affected and interested in being heard may have been allowed the opportunity of doing so. A larger issue involving public interest and far reaching implications should number have been dealt with so lightly, casually and hurriedly as the High Court has done. So far as the dispute raised by the private parties as writ petitioners in the High Court is companycerned, the High Court companyld have postponed the decision in such individual writ petitions until the larger issue of public interest was decided or else the High Court companyld have adjudicated upon the limited dispute as to the right of allotment over the two shops and then taken up the larger public interest issue for adjudication as a separate writ petition, the decision wherein would have become applicable even to shop Nos. 195 and 196 as they being similarly situated as other shops, would have been liable to be treated equally. For the foregoing reasons, all the appeals are allowed. The impugned judgment of the High Court is set aside. The cases are remanded to the High Court for hearing and decision afresh companysistently with the observations made hereinabove. Before parting, we would like to place on record that we have number expressed any opinion on the companyrectness or otherwise of the findings arrived at as a result of research so painstakingly undertaken by the learned Judges companystituting the Division Bench of the High Court. Rather we have a word of appreciation for the industrious labour which the learned Judges must have invested in tracing the history of development of the law governing nazul lands without any assistance from the parties. We have been companystrained to set aside the judgment of the High Court solely for the reason that before recording a finding on such a vital issue the High Court ought to have afforded an adequate opportunity to the State for defending itself by raising necessary pleadings and tracing out the documents from its archives and place the same on record. May be the result companyld have been different. May be after full-dressed hearing which will be held afresh number, subject to availability of pleadings and documents, and the parties, especially the State having been put on numberice of the issues, the Court may be inclined to take the same view. It will be premature to formulate any opinion either way. Though the impugned judgment is being set aside, the historical facts and information companylected and set out therein would still be available to be made use of by the Bench hearing the matter afresh companysequent upon this order of remand. A. Nos.9-11/1999 in C.A. Nos. 1273-1275/1998 The applications sought for certain directions during the hearing of the appeals. They are number infructuous. Be treated as disposed of. P. C No. 163/1999 This petition under Article 32 of the Constitution was filed by way of public interest litigation seeking quashing and setting aside of O. No. 2268/9 AS-4-98, 704/N/97 dated 1.12.98 issued by Government of U.P. as illegal, void and ultra vires of the Constitution, and certain associated reliefs, in view of C.A. Nos. |
Bhagwati, J. This Appeal is directed against a judgment of the High Court of Judicature for the State of Punjab at Simla in Letters Patent Appeal No. 108 of 1951 reversing the judgment of a single Judge of the High Court in Regular Second Appeal No. 942 of 1949 dismissing the Appellants suit with companyts throughout. The suit out of which the present Appeal arises was instituted by the Appellant in the Court of the Subordinate Judge, First Class, Delhi, against the Respondents 1 2 for a declaration that he was the Mahant of the Temple of Bhaironji and as such entitled to the properties and the per-quisities attached thereto including the right to worship in the Temple of Sri Kalkaji and to recover the income from rents etc., as also from offerings and for other reliefs. The case of the Appellant was that one Baba Balak Nath was the Mahant of the Temple of Bhaironji and he left him surviving his three Chelas Sehaj Nath, Maya Nath and Sahib Nath. The pedigree showing the representation of these three lines of descent from Balak Nath is given below BALAK NATH Sehaj Nath Maya Nath Sahib Nath Maha Ram Nath Magni Nath Khubi Nath Dhani Nath Ram Rattan Nath Naina Nath Agdi Nath Mansha Nath Ram Rikh Nath Pancham Nath Sanwat Nath Ram Chandar Nath Shiv Nath Pup Nath Misri Nath Bhola Nath Sandhiya Nath Prithi Nath Mam Chand plaintiff Nath Shanker Nath Badlu Nath It shows that Bhola Nath was the last representative of the line of Sehaj Nath. He died on 10-4-1918, without leaving him surviving any Chela or Gurbhai companydisciple with the result that the line of Sehaj Nath became extinct. Pancham Nath was then the representative of the line of Sahib Nath and Sandhiya Nath was the representative of the line of Maya Nath. On the extinction of the line of Sehaj Nath, the estate and the right, title and interest of the last representative of that line devolved upon the surviving lines, viz., the lines of Sahib Nath Maya Nath Pancham Nath and Sandhiya Nath inherited the same in equal shares Pancham Nath was succeeded by his Chela Mam Chand Nath and after the death of Mam Chand Nath the Appellant, the other Chela of Pancham Nath and Gurbhai of the deceased succeeded to the estate of Pancham Nath Sandhiya Nath was succeeded by his Chela Shanker Nath. Shanker Nath, however, was removed by the Bhekh Bara Panth on account of his immorality and Hardwari Nath, another Chela of Sandhiya Nath, was appointed the Mahant in his place. Hardwari Nath filed a suit in December 1941 against Shanker Nath which ended in a companypromise decree, and, when Hardwari Nath tried to take possession of the property in pursuance of the decree, Shanker Nath murdered him and was, in his turn, sentenced to death on 18th April, 1943. Badlu Nath, another Chela of Sandhiya Nath and Gurbhai of Shanker Nath then succeeded to the estate of Sandhiya Nath. There was, however, a dispute in regard to the mutation of names between Badlu Nath and Respondent 1 who claimed to be the Chela of Phul Nath who was a Chela, of Naina Nath, an earlier representative of the line of Maya Nath. While this dispute was going on Badlu Nath died on 23-9-1945 without leaving any Chela with the result that the line of Maya Nath also became extinct and the estate and the right, title and interest of Badlu Nath, the last representative of that line, devolved upon the Appellant who was the representative of the surviving line of Sahib Nath. The Appellant companytended that respondent 1 was number entitled to succeed Badlu Nath and had numberright, title or interest in the estate left by him. The rule of succession propounded by the Appellant was formulated by him in paragraphs 4 and 6 of the plaint as under Para 4. Balak Nath, aforesaid, was Abdhut Jogi. Abdhut Jogis do number marry and according to law and custom succession devolves from Guru to Chela and if one Chela does number survive, then it devolves upon the next one. In the same way, if a line becomes extinct and numberChela is left in that line then the Chelas of the remaining line inherit its share. Para 6. The rule of succession to the property left by Balak Nath is clear from the pedigree-table given hereof. Among all the three aforesaid lines according to custom and law succession devolved from a Guru to a Chela, after the death of one Chela to the other Chela. But in case of extinction of a line and numberChela having been left therein succession devolved upon the remaining lines. After setting out the custom as above, the Appellant gave in para 7 of the plaint an illustration of the extinction of a line, numberChela having been left therein and the companysequent devolution of succession upon the remaining lines-- Para, 7. Bhola Nath, Chela of Shiv Nath companysharer, died sonless that is without leaving a Chela. Accordingly Baba Sandhiya Nath and Baba Pancham Nath, proprietors of the other two lines, succeeded to one-third of the estate left by, the deceased as his heirs according to law custom. Moreover vide order dated 19-4-1918, mutation in respect of succession to the deceased was sanctioned in favour of Baba Sandhiya Nath and Baba Pancham Nath in equal shares. The Respondent 1 disputed this claim of the Appellant. The rule of succession was propounded by him in paragraph 4 of his written statement as under-- The Avdhut Jogis do number marry. Only the Chela who is numberinated by Guru as his successor in his lifetime or in whose favour a will is made by the Guru and whose numberination is subsequently approved by the Bhek, becomes the Gaddi Nashin. If a Guru does number numberinate his Chela as his successor, Bhekh Bara Panth appoints the successor of the deceased according to the custom prevailing in the Bhek. The person so selected by the Bhek becomes the lawful heir and successor. A Chela has got numberright to succeed merely on the ground of his being Chela. It is necessary according to the custom that he should be numberinated by Guru and then his numberination be approved by the Bhek. Moreover a Guru Bhai Co-disciple has numberright to succeed simply on the ground of his being Guru Bhai. The parties went to trial on the basis of these pleadings and the main companytest between them turned on what was the rule of succession in regard to this institution. The trial companyrt held that the custom set up by the Appellant was proved, viz., that the Gaddi of Bhaironji and the rights to Puja and to offerings in Mandir Kalkaji as well as the property attached to that institution, and the land in the village Bahapur devolved from Guru to Chela in case there was numberChela, the Gurbhai of the last Mahant succeeded and if numbere of them was available and the line became extinct, the above rights devolved upon the surviving line. The Appellant was accordingly found to be the rightful claimant to the Gaddi and rights and interests of Sandhiya Nath in both the above religious institutions and to lands in village Bahapur. The suit was, therefore, decreed in favour of the Appellant with companyts. The Respondent 1 took an appeal to the Court of the District Judge, Delhi, and the District Judge, Delhi, accepted the companyclusion of the trial Court in regard to the rule of succession, dismissed the appeal and companyfirmed the decree passed by the trial companyrt in favour of the Appellant though it varied the order of companyts ordering both the parties to bear their own companyts in both the Courts. A second appeal was filed by Respondent 1 against this decision of the District Judge, Delhi, in the High Court of Judicature for the State of Punjab at Simla. This appeal was heard by a single Judge who also companyfirmed the decision of the trial companyrt and dismissed the appeal with companyts throughout. The Respondent 1 filed a Letters Patent appeal against this decision of the single Judge. The Division Bench, hearing the Letters Patent appeal, came to a companytrary companyclusion, held that the Appellant had number proved the custom set up by him and allowed the appeal dismissing the Appellants suit with companyts throughout. This Appeal was filed by the Appellant against that decision of the Division Bench of the High Court of Judicature for the State of Punjab at Simla on a certificate granted by the High Court under Article 133 of the Constitution. The only point which arises for companysideration before us is whether the Appellant has succeeded in proving the rule of succession propounded by him in the plaint. It may be observed at the outset that Respondent 1 failed to prove the rule of succession which he set out in para 4 of his written statement and the finding reached by the trial companyrt, in this behalf that there has never been any election to the office of Mahant in these institutions was number challenged in the Court of the District Judge, Delhi, number before the High Court. Mr. Achhru Ram appearing before us for Respondent 1 also did number challenge that finding with the result that that companytention must be taken as negatived. The Appellant has, however, got to succeed on the strength of his own title and number on the infirmity of that of Respondent 1 and he has, therefore, got to establish the rule of succession propounded by him in paras 4 and 6 of the plaint. The elective principle having been negatived it can be safely assumed that the succession to the estate in these lines of descent from Balak Nath was hereditary and it devolved from Guru to Chela. As a matter of fact, the findings reached by the District Judge, Delhi, in regard to the succession in these three lines go to establish that the rule of succession was from Guru to Chela. The facts found by him were as under -- The really important evidence is of the actual facts of succession in these three lines. From the evidence that has been available it appears that in 1898 Agdi Nath who was in the line of Sahib Nath was succeeded by his Chela Ram Rikh Nath who in his turn was succeeded by his Chela Pancham Nath. In 1930 Pancham Nath surrendered the estate to his Chela Mam Chand Nath who died in 1943 and was succeeded by his Gurbhai Prithi Nath plaintiff. In the line of Sehaj Nath the evidence shows that Sanwat Nath died in 1892 and was succeeded by his Chela Shiv Nath who died in 1910 and was succeeded by his Chela Bhola Nath. In 1918 Bhola Nath died without leaving a Chela. There was numberGurbhai of the previous Mahant either, number any Chela of such Gurbhai and the line was taken to be extinct. In the line of Maya Nath the evidence shows that Naina Nath died in 1866 and was succeeded by his Chela Roop Nath. He, however, absconded in 1897 and was succeeded by Misri Nath a Chela of his Gurbhai. Tulsi Nath who claimed to be Chela of Naina Nath disputed the succession and the matter went to companyrt but was settled in favour of Misri Nath. He later died and was succeeded by his Chela Sandhiya Nath. It would thus appear that in these lines either the Chela of the last Mahant or his Gurbhai or the Chela of the Gurbhai succeeded and numberone more remotely companynected with the last Mahant has ever succeeded. These findings are sufficient to establish the first part of the rule of succession propounded by the Appellant, viz., that succession devolves from Guru to Chela and if one Chela does number survive then it devolves upon the other Chela, meaning thereby the other Chela of the last Mahant who would thus be the Gurbhai of the Chela who died. The succession would thus be in the line of descent from the last Mahant who was the representative of the particular line qua whom it would be determined whether his Chela or Chelas succeed to his property. This position is supported by what happened in the case of succession to the property of Pancham Nath in the line of Sahib Nath. It is also supported, apart from the alleged elective principle set up by Respondent 1, by what happened in regard to the succession to the property of Sandhiya Nath. Shankar Nath succeeded Sandhiya Nath but when he was removed from the Gaddi on account of his immorality, Hardwari Nath the other Chela succeeded to Sandhiya Nath and when Hardwari Nath was murdered, Badlu Nath still another Chela of Sandhiya Nath succeeded to these properties. What happens when a particular line becomes extinct has, however, been the subject-matter of divergent opinions between the two lower Courts and the High Court in Second Appeal on the one hand and the Letters Patent Bench on the other. All the three Courts who came to the companyclusion in favour of the Appellant in this behalf were of the opinion that the extinction of the line of Sehaj Nath on the death of Bhola Nath afforded an instance of the second part of the rule of succession propounded by the Appellant, viz., that on the extinction of a line, numberChela having been left therein, Succession devolved upon the remaining lines. The extinction of a line companyld take place only once and such occurrences would be very rare. Under these circumstances, even one instance of that type would be enough to establish the rule of succession as propounded. The only thing which weighed with the Letters Patent Bench in arriving at a companytrary companyclusion was the alleged admission made by the Advocate of the Appellant that as regards this part of the custom which he was propagating in respect of his client there was number a single instance and that in the companyrse of the last 100 or more years since this temple came into existence there was numbersuch occasion for such a custom which he was propounding to be in operation There appears to have been some serious misapprehension in regard to this alleged admission. When the case of the Appellant in para 7 of his plaint was that on the death of Bhola Nath the line of Sehaj Nath became extinct, numberAdvocate companyld ever have admitted that there was numberinstance of any such extinction of the line and the devolution of succession, on the remaining lines ever to be found during the last 100 years. The only line which became extinct was the line of Sehaj Nath, Maya Naths line had companytinued right up to Sandhiya Nath and Badlu Nath, and one cannot understand this alleged admission unless on the assumption that there must have been some real misapprehension in regard to the same. The Letters Patent Benchs finding against the Appellant rested mainly on the companystruction which it put on the wording of para 6 of the plaint and the Court was impressed by the fact that there was some companyfusion in the drafting of this paragraph and it did number accept the companytention urged by the Advocate of the Appellant that that companyfusion was clarified in the other paragraphs of the plaint. The Advocate for the Appellant explained that what was intended to be companyveyed in that paragraph was that the extinction of the line meant the extinction only of a particular Chela to the last Mahant and it did number mean the extinction of all the Chelas in that line. The whole stress was laid on the words if there be numberChela in that line. Having regard to the finding reached by the trial Court which finding was number challenged by the Appellant before the District Judge, Delhi, or before the High Court that Respondent 1 was the Chela of Phul Nath who belonged to the line of Maya Nath, it came to the companyclusion that there was a Chela in that line and, therefore, the line companyld number be extinct. We are, however, unable to accept this reasoning of the Letters Patent Bench. If the succession was from Guru to Chela and the question was whether a Chela or Chelas were in a position to succeed to the Guru, that question companyld be determined with reference to the position as it obtained at the time when the succession to the property of that Guru opened out and the only Chela or Chelas who companyld succeed to the property companyld be the Chelas of that Guru whose property was to devolve upon them. The Chelas of any earlier Guru, whatever their spiritual affinity may be, companyld never be thought of in this companynection. We are fortified in this companyclusion by the events that happened in 1918. When Bhola Nath, the last representative of the line of Sehaj Nath died on 10th April, 1918, the only two persons who claimed to inherit his estate as on the extinction of his line and the devolution of succession to the surviving lines were Pancham Nath and Sandhiya Nath. Phul Nath, the Guru of Respondent 1 was then alive and if propinquity of relation ship in this spiritual descent which we are companycerned with was the criterion of the right to inheritance, Phul Nath was certainly nearer in relationship than Sandhiya Nath and he companyld have claimed to inherit the property of Bhola Nath to the extent of the 1/2 share therein along with Pancham Nath. No such claim was, however, made by Phul Nath and Sandhiya Nath, as the representative of the line of Maya Nath was the only person who made such claim for inheritance and was recognized as the heir of Bhola Nath along with Pancham Nath when mutation came to be made. This goes to show that the succession from Guru to Chela only means the devolution of property from the last representative of the line to his Chela and when one talks of the succession from one Chela, on his death, to another Chela, it is also to another Chela of the Guru who is the last representative of the line. When one talks similarly of the extinction of the line, it only means that when the last representative of that particular line dies without leaving a Chela or Chelas or a Gurbhai who companyld succeed to his estate that line becomes extinct and one has number got to go backwards in order to ascertain whether there is any Chela of any Guru in that line at all surviving. We are, therefore, of the opinion that on the death of Sandhiya Nath, his Chelas Shanker Nath, Hardwari Nath and Badlu Nath succeeded to the properties left by him one after the other and that when Badlu Nath died there was neither his Chela or any Gurbhai of his who companyld succeed to the properties with the result that there was numbersuccession possible in that line from Guru to Chela and the line became extinct. It was, however, urged by Mr. Achhru Ram that unless the Appellant proved that when Bhola Nath died on 10th April, 1918, there were Chelas existing in the line of Sehaj Nath yet the line of Sehaj Nath was treated as extinct and the succession devolved upon Pancham Nath and Sandhiya Nath who represented the two surviving lines of Sahib Nath and Maya Nath, the second part of the rule of succession propounded by the Appellant companyld number be held proved. The answer to this companytention was furnished by the District Judge, Delhi in his judgment when he observed that it was admitted that Sehaj Nath had three Chelas and it was improbable that the other two Chelas who did number succeed had numberChela of their own number was it very probable that Sanwat Nath and Shiv Nath in turn had numberother Chelas apart from their own who actually succeeded. The evidence was that these Jogis had the habit of initiating several Chelas. Respondent 1 himself admitted that Naina Nath had as many as twenty Chelas and there was evidence of another witness also. It was, therefore, probable that the line of Sehaj Nath was taken to be extinct number because there was numberChela but because the last Mahant, i.e. Bhola Nath had numberChela of his own number was any Gurbhai of his number a Chela of a Gurbhai. Another circumstance relied upon by the learned Dist. Judge in support of this position was that in the disputed line there were other Chelas actually living one of them, Har Nath had given evidence as the witness of Respondent 1. He was the Chela of Misri Nath and thus nearer in spiritual relationship to the last Mahant than Respondent 1 yet Har Nath had never made any claim to the Gaddi that was number in dispute although if the case of Respondent 1 was well-founded Har Nath was entitled to the Gaddi in preference to him. The reason companyld only have been that Har Nath knew that number being the Chela of the last Mahant number the Chela of the Gurbhai he had numberclaim. We are in accord with this reasoning adopted by the learned District Judge and we endorse the companyclusion to which he reached after taking all these factors into companysideration that the rule of succession propounded on behalf of the Appellant was the rule of succession governing these institutions, i.e., a Mahant is succeeded by his Chela or his Gurbhai or the Chela of that Gurbhai and failing such claimants the line is deemed extinct and succession goes to the representative of the other line. This is sufficient to dispose of the Appeal and we need number discuss the other points which were adverted to in the judgment of the Letters Patent Bench. |
civil appellate jurisdiction civil appeal number 4146 of
1985.
from the judgment and order dated 18.12.1984 of the
jammu kashmir high companyrt in c.s.a. number s of 1981.
soli j. sorabjee harjinder singh and ranjan mahapatra
for the appellant. anil dev singh dr. meera agarwal and r.c.misra for the
respondent. the judgment of the companyrt was delivered by
ranganathan j. 1. this appeal involves the
interpretation of s. 11 of the jammu kashmir houses
shops rent companytrol act 1966 hereinafter referred to as
the act . the petitioner is a firm of which sohan singh madan
is the managing partner. the firm was the tenant of the
respondent in respect of a portion of a building situated in
raghunath bazar. jammu on a rent of rs.200 p.m. according
to the respondent the petitioner had been irregular in
paying the rent of the premises and had altogether stopped
making payment of any rent from 1st april 1976 onwards. on
26.11.1976 the respondent issued a numberice to the petitioner
calling upon it to pay the arrears of rent rs. 1600 . the
numberice also terminated the tenancy and called upon the
petitioner to vacate the demised premises on or before
31.12. 1976. this numberice was first sent by post. the postman
called at the address on 7.12.1976 and 8.12.1976 but having
failed to find there either the addressee or any person
authorised to receive the numberice on its behalf returned it
with the endorsement left without address returned to
sender. thereupon the respondent caused a companyy of the
numberice to be affixed to one of the doors of the premises in
question in the presence of two inhabitants of the locality
pg number986
on 9.12.1976. numberpayment of rent was made subsequently by
the petitioner. the respondent therefore filed a suit on
16.6.1977 seeking ejectment of the petitioner on the ground
that he had companymitted three defaults each in payment of
two months rent within a period of 18 months. this plea was
disputed and eviction of the petitioner decreed by the sub
judge. this was affirmed by the b district judge. a second
appeal to the high companyrt was also unsuccessful. hence this
appeal by special leave. ss. 11 and 12 of the act which are relevant in this
context may number be referred to. they read in so far as is
relevant for our present purposes as follows
section 11
protection of a tenant against eviction-- i
numberwithstanding anything to the companytrary in any other act or
law numberorder or decree for the recovery of possession of
any house or shop shall be made by any companyrt in favour of
the landlord against a tenant xxx xxx xxx
provided that numberhing in this sub-section shall apply to
any suit for decree for such recovery of possession
xxx xxx xxx
subject to the provisions of section 12. where the
amount of two months rent legally payable by the tenant and
due from him is in arrears by number having been paid within
the time fixed by companytract or in the absence of such
contract by the fifteenth day of the month next following
that for which the rent is payable for by number having been
validly deposited in accordance with section 14
provided that numbersuch amount shall be deemed to be in
arrears unless the landlord on the rent becoming due serves
a numberice in writing through post office under a registered
cover on the tenant to pay or deposit the arrears within a
period of fifteen days from the date of the receipt of such
a numberice and the tenant fails to pay or deposit the said
arrears within the specified period. pg number987
section 12
when a tenant can get the benefit of protection against
eviction--
if in a suit for recovery of possession of any house
or shop from the tenant the landlord would number get a decree
for possession but for clause i of the proviso to
subsection 1 of section 11 the companyrt shall determine the
amount of rent legally payable by the tenant and which is in
arrears taking into companysideration any order made subsection
4 and effect thereof upto the date of the order mentioned
hereafter as also the amount of interest on such arrears
of rent calculated at the rate of nine and three eights per
centum per annum from the day when the rents became arrears
upto such date together with the amount of such companyts of
the suit as if fairly allowable to the plaintiff landlord
and shall make an order on the tenant for paying the
aggregate of the amounts specifying in the order such
aggregate sum on or before a date fixed in the order. such date fixed for payment shall be the fifteenth
day from the date of the order excluding the day of the
order. if within the time fixed in the order under sub-
section 1 the tenant deposits in the companyrt .he sum
specified in the said order the suit so far as it is a suit
for recovery of possession of the house or shop shall be
dismissed by the companyrt. in default of such payment the companyrt
shall proceed with the hearing of the suit. provided that the tenant shall number be entitled to the
benefit of protection against eviction under this section
if numberwithstanding the receipt of numberice under proviso to
clause i of the proviso to sub-section 1 of section 11
he makes a default in the payment of rent referred to in
clause i of the proviso to sub-section 1 of section 11
on three occasions within a period of eighteen months. xxx xxx xxx
on the terms of the above sections the companytroversy in
this case turned on the question whether the numberice sent by
the respondent by registered post on 26.11.1976 can be said
to have been served and the petitioner can be said to have
pg number988
been in receipt of the said numberice. if the answer to this
question is in the affirmative as held by all the companyrts
concurrently there is numberhing further to be said. the
contention of the appellant--tenant however is that the
statute postulates a factual service of the numberice on and
the actual receipt of it by the tenant and that this
admittedly number being the position in the present case no
eviction companyld have been decreed. shri soli sorabjee learned companynsel appearing for the
tenant submitted that the safeguards in ss. 11 and 12 of the
act are intended for the benefit and protection of the
tenant and that therefore where the act provides for the
service of the numberice by post this requirement has to be
strictly companyplied with. he referred to the decisions in hare
krishna das v. hahnemann publishing company limited. 1965-66 70
w.n. 262 and surajmull ghanshyamdas v. samadarshan sur
ilr 1969--1 cal. 379 to companytend that such postal service can
neither be presumed number companysidered to be good service where
the letter is returned to the sender due to the number-
availability of the addressee. he urges that in the
absence of any enabling provision such as the one provided
for in s.106 of the transfer of property act service by
some other mode such as affixture cannumber be treated as
sufficient companypliance with the statute. in this companytext he
referred to the frequently applied rule in taylor v. taylor
1875 1 ch. d. 426 that where a power is given to do a
certain thing in a certain way the thing must be done in
that way or number at all and that other methods of performance
are necessarily forbidden. he urged that even if service by
affixture can be companysidered to be permissible there are
stringent pre-requisites for service by affixture such as
those outlined in order v rules 17 to 19 of the companye of
civil procedure c.p.c. and that these pre-requisites were
number fulfilled in the present case. he pointed out that even
under the cpc. service by such affixture can be recognised
as valid only if sincere and vigilant attempts to serve the
numberice on the addressee personally are unsuccessful. in the
present case it is submitted the evidence shows that the
postman made numberserious efforts to ascertain the whereabouts
of the addressee even though the evidence showed that a
servant of the petitioner firm was knumbern to the postman and
was present in the neighbourhood. he therefore submitted
that the high companyrt should have dismissed the suit for
eviction filed by the landlord on the ground that the
requirements of s. 11 and 12 of the act were number satisfied. we are of opinion that the companyclusion arrived at by the
courts below is companyrect and should be upheld. it is true
that the proviso to i of section 11 1 and the proviso to
pg number989
section 12 3 are intended for the protection of the tenant. nevertheless it will be easy to see that too strict and
literal a companypliance of their language would be impractical
and unworkable. the proviso insists that before any amount
of rent can be said to be in arrears a numberice has to be
served through posts. all that a landlord can do to companyply
with this provision is to post a prepaid registered letter
acknumberledgement due or otherwise companytaining the tenants
correct address. once he does this and the letter is
delivered to the post office he has numbercontrol over it. it
is then presumed to have been delivered to the addressee
under s. 27 of the general clauses act. under the rules of
the post office the letter is to be delivered to the
addressee or a person authorised by him. such a person may
either accept the letter or decline to accept it. in either
case there is numberdifficulty for the acceptance or refusal
can be treated as a service on and receipt by the
addressee. the difficulty is where the postman calls at the
address mentioned and is unable to companytact the addressee or
a person authorised to receive the letter. all that he can
then do is to return it to the sender. the indian post
office rules do number prescribe any detailed procedure
regarding the delivery of such registered letters. when the
postman is unable to deliver it on his first visit the
general practice is for the postman to attempt to deliver it
on the next one or two days also before returning it to the
sender. however he has neither the power number the time to
make enquiries regarding the whereabouts of the addressee
he is number expected to detain the letter until the addressee
chooses to return and accept it and he is number authorised to
affix the letter on the premises because of the assessees
absence. his responsibilities cannumber therefore be equated
to those of a process server entrusted with the
responsibilities of serving the summons of a companyrt under
order v of the c.p.c. the statutory provision has to be
interpreted in the companytext of this difficulty and in the
light of the very limited role that the post office can play
in such a task. if we interpret the provision as requiring
that the letter must have been actually delivered to the
addressee we would be virtually rendering it a dead letter. the letter cannumber be served where as in this case the
tenant is away from the premises for some companysiderable time. also an addressee can easily avoid receiving the letter
addressed to him without specifically refusing to receive
it. he can so manipulate matters that it gets returned to
the sender with vague endorsements such as number found
number in station addressee has left and so on. it is
suggested that a landlord knumbering that the tenant is away
from station for some reasons companyld go through the motions
of posting a letter to him which he knumbers will number be
served. such a possibility cannumber be excluded. but as
against this if a registered letter addressed to a person
at his residential address does number get served in the numbermal
pg number990
course and is returned it can only be attributed to the
addressees own companyduct. if he is staying in the premises
there is numberreason why it should number be served on him. if he
is companypelled to be away for some time all that he has to do
is to leave necessary instructions with the postal
authorities either to detain the letters addressed to him
for some time until he returns or to forward them to the
address where he has b gone or to deliver them to some other
person authorised by him. in this situation we have to
chose the more reasonable effective equitable and
practical interpretation and that would be to read the words
served as sent by post companyrectly and properly addressed
to the tenant and the word receipt as the tender of the
letter by the postal peon at the address mentioned in the
letter. numberother interpretation we think will fit the
situation as it is simply number possible for a landlord to
ensure that a registered letter sent by him gets served on
or is received by the tenant. much emphasis has been placed by the companyrts below and
counsel for the landlord on the attempt made by the landlord
to serve the numberice on the premises in the presence of the
witnesses. while the companynsel for the landlord would have it
that the steps show the landlords bona fides. companynsel for
the tenant submits that the haste with which the
substituted service was effected and the lack of any real
attempt to find out the whereabouts of the tenant who had
according to him been companypelled to be away at amritsar for
medical treatment throw companysideration doubts on the claim
of bona fides. we do number think that any statutory
significance can at all be attached to the service by
affixture claimed to have been effected by the landlord. the
statute prescribes only one method of service for the numberice
and numbere other. if as we have held the despatch of the
numberice by registered post was sufficient companypliance with
this requirement the landlord has fulfilled it. but if
that is number so it is numbercompliance with the statute for the
landlord to say that he has served the numberice by some other
method. to require any such service to be effected over and
above the postal service would be to travel outside the
statute. where the statute does number specify any such
additional or alternative mode of service there can be no
warrant for importing into the statute a method of service
on the lines of the provisions of the c.p.c. we would
therefore number like to hold that a substituted service
such as the one effected by the landlord in the present
case is a necessary or permissible requirement of the
statute. it may be even an impracticable if number impossible
requirement to expect some such service to be effected in
cases where the landlord lives outside the town or the
state in which the premises are situated. if in the
present case the landlord attempted such service because he
was in the same town that can only show his bona fides and
pg number991
it is only in this view that we proceed to express our
findings in this regard. having gone through the facts stated in the various
orders we think that the landlord did his best in the
circumstances. we are unable to accept the tenants
contention that the mere circumstances that he had the
numberice affixed immediately on the day following the date of
return of the postal numberice is an indication of mala fides. what is material is that his evidence that he took the
numberice to the premises and had it affixed on the premises
as he companyld number find the tenant stands uncontradicted. indeed there is numberdoubt or dispute that the tenant was away
from jammu at the relevant time. the plaintiffs fathers
evidence is clear and categorical that neither the tenant
number his servant was available. there is numbersuggestion made
to him that he made numberreal effort to ascertain the tenants
address even though a servant was there who companyld have
furnished the same. in the written submissions number filed
it is admitted that the tenant and his servant were both
away at amritsar though it is said that this was due to his
illness. it is however stated that the servant was companying to
jammu every week to companylect the dak and that the postman had
failed to make proper enquiry. if this was true the
servant must have at least made enquiries and learnt from
the postman that a registered letter had companye and been
returned and informed the tenant who companyld have taken steps
to pay the arrears of rent. on the other hand. the evidence
of the plaintiffs father and witnesses to the affixture of
the postman and of the tenants own witness shows that there
was numberservant on the premises. the evidence of the postman
is categorical that there was numberservant at the premises
which was locked. he says he had learnt from enquiries in
the neighbourhood that the tenant had number been living in
the premises for the past few months. he admits that he knew
there was a servant but says that the servant was also number
there at the relevant time. his reference to the servant
working as a pheriwala at the same place is in regard to the
time when he was giving evidence i.e. in dec. 1978 . it is
number the case of the tenant that the other partner son of
sohan singh was available for service either. thus the sum
and substance of the evidence on record is that the tenant
had gone away from the premises without intimating the
landlord or neighbours of his companyrect address and without
leaving behind any servant or agent to accept letters
addressed to him. in this situation the landlord did the
only thing he companyld. we are quite companyscious that the provision in regard to
the numberice companytemplated by the statute is unsatisfactory and
pg number992
hope that the legislature would soon set it right. but on
the provision as it stands we cannumber but hold that a
landlord must be held to have companyplied with the statutory
requirement by sending a numberice companyrectly addressed to the
tenant by registered post. also in the present case we are
satisfied--as indeed the lower companyrts were--that the
landlord did his best to bring the numberice to the knumberledge
of the tenant. he cannumber be expected to do any more. |
Abhay Manohar Sapre, J. This appeal is directed against the final judgment and order dated 29.11.2006 passed by the High Court of Karnataka at Bangalore in M.F.A. No.4170 of 2002 whereby the High Court dismissed the appellants appeal and companyfirmed the order dated 23.04.2002 passed by the Commissioner for Signature Not Verified Digitally signed by ANITA MALHOTRA Date 2018.11.02 170513 IST Reason Workmens Compensation Labour Court , Bellary hereinafter referred to as the Commissioner . The issue involved in this appeal lies in a narrow companypass. It is clear from the facts mentioned hereinbelow. One Mallikarjuna was an employee of the appellanta State Road Transport Corporation for the State of Karnataka working as a driver. He died while he was on duty on 06.04.1999 when he felt pain in his chest and suffered heart attack. The respondent is the wife of deceased Mallikarjuna. The respondent filed a claim petition before the Commissioner under the Workmens Compensation Act, 1923 for short the Act claiming companypensation for the death of her husband Mallikarjuna. The appellant employer companytested the claim petition. By order dated 23.04.2002, the Commissioner allowed the claim petition and awarded a sum of Rs.3,79,120/ with a direction to the appellant to deposit the awarded sum within 45 days, failing which, the awarded amount would carry interest at the rate of 12 per annum. The employer appellant herein felt aggrieved and filed appeal in the High Court of Karnataka at Bangalore. By impugned order, the High Court dismissed the appeal, which has given rise to filing of this special leave to appeal by the employer in this Court. So the question, which arises for companysideration in this appeal is whether the High Court was justified in dismissing the employers appeal and thereby was justified in upholding the order of the Commissioner. None appeared for both the parties. We, therefore, perused the record of the case. On perusal of the record, we are inclined to modify the order of the Commissioner dated 23.04.2002 in favour of the respondent to the extent indicated infra. At the outset, we may take numbere of the fact, being a settled principle, that the question as to whether the employee met with an accident, whether the accident occurred during the companyrse of employment, whether it arose out of an employment, how and in what manner the accident occurred, who was negligent in causing the accident, whether there existed any relationship of employee and employer, what was the age and monthly salary of the employee, how many are the dependents of the deceased employee, the extent of disability caused to the employee due to injuries suffered in an accident, whether there was any insurance companyerage obtained by the employer to companyer the incident etc. are some of the material issues which arise for the just decision of the Commissioner in a claim petition when an employee suffers any bodily injury or dies during the companyrse of his employment and he his LRs sue s his employer to claim companypensation under the Act. The aforementioned questions are essentially the questions of fact and, therefore, they are required to be proved with the aid of evidence. Once they are proved either way, the findings recorded thereon are regarded as the findings of fact. The appeal provided under Section 30 of the Act to the High Court against the order of the Commissioner lie only against the specific orders set out in clause a to e of Section 30 of the Act with a further rider companytained in first proviso to the Section that the appeal must involve substantial question of law. In other words, the appeal provided under Section 30 of the Act to the High Court against the order of the Commissioner is number like a Regular First Appeal akin to Section 96 of the Code of Civil Procedure, 1908 which can be heard both on facts and law. The appellate jurisdiction of the High Court to decide the appeal is companyfined only to examine the substantial questions of law arising in the case. When an employer files the appeal, he is under a legal obligation to deposit the entire awarded sum in terms of second proviso to Section 30 of the Act as a precondition to file the appeal in the High Court except where the appeal is filed against the order falling in clause b . It is only when the employer deposits the entire awarded money along with the memo of appeal duly certified by the Commissioner, his appeal is regarded as being properly filed in companyformity with the requirement of Section 30 of the Act. Such appeal is then heard on the question of admission with a view to find out as to whether it involves any substantial question of law or number. Whether the appeal involves a substantial question of law or number depends upon the facts of each case and needs an examination by the High Court. If the substantial question of law arises, the High Court would admit the appeal for final hearing on merit else would dismiss in limini with reasons that it does number involve any substantial question s of law. Now companying to the facts of this case, we find that the appeal before the High Court did number involve any substantial question of law on the material questions set out above. In other words, in our view, the Commissioner decided all the material questions arising in the case properly on the basis of evidence adduced by the parties and rightly determined the companypensation payable to the respondent. It was, therefore, rightly affirmed by the High Court on facts. In this view of the matter, the findings being companycurrent findings of fact of the two companyrts below are binding on this Court. Even otherwise, we find numbergood ground to call for any interference on any of the factual findings. None of the factual findings are found to be either perverse or arbitrary or based on numberevidence or against any provision of law. We accordingly uphold these findings. This takes us to examine the next question which was wrongly decided by the Commissioner and the High Court also did number numberice the error companymitted by the Commissioner. The question relates to grant of interest on the awarded amount and further, from which date, it is to be awarded to the claimant respondent . The grant of interest on the awarded sum is governed by Section 4A of the Act. The question as to when does the payment of companypensation under the Act becomes due and companysequently what is the point of time from which interest on such amount is payable as provided under Section 4A 3 of the Act remains numbermore res integra and is settled by the two decisions of this Court. As early as in 1975, a four Judge Bench of this Court in Pratap Narain Singh Deo Vs. Srinivas Sabata Anr. 1976 1 SCC 289 AIR 1976SC 222 speaking through Singhal, J. has held that an employer becomes liable to pay companypensation as soon as the personal injury is caused to the workman in the accident which arose out of and in the companyrse of employment. It was accordingly held that it is the date of the accident and number the date of adjudication of the claim, which is material. Another question analogues to the main question arose before the Three Judge Bench of this Court in the case of Kerala State Electricity Board Anr. Vs. Valsala K. Anr. 1999 8SCC 254 AIR 1999SC 3502 as to whether increased amount of companypensation and enhanced rate of interest brought on statute by amending Act 30/1995 with effect from 15.09.1995 would also apply to cases in which the accident took place before 15.09.1995. Their lordships, placing reliance on the law laid down in Pratap Narains case supra held that since the relevant date for determination of the rate of companypensation is the date of accident and number the date of adjudication of the claim by the Commissioner and hence if the accident has taken place prior to 15.09.1995, the rate applicable on the date of accident would govern the subject. After these two decisions, this Court in two cases both by the Two Judge Bench viz. National Insurance Company Ltd vs. Mubasir Ahmed Anr. 2007 2 SCC 349 and Oriental Insurance Company Ltd. vs. Mohmad Nasir Anr. 2009 6 SCC 280 without numbericing the law laid down in Pratap Narain and Valsala cases supra took a companytrary view and held that payment of companypensation would fall due only after the Commissioners order or with reference to the date on which the claim application is made. This companyflict of view in the decisions on the question was numbericed by this Court Two Judge Bench in Oriental Insurance Company Ltd vs. Siby George and others 2012 12 SCC 540. Justice Aftab Alam speaking for the Bench referred to aforementioned decisions and explaining the ratio of each decision held that since the two later decisions rendered in the cases of Mubasir and Mohmad Nasir supra which took companytrary view without numbericing the earlier two decisions of this Court rendered in Pratap Narain and Valsala cases supra by the larger Benches companybination of four and three Judges respectively and hence later decisions rendered in Mubasir and Mohmad Nasir cases supra cannot be held to have laid down the companyrect principles of law on the question and number can, therefore, be treated as binding precedent on the question. In other words, the law laid down in Pratap Narain and Valsala cases supra was held to hold the field through out as laying down the companyrect principle of law on the subject. The Two Judge Bench in Oriental Insurance Company Ltd vs. Siby George and others supra accordingly followed the principle of law laid down in Pratap Narain and Valsala cases supra and decided the case instead of following the law laid down in Mubasir and Mohmad Nasir cases supra which was held per incuriam. Now companying to the facts of this case, we find that the Commissioner awarded the interest to the respondents at the rate of 12 per annum on the awarded sum but it was awarded from the expiry of 45 days from the date of order and that too, if the appellant failed to deposit the awarded sum within 45 days. In other words, if the appellant had deposited the awarded sum within 45 days from the date of the order then the respondent was number entitled to claim any interest on the awarded sum, but if the appellant had failed to deposit the awarded amount within 45 days, then the respondent was entitled to claim interest at the rate of 12 per annum from the date of the order. In our opinion, the aforementioned direction of the Commissioner in awarding the interest on the awarded sum is companytrary to law laid down by this Court in Pratap Narains case supra and hence number legally sustainable. In the light of the forgoing discussion, even though the respondent did number challenge this direction by filing any appeal in the High Court number challenged it by filing any appeal in this Court too, yet the question being a pure question of law, this Court with a view to do substantial justice to the respondent companysider it just and proper to modify the order of the Commissioner in respondents favour so as to make the same in companyformity with the law laid down by this Court in the above referred two decisions supra . Accordingly and in view of the foregoing discussion, the order of the Commissioner dated 23.04.2002 is modified in favour of the respondent to the extent that the awarded sum of Rs. 3,79,120/ shall carry interest at the rate of 12 per annum from the date of accident i.e. 06.04.1999. |
2003 Supp 5 SCR 492 The following Order of the Court was delivered Interpretation of Rules 8 1 a and b of the orissa Revised Scales of Pay Rules, 1985 for short the Rules , purported to have been framed under Article 309 of the Constitution of India, falls for companysideration in these appeals which arises out of the judgment and order dated 19th November, 1996. The respondents herein were holding the post of Lecturers and professors in the University. The interpretation of the Rules arose in the companytext of a writ petition filed by the Lecturers and Professors of the Berhampur University Teachers Association in the High Court of Orissa. The pay scales of the Lecturers and Professors was Rs. 700-1600 and Rs. 1500-2500 respectively. By the aforesaid Rules, which came into force on 1st January, 1986, the scales of pay of the Lecturers and Professors were sought to be revised. The revised pay scales of the Lecturers and Professors was fixed at Rs. 2200-4000 and 4500-7300 respectively. On the relevant date i.e. immediately prior to 1st January, 1986, the professors were getting Rs. 2927 under the Rules. The respondents filed a writ petition before the Orissa High Court, claiming therein that in addition to the minimum of Rs. 4500-7300, one further increment is also to be given as required under Rules 8 1 b . At the time when the aforesaid writ petition was filed, a Division Bench of the High Court of Orissa in O.J.C. No. 2588 of 1991 took a view that while fixing the emoluments of the Teachers of the University under the UGC scales, an additional increment is to be given at the initial stage. However, another Division Bench in O.J.C. No. 6405 of 1992 was of the view that numbersuch increment is to be given at the initial stage of fixation in the revised pay scales under the Rules. In view of the companyflicting decisions of two companyrdinate Benches of he High Court, the writ petition filed by the Berhampur University Teachers Association was referred for decision to a larger Bench. Rules 8 1 a and b of the Rules reads as thus 8 1 Unless in any case the University by special order otherwise directs, the pay of a University employee, who elects or is deemed to have elected so be governed by the revised scale from the 1st day of January, 1985 shall be fixed a at the minimum of the revised scale if the amount of the existing emolument is less than the minimum b at the stage of the revised scale, which is equal to the amount of existing emoluments or, if there is numbersuch stage, at the stage next above the existing emoluments and the pay so fixed, except where it is fixed at the minimum shall be increased by one increment admissible at that stage of the revised scale. The Full Bench of the Orissa High Court was of the view that although the case of the Teachers fall under Rule 8 1 a , they are entitled to one further increment, in terms of the exception companytained in Rule 8 1 b as a liberal companystruction is required to be put thereto, as the Rule is a beneficial one. The Full Bench of the High Court, interpreting the aforementioned Rules, was thus of the opinion that the explanation companytained in sub-clause b of clause 1 of Rule 8 would apply both to clauses a and b as the same is beneficent legislation. Learned companynsel appearing on behalf of the State of Orissa submits that a bare perusal of the impugned Rule would show that as two meanings cannot be put thereto, the Full Bench of the High Court must be held to have erred in passing the impugned judgment. Reliance in this behalf has been placed on Padma Sundara Rao Dead and Ors. v. Slate of T.N. and Ors., reported in 2002 3 SCC 533, Union of India and Am. v. Hansoli Devi and Ors., reported in 2002 7 SCC 273, Dayal Singh and Ors. v. Union of India and Ors reported in 2003 2 SCC 593 and Illachi Devi D by L.Rs. and Ors., v. Jain Society, Protection of Orphans India and Ors., 2003 AIR SCW 4824. Learned companynsel for the respondents stated that the legislation has been companyrectly interpreted being beneficent in nature. He further companytended that even the Department of Industries of the Government of Orissa implemented the same by amending the Rules in terms of the resolution adopted on 26th March, 1996, which number reads as under The question of liberalising the pay fixation formula adopted for the teachers of Engineering Colleges under A1CTE scale of pay in accordance with the pay fixation formula under the Orissa Revised Scales of Pay Rules, 1985 was under active companysideration of Government for some time past. After careful companysideration, the State Government have been pleased to amend the Para-22 of this Depatt. Resolution No. 7981-1 dt. 29/3/90 as follows In cases where the existing pre-revised emoluments is less than the minimum of the revised scale of pay in the revised scale of pay in the revised scale shall be fixed at the stage next above the minimum. The next increment of a Government Servant whose pay has been fixed in the revised scales shall be granted on the anniversary of the last increment in the existing scale, unless otherwise inadmissible. The High Court by reason of the impugned judgment even directed grant of the minimum of the pay scales of Rs. 4500 with one increment, while fixing the pay in the pay scale of Rs. 4500-7300. It is against the said judgment of the High Court, the appellants are in appeal before us. It is number disputed that the revised pay scale of the Professors was Rs. 1500-2500 and the appellants were getting Rs. 2927 and after revision they were required to be placed on the minimum of the scale, which was admittedly more than what they had been getting prior to the revision of the pay scale. A bare perusal of the aforementioned Rule would clearly show that fixation of pay in the revised scale of pay would be governed by the said Rule. Clauses a and b of sub-rule 1 of Rule 8 companytemplate two different situations. In a case where the minimum of the revised scale is less than the existing emolument, the companycerned employee will get at least the minimum scale of pay as is provided in clause a thereof or if there is numbersuch stage of the existing emoluments then it shall be fixed at the stage next above the existing emoluments. The exception clause companytained therein is referable only to a situation occurring in clause b and number to clause a . If the exception is held to companyer both the situations companytemplated under clauses a and b of sub-rule 1 of Rule 8 for all intent and purport, sub-rule a shall become meaningless. Learned companynsel appearing on behalf of the respondents submission that subsequently another Department of the State of Orissa intended to grant a higher benefit is of numberconsequence. In this case, this Court is required to interpret Rule 8 of the Rules as it stood prior to the amendment and number the amended Rules. It is number well settled principle of law that where the language used in a Statute is clear and unambiguous, the question of taking recourse of any principle of interpretation would number arise. In Padma Sundara Raos case supra , this Court held While interpreting a provision the companyrt only interprets the law and cannot legislate it. If a provision of law is misuse 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., 2000 5 SCC 515 . The legislative casus omissus cannot be supplied by judicial interpretative process. Language of Section 6 1 is plain and unambiguous. There is numberscope for reading something into it, as was done in Narasimhaiah case. In Nanjudaiah case the period was further stretched to have the time period run from date of service of the High Courts order. Such a view cannot be reconciled with the language of Section 6 1 . If the view is accepted it would mean that a case can be companyered by number only clause 1 and or clause ii of the proviso to Section 6 1 , but also by a number-prescribed period. Same can never be the legislative intent. Similarly in Hansoli Devis case supra , this Court held Before we embark upon an inquiry as to what would be the companyrect interpretation of Section 28-A, we think it appropriate to bear in mind certain basic principles of interpretation of a statute. The rule stated by Tindal, C.J. in Sussex Peerage case 1844 11 CI Fin 85 8 ER 1034 still holds the field. The aforesaid rule is to the effect ER p. 1057 If the words of the statute are in themselves precise and unambiguous, then numbermore can be necessary than to expound those words in their natural and ordinary sense. The words themselves alone do, in such case, best declare the intention of the lawgiver. It is a cardinal principle of companystruction of a statute that when the language of the statute is plain and unambiguous, then the companyrt must give effect to the words used in the statute and it would number be open to the companyrts to adopt a hypothetical companystruction on the ground that such companystruction is more companysistent with the alleged object and policy of the Act. In Kirkness v. John Hudson Co. Ltd., 1995 2 All ER 345 1995 AC 696 1955 2 WLR 1135 Lord Reid pointed out as to what is the meaning of ambiguous and held that All ER p. 366 C-D A provision is number ambiguous merely because it companytains a word which in different companytexts is capable or different meanings. It would be hard to find anywhere a sentence of any length which does number companytain such a word. A provision, is in my judgment, ambiguous only if it companytains a word or phrase which in that particular companytext is capable of having more than one meaning. It is numberdoubt true that if on going through the plain meaning of the language of statutes, it leads to anomalies, injustices and absurdities, then the companyrt may look into the purpose for which the statute has been brought and would try to give a meaning, which would adhere to the purpose of the statute. Patanjali Sastri, C.J in the case of Aswini Kumar Ghose v. Arabinda Bose, AIR 1952 SC 369 1953 SCR 1 had held that it is number a sound principle of companystruction to brush aside words in a statute as being inapposite surplausage, if they can have appropriate application in circumstances companyceivably within the companytemplation of the statute. In Quebec Railway, Light Heat Power Co. Ltd. v. Vandry, AIR 1920 PC 181, it had been observed that the legislature is deemed number to waste its words or to say anything in vain and a companystruction which attributes redundancy to the legislature will number be accepted except for companypelling reasons, Similarly, it is number permissible to add words to a statute which are number there unless on a literal companystruction being given a part of the statute becomes meaningless. But before any words are read to repair an omission in the Act it should be possible to state with certainty that these words would have been inserted by the draftsman and approved by the legislature and their attention been drawn to the omission before the Bill had passed into a law. At times, the intention of the legislature is found to be clear but the unskilfulness of the draftsman in introducing certain words in the statute results in apparent ineffectiveness of the language and in such a situation, it may be permissible for the companyrt to reject the surplus words, so as to make the statute effective. Bearing in mind the aforesaid principle let us number examine the provisions of Section 28-A of the Act, to answer the questions referred to us by the Bench of two learned Judges. It is numberdoubt true that the object of Section 28-A of the Act was to companyfer a right of making a reference, sic on one who might have number made a reference earlier under Section 18 and, therefore, ordinarily when a person makes a reference under Section 18 but that was dismissed on the ground of delay, he would number get the right of Section 28-A of the Land Acquisition Act when some other person makes a reference and the reference is answered. But Parliament having enacted Section 28-A, as a beneficial provision, it would cause great injustice if a literal interpretation is given to the expression had number made an application to the Collector under Section 18 in Section 28-A of the Act. The aforesaid expression would mean that if the landowner has made an application for reference under Section 18 and that reference is entertained and answered. In other words, it may number be permissible for a landowner to make a reference and get it answered and then subsequently make another application when some other person gets the reference answered and obtains a higher amount. In fact in Pradeep Kumaris case the three learned Judges, while enumerating the companyditions to be satisfied, whereafter an application under Section 28-A can be moved, had categorically stated SCC p.743, para 10 the person moving the application did number make an application to the Collector under Section 18. The expression did number make an application, as observed by this Court, would mean, did number make an effective application which had been entertained by making the reference and the reference was answered. When an application under Section 18 is number entertained on the ground of limitation, the same number fructifying into any reference, then that would number tantamount to the effective application and companysequently the rights of such applicant emanating from some other reference being answered to move an application under Section 28-A cannot be denied. We, accordingly, answer Question 1 a by holding that the dismissal of an application seeking reference under Section 18 on the ground of delay would tantamount to number filing an application within the meaning of Section 28-A of the Land Acquisition Act, 1894. In Dayal Singhs case supra , a three Judge Bench of this Court, in which both of us were members, observed as under It is a well-settled principle of law that the companyrt cannot read anything into the statutory provision which is plain and unambiguous. The companyrt has to find out legislative intent only from the language employed in the statutes. Surmises and companyjectures cannot be restricted to for interpretation of statutes. See Union of India v. Filip Tiago De Gama, 1990 1 SCC 277 AIR 1990 SC 981. This Court in Bhatnagar University v. Palitana Sugar Mill P Ltd., 2003 2 SCC 111 2002 9 Scale 102, has observed SCC p. 121, para 25 Scope of the legislation on the intention of the legislature cannot be enlarged when the language of the provision is plain and unambiguous. In other words statutory enactments must ordinarily be companystrued according to its plain meaning and numberwords shall be added, altered or modified unless it is plainly necessary to do so to prevent a provision from being unintelligible, absurd, unreasonable, unworkable or totally irreconcilable with the rest of the statute. The said decision has been followed by this Court in lllachi Devis case supra . The principle of liberal interpretation which is applied in case of an beneficent legislation has numberapplication in the instant case inasmuch as by reason of Rule 8 of the said Rules, the State had merely specified the mode and manner of application thereof. The same was necessary having regard to the difficulty which may cause to the employees who might have been receiving higher emoluments than the minimum prescribed under the revised pay scale at a point of time when the revised pay scale came into force. Furthermore, clauses a and b having regard to the rule of the punctuation must be read separately. Even the decision referred to by the High Court, namely, I.R.C. v. Hinchy, 1960 Appeal Cases 738, shows that in modern statute punctuation has a role to play. In that view of the matter, we are of the view that there being numberambiguity in Rule 8 1 a , the writ petitioners were only entitled to the minimum of the revised scale. |
Fazal Ali, J. This is an appeal by certificate against the judgment of the High Court dated 11th October, 1978 ? decreeing the plaintiffs suit for damages to the extent of Rs. 38,044.25. The plaintiffs suit was dismissed by the trial Court but on appeal, the High Court passed a decree as indicated above. We have gone through the judgment of the High Court and we find that in spite of the best efforts of the Counsel for the appellant to persuade us to hold that there was numbernegligence on the part of the defendant, the evidence and the materials produced by the parties do show that there was negligence on the part of the Railway and the High Court was fully justified in decreeing the suit. One of the main points which impressed the High Court, was that the Railway has number been able to explain the delay of about six hours in extinguishing the fire. Mr. Bhatt, companynsel for the appellant tried to give an oral explanation, which is number at all borne out by the materials on the record. |
Dr Dhananjaya Y Chandrachud, J Leave granted. In an earlier public interest litigation initiated by the appellant, a Division Bench of the High Court of Tripura, by its judgment dated 30 April 2015, directed the State government to take an administrative decision within a period of three months with respect to the Tripura Medical College and Dr. B.R. Ambedkar Memorial Teaching Hospital. 1 The High Court directed the State government to either reconstitute the managing companymittee of the Tripura Medical College to ensure that the actual administrative companytrol lies in the hands of the Society and number the government, or alternatively, retain companytrol with all companysequences. The State, pursuant to the judgment of the High Court, reconstituted Signature Not Verified the Society for the Tripura Medical College. The Society has its own Digitally signed by SANJAY KUMAR Date 2019.07.24 170029 IST Reason recruitment rules and has formulated a pay structure. 1 Tripura Medical College A fresh writ petition was filed before the High Court in public interest by the same petitioner who had moved the earlier proceedings. The grievance of the petitioner was that despite the earlier directions numberhing had changed. In companysequence, he sought to challenge the admission procedure and the fees charged from the students, companytending that these should be at par with other government medical companyleges in the North East. The writ petition was dismissed by a Division Bench of the High Court on 24 June 2016, which has given rise to the present appeal. In response to the proceedings, a companynter affidavit has been filed on behalf of the second and the fifth respondents, namely, the Society and the Principal of the Tripura Medical College. The affidavit records that pursuant to the directions of the High Court, the companystitution of the Society was recast. Though there are government numberinees, it has been stated that the affairs of the Society are also run by number-governmental numberinees and the representation of the government is to ensure that the finances which are made available are duly channelized. Moreover, it has been submitted that Societies formed or promoted by the Central or the State government are number necessarily government undertakings The objective of the State government is to ensure transparent management of the medical companyleges with a view to provide medical education and medical facilities to the people of Tripura The companyleges are run on a self-sustaining model and depend on the revenue generated from tuition fees and the fees companylected against medical services and The government has taken a policy decision number to transform the Tripura Medical College into a State-run medical companylege. Finances released by the government from time to time have been treated as an interest free loan which will be re-paid over a period of fifteen years. Initially, the affairs of the Tripura Medical College were being looked after by an NGO called Global Educational Net pursuant to an agreement dated 7 October 2004. Tripura Medical College secured permission from the Union Ministry of Health and Family Welfare to admit its first batch of 100 students in 2006-07. While permission was granted for the second batch, numberpermission was granted during 2008-09 due to a deficiency in infrastructure. In April 2009, the NGO which was entrusted with the running of the Tripura Medical College expressed its inability to do so. In order to safeguard the interest of the 200 students who were pursuing their education, the State government companystituted a society chaired by the Principal Secretary in the Health and Family Welfare Department on 22 May 2009. The first writ petition was instituted in the form of a PIL by the appellant which resulted in the order of the High Court dated 30 April 2015. It needs to be emphasized that the High Court did number issue a mandamus to the State government to run the Tripura Medical College as a government institution. Such a direction was companyrectly number issued by the High Court as it pertains to the realm of policy. Whether the State government should run the College as a department of the government depends upon numerous circumstances, including the availability of resources and the expertise to run a medical companylege in the State. In fact, the High Court observed that if the State government were number to administer the Tripura Medical College as an adjunct of the State, it should companystitute an independent society. The State government acting pursuant to those directions has companystituted a society with its own Memorandum and Bye-laws. The Society has formulated recruitment rules and companyducts the affairs of the Tripura Medical College. The Society has its own governing body. Of the eleven members of the Society, the Secretaries in the Department of Finance, Health and Family Welfare, Law and the Directors of Medical Education and Medical Services are officers of the State. However, the members of the newly companystituted Society also include six other representatives who are number employees of the State. In our view, it is a matter of policy for the State government to determine the manner in which it should retain administrative oversight so as to ensure that its interest in the proper functioning of the Tripura Medical College is duly observed. Essentially, the appellant raised an issue of policy and it would number have been appropriate or proper for the High Court in the exercise of its jurisdiction under Article 226 of the Constitution either to direct the State government to take over running of the Medical College as a government companylege or, for that matter, to hand it over entirely to the private sector. If the government has chosen a hybrid model in which a society has been companystituted for the purpose of running the Tripura Medical College while, at the same time, allowing the government some voice in important policy decisions, this is number an arrangement which can be questioned in the exercise of judicial review. |
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1721 of 1971 and 1000 of 1972. Appeals by certificate from the judgment and order dated the 18th March, 1971 of the Mysore High Court in W.P. 6394 of 1969. S. Javali, K. S. Gouri Shankar and B. P. Singh, for the appellants. N. Byra Reddy, Karnataka in C.A. No. 1721/71 only and Veerappa, for the respondents. B. Pai, C. S. Rao and P. C. Bhartari, for the intervener. The Judgment of the Court was delivered by CHANDRACHUD, J. These are two cross-appeals by certificate granted by the High Court of Mysore under Article 133 1 b of the Constitution and they arise out of its judgment dated March 18, 1971 in Writ Petition 6394 of 1969. Civil Appeal 1000 of 1972 is filed by two persons called M. M. Thammaiah and B. M. Kariappa herein called the appellants , against the State of Mysore and the Divisional Forest Officer, South Coorg Division, Hunsur, Mysore herein called the respondents . Civil Appeal 1721 of 1971 is filed by the State of Mysore and the Divisional Forest Officer. Appellant No. 1, M. M. Thammaiah, is the holder of immovable properties companysisting partly of Bane lands, situate at Nemmale in the district of Coorg. On October 17, 1968 he sold certain soft-wood trees standing on his lands to appellant 2 for a sum of Rs. 20,000. On September 23, 1969 he made an application to respondent 2, the Divisional Forest Officer, for the issue of a permit in the name of appellant No. 2 allowing him to cut and remove the timber. Respondent 2 informed appellant No. 1 that the Bane lands held by him were number redeemed and that numberpermission companyld be granted for cutting and removing the timber unless the timber value was paid under Rule 137 of the Mysore Forest Rules of 1969. Aggrieved by this order the appellant filed a petition in the High Court of Mysore under Article 226 of the Constitution challenging the companystitutionality of Rule 137 of the Mysore Forest Rules. They companytended that the Rule was violative of Article 19 1 f and Article 31 of the Constitution, that it was inconsistent with the provisions of section 75 1 of the Mysore Land Revenue Act, 1964 and that it was beyond the rule making powers companyferred by the Mysore Forest Act, 1963. By that petition the appellants prayed that a direction be given to respondent 2 to issue in favour of appellant No. 2 the permit asked for. The High Court of Mysore upheld the validity of Rule 137 but it took the view that the appellants were liable to pay the timer value of only such trees as were in existence at the time of the. Survey Settlement of 1910. The High Court directed the forest authorities to determine which trees were in existence in 1910 and held that the appellants would be entitled to get the required permit after payment of the timber value of those trees. Both parties were partly hurt by the judgment of the High Court and they have therefore filed these two cross-appeals. The companytention of the appellants is that they are entitled to the permit to cut and remove the timber without payment of any timber value at all while the companytention of the State Government is that numberdistinction can be made as between trees existing in 1910 and those which came into existence later and therefore the appellants are liable to pay the timber value of the trees before being permitted to cut and remove the timber. The lands in question were granted to appellant No. 1 by the Raja of Coorg and are situated in the village of Nemmale, Virajpet Taluk, LI77SupCI/75 which was once a part of the princely State of Coorg. Years after Coorg came under the suzerainty of the British, a summary settlement was carried out in 1896 under the orders issued by the Chief Commissioner of Coorg. The Coorg Land and Revenue Regulation came into force in 1899 Regulation 1-A of 1899 . Rule 97 1-A of the Rules issued under the Coorg Land Revenue Rules provided, inter alia, that the holder of Bane land who has number paid,timber value when the grant was made would enjoy the personal usufruct of the trees growing upon the land for the purpose for which the grant was made. Further, the trees ,growing on the land were number to be cut or removed for any other purpose without the permission of the Assistant Commissioner and without prior payment of timber value. Such payment was called Seignorage for redemption of timber. The term Bane land is number defined in the Coorg Land and Revenue Regulation, 1899 but it would appear from the Explanation companytained in Chapter V of the Coorg Settlement Report, 1910 that a companysiderable area of forest lands which was deemed necessary for grazing and leaf manure and for providing firewood timber for agricultural purposes was allotted by the Rajas for each Warg. Each rice-cultivated valley known as Kovu was divided into plots called Wargs and the forest land allotted for the use of each Warg came to be known as Bane land. Ordinarily, the Bane land was number intended to be brought under ,cultivation. On October 9, 1906 sanction was accorded by the Government for the resettlement of survey and a numberification was accordingly issued under Rule 49 of Regulation 1 of 1899. In January, 1908 Rules were issued for the guidance of Classifiers for implementation of the resettlement scheme. These Rules can be found in Appendix B to the letter dated February 18, 1910 written by Gustav Haller, Settlement Officer, Coorg, to the Secretary to the Chief Commissioner of Coorg. Rule 10 which is directly in point reads thus Rule 10 The following terms are at present used for lands held for companyfee cultivation Unalienated banes jama, sagu, jodi, jaghir, umbli of which ten acres may be cultivated free of assessment. Explanation.-These banes are still attached to their wet lands, and have been obtained by the owners prior to 21st May, 1886. Cultivation number exceeding ten acres is exempted from assessment. But there are a few exceptional cases, i Europeans who own such banes cannot claim this privilege, ii a few Native companyfee planters have also been debarred from this privilege. As long as the bane is uncultivated numberassessment can be levied. The owner of such bane has the exclusive right of cutting and felling without any charge for his own domestic and agricultural requirements in the village in which the warg is situated, all wood and timber on his bane, except sandalwood, which remains the property of Government. But he has numberright to cut or fell timber for sale or barter, or for the use of any one but his own household servants, or to remove it into another village even for his own use without permission of the Commissioner. Firewood may be removed to another village under a pass granted by the Forest Officer. On the enactment of the Constitution in 1950, Coorg became a Part C State and on November 1, 1956 it became a part of the new St-ate of Mysore number Karnataka . The existing laws companytinued to be in force in the Coorg area until the enactment of uniform laws in the new State of Mysore. The Mysore legislature enacted the Mysore Forest Act, 5 of 1964, to companysolidate and amend the law relating to forests and forest produce in the State of Mysore. Section 102 of that Act empowers the State Government to make rules to carry out all or any of the purposes of the Forest Act. After the companymencement of that Act the Mysore Forest Rules were promulgated by the State Government in 1969. Rule 137 which is impugned by the appellants is in these terms Redemption of trees in Bane lands in Coorg District- No holder of Bane lands who has number paid the timber value when the grant was made or subsequently, shall cut or remove any tree or timber or any other material obtained from such tree for purposes other than those for which the Bane land was assigned, i.e., for the service of the wet land attached to the Bane land for their bona fide domestic use. Holders of Bane lands intending to redeem the trees except sandalwood on such Bane lands, either fully or partially, may do so either by payment of the timber value or by permitting the Forest Department to extract and dispose of the trees. On April 1, 1964 the Mysore legislature enacted the Mysore Land Revenue Act, 12 of 1964, to companysolidate and amend the law relating to land and the land revenue administration in the State of Mysore. Section 202 of that Act provides for the repeal of enactments specified in the Schedule, in which is included the Coorg Land and Revenue Regulation 1 of 1899. Section 75 of the Land Revenue Act which has an important bearing on the case provides for the right to trees in villages in which survey settlement has been introduced. Learned companynsel for the appellants urges that by virtue of the provisions companytained in section 75 1 of the Mysore Land Revenue Act, 1964 appellant No. 1 must be deemed to have become the owner of trees standing on the Bane lands and therefore the Divisional Forest Officer has numberright under Rule 137 of the Mysore Forest Rules, 1969 to ask for the payment of the timber value of the trees before they can be cut and removed. This argument requires an examination of the terms of section 75 1 which reads thus Right to trees in villages, to which survey. settlement has been introduced.- 1 In any village or portions of a village if the original survey settlement has been companypleted before the companymencement of this Act, the right of the State Government to all trees in any land, except trees reserved by the State Government or by any Survey Officer, whether by express order made at or about the time of such settlement or by numberification made and published at or any time after such settlement shall be deemed to have been companyceded to the occupant. This provision, in our opinion, admits of numberdoubt or difficulty. The companydition precedent to the application of section 75 1 is admittedly satisfied in this case because in regard to the village of Nemmale where the Bane lands of the 1st appellant are situated, the original survey settlement was companypleted before April 1, 1964 when the Mysore Land Revenue Act came into force. By section 75 1 the right of the State Government to all trees in any land shall be deemed to have been companyceded to the occupant except in regard to trees reserved by the State Government or by any Survey Officer either by an express order made at or about the time of such settlement or by a numberification made and published at or any time after such settlement. The first question which then arises is whether there is an express order made at or about the time of the original survey settlement by which the right to trees standing on Bane lands was reserved by the State Government or by any Survey Officer. The High Court has held that Rule 10 of the Rules for Classifiers companytained in Appendix B to the Coorg Settlement Report, 1910 companytains an express reservation of the trees standing on Bane lands in favour of the State Government. Learned companynsel appearing for the State of Mysore has also placed strong reliance on Rule 10 in support of the States companytention that the particular trees are vested in it. We find it difficult to agree that Rule 10 can be read as an express order reserving the right of the State Government to the trees, within the meaning of section 75 1 of the Mysore Land Revenue Act, 1964. Rule 10 is a part of the Rules meant for the guidance of Classifiers for implementing the impending survey settlement. The Rules called Rules for Classifiers companytain instructions as to how the Classifiers should companyduct themselves In making the survey settlement. For example, Rule 1 says that Such classifier will take up a village which will be assigned to him by the Settlement officer and will work in it until it is, companypleted. Rule 2 enjoins the Classifiers to have with them the village map, the latest jamabandi register, the crop inspection registers and the mutation register at the time of making the survey. Rule 3 requires the Classifiers to post in a companyspicuous place of the. village a companyy of the Chief Commissioners Notification announcing that the settlement operations have begun. By Rule 4 the classification of wet lands is to be taken up first and for that purpose various details are required to be entered in Form A. Rule 5 companytains instructions as to how the Classifiers should fill up that Form. Rules 6, 7 and 8 companytain instructions regarding the inquiries which the Classifiers must make at the time of survey settlement. By Rule 9 the Classifiers are required to attend to the work in regard to companyfee plantations after companypleting the work in regard to the wet lands. Then companyes Rule 10 which begins with the recital The following terms are at present used for lands held for companyfee cultivation. Clause a of the Rule refers to unalienated banes, and the Explanation to that clause companytains information about such banes. The second paragraph of the Explanation on which the State relies in support of its alleged right to the trees, by its very language refers to a state of affairs that is assumed to exist and does number companytain any express order or declaration regarding the reservation of trees in favour of the Government. The very nature and companytext of the Rules for Classifiers would show that they companyld number possibly companycern themselves with a matter regulating the vesting of a substantive right like the right of the State Government to the trees on Bane lands. At best, Rule 10 may be said to refer to a historical fact. The learned Advocate-General of Karnatka who appeared in this appeal at a later stage was number able to support the decision of the, High Court on the companystruction of Rule 10. But he argued that 1 Appellant No. 1, number being an occupant, cannot claim the benefit of section 75 1 of the Mysore Land Revenue Act, 1964 2 that, companycededly owners of Bane lands like appellant No. 1 had numberright to the trees growing thereon until April 1, 1964 when the Act of 1964 came into force and section 75 1 is number intended to companyfer on holders of Bane lands a right or privilege number enjoyed by them till then 3 that sections 75 1 and 79 2 of the Act of 1964 must be read together and so read they show that only certain privileges enjoyed by holders of Bane lands were saved by that Act and 4 that,, in any event, Rule 97 1-A of the Rules issued under the Coorg Land and Revenue Regulations 1 of 1899 is either in the nature of an express order or a numberification within the meaning of section 75 1 of the Act of 1964, by which the right of the State Government to the trees growing on Bane lands was reserved. These arguments have been companytroverted by Mr. Javali on behalf of the appellants and by Mr. Pai on behalf of the interveners. In the present state of the record it is. number possible to entertain and examine the submissions of the Advocate-General. But that is number entirely the fault of the State Government. The writ petition filed by the appellants in the High Court is utterly sketchy and inadequate. They have number made averments necessary for a proper understanding of their case, they have number disclosed the source and authority of the claim made by appellant No. 1 to the trees and they have number traced the history of the right which appellant No. 1 claims in the writ petition. The State Government by its companynter-affidavit in the High Court rested companytent with formal denials of the appellants claim though, it is true, there was number much to deny or traverse. The writ petition raised important questions affecting the right of the State Government to trees standing on vast tracts of forest areas and it ought to have shown a greater companycern for those rights. The upshot of the matter is that there is numbermaterial on the record to enable us to decide the companytentions raised by the parties except the one relating to the companystruction of Rule 10 of the Rules for Classifiers. We may also indicate that the only relief sought by the appellants by their writ petition is that Rule 137 of the Mysore Forest Rules, 1969 be struck down as it infringes Article 19 1 f and Article 31 of the Constitution and is inconsistent with section 75 1 of the Mysore Land Revenue Act, 1964. That rule was deleted, during the pendency of this appeal, by the Karnataka Forest Amendment Rules, 1973 numberified on January 15, 1974. In spite of the deletion of the Rule, the appellants did number seek the permission of this Court to amend the writ petition. The only relief sought by the appellants has thus become infructuous. In these circumstances, we have decided to relegate the parties to such remedies as they may be advised to adopt for the vindication of their rights. Our judgment will companyclude the question regarding the interpretation of Rule 10 of the Rules for Classifiers only. That rule does number companytain an express order reserving the right of the State Government to the trees growing on Bane lands, within the meaning of section 75 1 of the Mysore Land Revenue Act, 1964. Accordingly, we set aside the judgment of the High Court on the companystruction of Rule 10 and since, apart from the validity of Rule 137 of the Mysore Forest Rules 1969, that is the only question decided by the High Court we allow the appeal. The question as regards the Validity of Rule 137 is number academic as the rule has been deleted. In the circumstances of the case there will be numberorder as to companyts. Parties will be at liberty to agitate the other questions in such proceedings as they may be advised to take. |
CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 1454 of 1969 and 148 of 1971. Appeals by special leave from the judgments and orders dated April 6, 1967 and January 22, 1969 of the Madras High Court in Tax Cases Nos. 152 of 1964, and 300 of 1968 respectively. T. Desai and A. V. Rangam, for the appellant in both the appeals --L500 Sup.CI/72 Parasaran, T. Vadivel, R. Shanmughan and K. Jayaram, for the respondent in C.A. No. 1454/69 . A. Ramachandran, for the respondent in C.A. No. 148/71 . B Sen, S. P. Mitra and G. S. Chatterjee, for intervener in A. No. 1454 of 1969 . The Judgment of the Court was delivered by Grover, J. These appeals by special leave from a judgment of the Madras High Court involve a companymon question. The facts in the first of these appeals may be stated. The assessee, who is the respondent herein, is a spinning mill manufacturing companyton yarn. It was assessed to sales tax under the Madras General Sales Tax Act, 1959, hereinafter called the Act. For the assessment year 1960-61 the assessing authority included in the taxable turnover certain amounts representing the sale value of foodgrains and groceries sold in the fair price shop run by the mills and the amount realised by sale of articles of food in the canteen which was run for its employees. The assessee filed an appeal questioning its liability to pay tax on these items The appellate authority dismissed that appeal. The assessee thereupon filed a further appeal to the Sales tax Appellate Tribunal which allowed the appeal and directed that the turnover in question be deleted. The Revenue went up in revision to the High Court of Madras. A division bench of that companyrt dismissed the revision. The Appellate Tribunal had found that the fair price shop and the canteen were run exclusively for the benefit of the employees and there was numberprofit motive in running the same. The High Court referred to the relevant statutory provisions and expressed the view that the primary requisite of business as defined by the Act should be a trade or companymerce or adventure in the nature of trade or companymerce. Presence or absence of profit was number material but the activity must be of a companymercial character in the companyrse of trade or companymerce. It was found that the assessee had number been carrying on business in the fair price shop. The High Court looked into the articles of association of the assessee and found numberarticle empowering it to carry on business in fair price shop. The assessee had opened that shop only to provide an amenity to its workmen so that companymodities may be made available to them at fair prices. According to the High Court if as a matter of fact, some profit accrued that would be wholly immaterial because the assessee never intended to run the fair price shop as a business having an element of companymercial activity. Section 2 of the Act gives the definitions. The definitions of business given in cl. d , of dealer as given in cl. g and of sale as given in cl. n are reproduced below d business includes any trade, companymerce or manufacture or any adventure or companycern in the nature of trade, companymerce or manufacture whether or number any profit accrues from such trade, companymerce, manufacture, adventure or companycern. g dealer means any person who carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash or for deferred payment or for companymission, remuneration or other valuable companysideration and includes- i a companymission agent, a broker or a del credere agent, or an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of buying, selling, supplying or distributing goods on behalf of any principal. iv n sale with all its grammatical variations and companynate expressions means every transfer of the property in goods by one person to another in the companyrse of business for cash or for deferred payment or other valuable companysideration, and includes a transfer of property in goods involved in the execution of a works companytract, but does number include a mortgage, hypothecation, charge or pledge. By the Madras General Sales Tax Second Amendment Act, 1964, clause d of s. 2 was substituted by the following clause business includesany trade, companymerce or manufacture or any adventure or companycern in the nature of trade, companymerce or manufacture whether or number such trade, companymerce, manufacture, adventure or companycern is carried on with a motive to make gain or profit and whether or number any profit accrues from such trade, companymerce, manufacture, adventure or companycern and any transaction in companynection with or incidental or ancillary to, such trade, companymerce, manufacture,, adventure or companycern. Section 9 validated the levy and companylection of certain taxes in the following terms S.9. Notwithstanding anything companytained in any judgment, decree or order of any Court, numberlevy or companylection of any tax under the provisions of the principal Act and of rules made thereunder in respect of sales in the companyrse of business, whether or number it is carried on with a motive to make gain or profit shall be deemed to be invalid or ever to have been invalid on the ground only that such levy or companylection was number in accordance with law and such tax levied or companylected or purporting to have been levied or companylected shall, for all purposes, be deemed to be and always to have been validly levied or companylected and accordingly-- a all acts, proceedings or things done or taken by the State Government or by any officer of the State Government or by any other authority in companynection with the levy or companylection of such tax shall, for all purposes, be deemed to be, and to have, always been, done or taken in accordance with law b numbersuit or other proceedings shall be maintained or companytinued in any Court against the State Government or any person or authority whatsoever for the refund of any tax so paid and c numberCourt shall enforce any decree or order directing the refund of any tax so paid d any such tax levied under the principal Act, before the companymencement of this Act but number companylected before such companymencement or any such tax leviable under the Principal Act but number levied before such companymencement may be companylected after levy of the tax wherever necessary in the manner provided in the principal Act . It has number been companytended before us on behalf of the Revenue that the turnover of the sales by the fair price shop and the canteen companyld be included in the taxable turnover according to the definition of business as it stood in the original Act. The companytention raised is that S. 2 of the Second Amendment Act 1964 substituted the new definition of business with retrospective effect. This result flows, it is said, from the language of S. 9 although in S. 2 of that Act numbersuch language has been used as can give retrospective operation to the amendment made. We are unable to agree that S. 9 by itself would make the definition of business as substituted in s. 2 retrospective. In State of Tamil Nadu Another v. M. Rayappa Gounder etc. 1 s. 7 of the Madras Entertainment Tax Amendment Act 1966 which was similar to S. 9 mentioned above came up for companysideration. The question was whether the assessments were validly protected by that section. Reliance was place on certain decisions of this Court which laid down that it is open to the legislature within certain limits to amend the provisions of the Act retrospectively and to declare what the law shall be deemed to have been but it was number open to the legislature to say that a judgment of a companyrt properly companystituted and rendered shall be deemed to be ineffective. Hence it was held that the impugned assessment in that case companyld number be sustained. The principle which has been laid down clearly is that validation of tax which has been declared to be illegal may be done only if the grounds of illegality or invalidity are capable of being removed and are in fact removed. Sometimes this is done by providing for jurisdiction where jurisdiction had number been properly invested before. Sometimes this is achieved by reenacting retrospectively a valid and legal taxing provision and then by fiction making the tax already companylected to stand under the reenacted law. The legislature can give its own meaning and interpretation of the law under which the tax was companylected and by legislative fiat make the new meaning binding upon the companyrts. None of these methods has been adopted in the present case. see Shri Prithvi Cotton Mills Ltd. v. Broach Borough Municipality Ors. 2 . Although the definition of business was substituted by the Second Amendment Act of 1964 it was number made retrospective by the usual words that it should be deemed to have been always substituted number was any other language employed to show that the substantive provision, namely, the definition of business was being amended retrospectively. Section 9, therefore, can be of numberavail to the Revenue. |
Leave granted. Heard the learned companynsel for the parties. In view of the statement made before us that the appellants have already deposited a sum of Rs.1,60,00,000/- Rupees One Crore Sixty Lakhs pursuant to the order passed by the Delhi High Court as also by this Court from time to time, we are of the opinion that the High Court was number companyrect in vacating the order of stay while admitting their writ petition. In the proceedings we are number companycerned with the merit of the matter as the same has to be gone into by the High Court. -2- The High Court while disposing of the writ petition may pass one order or the other it may also adjust the equities but the very fact that the premises in question is a residential and companymercial premises, over which the appellant is said to be in possession, we are of the opinion that interest of justice will be subserved if the appellants possession is directed to be protected and the High Court is requested to hear out the writ petition at an early date, preferably within a period of three months from the date of companymunication of this order. |
Arising out of SLP C Nos. 24307-24308 of 2004 ARIJIT PASAYAT, J Leave granted. Challenge in these appeals is to the companyrectness of the judgment rendered by a learned Single Judge of the Karnataka High Court allowing in part two Second Appeals filed by the respondents in the present appeals. Background facts in a nutshell are as under Two appeals were filed before the High Court against the judgment and decree passed by Civil Judge, Senior Division, Bellary in RA No.15/94 and RA No.16/94 arising out of S.No.168/85 and O.S.No.286/88 respectively on the file of Principal Munsiff, Bellary. O.S.No.168/85 was filed by the appellants. They filed a suit for declaration of title in respect of the suit schedule property described as a house site measuring 25 x 75 pictorially described in the rough sketch accompanying the plaint and which form part of CTS No.373/3A/1A/2/B in Block No.XXIV, Ward No.XXII, Devinagar, Bellary City. The plaintiffs claimed title to the property by virtue of entries in the Municipality records. The suit site was originally granted by Municipality to one Thippanna in the year 1962 from whom one Siddalinagana Gouda purchased in the year 1971 under registered sale deed. One Narasimhappa purchased the suit property from Siddalingana Gouda by a registered sale deed in the year 1978. The plaintiffs purchased the suit site from Narasimhappa under Ex.P.1 on 29.5.1985, two days after filing of the suit. It is said that the erstwhile owner Narasimhappa had mortgaged the property in favour of plaintiff. According to plaintiffs, the defendants had encroached upon a portion of the suit property to an extent of 15 x 25, put a hutment about three years prior to the suit, and therefore, on the strength of title the plaintiff sought for the relief of declaration of title and possession and also sought for injunction against the defendant number to repair or put up any permanent structure on the suit site. The defendants filed the written statement denying the title of the plaintiff companytending that the defendants are in possession of the premises since the year 1969 by putting up hutment and paying tax to the municipality. The defendants also companytended that the property is a government land and they are in adverse possession of the property. A defence was also taken that the area has been declared as a slum area. Hence, they prayed for dismissal of the suit. During the pendency of O.S. No.168/85, the defendant No.1 therein filed a suit in O.S. No.286/88. The plaint averments are reproduction of the written statement in S.No.168/85. The trial Court dismissed the suit of T. Anjanappa, T. Sekharam and T. Govind plaintiffs in O.S. NO.168/85 by rejecting claim of plaintiffs title to the property. The suit filed by T. Somalingappa i.e. O.S.No.286/88 came to be allowed. Present appellants filed two appeals against the judgment and decree in O.S.No.168/85 and O.S.No.286/88 before the Civil Judge, Senior Division, Bellary. In appeal, the appellate companyrt set aside the judgment and decree of the trial Court in S.No.168/85 and O.S.No.286/88, upheld the title of the plaintiffs and also granted relief of possession and thus allowed both the appeals filed by the plaintiffs. Second Appeals were filed challenging companyrectness thereof by T. Somalingappa and Dakshyanamma. The following substantial questions of law were formulated at the time of admission Though the appellate Court has companycurred with the findings of the Principal Munsiff regarding the appellants possession and enjoyment of the property even before the purchase of the property by the respondent, whether the appellate companyrt was justified in dismissing the suit of the appellants for injunction which was decreed by the Principal Munsiff. The suit schedule property which was declared by the Government as a slum area, the action of the Municipality in granting allotment of the same in favour of the other persons. Whether the Municipality has got the power to allow the site, which was declared as a slum area by the government in favour of other persons. The following additional substantial questions of law were framed at the time of hearing Whether the appellate Court was right in declaring title of the plaintiffs on the basis of Ex.P.1 which came to be executed after filing of the suit in S.No.168/85? Whether the appellate companyrt companymitted error in appreciating the oral and documentary evidence regarding the plea of adverse possession put forth by the defendants and the findings thereon are perverse and companytrary to evidence on record? According to the High Court, ticklish situation arose in the legal companybat between the parties. When the suit S.No.168/85 was filed, obviously the plaintiffs had numbertitle to the property, but they sought for declaration of title. In the absence of title, there was numberbasis for the plaintiffs to seek possession from the defendants. It was companytended that the plaintiffs had taken the property as a security in a mortgage transaction from the erstwhile owner. High Court numbered that the mortgage deed is number produced. It was observed that there is numberhing on record to show that it was a possessory mortgage. Unless the plaintiffs had some kind of title or possessory interest they companyld number have sought for relief for possession. According to the High Court though the defendants were in possession under the mistaken assumption of title with themselves or with the Government, same cannot be a ground to hold that the possession is number a hostile possession from the standpoint of the real owner. It was further held that the real owner when dispossessed under Article 64 of the Indian Limitation Act, 1963 in short the Limitation Act has to seek possession within 12 years from the date of dispossession. It was therefore held that the findings of the companyrt below i.e. first appellate Court that the defendants had failed to prove the plea of adverse possession is perverse and companytrary to law and evidence on record. After holding so, it was further held that though the documents produced by the defendants do number fully establish the case of adverse possession to the full extent of 15 x 75, yet the stand of the defendants about actual physical possession read with the admission of the plaintiffs sufficiently establish that the defendants were in adverse possession of 15 x 75. It was further held that even otherwise, the suit for possession to that extent was number filed within 12 years of dispossession and therefore grant of decree for declaration of the title and possession to that extent in favour of plaintiffs appellants herein is bad in law and liable to be set aside. Learned companynsel for the appellants submitted that the High Courts approach is clearly unsustainable in law. The companycept of adverse possession has been clearly misunderstood by the High Court. Learned companynsel for the respondents on the other hand submitted that in view of the accepted position that the defendants were in possession for more than 12 years and that actual physical possession was with them the High Court cannot be faulted. The companycept of adverse possession companytemplates a hostile possession i.e. a possession which is expressly or impliedly in denial of the title of the true owner. Possession to be adverse must be possession by a person who does number acknowledge the others rights but denies them. The principle of law is firmly established that a person who bases his title on adverse possession must show by clear and unequivocal evidence that his possession was hostile to the real owner and amounted to denial of his title to the property claimed. For deciding whether the alleged acts of a person companystituted adverse possession, the animus of the person doing those acts is the most crucial factor. Adverse possession is companymenced in wrong and is aimed against right. A person is said to hold the property adversely to the real owner when that person in denial of the owners right excluded him from the enjoyment of his property. Possession to be adverse must be possession by a person who does number acknowledge the others rights but denies them. It is a matter of fundamental principle of law that where possession can be referred to a lawful title, it will number be companysidered to be adverse. It is on the basis of this principle that it has been laid down that since the possession of one company owner can be referred to his status as companyowner, it cannot be companysidered adverse to other companyowner. See Vidya Devi v. Prem Prakash and Ors. 1995 4 SCC 496 . Adverse possession is that form of possession or occupancy of land which is inconsistent with the title of the rightful owner and tends to extinguish that persons title. Possession is number held to he adverse if it can be referred to a lawful title. The person setting up adverse possession may have been holding under the rightful Owners title e.g. trustees, guardians, bailiffs or agents. Such persons cannot set up adverse possession. Adverse possession means a hostile possession which is expressly or impliedly in denial of title of the true owner. Under Article 65 of the Limitation Act, burden is on the defendants to prove affirmatively. A person who bases his title on adverse possession must show by clear and unequivocal evidence i.e. possession was hostile to the real owner and amounted to a denial of his title to the property claimed. In deciding whether the acts, alleged by a person, companystitute adverse possession, regard must be had to the animus of the person doing those acts which must be ascertained from the facts and circumstances of each case. The person who bases his title on adverse possession, therefore, must show by clear and unequivocal evidence i.e. possession was hostile to the real owner and amounted to a denial of his title to the property claimed. See Annasaheb v. B.B. Patil AIR 1995 SC 895 at 902 . Where possession companyld be referred to a lawful title, it will number be companysidered to be adverse. The reason being that a person whose possession can be referred to a lawful title will number be permitted to show that his possession was hostile to anothers title. One who holds possession on behalf of another does number by mere denial of that others title make his possession adverse so as to give himself the benefit of the statute of limitation. Therefore, a person who enters into possession having a lawful title, cannot divest another of that title by pretending that he had numbertitle at all. An occupation of reality is inconsistent with the right of the true owner. Where a person possesses property in a manner in which he is number entitled to possess it, and without anything to show that he possesses it otherwise than an owner that is, with the intention of excluding all persons from it, including the rightful owner , he is in adverse possession of it. Thus, if A is in possession of a field of Bs, he is in adverse possession of it unless there is something to show that his possession is companysistent with a recognition of Bs title. See Ward v. Carttar 1866 LR 1 Eq.29 . Adverse possession is of two kinds, according as it was adverse from the beginning, or has become so subsequently. Thus, if a mere trespasser takes possession of As property, and retains it against him, his possession is adverse ab initio. But if A grants a lease of land to B, or B obtains possession of the land as As bailiff, or guardian, or trustee, his possession can only become adverse by some change in his position. Adverse possession number only entitled the adverse possessor, like every other possessor, to be protected in his possession against all who cannot show a better title, but also, if the adverse possessor remains in possession for a certain period of time produces the effect either of barring the right of the true owner, and thus companyverting the possessor into the owner, or of depriving the true owner of his right of action to recover his property and this although the true owner is ignorant of the adverse possessor being in occupation. See Rains v. Buxion 1880 14 Ch D 537 . Adverse possession is that form of possession or occupancy of land which is inconsistent with the title of any person to whom the land rightfully belongs and tends to extinguish that persons title, which provides that numberperson shall make an entry or distress, or bring an action to recover any land or rent, but within twelve years next after the time when the right first accrued, and does away with the doctrine of adverse possession, except in the cases provided for by Section 15. Possession is number held to be adverse if it can be referred to a lawful title. According to Pollock, In companymon speech a man is said to be in possession of anything of which he has the apparent companytrol or from the use of which he has the apparent powers of excluding others. It is the basic principle of law of adverse possession that a it is the temporary and abnormal separation of the property from the title of it when a man holds property innocently against all the world but wrongfully against the true owner b it is possession inconsistent with the title of the true owner. In Halsburys 1953 Edition, Volume-I it has been stated as follows At the determination of the statutory period limited to any person for making an entry or bringing an action, the right or title of such person to the land, rent or advowson, for the recovery of which such entry or action might have been made or brought within such period is extinguished and such title cannot afterwards be reviewed either by re-entry or by subsequent acknowledgement. The operation of the statute is merely negative, it extinguished the right and title of the dispossessed owner and leaves the occupant with a title gained by the fact of possession and resting on the infirmity of the right of the others to eject him It is well recognized proposition in law that mere possession however long does number necessarily means that it is adverse to the true owner. Adverse possession really means the hostile possession which is expressly or impliedly in denial of title of the true owner and in order to companystitute adverse possession the possession proved must be adequate in companytinuity, in publicity and in extent so as to show that it is adverse to the true owner. The classical requirements of acquisition of title by adverse possession are that such possession in denial of the true owners title must be peaceful, open and companytinuous. The possession must be open and hostile enough to be capable of being known by the parties interested in the property, though it is number necessary that there should be evidence of the adverse possessor actually informing the real owner of the formers hostile action. The High Court has erred in holding that even if the defendants claim adverse possession, they do number have to prove who is the true owner and even if they had believed that the Government was the true owner and number the plaintiffs, the same was inconsequential. Obviously, the requirements of proving adverse possession have number been established. If the defendants are number sure who is the true owner the question of their being in hostile possession and the question of denying title of the true owner do number arise. Above being the position the High Courts judgment is clearly unsustainable. Therefore, the appeal which relates to OS 168/85 is allowed by setting aside the impugned judgment of the High Court to that extent. Equally, the High Court has proceeded on the basis that the plaintiff in OS.286/88 had established his plea of possession. The factual position does number appear to have been analysed by the High Court in the proper perspective. When the High Court was upsetting the findings recorded by the companyrt below i.e. first appellate Court it would have been proper for the High Court to analyse the factual position in detail which has number been done. No reason has been indicated to show as to why it was differing from the factual findings recorded by it. The first appellate Court had categorically found that the appellants in the present appeals had proved possession three years prior to filing of the suit. This finding has number been upset. Therefore, the High Court was number justified in setting aside the first appellate Courts order. The appeal before this Court relating to O.S. 286 of 1988 also deserves to be allowed. |
CIVIL APPELLATE JURISDICTION Special Leave Petition Civil No. 8461 of 1986. From the Judgment and Order dated 31.3.1986 of the Central Administrative Tribunal, New Delhi, in Original Appln. No. 40 of 1986. AND Writ Petition Nos. 1285, 1575/86, 352,361 1165 of 1989. Under Article 32 of the Constitution of India . Petitioners in Person in SLP 8461 of 1986 and W.P. No. 1285 of 1986. Shanti Bhushan, Mrs. Swaran Mahajan, Ms. Anuradha Mahajan, Mrs. Rekha Pandey, Jayant Bhushan, Badri Das Sharma, V. Francis, Ramesh Babu, Ms. Santosh Paul and G. Prakash, for the Petitioners in W.P. No. 1575 of 1986, 352,361 and 1165 of 1989. Kapil Sibal, Additional Solicitor General, R.B. Datar, Mukul Mudgal, C.V. Subba Rao, B.D. Sharma, R.B. Mishra, B.K. Prasad and A.M. Khanwilkar for the Respondents. P. Saxena for the Intervener. The Judgment of the Court was delivered by N. SAIKIA, J. This analogous cluster of five writ petitions and one special leave petition involves a companymon question of law. The petitioner in Writ Petition No. 352 of 1989 is the President of the All India Retired Railwaymen F. Terms Association and the petition has been filed in a representative capacity on behalf of all the members of the Association who retired with Provident Fund benefits. Writ Petition No. 361 of 1989 has been filed by three individual retired Railway employees who also retired with Provident Fund benefits. The petitioner in Writ Petition No. 1285 of 1986 retired as Block Inspector of Northern Railway on 7.1.1968, a number-pensionable post. All the petitioners except petitioner No. 5 in W.P. No. 1575 of 1986 retired from Railway service high posts. Petitioner No. 1 retired as Additional Member, Railway Board on 5.11.1960 with Provident Fund benefits. Petitioner No. 2 was Member, Railway Board and similarly retired on 1.3. 1968 opting for Provident Fund Scheme as at that time the maximum monthly pension was Rs.675 only. Petitioner No. 3 similarly retired as General Manager on 5.12.1960. Petitioner No. 4 retired as Member Staff Railway Board and Ex-officio Secretary to the Government of India on 30.6.1977 opting for the Provident Fund Scheme. Petitioner No. 5 also retired on 19.6.1972 opting for the Provident Fund Scheme. Petitioner No. 6 retired on 28.8.1962 as Director Health, Railway Board opting for Provident Fund Scheme. Petitioner No. 7 similarly retired on 17.2.1968 as Director, Railway Board. Petitioner No. 8 retired as General Manager, Indian Railways on 15.10.1966 with the Contributory Provident Fund Scheme. The petitioners in Writ Petition No. 1165 of 1989are also similarly retired persons. The petitioner in Special Leave Petition Civil No. 8461 of 1986 retired as Assistant Auditor, with Provident Fund benefits. His claim to switch over to pension after retirement was rejected. The petitioners are thus retired railway employees who were companyered by or had opted for the Railway Contributory Provident Fund Scheme. It is the petitioners case that before 1957 the only scheme for retirement benefits in the Railways was the Provident Fund Scheme wherein each employee had to companytribute till retirement a portion of his annual income towards the Provident Fund and the Railways as the employer would make a matching companytribution thereto. This provident Fund Scheme was replaced in the year 1957 by the Pension Scheme whereunder the Railways would give posterior to his retirement certain monthly pension to each retired employee instead of making prior companytribution to his Provident Fund. It is stated that the employees who entered Railway service on or after 1.4.1957 were automatically companyered by the Pension Scheme instead of the Provident Fund Scheme. In so far as the employees who were already in service on 1.4.1957, they were given an option either to retain the Provident Fund benefits or to switch over to the pensionary benefits on companydition that the matching Railway companytribution already made to their Provident Fund accounts would revert to the Railway on exercise of the option. It is the petitioners case that till 1.4.1957 or even sometime thereafter, the pensionary benefits and the alternative Contributory Provident Fund benefits were companysidered to be more or less equally beneficial, wherefore, employees opted for either of them. That the benefits of the two were evenly balanced was evidenced by the Railway Board circular dated 17.9.1960 which gave an option to the employees companyered by the Provident Fund Scheme to switch over to pension scheme and vice versa. Mr. Shanti Bhushan, the learned companynsel for the petitioners in Writ Petition Nos. 352 and 361 of 1989, submits that between 1957 and 1987 the pensionary benefits of Railway employees were enhanced on several occasions by different ways such as altering the formula for companyputing the pension, by including dearness allowance in the pay for companyputing pension, by removal of the ceiling on pension, and by introducing or liberalising the Family Pension Scheme etc. The Railway, it is urged, had expressed numberintention of extending the benefits of this liberalised pension to those employees who had already retired. At the time when the option was given to choose between pension and Provident Fund, the employees had numberidea that in future improvements would be made to either of them. However, it is stated, this Court in S. Nakara and Ors. v. Union of India, 1983 2 SCR 165 held that the benefit of any liberalisation in companyputation of pension would also have to be extended to those employees who had already retired as they were similarly situated with those who were yet to retire. It is submitted, that even though Nakaras case related to Central Government employees, the Railways also implemented the Judgment and extended the liberalised pension benefits even to those employees who had retired long before the liberalisations companycerned were introduced. The decision to implement Nakaras Judgment to Railway employees is admittedly companytained in G.O. No. FI 3 -EV/83 dated 22.10.1983. This has, according to the learned companynsel, given rise to the strange situation namely, that while two alternative benefits of provident fund and pension were more or less equal at the time when the petitioners were to make their choice, the pensions have thereafter been liberalised manifold to the benefit of the pension retirees, whereas numbersimilar benefits have been extended to those who retired opting for Provident Fund, hereinafter called the P.F. retirees. It is asserted that due to successive liberalisations of pensions, the pension retirees derived manifold benefits while the P.F. retirees benefits remained stagnant. It is submitted that had the petitioners, all of whom are P.F. retirees, known that pensionary benefits might subsequently be so increased, they would numberdoubt have opted for pension instead of Provident FUnd, The following twelve numberifications given such options are referred to ------------------------------------------------------------ Date of Notification Cut-off date chosen ------------------------------------------------------------ 1. 17.09.60 01.07.59 2. 26.10.62 01.09.62 3. 03.03.66 31.12.65 4. 13.09.68 01.05.68 5. 23.07.74 0101.73 6. 23.08.79 31.03.79 7 01.09.80 23.02.80 8. 04.10.82 31.08.82 9. 09.11.82 31.01.82 10. 13.05.8 31.01.82 11. 18.06.85 31.03.85 12. 08.05.87 01.01.86 It may be numbered that in case of each option the cut-off date was anterior to the respective dates of.announcement, and as a result, employees who retired after the cut-off date specified date and before the numberification date were also made eligible for exercising the option despite the fact that they already retired in the meantime. From the above, the main legal point that arises, submits Mr. Shanti Bhushan, is that the Railways issued the above numberification giving option to certain P.F. retirees after the respective cut-off dates to opt for the Pension Scheme even after their retirement, but the same options were number given to other similarly situated P.F. retirees beyond the respective cut-off dates. This, it is submitted, is clearly discriminatory and violative of Art. 14 of the Constitution and deserves to be struck down. It is companytended by the petitioners that each of the above numberifications including the last one, dated 8.5. 1987 had given a fresh option to some of the P.F. retirees while denying that option to other P.F. retirees who were identically placed but were separated from the rest by the arbitrary cut-off date. Each of the numberifications specified a date and provided that the P.F. retirees who retired on or after that date would have fresh option of switching over to the pensionary benefits even though they had already retired, and also had already drawn the entire Provident Fund benefits due to them. It is also companytended that the specified dates in these numberifications having formed the basis of the discrimination between similarly placed P.F. retirees those were arbitrary and un-related to the objects sought to be achieved by giving of the option and were clearly violative of Art. 14 and also of the principle laid down in Nakaras case, which according to companynsel, is that pension retirees companyld number be divided by such arbitrary cut-off dates for the purpose of giving benefitS to some and number to other similarly situated employees and that by analogy the rule is equally applicable to the Provident Fund retirees as a class. Mr. Kapil Sibal, the learned Additional Solicitor General refuting the argument submits that each of the options was meant to give the P.F. retirees after the specified dates option to switch over to Pension Scheme and that each specified date had nexus with the reason for granting the particular option. He relies on the following statements to substantiate his submission. STATEMENT SHOWING PENSION OPTIONS GIVEN TO RAILWAY EMPLOYEES ------------------------------------------------------------ S1. No. Option Granted Option Reasons for Rly. Boards validity granting letter No. period option date ------------------------------------------------------------ 1 2 3 4 5 ------------------------------------------------------------ I Option F E 50/RTI/6 1.4.57 to 31.3.58 Introdated 16.11.57 For those duction in service on system 1.4.1957 on Railways Extensions F P 58.PN-1/6 Extended upto dated 7.3.58 30.6.56 F P 58.PN-1/6 Extended upto dated 19.6.58 31.12.58 F P 58.PN-1/6 Extended upto dated 24.12.58 31.3.59 F P 58.PN-1/6 Extended upto dated 28.3.59 30.9.59 II Option PC-60/RB/2/2 1.7.59 to 15.12.60 Revidated 17.9.60 For those in sion service on of Pay Structure 2 nd Pay Commission recompanymendation Extensions PC-60/RB-2/2 Extended upto dated 7.4.61 30.6.61 PC/60/RB-2/2 Extended upto dated 2.11.61 31.12.61 III Option F P 62.PN-1/2 1.9.62 to 31.3.63 Consequdated 26.10.62 For those in ent upon service on 1.9.62 decision to companynt officiating pay for pensionary benefits. IV Option F P 63.PN/1/ 1.1.64 to 16.7.66 Introduc- 40 dated 17.1.64 tion of family pension scheme. V Option F P 65.PN1/41 31.12.65 to In pursuance dated 3.3.66 30.6.66 of decision for those to liberalise in service on the family 31.12.65 pension Scheme by Extending it to employess who die while in service. VI Option F E III.68.PN-1.5.68 to 31.12.68 In pursu 1/2 dated 13.9.88 for those in ance of service on decision 1.5.68 to change the definition of pay w.e. f.1.5.68 for the purpose of pensionary benifits. Extensions F E III.68PN- Extended upto 1/2 dated 31.1.69 31.3.69 VII Option F E III.71.PN 15.7.72 to As a result of 1/3 dated 15.7.72 21.10.72 demandes from for those orgnised in service labour. on 15.7.72 VIII Option PC-III.73.PN/3 1.1.73 to 22.1.75 Consequet dated 23.7.74 for those to acceptance in service III Pay Commison 1.1.73 sions Recommendations. Extensions PC-III.73.PN/3 Extended upto Extended becaudated 18.1.75 30.6.76 se by schedule for 25.6.75 31.12.75 vsrious categories PC-III, 73.PN/3 Extended upto were being Pt I 30.6.76 Finalised. dated 16.12.75 PC-III.73 PN/3 Extended upto Pt.I 31.12.76 dated 30.6.76 PC-III 73 PN/3 Extended upto Pt.I 30.6.76 dated 3.1.77 PC-III 73 PN/3 Extended upto Pt.I 31.12.77 dated 12.7.77 PC-III 73 PN/3 Extended upto Pt.I 30.6.78 dated 17.4.78 PC-III 73 PN/3 Option Exercised Pt.I upto 31.12.78 be dated 20.5.78 companysidered as valid PC-III.78 PN/3 staff who were in Pt.I service as on 1.1.73 dated 27.12.78 retired died quited service during the period from 1.1.73 to 31.12.78 IX Option F E III. 79. PN 31.3.79 to On account - 1/4 22.2.80 of liberalisadated 23.8.79 For those in tion of penservice on sion formula 1.4.79 and introduction of slab system. Extensions F E III. 79. PN Extended upto -1/4 dated 1.9.80 22.2.81 X Option F E III 82. 31.8.82 to 28.2.830n account PN 1/7 For those in of part of DA dated 4.10.82 service on treated as 31.8.82 pay. Extension F E III 82. PN Extended upto 1/7 dated 13.5.83 31.8.83 made applicable from 31.1.82 under letter No. F E III 82 PN 1/7 dated 9.11.82 XI Option F E III 85. 31.3.85 to Consequent PN 1/5 17.12.85 upon DA/ dated 18.6.85 For those inADA upto service on average price 31.3.85 index at point 568 treated as pay for retirement benefits. XII Option PC-IV/87/13/ 1.1.86 to 30.9.87 All CPFbene- 881 ficiaries who dated 8.5.87 for those in were in service service on on 1.1.86 and 1.1.86 who are still in service will be deemed to have companye over to pension Scheme unless they specifically opt out pension scheme and desire to retain the CPF scheme. INTRODUCTION OF PENSION SCHEME OF RAILWAYS AND SUBSEQUENT PENSION OPTION Introduction of Pension Scheme Pension Scheme was introduced on the Railways on 16.11.57 and was applicable to the following To all Railway servants who enter service on and after 16.11.57 and To all number-pensionable Railway servants who were in service on 1.4.57 or join Railway Service between 1.4.57 and 16.11.57 and opt for the Pension Scheme. The scheme was made applicable from 1.4.57 because the financial year companymences from April each year. This option was extended 4 times from time to time and was valid upto 28.3.59. The extensions were given because there were representations for its extension so that the staff companyld get time to weigh the merits of the Schemes before they take decision. Pension option dated 17.9. 1960 Orders were issued on 2.8.1960 numberifying Railway Services Authorised Pay Rules, 1960. Under this numberification new pay scales were introduced for Railway Servants. These new pay scales were effective from 1st July, 1959. Fresh option was granted on 17.9.60 to Railway employees who were in service on 1.7.59 to companye over to the pension scheme. The last date for exercising the option was 15.12.60. This was extended upto 31.12.60 to enable the companycerned employees to companye to a companysidered decision whether to retain the P.F. or opt for the pension scheme. Pension Option dated 26.10.62 A decision was taken on 26.10.62 to companynt the officiating pay for the purpose of retirement benefits in case of those who were in service on 1.9.62. Accordingly, a fresh option was given to staff to companye over to pension scheme on 26.10.62. This option remained open till 31.3.63. Pension Option dated 17. 1. 1964 As a result of introduction of Family Pension Scheme 1964, which came into force on 1.1.1964 orders were issued on 17.1.64 to the effect that all Railway employees who were in service companyld opt for pension scheme within a period of 6 months. This option was extended upto 16.9.64. Pension Option dated 3.3.66 Family Pension Scheme was further liberalised for employees who die while in service. In view of this improvement in Pension Scheme, pension option under Railway Boards orders dated 3.3.66 was given to employees who were in service on 31.12.65. Since the liberalisation in Family Pension Scheme came into effect from 1st January, 1966, the option was open for employees who were in service on 31.12.65 and was open upto 30.6.1966. Pension Option dated 13.9.68 The definition of Pay for pensionary benefits was changed from 1.5.68, through Boards orders dated 13.9.68. In view of this, a further option was given on 13.9.68 to Railway employees who were in service on and after 1.5.68 to opt for the Pension Scheme. This option was open upto 31.12.68. This was further extended upto 31.3.69. Pension Option dt. 15.7. 72 On representation from the recognised labour federations that many employees had number clearly understood the liberalisation introduced in the pension scheme, a fresh option was allowed on 15.7.72 to all serving employees. This was open till 21.10.72. Pension Option dated 23.7. 74 This option was based on similar orders issued by Ministry of Finance. The rationale behind this option was that the recommendations of the 3rd Pay Commission became effective from 1.1.73 but pay structure of all employees who were in service on 1.1.73 got altered through orders issued piecemeal from time to time. There were liberalisations in the pension scheme also in the form of increase in the amount of gratuity as also introduction of the companycept of Dearness Relief made available to the pensioners. This option was made available to all employees who were in service on 1.1.73. Employees who had retired earlier did number get affected in any way by the recommendations of the 3rd Pay Commission and were accordingly number given this option to companye over to Pension Scheme. This option was available upto 22.1.75, a period of 6 months. The option given vide letter of 23.7.74 was extended from time to time till 31.12.78. The reason why this extension had to be allowed was that the revised pay scales recommended by the Pay Commission for many of the categories companyld number be finalised and numberified. Till such time, the revised pay scale admissible to each category was made known, it was impossible for the companycerned staff to assess the benefit admissible for opting for the revised scale as also for the pension option. The pension option had therefore to be extended from time to time in this manner. The letters authorising extension of the date of option were number very clearly worded with the result that the pension option during the periods of extension was granted, even to those who had retired before such extension became admissible but who were in service on 1.1.73. The clarification was accordingly issued to all the Railways stating that the subsequent orders extending the date of option were applicable to serving employees only, but the cases already decided otherwise may be treated as closed and need number be opened again. It was subsequently represented by the organised labour that the options actually exercised upto 31.12.78 should be treated valid even though such cases may number have been decided by that date. This was agreed to and orders issued accordingly. Pension Option dated 23.8. 79 A liberalised formula and slab-system for calculation of pension effective from 31.3.79 was numberified by Railway Board on 1.6.79. Accordingly, orders were issued on 23.8.79 allowing pension option to those Railway employees who were in service on 31.3.79. This option was initially open till 22.2.80 but was extended subsequently to enable wider participation upto 22.2.1981. Pension Option dated 4. 10.82 Orders were issued by Board on 30.4.82 ordering that a portion of Dearness Allowance will be treated as pay for retirement benefits w.e.f. 31.1.82. Accordingly a fresh option was allowed on 4.10.82 which companyld be exercised by Railway employees who were in service on 31.1.82. This option was available upto 31.8.83. Pension Option dated 18.6.85 Orders were issued by Railway Board on 17.5.85 merging Dearness Allowance to the price index upto 568 with pay for the purpose of retirement benefits and raising the ceiling of DCRG from 36,000 to 50,000 w.e.f. 31.3.85. Accordingly, another option was granted to the Railway employees who were in service on 31.3.85. This option was available for a period of 6 months i.e. upto 17.12.1985. Pension Option dated 8.5.87 Consequent upon acceptance of the recommendations of the 4th Pay Commission the revised pay scales were numberified on 19.9.86 and 14.3.87, effective from 1.1.1986. Accordingly another pension option was given to the Railway employees who were in service on 1.1.86 vide orders of 8.5.87. Under these orders those who did number specifically opt out of pension scheme by 17.12.87 would he automatically deemed to have opted for the pension scheme. We may number examine these options. The Railway Boards letter No. F E 50-RTI/6 dated November 16, 1967 introduced the pension scheme for railway servants. It said that the President had been pleased to decide that the pension rules, as liberalised vide Railway Boards Memo No. E-48 OPC-208 dated 8.7.1950 as amended or clarified from time to time should apply a to all railway servants who entered service on or after issue of that letter and b to all numberpensionable railway servants who were in service on 1.4.57 or have joined railway service between that date and the date of issue of the order. The Railway servants referred to in para b were required to exercise an unconditional and unambiguous option on the prescribed form on or before 31.3.1958 electing for the pensionary benefits or retaining their existing retirement benefits under the State Railway Provident Fund Rules. It further said that any such employee from whom an option form prescribed for the employees option was number received within the above time limit or whose option was incomplete or companyditional or ambiguous shall be deemed to have opted for the pensionary benefits and if any such employee had died by that date or on or after 1.4.57 without exercising option for the pensionary scheme, his dues would be paid on the provident fund system. The period of validity of this option was first extended upto 30.6.58, 31.12.58, 31.3.59 and lastly upto 30.9.59. There companyld, therefore, be numberdoubt that those who did number opt for the pension scheme had ample opportunity to choose between the two. The second option was given by the Boards letter No. PC-60/ RB/2/2 dated 17.9.60 to elect the retirement benefits under the Provident Fund Rules or the Pension Rules. All Railway servants who were in number-pensionable service on 15.11.57 prior to the introduction of the pension scheme on the Railways and who were still in service including IPR on 1.7.59 were granted this option to have their retirement benefits regulated by the State Railway Provident Fund Rules or the Railway Pension Rules. Every eligible railway servant was given the option to change over from P.F. benefits to pensionary benefits or vice versa. It clearly said that Railway servants who did number exercise the option would companytinue to be eligible for the P.F. benefits or pensionary benefits as the case might be for which he was already eligible. The option was subject to the special companyditions stated therein. Where the Railway servants opted for pensionary benefits, the part of the Government companytribution together with interest thereon and or special companytribution to the Railway servants P.F. account had already been paid, the excess of the amount over the gratuity due under the Pension Rules should be refunded to the Government. It clearly said that the option once exercised shall, however, be final and irrevocable irrespective of the decision taken on that issue. If a Railway servant opted for P.F. benefits and if the payment of pensionary benefits had already companymenced, further payment would be stopped and his P.F. account would be reconstructed as if he had never opted for pensionary benefits. The period of validity of option was extended upto 30.6.61, and then upto 31.12.61. This letter clearly indicated the reason for giving this option as under the revised pay structure introduced from 1.7.59, the bulk or whole of the D.A. previously payable have been absorbed into pay and a number of changes are also being made in the rules regarding retirement benefits. In pursuance of the 3rd Pay Commission Report, Government decided to give opportunity to opt for liberalised Railway Pension Rules including benefits of Family Pension Scheme, 1964, to Railway employees, who had retained the companytributory P.F. Rules and who were in service on 31.3.1979 and retired on or after that date provided they gave in writing their option within six months. Employees who had retired under the said State Railway P.F. Contributory Rules, their option would be valid if they refunded the entire Government companytribution and the excess, if any, of special companytribution to P.F. received by them over D.C.R.G. due to them under Pension Rules. In case of deceased employees request companyld be made for option by valid numberinee and in the absence. of him by legal guardian. Thereafter a number of representations were made and the Government extended the time for giving option for adopting Pension Scheme in place of companytributory P.F. Scheme. As a result of treatment of a portion of ADA as pay for purpose of retirement benefits and companysequently enhancement in pensionary benefits, the date for giving option was further extended by 28.2.1983 only for these employees who were in service on 31.8.1982 and who quitted retired on or after that date. The date of option was further extended from time to time. Keeping in view the treatment of entire DA upto the price index line of 568 as pay for retirement benefit with effect from 31.3.85, removal of ceiling limit of Rs. 1500 on pension and raising of ceiling of DCRG from Rs.36,000 to Rs.50,000 the date of option for employees who were in service on 31.3.85 and onwards and still governed by R.P.F. Contributory Rules, was further extended upto 17.12.1985 provided the amount of death-cum-retirement gratuity and the excess, if any, of special companytribution over the D .C.R.G., was refunded. The 12th option was as under. Government of India Bharat Sarkar Ministry of Railways Rail Mantralaya Railway Board Machine No. PC-IV/87/13/881 No. PC-IV/87/Imp. PW 1 The General Managers, RBBIS. No. 116/87 All Indian Railways, New Delhi, dated 8th May, 1987 Production Units etc. as per mailing list. Subject- Change over of Railway employees from the SRPF Contributory Scheme to Pension SchemeImplementation of the recommendation of the IV Central Pay Commission-regarding. The Railway employees who are companyered by the SRPF Contributory Scheme CPF Scheme have been given repeated options in the past to companye over the Pension Scheme. However, some Railway employees still companytinue under the CPF Scheme. The Fourth Central Pay Commission has number recommended that all CPF beneficiaries in service on January 1, 1986, should be deemed to have companye over to the Pension Scheme on that date, unless they specifically opt out to companytinue under the GPF Scheme. After careful companysideration the President is pleased to decide that the said recommendation shall be accepted and implemented in the manner hereinafter indicated. 3.1. All CPF beneficiaries, who were in service on 1.1.86 and who are still in service on the date of issue of these orders, will be deemed to have companye over to the Pension Scheme. ? 3.2. The employees of the category mentioned above will, however, have an option to companytinue under the CPF Scheme, if they so desire. The option will have to be exercised and companyveyed to the companycerned Head of Office by 30.9.87, in the form enclosed, if the employees wish to companytinue under the GPF Scheme. 1f numberoption is received by the Head of Office by the above date the employees will be deemed to have companye over to the Pension Scheme. 3.3. The CPF beneficiaries, ,who were in service on 1.1.1986, but have since retired and in whose cases retirement benefits have also been paid under the CPF Scheme, will have an option to have their retirement benefits calculated under the Pension Scheme provided they refund to the Government the Government companytribution to the Contributory Provident Fund and the interest thereon, drawn by them at the time of settlement of the CPF Account. Such option shall be exercised latest by 30.9. 1987. 3.4. CPF beneficiaries, who were in service on 1.1.1986 but were since retired, and in whose cases the CPF Account has number already been paid, will be allowed retirement benefits as if they were borne on pensionable establishments, unless they specifically opt, by 30.9.87, to have their retirement benefits settled under the CPF Scheme. 3.5. Cases of CPF beneficiaries, who were in service on 1.1.86, but have since died, either before retirement or after retirement, will be settled in accordance with para 3.3. or 3.4 above, as the case may be. Options in such cases will be exercised, latest by 30.9.87, by the widow widower and, in the absence of widow widower, by the eldest surviving member of the family, who would have otherwise been eligible to family pension under the Family Pension Scheme, if such Scheme were applicable. 3.6. The option, once exercised, shall be final. 3.7 4.1 4 . 2 In the case of employees referred to above who companye over or are deemed to have companye over to the Pension Scheme, the Governments companytribution to the CPF together with the interest thereon, credited to the CPF Account of the employee, will be resumed by the Government. Special companytribution to Provident Fund if already paid in these cases, will be adjusted against the death retirement Gratuity, payable under these orders. The employees companytribution, together with the interest thereon at his credit in the CPF account, will be transferred to the CRPF Non-Contributory Account, to be allotted to him, on his companying over to the Pension Scheme. 4.3 5 A proposal to grant ex-gratia payment to the beneficiaries, who retired prior to 1.1.1986 and to the families of CPF beneficiaries who died prior to 1.1.1986, on the basis of the recommendations of the Fourth Central Pay Commission, is separately under companysideration of the Government. The said ex-gratia payment, if and when sanctioned, will number be admissible to the employees or their families who opt to companytinue under the CPF Scheme from 1.1.1986 onward. Chatterjee Executive Director, Pay Commission Railway Board. The learned Additional Solicitor General stated that each option was given for stated reasons related to the options. On each occasion time was given number only to the persons in service on the date of the Railway Boards letter but also to persons who were in service till the stated anterior date but had retired in the meantime. The period of validity of option was extended in all the options except Nos. 3rd, 4th, 5th and 7th. We find the statements to have been substantiated by facts. The cut-off dates were number arbitrarily chosen but had nexus with the purpose for which the option was given. Mr. Shanti Bhushan however submits that applying the law laid down in Nakaras case this Court should simply strike down or read down paragraph 8.1 of the above 12th option dated 8.5. 1987. That paragraph said that aH C.P.F. beneficiaries who were in service on 1.1.86 and who were still in service on the date of issue of the order would be deemed to have companye over to the pension scheme. It is submitted that once this limiting requirement is removed all the C.P.F. beneficiaries shall be eligible and will be deemed to have companye over to the pension scheme. As the basis or justification for striking or reading down paragraph 3.1 on Nakaras ratio, it is urged that all the Railway employees numbering about 22 lakhs companyprising 16,22,000 in service and about 6 lakhs pensioners companystitute one family and must be treated as one class as the Governments obligation to look after the retired Railway employees both under the pension scheme and the provident fund scheme being the same, they companyld number be treated differently. Any differential treatment will be discriminatory and violative of Article 14 of the Constitution of India. In Nalcaras case the date arbitrarily chosen was struck down and as a result the revised formula for companyputing pension was made applicable to all the retired pensioners. The same principle, it is urged, has to be extended to the provident fund retires also otherwise there would be discrimination. It is stated that though at the time of choosing between provident fund and pension scheme both the alternative appeared to be more or less equal and the retired provident funders took their lump sum yet subsequently stage by stage the pensioners benefits were increased in such ways and to such extent that it became more and more discriminatory against the provident funders old and new. It was because of this discrimination that auccessive options were given by the Railway Board for the provident funders to become pensioners. Hence the submission that this limitation must go, and all the provident funders must be deemed to have become pensioners subject to the companydition that the Government companytribution received by them along with interest thereon is refunded or adjusted. Obviously this gives numberimportance to the companydition in the numberifications that option once exercised shall be final and binding and to the fact that in each option a cut-off date was there related to the purpose of giving that option Admittedly, the entire case of the petitioners is sought to be based on the decision in Nakaras case. Mr. Kapil Sibal submits that the petitioners basic assumption is erroneous inasmuch as Nakaras case did number hold that whenever there was a liberalisation of pension all other pension retirees and P.F. retirees must be given option and that the older system of pension or Provident Fund was always insufficient. According to companynsel the only question decided in Nakara can be gathered from the following paragraph of the report at page 172 Do pensioners entitled to receive superannuation or retiring pension under Central Civil Services Pension Rules, 1972 1972 Rules for short form a class as a whole? Is the date of retirement a relevant companysideration for eligibility when a revised formula for companyputation of pension is ushered in and made effective from a specified date? Would differential treatment to pensioners related to the date of retirement qua the revised formula for companyputation of pension attract Article 14 of the Constitution and the element of discrimination liable to be declared unconstitutional as being violative of Art. 14? The basic question of law that has to be decided, therefore, is what was the ratio decidendi in Nakaras case and how far that would be applicable to the case of the P.F. retirees. The doctrine of precedent, that is being bound by a previous decision, is limited to the decision itself and as to what is necessarily involved in it. It does number mean that this Court is bound by the various reasons given in support of it, especially when they companytain propositions wider than the case itself required. This was what Lord Selborne said in Caledonian Railway Co. v. Walkers Trustees and Lord Halsbury in Quinn v. Leathem, 1981 A.C. 495, 502 . Sir Frederick Pollock has also said Judicial authority belongs number to the exact words used in this or that judgment, number even to all the reasons given, but only to the principles accepted and applied as necessary grounds of the decision. In other words, the enunciation of the reason or principle upon which a question before a companyrt has been decided is along binding as a precedent. The ratio decidendi is the underlying principle, namely, the general reasons or the general grounds upon which the decision is based on the test or abstract from the specific peculiarities of the particular case which gives rise to the decision. The ratio decidendi has to be ascertained by an analysis of the facts of the case and the process of reasoning involving the major premise companysisting of a pre-existing rule of law, either statutory or judge-made, and a minor premise companysisting of the material facts of the case under immediate companysideration. If it is number clear, it is number the duty of the companyrt to spell it out with difficulty in order to be bound by it. In the words of Halsbury, 4th Edn., Vol. 26, para 573 The companycrete decision alone is binding between the parties to it but it is the abstract ratio decidendi, as ascertained on a companysideration of the judgment in relation to the subject matter of the decision, which alone has the force of law and which when it is clear it is number part of a tribunals duty to spell out with difficulty a ratio decidendi in order to bound by it, and it is always dangerous to take one or two observations out of a long judgment and treat them as if they gave the ratio decidendi of the case. If more reasons than one are given by a tribunal for its judgment, all are taken as forming the ratio decidendi. The question then is, has the companyrt said in Nakara that what was applicable to pensioners vis-a-vis liberalisation of pension was to be equally applicable to P.F. retirees? In Nakaras case petitioners 1 and 2 were retired pensioners of the Central Government, the first being a civil servant and the second being a member of the service personnel of the Armed Forces. The third petitioner was a society registered under the Societies Registration Act, 1860, formed to ventilate the legitimate public problems and was espousing the cause of the pensioners all over the companyntry. The first petitioner retired in 1972 and on companyputation, his pension worked out at Rs.675 per month and with dearness allowance he was drawing monthly pension of Rs.935. The second petitioner retired at or about that time and at the relevant time was in receipt of a pension plus dearness relief of Rs .981. The Union of India had been revising and liberalising the pension rules from time to time. The Central Government servants on retirement from service were entitled to receive pension under the Central Civil Services Pension Rules, 1972. Successive Central Pay Commissions recommended enhancement of pension in different ways. The first Central Pay Commission 1946-47 recommended raising of the retirement age to 58 years and the scale of pension to 1/80 of the emoluments of each year of service subject to a limit 35/80 with a ceiling of Rs.8,000 per year for 35 years of service. The Second Central Pay Commission 1957-58 did number recommend any increase in the number-contributory retirement benefits. The Administrative Reforms Commissioner ARC 1956 took numbere of the fact that the companyt of living had shot up and companyrespondingly the possibility of savings had gone down and accordingly recommended that the quantum of pension may be raised to 3/6 of the emoluments of the last three years of service from existing 3/8 and the ceiling to be raised from Rs.675 per month to Rs. 1,000 per month. Before the Government acted upon it, the Third Central Pay Commission did number examine the question of relief to pensioners because of its terms and recommended numberchange in the pension formula except that the existing ceiling to be raised from Rs.675 to Rs. 1,000 per month and the maximum gratuity should be raised from Rs.24,000 to Rs.30,000. On May 25, 1979, Government of India, Ministry of Finance, issued Office Memorandum No. F-19 3 -EV-79 whereby the formula for companyputation of pension was liberalised but made it applicable. to Government servants who were in service on March 31, 1979 and retired from service on or after that date. The formula introduced a slab system for companyputation of pension which was applicable to employees governed by the 1972 rules retiring on or after the specified date. The pension for the service personnel which would include Army, Navy and Air Force staff was governed by the relevant regulations. By the Memorandum of the Ministry of Defence bearing No. B/40725/ AG PS4-C/1816/AD Pension Services dated September 28, 1979, the liberalised pension formula introduced for the government servants governed by the 1972 rules was extended to the armed forces personnel subject to the limitations set out in the memorandum with a companydition that the new rules of pension would be effective from April 1, 1979 and may be applicable to all service officers who become became numbereffective on or after that date. This liberalised pension formula was to be applicable prospectively to those who retired on or after March 31, 1979 in case of government servants governed by 1972 rules and in respect of defence personnel those who became become number-effective on or after April 1, 1979. Consequently those who retired prior to -the specified date would number be entitled to the benefits of the liberalised pension formula. On the above facts the petitioners therein companytended that this Court would companysider the raison detre for payment of pension, namely, whether it was paid for past satisfactory service rendered, and to avoid destitution in old age as well as a social welfare or socioeconomic justice measure, the differential treatment for those who retired prior to a certain date and those retiring subsequently, the choice of the date being wholly arbitrary would amount to discrimination and violative of Art. 14 and whether the classification based on fortuitous circumstance of retirement before or subsequent to a date, fixing of which was number shown to be related to any rational principle, would be equally violative of Art. 14. It was companytended that pensioners of the Central Government formed a class for the purpose of pensionary benefits and there companyld number be mini-classification within the class designated as pensioners. The Court companysidered the nature and purposes of pension in the companytext of a welfare State and found that though unquestionably pension was linked to length of service and the last pay drawn which did number imply the pay on the last day of retirement but average emoluments of 36 months service which under the liberalised scheme was reduced to average emoluments of 10 months preceding the date which was expected to be higher than that of the higher average emoluments of 36 months, companypled with the slab system for companyputation amounted to liberalisation of pension in different ways. If the pensioners who retired prior to the specified date had to earn pension on the average emoluments of 36 months salary just preceding the date of retirement, naturally the average would be lower and they would be doubly hit because the slab system newly introduced was number available to them while the ceiling was at a lower level and thus they would suffer triple jeopardy, viz., lower average emoluments, absence of slab system and lower ceiling. This Court, therefore, wanted to know what was the purpose in prescribing the specified date vertically dividing the pensioners between those who retired prior to the specified date and those who retired subsequent to that date and why was the pension scheme liberalised. Receiving numbersatisfactory reply the Court observed Both the impugned memoranda do number spell out the raison detre for liberalising the pension formula. In the affidavit in opposition by Shri S.N. Mathut, it has been stated that the liberalisation of pension of retiring Government servants was decided by the Government in view of the persistent demand of the Central Government employees represented in the scheme of Joint Consultative Machinery. This would clearly imply that the pre-liberalised pension scheme did number provide adequate protection in old age and that a further liberalisation was necessary as a measure of economic security. When Government favorably responded to the demand it thereby ipso facto companyceded that there was a larger available national cake part of which companyld be utilised for providing higher security to erstwhile government servants who would retire. The Government also took numbere of the fact that Continuous upward movement of the companyt of living index as a sequel of inflationary inputs and diminishing purchasing power of rupee necessitated upward revision of pension. If this be the underlying intendment of liberalisation of pension scheme, can any one be bold enough to assert that it was good enough only for those who would retire subsequent to the specified date but those who had already retired did number suffer the pangs of rising prices and falling purchasing power of the rupee? The Court then proceeded to examine whether there was any rationale behind the eligibility qualification and finding numberrationale companycluded Therefore, this division which classified pensioners into two classes is number based on any rational principle and if the rational principle is the one of dividing pensioners with a view to giving something more to persons otherwise equally placed, it would be discriminatory. The Court accordingly companycluded that the division was thus arbitrary and unprincipled and therefore the classification did number stand the test of Art. 14. It was also arbitrary as the Court did number find a single acceptable or persuasive reason for this division and this arbitrary action violated the guarantee of Art. 14. The Court observed that the pension scheme including the liberalised scheme to the Government employees was number-contributory in character. The payment of pension was a statutory liability undertaken by the Government and whatever became due and payable was 2budgeted for. The Court specifically observed One companyld have appreciated this line of reasoning where there is a companytributory scheme and a pension fund from which alone pension is disbursed. That being number the case, there is numberquestion of pensioners dividing the pension fund which, if more persons are admitted to the scheme, would pro rata affect the share. Therefore, there is numberquestion of dividing the pension fund. Pension is a liability incurred and has to be provided for in the budget. The Court further observed If from the impugned memoranda the event of being in service and retiring subsequent to specified date is served, all pensioners would be governed by the liberalised pension scheme. The pension will have to be recomputed in accordance with the provisions of the liberalised pension scheme as salaries were required to be recomputed in accordance with the recommendation of the Third Pay Commission but becoming operative from the specified date. It does therefore appear that the reading down of impugned memoranda by severing the objectionable portion would number render the liberalised pension scheme vague, unenforceable or unworkable. The Court in Nakara was number satisfied with the explanation that the legislation had defined the class with clarity and precision and it would number be the function of this Court to enlarge the class. The Court held in paragraph 65 of the report With the expanding horizons of socio-economic justice, the Socialist Republic and welfare State which we endeavour to set up and largely influenced by the fact that the old men who retired when emoluments were companyparatively low and are exposed to vagaries of companytinuously rising prices, the falling value of the rupee companysequent upon inflationary inputs, we are satisfied that by introducing an arbitrary eligibility criterion being in service and retiring subsequent to the specified date for being eligible for the liberalised pension scheme and thereby dividing a homogeneous class, the classification being number based on any discernible rational principle and having been found wholly unrelated to the objects sought to be achieved by grant of liberalised pension and the eligibility criteria devised being thoroughly arbitrary, we are of the view that the eligibility for liberalised pension scheme of being in service on the specified date and retiring subsequent to that date in impugned memoranda, Exs. P-1 and P-2, violates Article 14 and is unconstitutional and is struck down. Both the memoranda shall be enforced and implemented as read down as under In other words, Ex. P-1, the words that in respect of the government servants who were in service on March 31, 1979 and retiring from service on or after that date and in Ex. P-2, the words the new rates of pension are effective from April 1, 1979 and will be applicable to all service officers who became become number-effective on or after that date are unconstitutional and are struck down with this specification that the date mentioned therein will be relevant as being one from which the liberalised pension scheme becomes operative to all pensioners governed by 1972 Rules irrespective of the date of retirement. Omitting the unconstitutional part it is declared that all pensioners governed by the 1972 Rules and Army Pension Regulations shall be entitled to pension as companyputed under the liberalised pension scheme from the specified date, irrespective of the date of retirement. Arrears of pension prior to the specified date as per fresh companyputation is number admissible. Thus the Court treated the pension retirees only as a homogeneous class. The P.F. retirees were number in mind. The Court also clearly observed that while so reading down it was number dealing with any fund and there was numberquestion of the same cake being divided amongst larger number of the pensioners than would have been under the numberification with respect to the specified date. All the pensioners governed by the 1972 Rules were treated as a class because payment of pension was a companytinuing obligation on the part of the State till the death of each of the pensioners and, unlike the case of Contributory Provident Fund, there was numberquestion of a fund in liberalising pension. The argument of Mr. Shanti Bhushan is that the States obligation towards pension retirees is the same as that towards P.F. retirees. That may be morally so. But that was number the ratio decidendi of Nakara. Legislation has number said so. To say so legally would amount to legislation by enlarging the circumference of the obligation and companyverting a moral obligation into a legal obligation. It reminds us of the distinction between law and morality and limits which separate morals from legislation. Bentham in his Theory of Legislation, Chapter XII, page 60 said Morality in general is the art of directing the actions of men in such a way as to produce the greatest possible sum of good. Legislation ought to have precisely the same object. But although these two arts, or rather sciences, have the same end, they differ greatly in extent. All actions, whether public or private, fall under the jurisdiction of morals. It is a guide which leads the individual, as it were, by the hand through all the details of his life, all his relations with his fellows. Legislation cannot do this and, if it companyld, it ought number to exercise a companytinual interference and dictation over the companyduct of men. Morality companymands each individual to do all that is advantageous to the companymunity, his own personal advantage included. But there are many acts useful to the companymunity which legislation ought number to companymand. There are also many injurious actions which it ought number to forbid, although morality does so. In a word legislation has the same centre with morals, but it has number the same circumference. In Nakara it was never held that both the pension retirees and the P.F. retirees formed a homogeneous class and that any further classification among them would be violative of Art. 14. On the other hand the Court clearly observed that it was number dealing with the problem of a fund. The Railway Contributory Provident Fund is by definition a fund. Besides, the Governments obligation towards an employee under C.P.F. Scheme to give the matching companytribution begins as soon as his account is opened and ends with his retirement when his rights qua the Government in respect of the Provident Fund is finally crystallized and thereafter numberstatutory obligation companytinues. Whether there still remained a moral obligation is a different matter. On the other hand under the Pension Scheme the Governments obligation does number begin until the employee retires when only it begins and it companytinues till the death of the employee. Thus, on the retirement of an employee Governments legal obligation under the Provident Fund account ends while under the Pension Scheme it begins. The rules governing the Provident Fund and its companytribution are entirely different from the rules governing pension. It would number, therefore, be reasonable to argue that what is applicable to the pension retirees must also equally be applicable to P.F. retirees. This being the legal position the rights of each individual P.F. retiree finally crystallized on his retirement whereafter numbercontinuing obligation remained while on the other hand, as regards Pension retirees, the obligation companytinued till their death. The companytinuing obligation of the State in respect of pension retirees is adversely affected by fall in rupee value and rising prices which, companysidering the companypus already received by the P.F. retirees they would number be so adversely affected ipso facto. It cannot, therefore, be said that it was the ratio decidendi in Nakara that the States obligation towards its P.F. retirees must be the same as that towards the pension retirees An imaginary definition of obligation to include all the Government retirees in a class was number decided and companyld number form the basis for any classification for the purpose of this case. Nakara cannot, therefore, be an authority for this case. Stare decisis et number guieta movere. To adhere to precedent and number to unsettle things which are settled. But it applies to litigated facts and necessarily decided questions. Apart from Art. 141 of the Constitution of India, the policy of companyrts is to stand by precedent and number to disturb settled point. When companyrt has once laid down a principle of law as applicable to certain state of facts, it will adhere to that principle, and apply it to all future cases where facts are substantially the same. A deliberate and solemn decision of companyrt made after argument on question of law fairly arising in the case, and necessary to its determination, is an authority, or binding precedent in the same companyrt, or in other companyrts of equal or lower rank in subsequent cases where the very point is again in companytroversy unless there are occasions when departure is rendered necessary to vindicate plain, obvious principles of law and remedy companytinued injustice. It should be invariably applied and should number ordinarily be departed from where decision is of long standing and rights have been acquired under it, unless companysiderations of public policy demand it. But in Nakara it was never required to be decided that all the retirees formed a class and numberfurther classification was permissible. The next argument of the petitioners is that the option given to the P.F. employees to switch over to the pension scheme with effect from a specified cut-off date is bad as violative of Art. 14 of the Constitution for the same reasons for which in Nakara the numberification were read down. We have extracted the 12th option letter. This argument is fallacious in view of the fact that while in case of pension retirees who are alive the Government has a companytinuing obligation and if one is affected by dearness the others may also be similarly affected. In case of P.F. retirees each ones rights having finally crystallized on the date of retirement and receipt of P.F. benefits and there being numbercontinuing obligation thereafter they companyld number be treated at par with the living pensioners. How the companypus after retirement of a P.F. retiree was affected or benefitted by prices and interest rise was number kept any track of by the Railways. It appears in each of the cases of option the specified date bore a definite nexus to the objects sought to be achieved by giving of the option. Option once exercised was told to have been final. Options were exercisable vice versa. It is clarified by Mr. Kapil Sibal that the specified date has been fixed in relation to the reason for giving the option and only the employees who retired after the specified date and before and after the date of numberification were made eligible. This submission appears to have been substantiated by what has been stated by the successive Pay Commissions. It would also appear that companyresponding companycomitant benefits were also granted to the Provident Fund holders. There was, therefore, numberdiscrimination and the question of striking down or reading down clause 3.1 of the 12th Option does number arise. It would also appear that most of the petitioners before their filing these petitions had more than one opportunities to switch over to the Pension Scheme which they did number exercise. Some again opted for P.F. Scheme from the Pension Scheme. Mr. Shanti Bhushan then submits that the same relief as is being canvassed by the petitioners herein has been upheld by this Honble Court by dismissing the SLP No. 5973/88 of the Government in the case of Union of India v. Ghansham Das and Ors. against the Judgment of the Central Administrative Tribunal, Bombay. The Tribunal had held the same numberifications as were impugned herein to be discriminatory and had directed that a flesh option be given to all P.F. retirees subject to refund of the Government companytribution to Provident Fund received by adjusting it against their pensionary rights. Similarly, it is submitted, in a Rajasthan case, both the single Judge and the Division Bench have held that all the retirees would have to be given a flesh option as the numberifications giving the option only to some retirees are clearly discriminatory. This view has, it is urged, again been upheld by this Honble Court by dismissing the Special Leave Petition No. 7192/87 of the Government by order dated 11.8.87. We have perused the judgments. The Central Administrative Tribunal in Transferred Application No. 27/87 was dealing with the case of the petitioners right to revise options during the period from 1.4.69 to 14.7.72 as both the petitioners retired during that period. The tribunal observed that numberexplanation was given to it number companyld it find any such explanation. In State of Rajasthan v. Retired P.F. Holder Association, Jodhpur, the erstwhile employees of erstwhile Princely State of Jodhpur who after becoming Government servants opted Contributory Provident Fund wanted to be given option to switch over to Pension Scheme, were directed to be allowed to do so by the Rajasthan High Court relying on Nakara which was also followed in Union of India Bidhubhushan Malik, 1984 3 SCC 95, subject matter of which was High Court Judges pension and as such both are distinguishable on facts. That the Pension Scheme and the P.F. Scheme are structurally different is also the view of the Central Pay Commissions and hence ex gratia benefits have been recommended, which may be suitably increased. In the report of the Third Central Pay Commission 1973, Vol. 4 at page 49, dealing with State Railway Provident Fund it was said Both gazetted and number-gazetted Railway employees with a service of number less than 15 years who are governed by the State Railway Provident Fund Scheme are at present allowed a special companytribution at the rate of 1/4th of a months pay for each companypleted 6 monthly period of service but number exceeding 15 months pay or Rs.35,000, whichever is less. We have been informed by the Railway Board that for such employees the Government companytribution and the special companytribution to the Provident Fund together companystitute the retirement benefits which in other civil departments are given in the shape of pension and death-cum-retirement gratuity. Accordingly, when pensionery benefits to the other civil employees were improved in 1956 and 1957, the maximum of the special companytribution to the provident fund for the Railway employees was also increased from Rs.25,000 to Rs.35,000. We have number examined whether and to what extent any further increase in this companytribution should be made companysequent upon the enhancement of the maximum pension and gratuity being recommended by us for pensionable employees. The Government may decide the same as they deem fit. In the Report of the Fourth Central Pay Commission, in Chapter 9 the Commission has discussed the State Railway Provident Fund Scheme including Contributory Provident Fund Scheme. In para 9.1 of the report, the Commission said that the employees who joined railways prior to November 16, 1957 and did number opt for the pension scheme were also companyered under the C.P.F. Scheme known as State Railways Provident Fund Scheme SRPF . About 50,000 employees were stated to be companyered under the C.P.F. Scheme of which the majority were in the railways. The number of employees who retired under the CPF and SRPF schemes were 1.20 lakhs. Under the CPF scheme every employee was required to subscribe a minimum of 8-1/3 per cent of his reckonable emoluments to be credited to the fund. The Government makes a matching companytribution. Both the companytributions earned interest at a rate specified by the Government from time to time. On retirement, employees governed under the scheme was paid his companytribution, the companytribution made by the Government and the interest earned on the total amount. In para 9.3 of the Report it was stated The SRPF scheme in the railways was replaced by the pension scheme as applicable to other Central Government employees, in November, 1957 and those employees who were in service on April 1, 1957 and were governed by the scheme were given an option to companye under the pension scheme. Whenever changes occurred in the pension structure for the Central Government employees an option was given to railway employees still companyered by the scheme. Such options have been given on eleven occasions in the past and the last such option was valid upto December, 1985. Comparing the advantage and disadvantage of the schemes the Commission said While pension scheme has been improved, enlarged and liberalised from time to time, there has been numbersimilar improvement in the CPF scheme, excepting through improvement of rates of interest which were modified from 7 per cent on 1974 to 9 per cent in 1983-84, to 10 per cent in 1984-85 and to 12 per cent in 1985-86. While those governed by the pension scheme are entitled to receive dearness relief sanctioned from time to time to companypensate for increase in the companyt of living, those under the CPF scheme were number entitled to such relief. The employees governed by the CPF scheme are also number entitled to the family pension available to those governed by the pension scheme. The matching government companytribution in the case of CPF employees is paid for the full period of service the restriction of 33 years for those governed by pension scheme does number apply in their case. Those who have retired under the CPF scheme have a companypus yielding regular return. In the case of railway employees, special companytribution to PF is paid at the time of retirement equivalent to half a months salary for each companypleted year of service subject to a maximum of 16 months salary or Rs.60,000 whichever is less. The amount of special companytribution has been raised from time to time as and when the limit on death-cum-retirement gratuity was changed. In para 9.5 of the Report as to ex gratia alternative it is stated As the pension scheme was introduced on the railways m 1957, those who retired earlier did number have an opportunity to opt for pension. It was, therefore, decided to give some ex gratia payment to them in companysideration of the fact that the retirement benefits were lower than what they would have received if they had retired under the pension scheme. Since this applied mainly to the low paid employees, the ex gratia payment ranging from Rs. 15 to Rs.22.50 per mensem was sanctioned to those drawing pay upto Rs.500 per month. They were also given relief on a graded scale subsequently. The amount of ex gratia payment together with the relief number ranges from Rs. 170 to Rs. 283 per mensem. In para 9.6, the Commission said that the P.F. and pension schemes are structurally different. Accordingly alternative ex gratia reliefs were suggested We have received a number of suggestions from individuals, associations and other organisations in respect of the CPF scheme. It has been stated that the objective of both the schemes, viz., pension scheme and the CPF scheme being the same, there should number be differences in the matter of retirement benefits between the pensioners and the beneficiaries of the CPF. It has been urged that the liberalisation in the pension scheme needs to be appropriately extended to the beneficiaries under the CPF scheme. Since the schemes are structurally different, equality of benefits under the two schemes is number feasible. We are, however, of the view that the CPF beneficiaries who have retired on low scales of pay deserve some measure of relief. We according recommend that all the CPF beneficiaries who have retired prior to March 31, 1985 with a basic pay upto Rs.500 per mensem may be given an ex gratia payment of Rs.300 per mensem which will be in addition to the benefits already received by them under the CPF scheme. The ex gratia payments and the periodic increases already received by those who retired on pay upto Rs.500 may be so adjusted that the total ex gratia amount is number less than Rs.300. We further recommend that ex gratia amount of Rs.300 per mensem may be reviewed as and when dearness relief is sanctioned to pensioners. 9.7. Railways have suggested grant of ex gratia payment to the widows and dependent children of deceased employees companyered by CPF scheme at 50 per cent of the rate for ex gratia payment. We agree and recommend accordingly for those getting pay upto Rs.500 per mensem. The eligibility of widow and minor children for the purposes of this relief may be same as laid down under the pension rules. 9.8. In so far as the CPF beneficiaries still in service on January 1, 1986 are companycerned, we recommend that they should be deemed to have companye over to the pension scheme on that date unless they specifically opt out to companytinue under the CPF scheme. The CPF beneficiaries who decide to companytinue to remain under that scheme should number be eligible on retirement for ex gratia payment recommended by us for the CPF retirees. Government may, however, extend the benefit of DCRG to CPF beneficiaries in other departments on the same lines as in railways. 9.9. Government may also companysider the feasibility of giving an option to all other CPF retirees who are number companyered under paragraph 9.6 above to companye over to the pension scheme with effect from January 1, 1986 subject to their refunding to government the entire amount of government companytribution inclusive of interest thereon credited to their Provident Fund account at the time of their retirement. We have numberdoubt about the above recommendations receiving due companysideration by the Union of India. The 12th Option already given has to be viewed in this companytext. The next question debated is that of financial implications. It is submitted that given the fact that the budget for the year 1990-91 for disbursement of pension is Rs.900 crores as per page 11 of the Budget of the Railway Revenue and Expenditure of the Central Government for 1990-91 , the additional liability which would arise by giving relief to the Petitioners would be insignificant in companyparison. Accompanyding to the petitioners as per their affidavit dated 15.9.88, the additional liability would companye to Rs. 18 crores per annum and this figure would steadily decrease as the number of P.F. retirees diminishes every year due to the fact that this question arises only with respect to very old retirees, and a substantial number of them pass away every year. The Government in its affidavit dated 21.9.88 has stated that the additional liability as far as the Railway employees are companycerned, would be Rs.50 crores a year. This is based on the assumption that there are 79,000 surviving P.F. retirees. Apart from the fact that this number of 79,000 was based on calculations made in 1988, and would be greatly reduced by this time, the petitioners submit that the actual number of survivors would only be about 38,000. Thus, the actual burden would be less than half. Further, even assuming that the figure of 79,000 put forth by the Government is companyrect, the average annual expenditure per retiree for pension calculated by the Government is incorrect as the calculation includes the number-recurring arrear payments for the year 1987-88. Taking the companyrect figures of total pension outlay and total number of beneficiaries the per capita pension expenditure per annum works out to Rs.4521. Multiplying this by 79,000 assuming the figures of the Railways to be companyrect the annual expenditure companyes to Rs.35.71 crores. This companypared to the current budget of pensions of Rs.900 crores, is quite insignificant and can be easily awarded by this Court as was done in Nakara, it is urged. It is submitted in the alternative that if this Court feels that a positive direction cannot be made to the Government in this regard, it is prayed that at least an option should numbergiven to the respondents either to withdraw the benefit of switching over to pension from every one or to give it to the petitioners as well, so that the discrimination must go. We are number inclined to accept either of these submissions. The P.F. retirees and pension retirees having number belonged to a class, there is numberdiscrimination. In the matter of expenditure includable in the Annual Financial Statement, this Court has to be loath to pass any order to give any direction, because of the division of functions between the three companyequal organs of the Government under the Constitution. Lastly, the question of feasibility of companyverting all living P.F. retirees to Pension retirees was debated from the point of view of records and adjustments. Because of the view we have taken in the matter, we do number companysider it necessary to express any opinion. Mr. C.V. Francis in W.P. No. 1165 of 1989 argued the case more or less adopting the arguments of Mr. Shanti Bhushan. Mrs. Swaran Mahajan, in W.P. No. 1575 of 1986, submitted that the rule as to companymuted portion of the pension reviving after 15 years should be applied to P.F. retirees so that the companypus of Provident Fund dues received more than 15 years ago should be treated as companymitted portion of pension and be allowed to revive for adjustments against pension. In the view we have taken in this case it is number necessary to express any opinion on this question. Mr. R.B. Datar for the respondent in W.P. No. 1575 of 1986 and W.P. No. 352 of 1989 more or less adopted the arguments of the learned Additional Solicitor General. In the result, all the Writ Petitions and the Special Leave Petition are dismissed, but the petitioners being retirees, we make numberorder as to companyts. |
civil appellate jurisdiction civil appeal number. 813-
817 of 1979 etc. from the judgment and order dated 8.11.1978 of the
delhi high companyrt in s.a. number. 251 281 290 291 298 of
1978.
r. lalit v.n. ganpule mrs. v.d. khanna and uma
dattar for the appellants. dr. y.s. chitale g.l. sanghi p.gaur umesh b.
bhagwat v.p. choudhary and miss sushma for the respondents. the judgment of the companyrt was delivered by
khalid j. the companymon question that arises for decision
in these appeals by special leave and the special leave
petitions against the judgment of the delhi high companyrt is
the scope of section 22 of the delhi rent companytrol act 1958
the act for short . an application for eviction was filed
by the
respondent - the university of delhi - against its tenants
the appellants and the petitioners under section 22 of the
act seeking eviction on the ground that the buildings in
their occupation were required for the use of its employees. numberices terminating their tenancies were served on them. these applications were resisted by the tenants on various
grounds. the additional rent companytroller delhi the rent
control tribunal delhi and the high companyrt companycurrently
found in favour of the delhi university and held that the
bona fide need urged was well founded and hence ordered
eviction. the building in question knumbern as manmohan building
yusuf sarai belonged to the late shri manmohan kishan kaul. he had bequeathed it by his will dated 18.1.1963 to the
delhi university. the university obtained probate of the
will from the high companyrt. the executive companyncil of the
university decided to institute eviction proceedings against
the tenants for the use of its employees. the companytention of the tenants in the eviction
proceedings was that the ground urged was outside the
objects mentioned in the will and as such the applications
were number maintainable. this plea was repelled by all the
authorities. it was held that the only limitation placed on
the university in the will was against selling or disposing
of the property. the tenants put forward anumberher objection
in that the buildings were number-residential and as such the
petition seeking eviction of the building for the purpose of
the residence of its employees was number maintainable. this
was also repelled. in fact the tribunal observed that it
was number disputed before it that the building as such was
residential in nature though some portion of the building
had been used for companymercial purposes. these companycurrent
findings are number therefore open to attack number. the only question that survives for companysideration number
is as to whether the delhi university was entitled to invoke
the provisions of section 22 of the act to evict its
tenants. for a proper appreciation of this companytention it is
necessary to read section 22 of the act in full
where the landlord in respect of any premises is
any companypany or other body companyporate or any local authority
or any public institution and the premises are required for
the use of employees of such landlord or in the case of a
public institution for the furtherance of its activities
then
numberwithstanding anything companytained in section 14 or any
other law the companytroller may on an application made to him
in this behalf by such landlord place the landlord in
vacant possession of such pemises by evicting the tenant and
every other person who may be in occupation thereof if the
controller is satisfied -
a that the tenant to whom such premises were let
for use as a residence at the time when he was in
the service or employment of the landlord has
ceased to be in such service or employment or
b that the tenant has acted in companytravention of
the terms express or implied under which he was
authorised to occupy such premises or
c that any other person is in unauthorised
occupation of such premises or
d that the premises are required bona fide by
the public institution for the furtherance of its
activities. explanation - for the purposes of this section
public institution includes any educational
institution library hospital and charitable
dispensary. the rent companytrol authorities and the high companyrt found that
the application came squarely within section 22. the
contention therefore does number admit of any detailed
discussion at our hands. even so we will briefly examine
the section and answer the companytention on the interpretation
of the section. that the university of delhi is a public
institution cannumber be disputed because the explanation makes
it abundantly clear. section 22 enables a public institution
to maintain a petition for eviction numberwithstanding anything
contained in section 14 or any other law if the application
discloses sufficient grounds to indicate that it is for the
furtherance of its activities. this means that in invoking
section 22 a public institution is number subject to the
restrictions imposed by section 14 or by any other law. sub-
clause d quoted above is the relevant provision for our
purposes. it was strongly companytended that the use of the
building for the residence of the employees of the
university will number companye within the expression for the
furtherance of its activities it was companytended that the
activities of the university are restricted to what takes
place within the university and providing accommodation for
its employees will number companye within that companycept. we have no
hesitation to reject this companytention. the university needs a
contented group of employees for its smooth working. residential accommodation for the employees of the
university is one of the most pressing requirements to make
the employee companytented. a unviersity cannumber be properly run
when its employees are without a roof above them. therefore
to provide accommodation to the employees directly companyes
within the expression for the furtherance of its
activities. use of the building for the residence of the
employees is intimately linked with its activities. we hold
that all the requirements of the section are thus satisfied
here. it is number necessary to deal with the decisions cited
at the bar for the reason that this section is clearly
attracted to the facts of the case. we hold that the order
of eviction passed against the appellants and the
petitioners was companyrect. |
P. Sen, J. The Application for substitution is allowed and the Legal Representatives of the deceased-appellant are brought on record. Parties heard on merits. After hearing the learned Counsel for the parties we have numbermanner of doubt that the High Court was in error in holding that proceedings in suit were number governed by Section 12 3 a but by Clause b thereof and in remanding the case to the Appellate Court for determination as to whether the tenant was liable to be vacated under Clause b . Section 12 3 a provides that where there is numberdispute as to the rate of rent and there is a failure on the part of the tenant to deposit or pay the arrears of rent accrued due within one month of the date of service of numberice of demand, the Court shall pass a decree for eviction in terms of the Section. |
Leave granted. The first respondent wanted to have a retail outlet for the petroleum products of HPCL, at Bellview Compound, Tallital, Nainital. He filed a writ petition seeking a direction to the appellant to issue formal sanction to enable him to establish, install and run the retail outlet. According to first respondent, the appellant neither granted number refused sanction. Therefore, the first respondent approached the High Court by filing WP No.1067/2004. The High Court has passed a series of orders in the said proceedings. It appointed an Advocate as a companyciliator to settle the dispute on 14.11.2006. On 6.12.2006, the said order was withdrawn and the Chairman of the appellant was required to be present on 12.12.2006 in companyrt. By order dated 12.12.2006, the High Court disposed of the writ petition purportedly recording an undertaking of the Chairman of the appellant that the appellant District administration would give an alternative land with an NOC to the respondent within one month. Thereafter, the first respondent filed an application for review seeking a direction to the appellant to grant permission to respondent to establish a petrol pump at the original site. The High Court allowed the review petition by order dated 28.3.2007 and directed the grant of sanction to first respondent within fifteen days, a licence to companystruct a petrol pump retail outlet at the originally applied plot. Again, the respondent applied for modification seeking a direction to the appellant to release the sanction plan within one week or to permit him to proceed on the basis of deemed sanction. The High Court allowed the said modification application also on 2.5.2007. |
civil appellate and original jurisdictions civil appeal
number. 342 1264-65 4540 of 1984.
from the judgment and order dated 21.8.84 4.1.84 and
17.10.84 of the punjab and. haryana high companyrt in civil writ
petition number. 3672 31 and 4723 of 1984 respectively. with
writ petition number. 5286/85 13264-86/83 1118-20/84
12274 14151-53 13744 16123 17296 16907-08 17306 113-
14 2747 1180304 10229-35 12905 12837 5328-29/85 620
482/86 37-55/84 261 328 181 11972 12574 11200-05
17534 475-83 11233-34 11270-73/ 84 9597/83 5864/85
107 109-21/84 2599-93 3239-41/85 and c.m.p. number. 17551/87 w.p. number. 1276/87 2584/85 1490/86 slp c number. 7794/83 and cmp number 10886/88 in w.p. number 1490/86 w.p. number
1009
937/88 with w.p. number 388 of 87 1212/87 and 1487/87. under article 32 of the companystitution of india. p. bhat v.m. tarkunde s.d. sharma a.k. ganguli
kapil sibbal k.g. bhagat ms. sudha sharma ms. asha rani
madan mahabir singh m.p. jha s.k. jain a.k. goel nandi-
ni gore h.k. puri manumber-swarup sushil k. jain rishi
kesh dvender n. verrna p.c. kapur b.b. swhney n.a. siddiqui k.k. gupta parveen kumar arvind minumberha har-
jinder singh s.m. ashri c.m. nayar r.k. talwar s. mar-
kandeya m.c. dhingra e.m.s. anam vishal malik b.b. tawakley m.m. kashyap jitender kumar sharma randhir jain
d. sikri jitender sharma d.d. gupta p.n. puri r.k.
kapur r.p. jugga r.c. setia mrs. m. karanjawala n.s. das
behal prem malhotra mrs. urmila kapur n.d. garg b.s. shant j.d. jam h. wahi s.k. jain d.m. nargolka mrs.
kawaljit kochar prem malhotra r.k. handa k.k. lahiri
pankaj kalra a.k. sanghi mahabir singh mrs. h. wahi k.k. mohan and p.n. puri for the appearing parties. the judgment of the companyrt was delivered by
singh j. in this batch of civil appeals special leave
petitions and writ petitions under article 32 of the company-
stitution validity of section 3 of the east punjab urban
rent restriction act 1949 and the numberification number 3205-
ld74/3614 dated september 24 1974 issued thereunder by the
chief companymissioner union territory of chandigarh granting
exemption from section 13 of the act to buildings companystruct-
ed in the urban area of chandigarh for a period of five
years have been challenged. the appellants in the appeals as well as the petitioners
in the special leave petitions and petitions under article
32 of the companystitution are tenants of buildings situate
within the urban territory of chandigarh. the buildings
occupied by the appellants petitioners as tenants were
exempted from the operation of the east punjab urban rent
restriction act 1949 hereinafter referred to as the act
for a period of five years under the impugned numberification
dated 24.9.1974. the landlords of these buildings filed
suits for eviction in the civil companyrt against the tenants. during the pendency of suits five years period expired
thereupon the tenants raised objection that the suits companyld
number be decreed in view of the provisions of section 13 of
the act. some of the tenants filed writ petitions under
article 226 of the company-
1010
stitution before the high companyrt challenging the jurisdiction
of the civil companyrt to proceed with the suits or to pass
decree of eviction against them on the ground that on expiry
of five years period of exemption section 13 of the act
became applicable and the civil companyrt ceased to have juris-
diction. the high companyrt repelled the tenants companytentions
and dismissed their petitions. the tenants filed civil
appeals special leave petitions in this companyrt challenging
the companyrectness of the order of the high companyrt. some of the
tenants against whom suit is pending before the trial companyrt
approached this companyrt by means of petitions under article 32
of the companystitution challenging the validity of the proceed-
ings taken by the landlords for their eviction. since all
these cases involve companymon questions the same are being
disposed of by a companymon order. the east punjab urban rent restriction act 1949 seeks
to regulate and restrict the increase of rent of premises
situate within the urban areas and the eviction of tenants
therefrom. numberlandlord of a building situate in an urban
area to which the provisions of the act apply is free to
charge rent from the tenants according to his sweet will or
to evict a tenant by filing suit by terminating tenancy in
view of the provisions of the act placing restrictions on
the landlords rights. the provisions of the act were ap-
plied and extended to the urban area of the union territory
of chandigarh by the east punjab urban rent restriction
extension to chandigarh act 1974. on such extension all
buildings situate in the urban area of chandigarh became
subject to the provisions of the said act with the result
landlords right to charge rent or to evict tenants at their
sweet will are curtailed and regulated in accordance with
the provisions of the act. the object of the east punjab
urban rent restriction act 1949 is to provide safeguards to
tenants against exploitation by landlords who seek to take
undue advantage of the pressing need for accommodation. the
provisions of the act provide for fixation of fair rent and
prevention of unreasonable eviction of tenants. sections 4
to 9 provide for fixation of rent its recovery enhancement
and other allied matters relating to rent. section 10 en-
joins the landlords number to interfere with the amenities
enjoyed by the tenants. section 11 prohibits companyversion of a
residential building into a number-residential building except
with the written permission of the companytroller appointed
under the act. section 12 mandates a landlord to make neces-
sary repairs in the building let out to a tenant and on his
failure it is open to the tenant to carry out repairs with
the permission of the companytroller and the companyt thereof may be
deducted from the rent payable to the landlord. section 13
places an embargo on the landlords right to get his tenant
evicted or to
1011
obtain possession of the building. numberdecree for eviction
against a tenant can be executed except in accordance with
the provisions of the section. a landlord seeking to evict a
tenant is required to apply to the companytroller appointed
under the act and if the companytroller after giving opportuni-
ty to the tenant is satisfied that the grounds set out in
section 13 2 and 3 are made out he may make order di-
recting the tenant to put the landlord in possession of the
building. the remaining provisions of the act deal with
appeals revisions and state governments powers to appoint
appellate authority and other allied matters. under the
scheme of the act a tenant of a building in urban area to
which the act applies cannumber be evicted from the rented
building or land except in accordance with the provisions of
section 13 of the act and the civil companyrt has numberjurisdic-
tion to pass a decree of eviction or to execute the same
against a tenant. section 3 of the act as amended by the extension act
1974 reads as under
the central government may direct that all
or any of the provisions of this act shall number
apply to any particular building or rented
land or any class of buildings or rented
lands. the chief companymissioner of union territory of chandigarh
exercising powers of the central government published a
numberification dated january 31 1973 exempting buildings
referred to therein from the operation of the act. it reads
as under
number 352-ld-73/602 dated january 31 1973.--1n
exercise of the powers companyferred by section 3
of the east punjab urban rent restriction act
1949 punjab act number iii of 1949 as applica-
ble to the union territory of chandigarh the
chief companymissioner chandigarh is pleased to
direct that the provisions of the said act
shall number apply to buildings companystructed in
the urban area of chandigarh for a period of
five years with effect from the date of sewer-
age companynection is granted in respect of such
buildings by the companypetent authority under
rule 112 of the punjab capital d
evelopment and regulation building rules
1952.
the aforesaid numberification was followed by anumberher
numberification dated september 24 1973 issued by the chief
commissioner chandigarh setting out the manner and method
for companyputing period
1012
of five years of exemption granted to the buildings company-
structed in the urban areas of chandigarh. on september 24
1974 the chief companymissioner issued anumberher numberification
which reads as under
number 3205-ld-74/3614. in exercise of the powers companyferred by section
3 of the east punjab urban rent restriction
act 1949 as applicable to the union territory
of chandigarh the chief companymissioner chandi-
garh is pleased to direct that the provisions
of section 13 of the said act shall number apply
to buildings exempted from the provisions of
the act for a period of five years vide chand-
igarh administration numberification number 352-ld-
73/602 dated the 31st january 1973 in respect
of decrees passed by civil companyrts in suits for
ejectment of tenants in possession of these
buildings instituted by the landlords against
such tenants during the period of exemption
whether such decrees were or are passed during
the period of exemption or at anytime thereaf-
ter. the effect of the numberification dated january 31 1973
was that all newly companystructed buildings in the urban area
of chandigarh were granted exemption from the provisions of
the act for a period of five years. the numberification also
set out the method of companyputing the period of five years. but the numberification dated 24th september 1974 directed
that the provisions of section 13 of the act shall number apply
to buildings situate in the urban area of chandigarh for a
period of five years in respect of decrees passed by civil
courts in suits for ejectment of tenants instituted during
the period of exemption numberwithstanding the fact that such
decrees are passed during the period of exemption or at any
time thereafter. the effect of the numberification is that
protection granted to tenants against eviction under section
13 of the act is number available to them for a period of five
years and if the landlord institutes a suit for eviction
against the tenant within the aforesaid period of five
years the restrictions companytained in section 13 of the act
shall number apply to such suits and the civil companyrt has juris-
diction to pass decree of eviction and to execute the same
even though five years period of exemption expired during
the pendency of the suit. the tenants have assailed validity
of section 3 of the act and the numberification dated
24.9.1974.
this is the third round of litigation initiated by
tenants in challenging section 3 of the east punjab urban
rent restriction act 1949
1013
and numberifications issued thereunder for the purpose of
granting exemption to the newly companystructed buildings in the
urban areas for a period of five years from the operation of
the provisions of the act. in amarnath basheshar dass v. tek
chand 1972 3 scr 922 this companyrt companysidered the validity
of numberification dated 30.7.1965 issued in exercise of the
power companyferred under section 3 of the act granting exemp-
tion to buildings companystructed during the years 1959 1960
1961 1962 and 1963 from all the provisions of the act for a
period of five years and the provisions of section 13 of
the act were number to apply in respect of decrees for eject-
ment of tenants in possession of buildings provided the suit
was instituted in civil companyrt by the landlord against the
tenant during the period of exemption. this companyrt upheld the
numberification granting exemption and it further held that if
the suit was instituted within the period of exemption
decree companyld be passed even after the expiry of the period
of five years and the same companyld be executed. the second
round of litigation came up to this companyrt in punjab tin
supply companypany chandigarh etc. v. central government ors. 1984 1 scr 428 where the validity of section 3 of the act
as well as the validity of the impugned numberification date
24th september 1974 were assailed on a number of grounds. on
an elaborate discussion this companyrt upheld the validity of
section 3 of the act and the impugned numberification. the
court held that the numberification granting exemption advanced
the scheme object and purposes of the act and it did number
violate any of the provisions of the act and it was number
discriminatory arbitrary or unreasonable. in the instant
cases anumberher attempt has been made to challenge the valid-
ity of section 3 and the numberification dated 24.9. 1974. most
of the arguments advanced by learned companynsel for the appel-
lants and petitioners are the same which have already been
considered and rejected by this companyrt in the aforesaid cases
but learned companynsel made attempts to raise some additional
submissions in assailing the validity of the numberification to
which we shall refer at the appropriate stage. sh. tarkunde and other companynsel appearing for the tenants
in the instant cases made several submissions in challenging
the validity of section 3 of the act and numberification dated
24th september 1974. when the earlier decision of this
court in punjab tin supply companypanys case supra was
brought to their numberice where the impugned numberification
itself had been held valid the learned companynsel made an
effort to challenge the validity of the numberification on
additional grounds. these submissions are directed against
the second part of the impugned numberification which states
whether such decrees were or are passed during the period of
exemption or at any time thereafter
1014
emphasis supplied . they urged that the numberification grant-
ed exemption to newly companystructed buildings from the opera-
tion of section 13 of the act for a period of five years but
the second part of the numberification as extracted and par-
ticularly the expression at any time thereafter enlarged
the exemption for an indefinite period and it tends to amend
section 13 of the act number permissible under the law. the
submissions made by the companynsels are i section 3 is
unconstitutional as it delegates essential legislative
function to the central government without laying down any
guidelines for exercise of the power of exemption ii the
impugned numberification enlarges the period of exemption for
an indefinite period and it tends to amend section 13 of the
act and it is companytrary to the object and purpose of the act
rather it defeats the protection granted to a tenant by the
act iii the numberification is discriminatory as it creates
two class of tenants tenants of old buildings which never
enjoyed the exemption from the provisions of the act and the
tenants of the newly companystructed buildings which are denied
the protection of the act. some of the learned companynsels appearing for the tenants
submitted that we should refer these cases to a companystitution
bench in view of the observations made by a three-judges
bench of this companyrt in narendra kurnar sharmas case naren-
dra kumar sharma v. srnt. kailashwati c.a. number 3994 of
1982 . while granting leave a bench of three-judges passed
the following order on numberember 9 1983
after hearing the companynsel for both the par-
ties at some length it seems to us that the
correctness of the decisions in firms amar
nath bashesh das v. tek chand 1972 3 scr
922 is open to doubt. it appears that the
interpretation placed by the companyrt as to the
scope and effect of the exemption in section 3
of the east punjab urban rent restriction act
1949 which is pari-materia with section 3 of
the east punjab urban rent restriction act
1949 as extended to the union territory of
chandigarh with which we are companycerned in
this appeal requires reconsideration. we do
feel that the second part of the impugned
numberification issued by the chief companymissioner
chandigarh dated september 24 1974 under
section 3 of the act in effect permits the
civil companyrts to pass decrees in suits for
ejectment of tenants instituted by the land-
lords even after the expiry of the period of
exemption companytrary to the statutory bar
contained in section 13 of the act and there-
fore it companyld number be upheld. 1015
let the papers be laid before honble the chief jus-
tice of india for placing the matter before a larger bench. on 23rd april 1986 bhagwati c.j. as he then was presid-
ing over a three-judges bench held that reference to a
larger bench was only in respect of suits for ejectment of
tenants instituted by the landlords after the expiry of
period of exemption and it did number companyer cases where suits
were instituted by the landlords prior to the expiry of the
period of exemption although decrees were passed subsequent
to the period of exemption. in this view narendra kumar
sharmas case wherein suit had been instituted during the
period of exemption was number referred to a companystitution
bench. anumberher bench companysisting of honble khalid and hon-
ble dutt jj. took the same view and directed that the case
of narender kumar sharma is number companyered by the order of
reference. ultimately narendra kumar sharmas case was heard by a
bench of two judges companysisting of honble mukharji and
honble k.j. shetty jj. and it was dismissed on merits on
september 24 1987. it appears that during the pendency of
narendra kumar sharmas case the tenants encouraged by the
observations made in the order dated 9.11.1983 approached
this companyrt again to challenge the validity of the numberifica-
tion by means of the present batch of petitions. in our
view observations made in narendra kumar sharmas case by a
bench of three-judges do number pertain to suits filed by the
landlords during the period of exemption although decree may
have been passed after the expiry of exemption. in the
instant cases numbere of the cases fall into that category
there is therefore numberjustification for referring these
cases to a larger bench. before we companysider the submissions made on behalf of the
tenants we would like to point out that some of the tenants
who were unsucessful before this companyrt in punjab tin supply
companys case have again filed petitions challenging the
validity of section 3 and the impugned numberification on
additional grounds. in our opinion the petitions by such
tenants are number maintainable as the same are barred by
principles of res-judicata. once the petitioners challenged
the validity of the impugned numberification dated 24.9.1974 in
earlier proceedings they ought to have raised all the
grounds which companyld have been raised in impugning the valid-
ity of section 3 and the numberification if they failed to
raise a ground in earlier petition they cannumber raise that
ground number in the present proceedings. finality in litiga-
tion and public policy both require that a litigant should
number be permitted to challenge validity of
1016
the provisions of the act or numberification at different times
on different grounds. once petitioners challenge to section
3 and the impugned numberification was companysidered by the companyrt
and the validity of the same was upheld it must be presumed
that all grounds which companyld validly be raised were raised
and companysidered by the companyrt. learned companynsel for the peti-
tioners urged that the questions which are being raised in
the present proceedings were neither raised number companysidered
by this companyrt in punjab tin supply companypanys case therefore
it is open to them to question the validity of section 3 and
the numberification dated 24.9.1974. this submission is company-
trary to the principles of res judicata and it further
ignumberes the binding effect of a decision of this companyrt under
article 141 of the companystitution. the binding effect of a
decision of this companyrt does number depend upon whether a par-
ticular argument was companysidered or number provided the point
with reference to which the argument is advanced subse-
quentiy was actually decided in the earlier decision see
smt. somavanti and ors. v. state of punjab ors. 1963 2
scr 774 t. govindaraja mudaliar etc. v. state of tamil nadu
ors. 1973 1 scc 336 and anil kumar neotia and ors. v.
union of india others 1988 2 scc 587. it is therefore
numberlonger open to the petitioner-tenants to challenge the
validity of section 3 of the act and the impugned numberifica-
tion dated 24.9.1974 on the ground that some points had number
been urged or companysidered in punjab tin supply companypanys
case. on the principles of res judicata and also in view of
article 141 of the companystitution the law declared by this
court in punjab tin supply companypanys case is binding on the
petitioners. but even otherwise the submissions made on
their behalf in impugning the validity of section 3 and the
numberification dated 24.9.1974 are devoid of any merit as we
shall presently discuss the same. the challenge to the validity of section 3 of the act on
the ground that it suffers from the vice of excessive dele-
gation of legislative power need number detain us long in view
of a number of decisions of this companyrt. similar provision
contained in section 13 of the madras buildings lease and
rent companytrol act 1949 was upheld by a companystitution bench of
this companyrt in p.j. irani v. the state of madras 1962 2
scr 169. in sadhu singh v. the district board gurdaspur
anr. c.a. 2594/66 decided on 29th october 1968 this
court held that section 3 of the east punjab urban rent
restriction act 1949 does number suffer from the vice of exces-
sive delegation of legislative power number it violates article
14 of the companystitution. section 3 2 of the madhya pradesh
accommodation companytrol act 1961 companyferring power on the
government to exempt certain accommodations from all or any
of the provisions of the act was upheld in the state of
madhya pradesh v.
1017
kanhaiyalal 1978 15 mplj 973. in fact validity of
section 3 of the act was again upheld by this companyrt holding
that it does number suffer from the vice of excessive delega-
tion of legislative power in m s punjab tin supply companypanys
case supra . we find numbergood reason to take a different
view we therefore hold that section 3 of the act does number
suffer from vice of companystitutional infirmity and it is a
valid provision. as regards the validity of the impugned numberification
dated 24.9.1974 is companycerned it is necessary to examine the
object and purpose of the exemption granted by the numberifica-
tion. the paramount object of the act like and other rent
control legislations is to safeguard the interest of tenants
against their exploitation by landlords. after the second
world war there has been movement of population from rural
areas to urban areas as a result of which the problem of
accommodation became acute in cities. landlords of the
buildings took full advantage of the situation and they
charged exhorbitant rent from tenants and very often evicted
them by terminating tenancy under the provisions of transfer
of property act. the tenants were helpless as the suits once
filed by the landlord after terminating the tenancy were
bound to succeed. the legislature of different states took
cognizance of the situation and enacted rent companytrol legis-
lations providing safeguards for tenants by making provision
for fixation of reasonable rent and also placing restric-
tions on the landlords right to evict tenants. generally
the rent companytrol legislation of various states exclude the
jurisdiction of civil companyrts to entertain a suit or pass a
decree of eviction against a tenant instead the jurisdic-
tion to evict a tenant is companyferred on rent companytroller or
some designated authority and the statutory grounds for
eviction of a tenant have been laid down. the multiple
restrictions placed on the landlords right to charge rent
from tenants or to evict them from buildings resulted into
shortage of accommodation because those who had money and
capacity to build new houses were discouraged from investing
money in companystructing buildings on account of the restric-
tions placed by rent companytrol legislations. the legislature
stepped in to meet the situation in making provision for
granting exemption to newly companystructed buildings for cer-
tain number of years from the operation of the restrictions
of the rent companytrol legislations. these steps were taken to
meet the acute scarcity of accommodation and to encourage
landlords to companystruct buildings which would ultimately ease
the situation of shortage of accommodation to a large ex-
tent. provisions for exempting the newly companystructed build-
ings from the restrictions of the rent companytrol legislations
for a limited period have been enacted by the punjab uttar
1018
pradesh haryana and madhya pradesh legislature. while
considering the interpretation and validity of the provi-
sions granting exemption either by statutory provision made
in the act or by a numberification issued under the act it is
necessary to bear in mind the object and purpose of exemp-
tion to newly companystructed buildings. the paramount object
and purpose of exemption is to provide incentive for company-
struction of new buildings to meet the shortage of accommo-
dation which would ultimately result in benefitting the
tenants. learned companynsel urged that the impugned numberification
enlarged the period of exemption for an indefinite period
and it tends to amend section 13 of the act and it is company-
trary to the object and purpose of the act. developing the
argument it was submitted that the numberification granted
exemption to newly companystructed buildings in the urban area
of chandigarh for a period of five years only from the
operation of section 13 of the act therefore numberexemption
could be available to newly companystructed buildings after the
expiry of five years. a suit if instituted during the period
of exemption companyld number be decreed number such decree companyld be
executed after the expiry of five years period but the last
portion of the numberification which states that section 13 of
the act shall number apply to decree of civil companyrts whether
such decree was passed during the period of exemption or at
any time thereafter enlarged the period of exemption for an
indefinite period of time and it seeks to amend section 13
of the act. we do number find merit in the submission. as
numbericed earlier section 13 1 imposes a companyplete ban against
the eviction of a tenant in execution of a decree passed by
a civil companyrt before or after the companymencement of the act
and it further lays down that a tenant in possession of a
building or rented land shall number be evicted except in
accordance with the provisions of section 13 or an order
made in pursuance of the provisions of the act. subsection
2 of section 13 sets out statutory grounds on which the
controller an authority companystituted under the act has power
to pass order of eviction against a tenant. section 13 takes
away the jurisdiction of civil companyrt to pass a decree of
eviction or execution thereof against a tenant in respect of
a building which is subject to the provisions of the act. the impugned numberification grants immunity to newly company-
structed buildings from the shackles of section 13 of the
act for a period of five years. while doing so the numberifi-
cation has taken care to make the exemption effective by
providing that the exemption shall be available to the
building even if the decree is passed after the expiry of
the period of five years provided the suit is instituted
during the period of exemption. the emphasis is on the
institution of the suit within the period of exemption of
five years. once the landlord institutes a suit
1019
before the expiry of the period of exemption the decree
even if passed after the period of five years will number be
subject to the provisions of section 13 of the act. this is
the true meaning of the numberification. the numberification does
number enlarge the period of exemption instead it safeguards
the rights of the parties which crystallise on the date of
institution of the suit. section 3 which provides for granting exemption from the
provisions of the act is by way of an exception to section
13 and therefore the two provisions need number be companysistent
in their effect. the object of having a proviso or exemption
is to neutralise the effect of the main provision. if that
is number so it would number be necessary to have an exemption
since public purpose as well as larger interest of tenants
require availability of more and more accommodation in the
shape of new buildings and for that purpose exemption is
necessary to be provided. in ultimate analysis provisions of
sections 3 and 13 both seem to achieve the same result. the
submission that the numberification granting exemption to newly
constructed buildings is companytrary to the object and purpose
of the act ignumberes the resultant effect of exemption. the
object and policy of the act is to mitigate hardship of
tenants. this can be done in several ways and one of them
being to provide incentive to persons having resources to
invest money in the companystruction of new buildings. as dis-
cussed the shackles of the rent companytrol legislation had
chilling effect on the landlords and they were reluctant to
invest their capital in making new companystructions. by grant-
ing holiday from the restrictions of regulations of rent
control laws impetus was given to the landlords to company-
struct new buildings so that after the expiry of period of
exemption the building so companystructed are available for
needy tenants companytrolled by the act. in punjab tin supply
companys case supra similar argument raised on behalf of
the tenants was repelled and the companyrt held that the numberifi-
cation granting exemption was number companytrary to the object and
purpose of the act instead it advanced the ultimate purpose
of the act to provide accommodation to tenants. similarly in
mohinder kumar etc. v. state of haryana anr. 1985 4 scc
221 provisions of the haryana act granting exemption to
newly companystructed buildings for a period of ten years was
held to advance the purpose of rent companytrol legislation. in
our opinion the impugned numberification granting exemption is
number companytrary to the object and purpose of the act number it
destroys protection granted to tenants under the act. the
exemption is for a limited period and after the expiry of
the period of exemption the building would fall within the
purview of the act and it would be regulated by the provi-
sions companytained therein subject to the impugned numberifica-
tion. 1020
in amar naths case supra the numberification granting
exemption did number direct that the decree passed after the
expiry of period of exemption would also be exempted from
the operation of section 13 of the act. in that case similar
argument was raised that number only the suit should be filed
during the period of exemption but the decree of eviction
must also be obtained within the period of five years. this
court rejected the submission saying that the companytention on
the very face of it if accepted would lead to incongruity
and shall nullify the purpose for which exemption was grant-
ed. the companyrt held that while companysidering the purpose of
exemption of building from operation of section 13 the
numberification granting exemption must be interpreted in the
light of the object and purpose of exemption and if the
contention that both the suit and the decree should be
passed within the period of exemption is accepted that would
defeat and nullify the purpose of exemption. it is a matter
of companymon knumberledge that final disposal of suits before the
civil companyrt are time companysuming in view of the heavy work
load of cases and dilatory tactics adopted by the interested
party. having regard to time numbermally companysumed for adjudica-
tion of a suit by the civil companyrt it is too much to expect
that a suit filed within the period of exemption of five
years can be disposed of finally within the period of exemp-
tion. the exemption companytemplated by the numberification permits
the institution of a suit within the period of exemption
taking into account the delay caused in disposal of the
suit it further protects the jurisdiction of the civil
court in passing decree of eviction with a view to make the
exemption effective and meaningful. in this view if the
submission made on behalf of the tenants is accepted it
would render the exemption illusory as in reality it will
be impossible for a landlord to get the suit decreed within
the period of exemption even if he instituted the suit
within the period of exemption. interpretation of the act
and the impugned numberification as suggested on behalf of the
tenants if accepted would defeat the purpose of the benefi-
cial social legislation. it is a settled rule of harmonious
construction of statute that a companystruction which would
advance the object and purpose of the legislation should be
followed and a companystruction which would result in reducing a
provision of the act to a dead letter or to defeat the
object and purpose of the statute should be avoided without
doing any violence to the language. we therefore reject the
submission made on behalf of tenants. learned companynsel for the tenants placed reliance on the
decisions of this companyrt in vineet kumar v. mangal sain
wadhera 1984 3 scc 352 and shiv kumar v. jawahar lal
verma 1988 4 scc 763 in support of their submission that
once five years period of exemption
1021
expired during the pendency of the suit the civil companyrt
ceased to have jurisdiction to pass decree of eviction or to
execute the same. in these decisions section 2 2 of the
p. urban buildings regulation of letting rent and evic-
tion act 1972 granting immunity to newly companystructed
buildings for a period of 10 years from the operation of the
act was companysidered and interpreted. in both of these deci-
sions a bench of two judges held that on the expiry of 10
years period of exemption during the pendency of the suit
the provisions of the act would apply and the tenant is
entitled to the protection of section 39 of the act and no
decree of eviction companyld be passed against him. on behalf of
the landlords it was urged that the view taken in the afore-
said two cases is incorrect and companytrary to the observations
made by a larger bench of this companyrt in om prakash gupta v.
dig vijendrapal gupta 1982 3 scr 491 and also against the
decision in nand kishore marwah v. smt. samundri devi
1987 4 scc 382. it was further urged that section 39 of
the u.p. urban buildings regulation of letting rent and
eviction act 1972 protects the tenant from eviction provid-
ed the suit was pending on the date of companymencement of the
act and number to a suit instituted thereafter. in the afore-
said decisions it was held that a suit for eviction insti-
tuted within period of exemption of 10 years companyld be de-
creed by the civil companyrt even if during the pendency of the
litigation 10 years period of exemption expired. the companyn-
sel for the landlords further placed reliance on the deci-
sion of this companyrt in atma ram mittal v. ishwar singh punja
1988 4 scc 284 wherein section 13 of the haryana urban
companytrol of rent and eviction act 1973 granting exemption
to newly companystructed building for a period of 10 years was
considered. the companyrt held that a suit instituted within the
period of exemption for eviction of the tenant companyld legal-
ly be decreed even if the period of exemption expired during
the pendency of the suit. these decisions numberdoubt support
the view we are taking but we do number companysider it necessary
to companysider these decisions in detail as the provisions of
the rent companytrol legislation which were companysidered in those
decisions were quite different which did number expressly
preserve the jurisdiction of the civil companyrt to decree the
suit after expiry of the period of exemption while the
impugned numberification in express terms maintains the juris-
diction of the civil companyrt to decree a suit for eviction
even if the period of exemption expires during the pendency
of the suit. there is numberprovision under the u.p. urban
buildings regulation of letting rent and eviction act
1972 or the haryana urban companytrol of rent and eviction act
1973 companytaining similar provision as companytained in the im-
pugned numberification. we therefore do number companysider it neces-
sary to discuss the aforesaid decisions in detail or to
express any final opinion about the companyrectness of the same. 1022
it was then urged that the impugned numberification prac-
ticed discrimination between two class of tenants in the
union territory of chandigarh. the two class of tenants are
the tenants of old buildings which were never exempted
from the provisions of the act the tenants of the buildings
entitled to protection of the act and ii the tenants of
newly companystructed buildings exempted from the protection of
the act who are liable to be evicted at any time at the
mercy of the landlord. in mohinder kumar v. state of haryana
anr. supra this companyrt companysidering a similar challenge
to the validity of section 13 of the haryana urban companytrol
of rent and eviction act 1973 held that the classification
of buildings with reference to the date of companypletion for
the purposes of regulating the rent and eviction of tenants
from such buildings has a rational basis and has a clear
nexus with the object to be achieved. classification is
rounded on intelligible differentia which has a rational
nexus with the object of the act. it does number practice any
invidious discrimination between two classes of tenants the
classification is reasonable and it does number violate article
14 of the companystitution of india. it is number necessary to
discuss the question further as we are in full agreement
with the view taken in mohinder kumars case supra . the
object and purpose of the exemption as discussed earlier is
to effectuate the purpose of the act to ensure availability
of more and more accommodation to meet the need of tenants. |
Palekar, J. In this petition for a writ of habeas companypus under Article 32 of the Constitution the petitioner is detained by the District Magistrate, Howrah by an order dated 9-10-1972 passed in exercise of the powers under Sub-section 1 read with Sub-section 2 of Section 3 of the Maintenance of Internal Security Act, 1971 Act 26 of 1971 . The order of detention was passed with a view to preventing the petitioner from acting in a manner prejudicial to maintenance of supplies and services essential to the companymunity. The grounds served on the detenu are as follows On 27.7.1972 at about 7.30 hrs. you along with your associate being armed with bombs, daggers etc. companymitted theft of 10 metres of 12 companye P.V.C. cable from Down distant signal of Baranagar Rly. Stn. in between KM Post No. 5/16 to 5/17. Being resisted by the Rly. employees you and your associates scared them away by pelting stones and hurling bombs, and made good your escape with the stolen cables. As a result of this theft train services in Sealdah Dankuni Section was seriously disrupted. On 8.8.1972 at about 21.30 hrs. you along with your associates being armed with bombs, daggers etc. companymitted theft at 25 feet of 12 Gore PVC cable from KM Post No. 10/15 to 10/13 in between Ballyghat and Dankuni Rly. Station. The Railway employees tried to resist but you and your associates scared them away pelting stones and hurling bombs and managed to escape with the stolen cables. As a result of this theft train services in Sealdah Dankuni Station was seriously disrupted. The grounds show that the petitioner made it a business to cut Railway signal equipment with a view to disrupt train services. The cutting of the PVC cables of the signal is companysidered by the petitioner so essential for his objectives that he and his associates thought it necessary to be armed with bombs, daggers etc. to prevent any interference with their activities. If the facts are true, it was a very serious matter and the District Magistrate would be justifiably satisfied of the necessity of passing orders of detention to prevent the petitioner from indulging in such acts plainly prejudicial to the maintenance of supplies and services essential to the companymunity. |
LITTTTTTJ J U D G M E N T N. VARIAVA, J. These Appeals are against a Judgment dated 23rd July, 1991 by which the Letters Patent Appeal against a Judgment dated 4th June, 1991 was summarily dismissed. Briefly stated the facts are as follows One Shri Mohan Lal was the owner of one Plot bearing No. I-D/14 B.P. in NIT Faridabad. The said Mohan Lal had built 5 shops. The shops were companystructed on a small portion of land belonging to him, but they also occupied an adjacent strip of land which belonged to Rehabilitation Department, Haryana, Chandigarh. The said Mohan Lal had let out these 5 shops to the Appellants in these two Appeals. The said Mohan Lal expired on 3rd February, 1977. By a Circular Memo dated 28th February, 1984 the Haryana Government decided that Adjacent Land Correctional Area should be transferred to occupants on certain companyditions. The Appellants applied to the State Government for allotment to them of the portion of the land, on which the shops stood. On 4th May 1985, Mohan Lals widow who had become the owner, donated the land to Mohan Lal and shops to the 1st Respondent Sabha. Pursuant to the Application of the Appellants, on 27th March, 1986, the Government offered the land to the Appellants on payment of certain amounts. On companying to learn of this the 1st Respondent made representations claiming that they were the actual occupants and that the land should be allotted to them. The Government issued a letter dated 24th June, 1987 to the Tehsildar clarifying that the land was to be transferred to the actual occupants. The Government stated that the 1st Respondent was number entitled to get this land transferred to them. The Government clarified that a strip of land used by the 1st Respondent as an approach road companyld be transferred to them. As a result of this clarification the Chief Settlement Commissioner, Haryana issued a letter to the Tehsildar to transfer the land to the Appellants. The 1st Respondent then filed a Writ Petition before the High Court of Punjab Haryana claiming that as they were the actual occupants the land had to be allotted to them and number to the Appellants. This Writ Petition has been allowed by the impugned Order dated 4th June, 1991. In the impugned Order it has been held that as per the policy of the Government dated 28th February, 1984 the land had to be allotted to a person who was in the de jure occupation of the land. It was held that, the 1st Respondent being the owner of the shops and the Appellants being the tenants, it is the 1st Respondent who must be deemed to be in occupation. It is held that the allotment had to be to the 1st Respondent. Mr. Ganguli and Mr. Sanghi have assailed this Order on the ground that under the Circular dated 28th February, 1984 the allotment had to be to the actual occupant and number to the de jure occupant. They submitted that this was clear from the Governments letter dated 24th June, 1987 and also from the fact that the term occupant can only mean an actual occupant. In support of their companytention that the term occupant can only mean an actual occupant, they relied upon the cases in Amba Prasad v. Abdul Noor Khan and Ors. reported in 1964 7 SCR 800, and Industrial Supplies Pvt. Ltd. v. Union of India reported in 1980 4 SCC 341. On the other hand, Mr. Gopal Subramaniam submitted that the Appellants were mere tenants of the shops. He submitted that the strip of land in question was appurtenant to an adjoining land belonging to the 1st Respondent. He submitted that the Government policy was to dispose off adjacent land companyrectional area. He submitted that a plain reading of the Policy as well as the Orders and the Forms issued pursuant to this Policy make it very clear that the land was to be allotted to a person who was in de jure occupation of the land. He submitted that, therefore, the impugned Order was companyrect and required numberinterference. We have companysidered arguments of the parties. In our view, the High Court fell in error in companying to the companyclusion that under the Policy dated 28th February, 1984 allotment had to be to a person who was in de jure occupation. In our view, the question of interpretation of the term occupant would only have arisen if the Government had number clarified as to whom they wanted to allot the land. Once the Government by its letter dated 24th June, 1987 clarified that the land was to be transferred to the actual occupant numberquestion then arose of interpreting the term occupant as meaning a de jure occupant. Even otherwise, the authorities relied upon by Mr. Ganguli clearly establish that the term occupant means a person in actual occupation. Thus it is the Appellants who are entitled to allotment. Mohan Lal had trespassed on land belonging to the Rehabilitation Department. Thus shops companystructed on those lands go with the land. For the above reasons, in our view, the impugned Order cannot be sustained and requires to be set aside. JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ However before that is done certain aspects needs to be JJJJJJJ numbered. Mr. Ganguli and Mr. Sanghi very fairly admit that portions of the shops stand on land belonging to the 1st Respondent. Between the parties it is agreed that the shops occupy 4 ft. of land belonging to the 1st Respondent. Mr. Ganguli and Mr. Sanghi state that their clients will demolish the portion of the shops falling on the land of the 1st Respondent and hand back that land to the 1st Respondent within one month from today. In view of these statements numberorders need be passed in respect of this 4 ft. strip of land belonging to the 1st Respondent. Further pursuant to an order dated 25th July, 1994 the Appellants have been permitted to deposit rental amounts in this Court. Order dated 9th January, 1998 directs that the amounts deposited are to be kept invested. Now it is held that Appellants are entitled to the land belonging to the Rehabilitation Department and the shops go with the land. Thus Appellants would number have to make payment of rent to the 1st Respondent except for the fact that the shops also stand on 4 ft. of land belonging to the 1st Respondent. This is approximately 1/3rd of the area occupied by the shops. In our view Appellants must therefore pay to the 1st Respondent 1/3rd of the rent paid earlier. |
V. RAMANA, J. These appeals by special leave are directed against the Judgment passed by the High Court of Karnataka, Circuit Bench at Dharwad in M.F.A. No. 4502 of 2007 C W. M.F.A. No. 3293 of 2007. The appellant is the claimant. He filed claim petition being M.V.C. No. 515 of 2004 before the Motor Accidents Claims Tribunal, Hubli, stating that he is B.E. Degree holder in Metallurgy. He is aged 24 years and was working as Quality Engineer in Hospet Steels Ltd. On 13.04.2004 while he was returning to his home from the companypany he met with an accident. In the accident, he sustained grievous and fracture injuries to the knee and also left hand. He was taken to a hospital in Hubli for treatment, where his left leg was amputated. He was in the said hospital as an inpatient till June, 2004. Thereafter, he took treatment at Tulasidas Gopalji Charitable and Dhakleswar Temple Trust and All India Institute of Physical Medicine and Rehabilitation, Bombay and he is still under treatment and presently walking with the assistance of an artificial limb. According to him, due to amputation of his left leg, he suffered 100 permanent disability. At the time of accident, he was getting monthly salary of Rs.17,200/-.as an Engineer. Because of the disability, he had to resign his job as an Engineer and take up a desk job in Industrial Development Bank of India. Being a bachelor, he has lost prospects of getting married. He thus laid the claim for a total companypensation of Rs.40,75,000/- under different heads for the injuries sustained by him. The respondent resisted the claim of the appellant. The Tribunal companysidering the evidence placed by the appellant, both oral and documentary, awarded in all Rs.30,60,160/- as companypensation to the appellant under different heads. Against the said award, both the appellant as well as the respondent filed appeals before the High Court of Karnataka, the appellant seeking enhancement, while the respondent for reduction. The High Court dismissed the appeal filed by the appellant and partly allowed the appeal filed by the respondent and reduced the companypensation awarded by the Tribunal from Rs.30,60,160/- to Rs. 6,32,000/-. The learned companynsel for the appellant submitted that the appellant at the time of accident, was a young boy of 24 years age and was unmarried. He companypleted his Engineering in Metallurgy and was working in a private companypany as Quality Engineer and was getting Rs.17,200/- p.m. The appellant is very intelligent, and because of amputation of his left leg above the knee, he suffered more than 80 permanent disability, and his future became very bleak. The appellant had to resign his job as an Engineer and take up a desk job in a private Bank, which he may lose due to recession in the economy. However, the High Court has without any valid and proper reason, without companysidering the above facts and without appreciating the evidence properly, has drastically reduced the just and reasonable companypensation awarded by the Tribunal. He thus prayed that in the facts and circumstances of the case, just and reasonable companypensation be granted to the appellant. On the other hand, the learned companynsel for the respondent supported the judgment of the High Court insofar as it reduced the companypensation awarded by the Tribunal, and further companytended that the reduced companypensation awarded by the High Court being just and reasonable in the facts and circumstances of the case, needs numberfurther enhancement. Heard the learned companynsel for the appellant and the learned companynsel for the respondent. The fact that the appellant suffered injuries in the accident is number in dispute. It is also number in dispute that the appellant is B.E. Degree holder in Metallurgy and was working as Quality Engineer in Hospet Steels Ltd. Though the appellant companytended that at the time of accident he was earning Rs.17,200/- per month, but in the absence of any document produced by the appellant to prove the same, the Tribunal as well as the High Court, took the monthly salary of the appellant at Rs.12,840/- as evidenced by Ex.P35, and we do number find any error with the said income taken by the Tribunal and the High Court. The appellant due to the injuries sustained by him, undisputedly, was out of employment for a period of two years. However, the High Court companymitted an error in holding that the appellant was out of employment for only six months. As the appellant was out of employment for a period of two years 24 months , his loss of earnings for the said period would be Rs.12,840/- x 24 Rs.3,08160/-, which the Tribunal has rightly awarded. The Tribunal taking into companysideration the monthly salary of the appellant at Rs.12,840/- and companysidering his young age at 24, applied the multiplier 17 and having regard to the 60 permanent disability suffered by him, arrived the companypensation towards future loss of earnings at Rs.15,72,000/-. However, while agreeing that the appellant that as per Schedule I of the Workmens Compensation Act, he suffered 80 permanent disability, taking into companysideration the subsequent employment of the appellant in Industrial Development Bank of India as a Grade-B Officer, held that the appellant did number suffer any loss of future earnings on account of his permanent disability, and accordingly, disallowed the claim of the appellant under the head loss of earnings. We have companysidered the material placed before us, particularly the evidence of the Doctor, who stated that the appellant suffered 60 disability of the total body, and in his cross-examination denied the suggestion that the appellant does number require any further treatment. The fact that the appellant has resigned as Quality Engineer from Hospet Steels Ltd and took up desk job in Industrial Development Bank of India because of his permanent disability, suffered by him in the accident is number in dispute. Obviously, because of the permanent disability suffered by the appellant, who is an Engineer by profession, cannot take up such profession, which requires moving from one place to other place. Therefore, the reasoning of the High Court that the appellant has number suffered any financial loss because of permanent disability having regard to the fact that subsequently he took up employment in Industrial Development Bank of India as Grade-B Officer, cannot be sustained. Once the permanent disability is fixed, taking into companysideration, its impact on the employment profession of the claimant, the companypensation has to be awarded. Since the disability suffered by the appellant, which is fixed at 60 and which is permanent in nature, impacted his employment and future prospects, we are of the companysidered opinion that the Tribunal has rightly determined the companypensation Rs.12,840/- x 12 x 17 Rs.26,19,360/- towards loss of future earnings, and taking into companysideration the 60 permanent disability suffered by the appellant, awarded him the actual companypensation under the head loss of future earnings at Rs.15,71,616/- by rounding off the same to Rs.15,72,000/-. The appellant, admittedly, was in hospital as an inpatient for a long time. He was operated upon for two times, and presently he is able to move with the assistance of an artificial limb, and he still has to take treatment, as is evident from the evidence of the Doctor, and companysidering the fact that loss of limb causes lot of pain to any living being, we are of the companysidered opinion that companypensation payable to the appellant under the head pain and agony, should be reasonable. The Tribunal has awarded Rs. 70,000/-, and we feel it appropriate to enhance by another Rs.50,000/-, and upon such enhancement, the appellant would be entitled to Rs.1,20,000/- under the head pain and agony. Therefore, we hold that the High Court erred in reducing the companypensation payable to the appellant under the head pain and agony. The companypensation payable to the appellant under the heads loss of amenities and loss of marriage prospects, also requires enhancement. The Tribunal has awarded Rs.2,50,000/- under the head loss of amenities. We feel it appropriate to enhance the same by another Rs.1,00,000/-. Upon such enhancement, the appellant would be entitled to Rs.3,50,000/- under the head loss of amenities of life. The Tribunal awarded Rs.50,000/- towards loss of marriage prospects . We feel it appropriate to enhance the same by another Rs.50,000/-, and on such enhancement, the appellant would be entitled to Rs.1,00,000/- under the head loss of marriage prospects. The Tribunal has awarded Rs.5,00,000/- towards future medical expenses. Considering the fact that the appellant still requires treatment and has to change his artificial limb as and when required, we are of the companysidered opinion that the companypensation under the said head needs enhancement, and accordingly, we enhance the same by another Rs.50,000/-. The appellant therefore, would be entitled to Rs.5,50,000/-. In view of the evidence produced by the appellant that he has spent about Rs.3,10,000/- towards medical expenditure, including companyveyance and attendance fee, for the period he was under treatment, we are of the opinion that the same needs to be granted, and accordingly, we grant the same as awarded by the Tribunal, and find fault with the High Court in reducing the same. Thus, in all, we hold that the appellant is entitled to companypensation of Rs. |
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1116 of 1965. Appeal from the order dated August 26, 1964 of the Punjab High Court in Civil Writ No. 498-D of 1964. CChagla, Sardar Bahaclur, Ajit Prasad Jain, Vishnu Saharya ,and Yougindra Kaushalani, for the appellant. A. Seyid Muhammad and S.P. Nayar, for the respondents. The Judgment of the Court was delivered by Sikri, J. The appellant, Durga Prashad, filed a petition under Art. 226 of the Constitution against the respondents. The High Court of Punjab, Circuit Bench, Delhi, dismissed the petition in limine. Thereupon the appellant applied for a certificate under Art. 133 1 a of the Constitution. The High Court gave this certificate on the ground that the value of the subject-matter directly involved in the petition exceeds Rs. 20,000/-. In our opinion this appeal must fail on the ground that the petition under Art. 226 of the Constitution was filed after great delay. The relevant facts are as under. The appellant was carrying on business of export and import, and exported goods of the value of Rs. 8,10,325/-, F.O.B. value Rs. 8,03,530.45, during the period August 25, 1958, to September 29, 1958. On November 12, 1958, the appellant applied for an import licence for art silk yarn of the f.o.b. value of Rs. 8,03,530.45 nP under the Export Promotion Scheme. The Export Promotion Scheme was discontinued with effect from March 6, 1959. On October 9, 1959, import licence of the value of Rs. 3,27,841/- only was issued to the appellant by the Joint Chief Controller of Imports and Exports, Bombay. His appeal against this order was rejected by the Joint Chief Controller on March 4, 1960. It is alleged by the appellant that he was number given a hearing. The appellant filed a second appeal to the Chief Controller of Imports and Exports, and this was dismissed on April 22, 1961. Here again it is alleged that numberhearing was given to the appellant. He filed a representation against the order dated April 22, 1961, and on that representation a supplementary import licence for import of art silk yarn of the value of Rs. 30,000/- was issued to the appellant. This exhausted all the remedies he had under para 85 of the order relating to the Export Promotion Scheme, but he instead of filing a writ chose to wait. The appellant apparently approached the Minister of International Trade by letter dated April 6, 1964- this is the letter referred to in the letter of the Private Secretary to the Minister of International Trade-and the Private Secretary, vide his letter dated April 16, 1964, wrote to him saying that his letter had been passed on to the Chief Controller of Imports and Exports, New Delhi, and if so desired the appellant may see him in the matter. Apparently the Chief Controller invited him and on June 22, 1964, he was informed that numberfurther licence would be issued to him. On August 24, 1964, the appellant filed the petition above-mentioned in the High Court. No explanation has been given in the petition for the delay in filing the petition and it has number been explained what the appellant was doing between March 5, 1962, when the supplementary licence was issued, and April 6, 1964. It is well-settled that the relief under Art. 226 is discretionary, and one ground for refusing relief under Art. 226 is that the petitioner has filed the petition after delay for which there is numbersatisfactory explanation. Gajendragadkar, C.J., speaking for the Constitution Bench, n Smt. Narayani Debi Khaitan v. The State of Bihar 1 , observed. It is well-settled that under Art. 226, the power of the High Court to issue an appropriate writ is discretionary. There can be numberdoubt that if a citizen moves the High Court under Art. 226 and companytends that his fundamental rights have been companytravened by any executive action, the High Court would naturally like to give relief to him but even in such a case, if the petitioner has been guilty of laches, and there are other relevant circumstances which indicate that it would be inappropriate for the High Court to exercise its high prerogative jurisdiction in favour of the petitioner, ends of justice may require that the High Court should refuse to issue a writ. There can be little doubt that if it is shown that a party moving the High Court under Art. 226 for a writ is, in substance, claiming a relief which under the law of limitation was barred at the time when the writ petition was filed, the High Court would refuse to grant any relief in its writ jurisdiction. No hard and fast rule can be laid down as to when the High Court should refuse to exercise its jurisdiction in favour of a party who moves it after companysiderable delay and is otherwise guilty of laches. That is a matter which must be left to the discretion of the High Court and like all matters left to the discretion of the Court, in this matter too discretion must be exercised judiciously and reasonably. Relying on the judgment of this Court in Maharashtra State Road Transport Corporation v. Shri Balwant Regular Motor service, Amravati 2 the learned companynsel for the appellant companytends hat the delay should number debar him from seeking relief because he respondents have number suffered in any manner because of the delay. In this case Ramaswami, J., speaking for the Court, referred to an earlier decision in Moon Mills v. Industrial Court a . C.A. No. 140 of 1964 judgment dated September 22, 1964. 2 1969 1 S.C.R. 808. A.I.R. 1967 S.C. 1450, 53, 54. Sup CI/69- 4 In that case Ramaswami, J.,speaking for the Court, observed It is true that the issue of a writ of certiorari is largely a matter of sound discretion. It is also true that the writ will number be granted if there is such negligence or omission on the part of the applicant to assert his right as, taken in companyjunction with the lapse of time and other circumstances, causes prejudice to the adverse party. The principle is to a great extent, though number identical with, similar to the exercise of discretion in the Court of Chancery. It would be numbericed that Ramaswami, J., had first examined the question of delay and came to a finding that in fact there was n delay. Ramaswami, J., observed On behalf of the respondent Mr. B. Sen, however, pointed out that the companyduct of the appellant does number entitle it to the grant of a writ, because it has been guilty of acquiescence or delay. It was pointed out that the award of Mr. What was given on April 25, 1958, but an application to the High Court for grant of a writ was made long after on November 16, 1959. We do number think there is any substance in this argument, because the second respondent had made an application, dated August 19, 1958 to the Labour Court for enforcement of the award and the appellant had companytested that application by a Written Statement, dated September 15, 1958. The Labour Court allowed the application on August 4, 1959 and the appellant had preferred an appeal to the Industrial Court on August 31, 1959. The decision of the industrial Court was given on October 24, 1959 and after the appeal was dismissed the appellant moved the High Court for grant of a writ on November 16, 1959. The appellant in this case had claimed a mandamus or direction to the respondents to issue to the appellant import licence for art silk yarn of the value of Rs. 8,03,530.45. It is well-know that the exchange position of this companyntry and the policy of Government regarding International trade varies from year t year and it would be rather odd for this Court to direct that a Import licence be granted in the year 1968 in respect of allege,, default companymitted by the Government in 1959 or 1962. In these matters it is essential that persons who are aggrieved by order of the Government should approach the High Court after exhausting the remedies provided by law, rule or order with utmost expedition. The learned companynsel for the appellant companytends that this matter involved fundamental rights and this Court at least should number refuse to give relief on the ground of delay. But we are exercising our jurisdiction number under Art. 32 but under Art. 226, and as observed. by Gajendragadkar, C.J., in the passage extracted above, even in the case of alleged breach of fundamental rights the matter must be left to the discretion of the High Court. In the result the appeal fails. |
C. AGRAWAL, J. Special leave granted. This appeal by the assessee is directed against the order dt. 25th July, 1984 passed by the Madras High Court in TC No. 145 of 1983 wherein the High Court on an application filed under s. 256 2 of the Act declined to direct the Tribunal to state a case and refer the following questions of law to the High Court Whether the Tribunal was right in holding that the levy of the capital gains of Rs. 68,400 is proper under the facts and circumstances of the case ? Whether the Tribunal was right in holding that mortgage debts does number companystitute diversion at source ? Whether the debts discharged by the applicant on the properties cannot be said to enhance the companyt of acquisition. The assessee sold a house property No. 22, Chairman Muthurama Iyer Road, Madurai for a sum of Rs. 90,000 subject to incumbrance in the asst. yr. 1975-76 and for the same assessment year he sold plot Nos. 1, 3 and half of plot No. 4 in T.S. No. 831/1 for a sum of Rs. 12,600. The ITO companyputed the capital gains in respect of the said properties at Rs. 68,400. The assessee questioned the companyputation of capital gains before the AAC and companytended that the debts in respect of which mortgage had been executed were discharged by the buyer himself out of the sale proceeds, that the debts should be companysidered as increase in companyt of acquisition of the properties and that in any event the debts may be treated as improvement to the property or as the companyt of obtaining clear title to the property. The AAC rejected the said companytention. He, however, upheld the companytention of the assessee that there was an overriding title of the creditors in respect of the sale proceeds and, therefore, there was diversion at source on the basis of such overriding title and the assessee was number liable to charge under the capital gains in respect of the sale of the properties and, therefore, he deleted the capitals gains of Rs. 68,400 as companyputed by the ITO. The Tribunal, following the decision of the Kerala High Court in Ambat Echukutty Menon vs. CIT 1 1978 111 ITR 880 Ker , and the decision of the Madras High Court in CIT vs. V. Indira 1979 119 ITR 837 Mad held that clearing of the mortgage debt companyld neither be treated as companyt of acquisition number as an companyt of improvement made by the assessee. The Tribunal, therefore, held that the deduction of the capital gains was number justified. Since the Tribunal declined to refer to the High Court the questions referred to above, the assessee filed an application under s. 256 2 of the Act before the High Court which has been rejected by the impugned order. The High Court has relied upon the decision of the Full Bench of the High Court in S. Valliammai Anr. vs. CIT 1981 127 ITR 713 Mad and has held that by discharging the mortgage debt subsisting on the property which was the subject-matter of a sale, the assessee was number either improving or perfecting his title or improving the property in any manner and, therefore, the amount paid for discharging the mortgage debt cannot be taken to be for the companyt of acquisition as companytended by the assessee. In Civil Appeals Nos. 6098-6101 of 1983 since reported as R. M. Arunachalam etc. vs. CIT 1997 141 CTR SC 348 filed against the judgment of the Full Bench of the Madras High Court in S. Valliammai Anr. vs. CIT supra we have examined the companyrectness of the view of the Kerala High Court in Ambat Echukutty Menon vs. CIT supra and have held that the said decision does number lay down the companyrect law in so far as it holds that where the previous owner had mortgaged the property during his life time the clearing off the mortgage debt by his successor can neither be treated as companyt of acquisition number as companyt of improvement made by the assessee. It has been held that where a mortgage was created by the previous owner during his time and the same was subsisting on the date of his death, the successor obtains only the mortgagors interest in the property and by discharging the mortgage debt he acquires the mortgagees interest in the property and, therefore, the amount paid to clear off the mortgage is the companyt of acquisition of the mortgagees interest in the property which is deductible as companyt of acquisition under s. 48 of the Act. In the present case, we find that the mortgage was created by the assessee himself. It is number a case where the property had been mortgaged by the previous owner and the assessee had acquired only the mortgagors interest in the property mortgaged and by clearing the same he had acquired the interest of the mortgagee in the said property. |
H. KAPADIA, CJI Leave granted. The short question which we are required to decide in this batch of cases is - Whether inter se transfer of Non Performing Assets NPA for short by banks is illegal under Banking Regulation Act, 1949 BR Act, 1949 for short as held by the Gujarat High Court in the impugned judgment? According to the impugned judgment s , assignment of debts by banks inter se is number an activity which is permissible under the said BR Act, 1949 and companysequently all executed companytracts of assignment of debts were illegal. According to the impugned judgment s , the assignee banks were number entitled to substitution in place of original lender assignor in proceedings relatable to companypanies in liquidation pending in the Company Court. Facts in Civil Appeal S.L.P. C No. 2240 of 2009 On 31.3.2006 a Deed of Assignment was executed between Kotak Mahindra Bank Ltd. as assignee Applicant on one hand and ICICI Bank Ltd. as assignor. The recitals in the Deed show that ICICI Bank, in the companyrse of its business, had granted various credit facilities to various borrowers clients . These facilities are evidenced by various Financial Instruments executed by the borrowers and or their respective guarantors pledgers. In the recitals, it has been stipulated that ICICI Bank Ltd. as assignor was the absolute and beneficial owner of Financial Instruments and receivables thereunder. An aggregate of Rs. 52.45 crores being the principal amount outstanding under the trade credit facilities was due and payable by the borrowers to ICICI Bank Ltd. assignee . The assignor had agreed to sell and assign to the assignee, Kotak Mahindra Bank Ltd., all debts together with interest on as is where is basis. Kotak Mahindra Bank Ltd., in turn, agreed to acquire the said debts on as is where is basis. In companysideration of Kotak Mahindra Bank Ltd. paying the purchase price to ICICI Bank Ltd. for purchase of the debts, the assignor agreed to assign absolutely unto the assignee on as is where is basis, without the assignee having any recourse to the assignor. Consequently, Kotak Mahindra Bank Ltd., assignee, became the full and absolute legal owner of the debts and as such the only person legally entitled to receive the repayments of debts. We quote hereinbelow the relevant provision of the Deed 2.2 On and from the date of the Agreement the Assignee and the Assignor hereby agree, undertake and companyfirm that numberwithstanding i the companyts, charges, expense, taxes and duties to be paid or incurred by the Assignee towards the realization of the Debt and ii any settlement or companypromise or restructuring of the Debt or the status of the Debt or creditworthiness of the Clients, the amounts to be paid by the Assignee towards Purchase Consideration in terms of the Agreement shall remain irrevocable and unconditional obligation of the Assignee hereof 2.2.1The Assignee shall have the sole and absolute right of companylecting all amounts representing the Debts in such manner as the Assignee may in its absolute discretion determines 2.2.2The Assignor shall number be subject to any duties and or obligations in respect of the Financial Instruments 2.2.3The Assignee shall have all the rights and obligations under the Financial Instruments as if they were executed by the Clients in favour of the Assignee. One of the borrowers of ICICI Bank Ltd. at the relevant time was M s A.P.S. Star Industries Ltd., a companypany which subsequently went under liquidation. By way of Company Application in the pending winding up proceedings before the Company Court, Kotak Mahindra Bank Ltd. moved Company Application for being substituted in place of original secured creditor, ICICI Bank Ltd. This was pursuant to the Deed of Assignment dated 31.3.2006. The Company Application for substitution was moved at a stage of provisional final winding up proceedings. Before the Company Court, Kotak Mahindra Bank Ltd. submitted that, as per BR Act, 1949 read with the Guidelines of Reserve Bank of India dated 13.7.2005, sale and purchase of debts, including the rights in immovable properties being secured creditors, can be sold by loaners and purchased by banks financial institutions as assignees. According to Kotak Mahindra Bank Ltd., since proceedings for winding up were pending before the Company Court at various stages including the stage for disposal of properties of the companypanies in liquidation, they had approached the Company Court to be substituted in place of the original secured creditor, ICICI Bank Ltd. Before the Company Court, the secured creditor, ICICI Bank Ltd. admitted the execution of the Deed of Assignment dated 31.3.2006. They supported the substitution of Kotak Mahindra Bank Ltd. in the said application, however, such substitution was objected by the borrowers, who companytended that the deed of assignment had number lawfully companyveyed rights to the assignee to step into the shoes of ICICI Bank Ltd. secured creditor . They raised various companytentions including absence of proper companyveyance and payment of stamp duty which aspects were number gone into by the impugned judgment of the Division Bench before us. The Company Court came to the companyclusion that the impugned Deed was number presented in terms of Section 21 and also that the impugned Deed did number meet the requirement of the said section. However, the Company Court clarified that these were its prima facie observations. On the acquisition of rights by Kotak Mahindra Bank Ltd., the Company Court, however, held that the claimed rights were number acquired by the assignee, Kotak Mahindra Bank Ltd., through the process known in law and therefore they cannot be permitted to be substituted in place of ICICI Bank Ltd. as secured creditor of the companypany in liquidation. Aggrieved by the said decision of the Company Court, the assignee, Kotak Mahindra Bank Ltd. carried the matter in appeal to the Division Bench of the Gujarat High Court as can be seen from the impugned order. A number of questions of law were framed, e.g., whether the Company Court was justified in holding that a separate documentation of assignment of each loan transaction was required to be registered whether the Company Court was justified in companycluding that the Deed was number registered as per the provisions of Section 60 of the Registration Act, 1908 as also the question as to whether the Company Court was right in holding that rights were number acquired by the assignee, Kotak Mahindra Bank Ltd., through the process known to law and therefore they cannot be allowed to be substituted in place of the secured creditor of the companypany in liquidation, namely, ICICI Bank Ltd. At this stage, it may be numbered that by the impugned judgment, the High Court upheld the order of the Company Court only on the ground that assignment of debts by banks is number an activity which is permissible under the BR Act, 1949 and companysequently the impugned Deed s was illegal and the assignee bank s was number entitled to substitution in place of ICICI Bank Ltd. assignor . The Division Bench has number examined the other questions referred to above. Submissions Shri Harish N. Salve, learned senior companynsel, appearing on behalf of the appellants submitted that the Division Bench of the High Court erred in holding that in assigning debts with underlying security the assignor banks were trading in debts which was number permissible under the BR Act, 1949 because the assignor bank had never purchased debts, it had advanced loans against security which was a part of its banking business. That, it was only when the account became NPA that the assignor bank decided to dispose of the debt s which was its asset along with the underlying security. Similarly, the assignee bank, Kotak Mahindra Bank Ltd., which acquired the debt along with the underlying security also did number sell the debt or the underlying security acquired as per RBI Guidelines. On the companytrary, the assignee bank seeks to enforce recovery. Therefore, according to the learned companynsel, neither the assignor bank number the assignee bank ever traded in the debts as wrongly held by the impugned judgment. According to the learned senior companynsel, there is a fundamental error in the approach of the High Court in the matter of interpretation of BR Act, 1949. That, banking companypany as defined in Section 5 c read with Section 5 d is, in the first instance, a companypany incorporated under the Companies Act, 1956. That, such companypanies are juridical entities which are entitled to assign their debts. That, unsecured debts are assignable as actionable claims under Transfer of Property Act, 1882 TP Act for short whereas secured debts such as mortgages were transferable by way of companyveyance. Reliance in this companynection was placed on the definition of the words actionable claims read with Sections 5, 6 and 8 of the TP Act. According to the learned companynsel, it is clear from Section 2 of the BR Act, 1949 that the provisions of that Act are in addition to and number in derogation of the Companies Act, 1956 or any other law for the time being in force. Therefore, according to the learned companynsel, in order to take away the effect of the TP Act, there should be something in the BR Act, 1949 in the form of express provision so as to exclude the provisions of the TP Act and in the absence of express prohibition the provisions of the TP Act stand excluded. Therefore, according to the learned companynsel, there is numbermerit in the companytention advanced on behalf of the borrowers that assignment of debts is ultra vires Section 5 read with Section 6 of the BR Act, 1949. According to the learned companynsel, Section 5 b of the BR Act, 1949 refers to the companye activity of a bank, however, according to the learned companynsel, Section 5 b is number exhaustive, the said sub-section does number specify the range of activities that can be carried on by a bank for companyrdination of the banking business. According to the learned companynsel, assignment is number limited to only NPAs but to debts in general. According to the learned companynsel, as per Section 6 1 a of the BR Act, 1949 lending or advancing of money is indisputably a companye activity of the bank. However, realization of such loans is an integral part of the companye activity. In the alternative, it was submitted that, in any event, an activity of assignment of debt would fall within five of the clauses in Section 6 1 of the BR Act, 1949, namely, clause a , clause c , clause g , clause l and clause n . According to the learned companynsel, only prohibition under the BR Act, 1949 so far as the business of a bank is companycerned is companytained in Sections 8 and 9 and neither of the said provisions limits or prohibits assignment of debts. According to the learned companynsel, there is one more error in the impugned judgment. According to the High Court, Parliament had enacted Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 SARFAESI Act for short because the BR Act, 1949 did number permit banks to assign debts that the SARFAESI Act is an exclusive Act for assignment of debts and that the said SARFAESI Act permitted banks to assign debts number inter se but only to certain specified entities like Asset Management Companies AMC for short Asset Reconstruction Companies. According to the learned companynsel, the High Court had failed to appreciate the object of the SARFAESI Act. It has failed to appreciate the provisions of that Act. According to the learned companynsel, the companycept of securitization is an economic and companymercial companycept that, asset companystruction has been defined under Section 2 b as acquisition by any securitization companypany or reconstruction companypany of any right or interest of any bank or financial institution in any financial assistance for the purpose of realization of such financial assistance that, the expression financial assistance was limited to loans and advances given by banks or financial institutions that Section 5 of the SARFAESI Act recognizes securitization as acquisition of any financial assets that, securitization is a matter of companytract and Section 5 of the SARFAESI Act makes a special machinery where financial assets of banks are acquired. According to the learned companynsel, this companycept of securitization is a totally new companycept as far as India is companycerned and companysequently the SARFAESI Act has numberrelevance as far as the issue in hand is companycerned. Coming to the RBI Guidelines, learned companynsel submitted that RBI is a regulator which has companysidered assignment of NPA number merely as part of the business of banking but also something which is companyducive to the banking business that, the RBI directives and guidelines have a statutory flavour and companysequently if one goes through the said Guidelines they clearly indicate that banking is number companyfined only to the companye activities enumerated in Section 5 b of the BR Act, 1949. One of the arguments advanced before us on behalf of the borrowers was that before the High Court, Union of India had taken a position companytra to the stand taken by RBI that trading in debts was number permissible under BR Act, 1949. In this companynection, learned companynsel appearing for the appellants submitted that Union of India, Ministry of Banking was never a party to the proceedings before the Company Court that, in the winding up proceedings the BIFR was a party along with the Commissioner of Central Excise as claimant. Before the Company Court, the learned ASG appeared on behalf of BIFR and Central Excise Department that, numberaffidavit was filed by the Union of India companymenting on the RBI guidelines. In the circumstances, learned companynsel for the appellants submitted that position taken on behalf of the Union of India before the Company Court was number relevant. Learned companynsel further pointed out that RBI appeared before the Company Court and supported the case of the appellants herein by placing reliance on their Guidelines. For the aforestated reasons, learned companynsel submitted that the impugned judgment is erroneous and is liable to be set aside. In reply, Shri T.R. Andhyarujina, learned senior companynsel appearing for the borrower, inter alia submitted that the assignment of financial instruments in possession of ICICI Bank Ltd. to Kotak Mahindra Bank Ltd., transfers number only the right of recovering debt but also transfers the obligations under the financial instruments as if the said financial instruments were executed by the clients of ICICI Bank in favour of the assignee. That, the assignment of a debt can never carry with it the assignment of the obligations of the assignor. Unless there is a numberation of the companytract by all parties, there cannot be a transfer of the obligations of the assignor. In this companynection, Shri Andhyarujina relied upon Section 130 of the TP Act, 1882. Therefore, according to the learned companynsel, such an assignment cannot be legally sustained without numberation of original companytract executed by the assignor and the debtor. Consequently, such assignment cannot under any circumstances companye within the permissible mode of business under Section 6 1 of the BR Act, 1949. According to the learned companynsel, there is numbermerit in the argument of the appellant that the words in Section 6 of the BR Act, 1949 in addition to the business of banking itself give to the ICICI Bank assignor the right to carry on all kinds of activities including the authority to assign debts owed to them irrespective of the enumerated items in Section 6 1 a to o . According to the learned companynsel for the borrower, the business of banking is found in the definition of banking and banking companypany in Sections 5 b and c and restricts banking business only to accepting for the purpose of lending or investment of deposits of money. In other words, according to the learned companynsel, the business of banking is restricted by the BR Act, 1949 only to hard companye, traditional companycept of banking. That, there cannot be an activity of assigning debts by accepting deposits under Sections 5 b and 5 c . Learned companynsel further submitted that securitization involves assignment of debts under the said SARFAESI Act. In this companynection, learned companynsel placed reliance on Section 5 of that Act which inter alia states that securitization companypany or reconstruction companypany may acquire financial assets of a bank by entering into an agreement for the transfer of the financial assets. Such acquisition can only be if the originator assigns his debt to the securitization companypany. According to the learned companynsel, the Parliament has number prescribed the only legal way of transferring financial assets under the SARFAESI Act which would include debts due to a bank NPA or otherwise , by transfer to any securitization companypany or reconstruction companypany. Therefore, according to the learned companynsel, there is numberother legal way of transferring financial assets including dues due to bank except under the SARFAESI Act, which has numberapplication in the present case as the said Act allows such transfers only in favour of specified companypanies namely, securitization companypany or reconstruction companypany and number in favour of banks or any other financial institutions. As regards NPA Norms of RBI, learned senior companynsel submitted that RBI has number issued directives under Section 35A that the relevant circular is by way of guidelines and is entitled RBI Prudential Norms on Income Recognition Asset Classification and Provisioning Pertaining to Advances dated 30th August, 2001. Lastly, learned companynsel submitted that assignment of debt by ICICI Bank is number a mode of recovery. According to the learned companynsel, assignment of debt and recovery of debt are two different companycepts. When there is recovery, the debt is totally extinguished whereas in the case of assignment the debt is number extinguished, the debt remains, the debtor remains, only the creditor changes. That, the assignee Bank cannot be said to be recovering debt when it in fact assigns the debt because both the debtor and the debt companytinue to exist and they are number extinguished. In the written submissions submitted on behalf of the borrower, one additional point is taken. According to the borrower, in the present batch of cases all rights and liabilities have crystallized on the date of the winding up order and, therefore, assignment of debt by a bank cannot be permitted after the companypany is ordered to be wound up as that would amount to violating the provisions of the Companies Act, 1956. For the afore-stated reasons, the learned companynsel submitted that numberinterference is called for with the impugned judgment s and the appeals preferred by the assignor deserve to be dismissed. Issues Whether the Gujarat High Court was right in holding that assignment of debts by banks inter se is number an activity permissible under the BR Act, 1949 and companysequently all executed companytracts of assignment of debts were illegal? Whether the High Court was right in holding that the assignee bank s was number entitled to substitution in place of the original lendor assignor in proceedings relating to companypanies in liquidation pending in the Company Court? Reasons and Findings On the issue companycerning assignment of debts by bank inter se Before dealing with Issue No. i , we need to quote hereinbelow relevant provisions of BR Act, 1949 2 - Application of other laws number barred The provisions of this Act shall be in addition to, and number, save as hereinafter expressly provided, in derogation of the Companies Act, 1956 1 of 1956 , and any other law for the time being in force. 5 - Interpretation In this Act, unless there is anything repugnant in the subject or companytext, - b banking means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawal by cheque, draft, order or otherwise c banking companypany means any companypany which transacts the business of banking in India Explanation.--Any companypany which is engaged in the manufacture of goods or carries on any trade and which accepts deposits of money from the public merely for the purpose of financing its business as such manufacturer or trader shall number be deemed to transact the business of banking within the meaning of this clause ca banking policy means any policy which is specified from time to time by the Reserve Bank in the interest of the banking system or in the interest of monetary stability or sound economic growth, having due regard to the interests of the depositors, the volume of deposits and other resources of the bank and the need for equitable allocation and the efficient use of these deposits and resources d companypany means any companypany as defined in section 3 of the Companies Act, 1956 1 of 1956 and includes a foreign companypany within the meaning of section 591 of that Act Reserve Bank means the Reserve Bank of India companystituted under section 3 of the Reserve Bank of India Act, 1934 2 of 1934 6 - Forms of business in which banking companypanies may engage In addition to the business of banking, a banking companypany may engage in any one or more of the following forms of business, namely- a the borrowing, raising, or taking up of money the lending or advancing of money either upon or without security the drawing, making, accepting, discounting, buying, selling, companylecting and dealing in bills of exchange, hoondees, promissory numberes, companypons, drafts, bills of lading, railway receipts, warrants, debentures, certificates, scrips and other instruments and securities whether transferable or negotiable or number the granting and issuing of letters of credit, travellers cheques and circular numberes the buying, selling and dealing in bullion and specie the buying and selling of foreign exchange including foreign bank numberes the acquiring, holding, issuing on companymission, underwriting and dealing in stock, funds, shares, debentures, debenture stock, bonds, obligations, securities and investments of all kinds the purchasing and selling of bonds, scrips or other forms of securities on behalf of companystituents or others, the negotiating of loans and advances the receiving of all kinds of bonds, scrips or valuables on deposit or for safe custody or otherwise the providing of safe deposit vaults the companylecting and transmitting of money and securities f managing, selling and realising any property which may companye into the possession of the companypany in satisfaction or part satisfaction of any of its claims g acquiring and holding and generally dealing with any property or any right, title or interest in any such property which may form the security or part of the security for any loans or advances or which may be companynected with any such security l selling, improving, managing, developing, exchanging, leasing, mortgaging, disposing of or turning into account or otherwise dealing with all or any part of the property and rights of the companypany n doing all such other things as are incidental or companyducive to the promotion or advancement of the business of the companypany o any other form of business which the Central Government may, by numberification in the Official Gazette, specify as a form of business in which it is lawful for a banking companypany to engage. No banking companypany shall engage in any form of business other than those referred to in sub-section 1 . 8 - Prohibition of trading Notwithstanding anything companytained in section 6 or in any companytract, numberbanking companypany shall directly or indirectly deal in the buying or selling or bartering of goods, except in companynection with the realisation of security given to or held by it, or engage in any trade, or buy, sell or barter goods for others otherwise than in companynection with bills of exchange received for companylection or negotiation or with such of its business as is referred to in clause i of sub-section 1 of section 6 9 - Disposal of number-banking assets Notwithstanding anything companytained in section 6, numberbanking companypany shall hold any immovable property howsoever acquired, except such as is required for its own use, for any period exceeding seven years from the acquisition thereof or from the companymencement of this Act, whichever is later or any extension of such period as in this section provided, and such property shall be disposed of within such period or extended period, as the case may be Provided that the banking companypany may, within the period of seven years as aforesaid deal or trade in any such property for the purpose of facilitating the disposal thereof Provided further that the Reserve Bank may in any particular case extend the aforesaid period of seven years by such period number exceeding five years where it is satisfied that such extension would be in the interests of the depositors of the banking companypany. Regulation of paid-up capital, subscribed capital and authorised capital and voting rights of shareholders No banking companypany shall carry on business in India, unless it satisfies the following companyditions, namelythat the subscribed capital of the companypany is number less than one-half of the authorised capital, and the paid-up capital is number less than one-half of the subscribed capital and that, if the capital is increased, it companyplies with the companyditions prescribed in this clause within such period number exceeding two years as the Reserve Bank may allow that the capital of the companypany companysists of ordinary shares only or of ordinary shares or equity shares and such preferential shares as may have been issued prior to the 1st day of July, 1944 Provided that numberhing companytained in this sub-section shall apply to any banking companypany incorporated before the 15th day of January, 1937. No person holding shares in a banking companypany shall, in respect of any shares held by him, exercise voting rights on poll in excess of ten per cent of the total voting rights of all the shareholders of the banking companypany. Reserve Fund Every banking companypany incorporated in India shall create a reserve fund and shall, out of the balance of profit of each year as disclosed in the profit and loss account prepared under section 29 and before any dividend is declared, transfer to the reserve fund a sum equivalent to number less than twenty per cent of such profit. 1A Notwithstanding anything companytained in subsection 1 , the Central Government may, on the recommendation of the Reserve Bank and having regard to the adequacy of the paid-up capital and reserves of a banking companypany in relation to its deposit liabilities, declare by order in writing that the provisions of sub-section 1 shall number apply to the banking companypany for such period as may be specified in the order Provided that numbersuch order shall be made unless, at the time it is made, the amount in the reserve fund under sub-section 1 , together with the amount in the share premium account is number less than the paid-up capital of the banking companypany. Cash reserve Every banking companypany, number being a scheduled bank, shall maintain in India by way of cash reserve with itself or by way of balance in a current account with the Reserve Bank, or by way of net balance in current accounts or in one or more of the aforesaid ways, a sum equivalent to at least three per cent of the total of its demand and time liabilities in India as on the last Friday of the second preceding fortnight and shall submit to the Reserve Bank before the twentieth day of every month a return showing the amount so held on alternate Fridays during a month with particulars of its demand and time liabilities in India on such Fridays or if any such Friday is a public holiday under the Negotiable Instruments Act, 1881 26 of 1881 , at the close of business on the preceding working day. Explanation.--In this section, and in section 24,- a liabilities in India shall number includethe paid-up capital or the reserves or any credit balance in the profit and loss account of the banking companypany any advance taken from the Reserve Bank or from the Development Bank or from the Exim Bank or from the Reconstruction Bank or from the National Housing Bank or from the National Bank or from the Small Industries Bank by the banking companypany in the case of a Regional Rural Bank, also any loan taken by such bank from its Sponsor Bank b fortnight shall mean the period from Saturday to the second following Friday, both days inclusive c net balance in current accounts shall, in relation to a banking companypany, mean the excess, if any, of the aggregate of the credit balances in current account maintained by that banking companypany with State Bank of India or a subsidiary bank or a companyresponding new bank over the aggregate of the credit balances in current account held by the said banks with such banking companypany d for the purposes of companyputation of liabilities, the aggregate of the liabilities of a banking companypany to the State Bank of India, a subsidiary bank, a companyresponding new bank, a regional rural bank, another banking companypany, a companyoperative bank or any other financial institution numberified by the Central Government in this behalf, shall be reduced by the aggregate of the liabilities of all such banks and institutions to the banking companypany e the expression companyoperative bank shall have the meaning assigned to it in clause cci of section 56. The Reserve Bank may, for the purposes of this section and section 24, specify from time to time, with reference to any transaction or class of transactions, that such transaction or transactions shall be regarded as liability in India of a banking companypany and, if any question arises as to whether any transaction or class of transactions shall be regarded for the purposes of this section and section 24 as liability in India of a banking companypany, the decision of the Reserve Bank thereon shall be final. Restrictions on loans and advances Notwithstanding anything to the companytrary companytained in section 77 of the Companies Act, 1956 1 of 1956 , numberbanking companypany shall,- a grant any loans or advances on the security of its own shares, or- b enter into any companymitment for granting any loan or advance to or on behalf ofany of its directors, any firm in which any of its directors is interested as partner, manager, employee or guarantor, or any companypany number being a subsidiary of the banking companypany or a companypany registered under section 25 of the Companies Act, 1956 1 of 1956 , or a Government companypany of which or the subsidiary or the holding companypany of which any of the directors of the banking companypany is a director, managing agent, manager, employee or guarantor or in which he holds substantial interest, or any individual in respect of whom any of its directors is a partner or guarantor. Where any loan or advance granted by a banking companypany is such that a companymitment for granting it companyld number have been made if clause b of sub-section 1 had been in force on the date on which the loan or advance was made, or is granted by a banking companypany after the companymencement of section 5 of the Banking Laws Amendment Act, 1968 58 of 1968 , but in pursuance of a companymitment entered into before such companymencement, steps shall be taken to recover the amounts due to the banking companypany on account of the loan, or advance together with interest, if any, due thereon within the period stipulated at the time of the grant of the loan or advance, or where numbersuch period has been stipulated, before the expiry of one year from the companymencement of the said section 5 Provided that the Reserve Bank may, in any case, on an application in writing made to it by the banking companypany in this behalf, extend the period for the recovery of the loan or advance until such date, number being a date beyond the period of three years from the companymencement of the said section 5, and subject to such terms and companyditions, as the Reserve Bank may deem fit Provided further that this sub-section shall number apply if and when the director companycerned vacates the office of the director of the banking companypany, whether by death, retirement, resignation or otherwise. No loan or advance, referred to in sub-section 2 , or any part thereof shall be remitted without the previous approval of the Reserve Bank, and any remission without such approval shall be void and of numbereffect. Where any loan or advance referred to in subsection 2 , payable by any person, has number been repaid to the banking companypany within the period specified in that subsection, then, such person shall, if he is a director of such banking companypany on the date of the expiry of the said period, be deemed to have vacated his office as such on the said date. Explanation.--In this section- a loans or advance shall number include any transaction which the Reserve Bank may, having regard to the nature of the transaction, the period within which, and the manner and circumstances in which, any amount due on account of the transaction is likely to be realised, the interest of the depositors and other relevant companysiderations, specify by general or special order as number being a loan or advance for the purpose of this section b director include a member of any board or companymittee in India companystituted by a banking companypany for the purpose of managing, or for the purpose of advising it in regard to the management of, all or any of its affairs. If any question arises whether any transaction is a loan or advance for the purposes of this section, it shall be referred to the Reserve Bank, whose decision thereon shall be final. 21 - Power of Reserve Bank to companytrol advances by banking companypanies Where the Reserve Bank is satisfied that it is necessary or expedient in the public interest or in the interests of depositors or banking policy so to do, it may determine the policy in relation to advances to be followed by banking companypanies generally or by any banking companypany in particular, and when the policy has been so determined, all banking companypanies or the banking companypany companycerned, as the case may be, shall be bound to follow the policy as so determined. Without prejudice to the generality of the power vested in the Reserve Bank under sub-section 1 the Reserve Bank may give directions to banking companypanies, either generally or to any banking companypany or group of banking companypanies in particular, as to- a the purposes for which advances may or may number be made, b the margins to be maintained in respect of secured advances, c the maximum amount of advances or other financial accommodation which, having regard to the paid-up capital, reserves and deposits of a banking companypany and other relevant companysiderations, may be made by that banking companypany to any one companypany, firm, association of persons or individual, d the maximum amount up to which, having regard to the companysiderations referred to in clause c ,guarantees may be given by a banking companypany on behalf of any one companypany, firm, association of persons or individual, and e the rate of interest and other terms and companyditions on which advances or other financial accommodation may be made or guarantees may be given. Every banking companypany shall be bound to companyply with any directions given to it under this section. 22 - Licensing of banking companypanies Save as hereinafter provided, numbercompany shall carry on banking business in India unless it holds a licence issued in that behalf by the Reserve Bank and any such licence may be issued subject of such companyditions as the Reserve Bank may think fit to impose. Restrictions on opening of new, and transfer of existing, places of business Without obtaining the prior permission of the Reserve Bank- a numberbanking companypany shall open a new place of business in India or change otherwise than within the same city, town or village, the location of an existing place of business situated in India and b numberbanking companypany incorporated in India shall open a new place of business outside India or change, otherwise than within the same city, town or village in any companyntry or area outside India, the location of an existing place of business situated in that companyntry or area 24 - Maintenance of a percentage of assets 2A A scheduled bank, in addition to the average daily balance which it is, or may be, required to maintain under section 42 of the Reserve Bank of India Act, 1934 2 of 1934 and every other banking companypany, in addition to the cash reserve which it is required to maintain under section 18, shall maintain in India, assets, the value of which shall number be less than such percentage number exceeding forty per cent, of the total of its demand and time liabilities in India as on the last Friday of the second preceding fortnight as the Reserve Bank may, by numberification in the Official Gazette, specify from time to time and such assets shall be maintained, in such form and manner, as may be specified in such numberification. 35A. Power of the Reserve Bank to give directions Where the Reserve Bank is satisfied that- a in the public interest or aa in the interest of banking policy or b to prevent the affairs of any banking companypany being companyducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking companypany or c to secure the proper management of any banking companypany generally, it is necessary to issue directions to banking companypanies generally or to any banking companypany in particular, it may, from time to time, issue such directions as it deems fit, and the banking companypanies or the banking companypany, as the case may be, shall be bound to companyply with such directions. The Reserve Bank may, on representation made to it or on its own motion, modify or cancel any direction issued under sub-section 1 , and in so modifying or cancelling any direction may impose such companyditions as it thinks fit, subject to which the modification or cancellation shall have effect. 36 - Further powers and functions of Reserve Bank The Reserve Bank may- a caution or prohibit banking companypanies or any banking companypany in particular against entering into any particular transaction or class of transactions, and generally give advice to any banking companypany b on a request by the companypanies companycerned and subject to the provision of section 44A, assist, as intermediary or otherwise, in proposals for the amalgamation of such banking companypanies c give assistance to any banking companypany by means of the grant of a loan or advance to it under clause 3 of sub-section 1 of section 18 of the Reserve Bank of India Act, 1934 2of 1934 d at any time, if it is satisfied that in the public interest or in the interest of banking policy or for preventing the affairs of the banking companypany being companyducted in a manner detrimental to the interests of the banking companypany or its depositors it is necessary so to do, by order in writing and on such terms and companyditions as may be specified thereinrequire the banking companypany to call a meeting of its directors for the purpose of companysidering any matter relating to or arising out of the affairs of the banking companypany or require an officer of the banking companypany to discuss any such matter with an officer of the Reserve Bank depute one or more of its officers to which the proceedings at any meeting of the Board of directors of the banking companypany or of any companymittee or of any other body companystituted by it require the banking companypany to give an opportunity to the officers so deputed to be heard at such meetings and also require such officers to send a report of such proceedings to the Reserve Bank require the Board of directors of the banking companypany or any companymittee or any other body companystituted by it to give in writing to any officer specified by the Reserve Bank in this behalf at his usual address all numberices of, and other companymunications relating to, any meeting of the Board, companymittee or other body companystituted by it appoint one or more of its officers to observe the manner in which the affairs of the banking companypany or of its offices or branches are being companyducted and make a report thereon require the banking companypany to make, within such time as may be specified in the order, such changes in the management as the Reserve Bank may companysider necessary. Reserve Bank to be official liquidator.- Notwithstanding anything companytained in section 38A of this Act or in section 448 or section 449 of the Companies Act, 1956 1 of 1956 , where in any proceeding for the winding up by the High Court of a banking companypany, an application is made by the Reserve Bank in this behalf, the Reserve Bank, the State Bank of India or any other bank numberified by the Central Government in this behalf or any individual, as stated in such application shall be appointed as the official liquidator of the banking companypany in such proceeding and the liquidator, if any, functioning in such proceeding shall vacate office upon such appointment. Subject to such directions as may be made by the High Court, the remuneration of the official liquidator appointed under this section, the companyt and expenses of this establishment and the companyt and expenses of the winding up shall be met out of the assets of the banking companypany which is being wound up, and numberwithstanding anything to the companytrary companytained in any other law for the time being in force, numberfees shall be payable to the Central Government, out of the assets of the banking companypany. 46 - Penalties If any other provision of this Act is companytravened or if any default is made incompanyplying with any requirement of this Act or of any order, rule or direction made or companydition imposed thereunder, or carrying out the terms of, or the obligations under, a scheme sanctioned under sub-section 7 of section 45, by any person, such person shall be punishable with fine which may extend to fifty thousand rupees or twice the amount involved in such companytravention or default where such amount is quantifiable, whichever is more, and where a companytravention or default is a companytinuing one, with a further fine which may extend to two thousand and five hundred rupees for every day, during which the companytravention or default companytinues. 47A. Power of Reserve Bank to impose penalty Notwithstanding anything companytained in section 46, if a companytravention or default of the nature referred to in sub-section 3 or sub-section 4 of section 46, as the case may be, is made by a banking companypany, then, the Reserve Bank may impose on such banking companypany- a where the companytravention is of the nature referred to in sub-section 3 of section 46, a penalty number exceeding twice the amount of the deposits in respect of which such companytravention was made b where the companytravention or default is of the nature referred to in sub-section 4 of section 46, a penalty number exceeding five lakh rupees or twice the amount involved in such companytravention or default where such amount is quantifiable, whichever is more, and where such the companytravention or default is a companytinuing one, a further penalty which may extend to twenty-five thousand rupees for every day, after the first, during which the companytravention of default companytinues. Application of certain provisions to the State Bank of India and other numberified banks Without prejudice to the provisions of the State Bank of India Act, 1955 23 of 1955 or any other enactment, the provisions of sections 10, 13 to 15, 17, 19 to 21A, 23 to 28, 29 excluding sub-section 3 subsection 1B , 1C and 2 of sections 30,31, 34, 35, 35A, 36 excluding clause a of sub-section 1 , 45Y to 45ZF, 46 to48 50, 52 and 53 shall also apply so far as may be, to and in relation to the State Bank of India or any companyresponding new bank or a Regional Rural Bank or any subsidiary bank as they apply to and in relation to banking companypanies Provided that- a numberhing companytained in clause c of sub-section 1 of section 10 shall apply to the chairman of the State Bank of India or to a managing director of any subsidiary bank insofar as the said clause precludes him from being a director of, or holding an office in, any institution approved by the Reserve Bank b numberhing companytained in sub-clause iii of clause b of sub-section 1 of section 20 shall apply to any bank referred to in sub-section 1 , insofar as the said subclause iii of clause b precludes that bank from entering into any companymitment for granting any loan or advance to or on behalf of a companypany number being a Government companypany in which number less than forty per cent of the paid-up capital is held whether singly or taken together by the Central Government or the Reserve Bank or a companyporation owned by that bank and c numberhing companytained in section 46 or in section 47A shall apply to, - an officer of the Central Government or the Reserve Bank, numberinated or appointed as director of the State Bank of India or any companyresponding new bank or a Regional Rural Bank or any subsidiary bank or a banking companypany or an officer of the State Bank of India or a companyresponding new bank or a Regional Rural Bank or a subsidiary bank numberinated or appointed as director of any of the said banks number being the bank of which he is an officer or of a banking companypany. References to a banking companypany in any rule or direction relating to any provision of this Act referred to in sub-section 1 shall, except where such rule or direction provides otherwise, be companystrued as referring also to the State Bank of India, a companyresponding new bank, a Regional Rural Bank and a subsidiary bank. For the purpose of deciding Issue No. i , we are also required to quote relevant portion of RBI Guidelines dated 13th July, 2005, which reads as under Guidelines on purchase sale of Non Performing Financial Assets Scope These guidelines would be applicable to banks, FIs and NBFCs purchasing selling number performing financial assets, from to other banks FIs NBFCs excluding securitisation companypanies reconstruction companypanies . A financial asset, including assets under multiple companysortium banking arrangements, would be eligible for purchase sale in terms of these guidelines if it is a number-performing asset number performing investment in the books of the selling bank. The reference to bank in the guidelines would include financial institutions and NBFCs. Brief analysis of the BR Act, 1949 The BR Act, 1949 provides for the companyprehensive definition of banking so as to bring within its scope all institutions which receive deposits for lending or investment and to give RBI a companytrol over banking companypanies. It is an Act to companysolidate and amend the law relating to banking. Section 2 clarifies that the 1949 Act shall be in addition to and number in derogation of the Companies Act, 1956 and any other law for the time being in force save as therein expressly provided. Section 5 1 a is the interpretation section. It defines banking to mean accepting deposits for lending. This is principal business of a bank. Section 5 1 c defines banking companypany as any companypany which transacts the business of banking. Thus, a banking companypany has to be a companypany in the first instance. Section 5 1 ca defines banking policy to mean any policy which is specified from time to time by RBI in the interest of banking system or in the interest of monetary stability or economic growth having due regard to the interest of the depositors and efficient use of these deposits. Part II deals with business of banking companypanies. Section 6 1 in Part II says that in addition to the business of banking, a banking companypany may engage in any one or more of the forms of business enumerated in clauses a to o . It companyers borrowing, lending, advancing of money acquiring and holding and dealing with property security or right, title and interest therein selling, improving leasing or turning into account or otherwise dealing with such security doing all such other things as are incidental or companyducive to the promotion or advancement of the business of the companypany and any other form of business which the Central Government may numberify. Thus, Section 6 1 has a general provision and the provision which enumerates topics fields in which the banks can carry on their business. Section 8 begins with number-obstante clause. It says that numberbanking companypany shall deal in the buying or selling of goods except in companynection with the realization of security. Section 9 also begins with a number-obstante clause. It deals with restrictions on disposal of number-banking assets. Both Sections 8 and 9 are prohibitions and restrictions under the Act which are companyered by the expression save as except provided in Section 2 of the Act. As stated earlier, BR Act, 1949 is in addition to the Companies Act, 1956 or any other law for the time being in force and its provisions shall number be treated to be in derogation of any other laws save and except to the extent of any activity which is prohibited or restricted See Section 2 . Section 12 says that numberbanking companypany shall carry on business unless it satisfies certain companyditions. Section 17 refers to creation of Reserve Fund. Section 18 refers to creation of Cash Reserve. Section 20 refers to restrictions on loans and advances. Section 21 deals with the power of RBI to companytrol advances by banking companypanies. Section 21 empowers RBI to frame policies in relation to advances to be followed by banking companypanies. It further says that once such policy is made all banking companypanies shall be bound to follow them. Section 21 1 is once again a general provision empowering RBI to determine policy in relation to advances whereas Section 21 2 empowers RBI to give directions to banking companypanies as to items mentioned there i.e. in Section 21 2 . Under Section 21 3 every banking companypany is bound to companyply with directions given by RBI at the peril of penalty being levied for number-compliance. Section 35A says that where RBI is satisfied that in the interest of Banking Policy it is necessary to issue directions to banking companypanies it may do so from time to time and the banking companypanies shall be bound to companyply with such directions. Thus, in exercise of the powers companyferred by Sections 21 and 35A of the said Act, RBI can issue directions having statutory force of law. Section 36 deals with further powers and functions of RBI. Under Section 39 it is the RBI who shall be the Official Liquidator in any proceedings companycerning winding up of a banking companypany. The above analysis of the various provisions of the 1949 Act shows that RBI is empowered to regulate the business of the banking companypanies. That, RBI is empowered to companytrol management of banking companypanies in certain situations. It is empowered to lay down companyditions on which the banking companypanies will operate. It is empowered to regulate paid-up capital, reserve fund, cash fund and above all to lay down policies in the matter of advances to be made by the banking companypanies, allocation of resources etc. While laying down such policies under the said Act, RBI can lay down parameters enabling banking companypanies to expand its business. For example, RBIs permission is required to be obtained if a banking companypany seeks to deal in derivatives. It is a business which will number fall in clauses a to o of Section 6 1 a and yet RBI can lay down guidelines and directions enabling banking companypanies to deal in derivatives like futures and options. The point we are trying to make is that apart from the principal business of accepting deposits and lending the said 1949 Act leaves ample scope for the banking companypanies to venture into new businesses subject to such businesses being subject to the companytrol of the Regulator, viz. RBI. In other words, the 1949 Act allows banking companypanies to undertake activities and businesses as long as they do number attract prohibitions and restrictions like those companytained in Sections 8 and 9. In this companynection we need to emphasize that Section 6 1 n enables a banking companypany to do all things as are incidental or companyducive to promotion or advancement of the business of the companypany. Section 6 1 enables banking companypanies to carry on different types of businesses. Under Section 6 1 , these different types of businesses are in addition to business of banking, viz., companye banking. The importance of the words in addition to in Section 6 1 is that even if different businesses under clauses a to o are shut down, the companypany would still be a banking companypany as long as it is in the companye banking of accepting deposits and lending so that its main income is from the spread or what is called as interest income. Thus, we may broadly categorise the functions of the banking companypany into two parts, viz., companye banking of accepting deposits and lending and miscellaneous functions and services. Section 6 of the BR Act, 1949 provides for the form of business in which banking companypanies may engage. Thus, RBI is empowered to enact a policy which would enable banking companypanies to engage in activities in addition to companye banking and in the process it defines as to what companystitutes banking business. The BR Act, 1949 basically seeks to regulate banking business. In the cases in hand we are number companycerned with the definition of banking but with what companystitutes banking business. Thus, the said BR Act, 1949 is an open-ended Act. It empowers RBI regulator and policy framer in matter of advances and capital adequacy numberms to develop a healthy secondary market, by allowing banks inter se to deal in NPAs in order to clean the balance sheets of the banks which guideline policy falls under Section 6 1 a r w Section 6 1 n . Therefore, it cannot be said that assignment of debts NPAs is number an activity permissible under the BR Act, 1949. Thus, accepting deposits and lending by itself is number enough to companystitute the business of banking. The dependence of companymerce on banking is so great that in modern money economy the cessation even for a day of the banking activities would companypletely paralyse the economic life of the nation. Thus, the BR Act, 1949 mandates a statutory companyprehensive and formal structure of banking regulation and supervision in India. The test to be applied is - whether trading in NPAs has the characteristics of a bona fide banking business. That test is satisfied in this case. The guidelines issued by RBI dated 13.7.2005 itself authorizes banks to deal inter se in NPAs. These guidelines have been issued by the Regulator in exercise of the powers companyferred by Sections 21 and 35A of the Act. They have a statutory force of law. They have allowed banks to engage in trading in NPAs with the purpose of cleaning the balance sheets so that they companyld raise the capital adequacy ratio. All this companyes within the ambit of Section 21 which enables RBI to frame the policy in relation to Advances to be followed by the banking companypanies and which empowers RBI to give directions to banking companypanies under Section 21 2 . These guidelines and directions following them have a statutory force. When a delegate is empowered by the Parliament to enact a Policy and to issue directions which have a statutory force and when the delegatee RBI issues such guidelines Policy having statutory force, such guidelines have got to be read as supplement to the provisions of the BR Act, 1949. The banking policy is enunciated by RBI. Such policy cannot be said to be ultra vires the Act. The idea behind empowering RBI to determine the Policy in relation to Advances is to enable banking companypanies to expand their business of banking and in that sense such guidelines also define - as to what companystitutes banking business. Trading in NPA - a misnomer At the outset one needs to know what is NPA? When a borrower who is under liability to pay to secured creditors, makes default in repayment of secured debt or any installment thereof, the account of borrower is classified as Non-Performing Asset NPA . Such NPAs cannot be used for any productive purpose. Continuous growth in NPAs threatens the repayment capacity of the banks. They have an adverse impact on the financial strength of the banks which in the present era of globalization are required to companyform to International Standards. Thus, NPA means an asset or account receivable of a borrower, which has been classified by banks or financial institutions in terms of RBI Guidelines as sub-standard, doubtful etc. These guidelines are issued to improve quality of assets of the banks. The 2005 guidelines of RBI are number to eliminate NPAs but to restructure. The BR Act, 1949 vide Section 21 empowers RBI in the interest of the Banking Policy to lay down guidelines in relation to advances to be followed by banking companypanies. The 2005 guidelines have been issued as a restructuring measure in order to avoid setbacks in the banking system. NPAs do number generate interest. 85 of the Indian Banks income companyes from interest. Thus, NPAs adversely impact profits of the banks and hence, as a matter of Banking Policy, RBI as Regulator seeks through its guidelines under Section 21 r w Section 35A to manage these NPAs and number to eliminate. The said guidelines deal with restructuring of the banking system which is one of the objects behind giving authority to RBI to frame banking policy. One more aspect needs to be kept in mind. In this batch of cases we are dealing with assets in the hands of banks. NPAs are Account Receivables. The impugned guidelines show that RBI companysiders inter se NPA assignment between banks to be a tool for resolving the issue of NPAs and in the interest of banking policy under Section 21 of the BR Act, 1949. The object is to minimize the problem of credit risk. The companyporate debt restructuring is one of the methods for reducing NPAs. Thus, such restructuring as a matter of banking policy cannot be treated as trading. One has to keep in mind the object behind enactment of BR Act, 1949. Thus, the said Guidelines fall under Section 21 of the 1949 Act. These Guidelines are a part of Credit Appraisal Mechanism. Thus, in our view the impugned Guidelines are number ultra vires the BR Act, 1949. Dealing in NPAs as part of the Credit Appraisal Mechanism and as a part of Restructuring Mechanism falls within Section 21 r w Section 35A of the Act. Hence, it cannot be said that transfer of debts NPAs inter se between banks is an activity which is impermissible under the 1949 Act. The BR Act, 1949 is an Act enacted to companysolidate and amend the law relating to banking. Thus, while interpreting the Act one needs to keep in mind number only the framework of the banking law as it stood in 1949 but also the growth and the new companycepts that have emerged in the companyrse of time. see Principles of Statutory Interpretation by G.P. Singh, 11th edition at page 328. Thus, in our view on reading the provisions of the BR Act, 1949 with the Guidelines of RBI issued from time to time in relation to Advances and Re-structuring Management of NPAs we are of the view that the BR Act, 1949 is a companyplete Code on banking and that dealing in NPAs inter se by the banks needs to be looked in the larger framework of Re-structuring of banking System. Thus, we need number go into the provisions of the said TP Act. In fact, it is the case of the borrower s that provisions of the said TP Act has numberapplication. See Written Submissions filed on 31.8.2010 . Invocation of Section 130 of TP Act, 1882 In the alternative, since the borrower s has relied on Section 130 of the said TP Act, one needs to analyse the companytentions raised in that regard. According to the borrower s assignment of Financial Instruments in possession of ICICI Bank Ltd. to Kotak Mahindra Bank Ltd. transfers number merely the right to recover the debt but also transfers the obligations under the Financial Instruments as if they were executed by the clients of ICICI Bank in favour of the assignee, i.e., Kotak Mahindra Bank Ltd. According to the borrower s , an assignment of a debt can never carry with it the assignment of the obligations of the assignor unless there is a numberation of the companytract by all parties. Therefore, according to the borrower s , the impugned Deed of Assignment is legally unsustainable without numberation of original companytract between ICICI Bank Ltd. assignor and the borrower s assignee . We find numbermerit in the above arguments. As stated above, an outstanding in the account of a borrower s customer is a debt due and payable by the borrower s to the bank. Secondly, the bank is the owner of such debt. Such debt is an asset in the hands of the bank as a secured creditor or mortgagee or hypothecatee. The bank can always transfer its asset. Such transfer in numbermanner affects any right or interest of the borrower s customer . Further, there is numberprohibition in the BR Act, 1949 in the bank transferring its assets inter se. Even in the matter of assigning debts, it cannot be said that the banks are trading in debts, as held by the High Court s . The assignor bank has never purchased the debt s . It has advanced loans against security as part of its banking business. The account of a client in the books of the bank becomes Non Performing Asset when the client fails to repay. In assigning the debts with underlying security, the bank is only transferring its asset and is number acquiring any rights of its client s . The bank transfers its asset for a particular agreed price and is numberlonger entitled to recover anything from the borrower s . The moment ICICI Bank Ltd. transfers the debt with underlying security, the borrower s ceases to be the borrower s of the ICICI Bank Ltd. and becomes the borrower s of Kotak Mahindra Bank Ltd. assignee . At this stage, we wish to once again emphasize that debts are assets of the assignor bank. The High Court s has erred in number appreciating that the assignor bank is only transferring its rights under a companytract and its own asset, namely, the debt as also the mortgagees rights in the mortgaged properties without in any manner affecting the rights of the borrower s mortgagor s in the companytract or in the assets. None of the clauses of the impugned Deed of Assignment transfers any obligations of the assignor towards the assignee. In the case of Khardah Company Ltd. v. Raymon Co. India Private Ltd. reported in 1963 3 S.C.R. 183 the Supreme Court has held that the law on the subject of assignment of a companytract is well settled. An assignment of a companytract might result by transfer either of the rights or by transfer of obligations thereunder. There is a well recognized distinction between the two classes of assignments. As a rule, obligations under a companytract cannot be assigned except with the companysent of the promisee, and when such companysent is given, it is really a numberation resulting in substitution of liabilities. That, rights under a companytract are always assignable unless the companytract is personal in its nature or unless the rights are incapable of assignment, either under the law or under an agreement between the parties. A benefit under the companytract can always be assigned. That, there is, in law, a clear distinction between assignment of rights under a companytract by a party who has performed his obligation thereunder and an assignment of a claim for companypensation which one party has against the other for breach of companytract. In the case of Camdex International Ltd. v. Bank of Zambia reported in 1998 Q.B. 22 CA the following observation which is relevant to the present case needs to be quoted The assignment of a debt will number be companytrary to public policy solely on the grounds that the assignee has purchased the debt for a companysiderably discounted price or because that price is only payable after a period of credit. Nor will the assignment be companytrary to public policy simply because the assignee may make a profit on the transaction at the end of the day. If there was numberprospect of a profit, Hobhouse LJ observed, companymercial entities would never purchase debts. Similarly, the following proposition in Chitty on Contracts, 27th edn. 1994 at para 19.027 is relevant to be numbered. It is also well established that a claim to a simple debt is assignable even if the debtor has refused to pay. The practice of assigning or selling debts to debt companylecting agencies and credit factors companyld hardly be carried on if the law were otherwise. In view of the above exposition of law, we find that under the impugned Deed of Assignment only the Account Receivables in the books of ICICI Bank Ltd. has been transferred to Kotak Mahindra Bank Ltd. The obligations of ICICI Bank Ltd. towards its borrower s customer under the loan agreement secured by deed of hypothecation mortgage have number been assigned by ICICI Bank Ltd. to the assignee bank, namely, Kotak Mahindra Bank Ltd. Hence, it cannot be said that the impugned Deed of Assignment is unsustainable in law. The obligations referred to in the impugned Deed of Assignment are the obligations, if any, of ICICI Bank Ltd. towards Kotak Mahindra Bank Ltd. assignee in the matter of transfer of NPAs. For example, when an Account Receivable is treated as NPA and assigned to the assignee bank, the parties have to follow certain Guidelines issued by RBI. If there is a breach of the Guidelines or statutory directions issued by RBI by Assignor in regard to transfer of NPA then the assignee bank can enforce such obligations vis--vis the assignor bank. It is these obligations which are referred to in the impugned Deed of Assignment. That, an Account Receivable becomes an NPA only because of the default companymitted by the borrower s who fails to repay. Lastly, it may be mentioned that the said SARFAESI Act, 2002 was enacted enabling specified SPVs to buy the NPAs from banks. However, from that it does number follow that banks inter se cannot transfer their own assets. Hence the said SARFAESI Act, 2002 has numberrelevance in this case. Before companycluding, we may state that NPAs are created on account of the breaches companymitted by the borrower. He violates his obligation to repay the debts. One fails to appreciate the opportunity he seeks to participate in the Transfer of Account Receivable from one bank to the other. Conclusion As stated above, by the impugned judgment, the Division Bench of the Gujarat High Court upheld the order of the Company Court only on one ground, namely, assignment of debts by the banks inter se is an activity which is impermissible under the Banking Regulation Act, 1949. |
This is an appeal under Section 379, Cr. P.C. read with Section 2 a of the Supreme Court Enlargement of Criminal Appellate Jurisdiction Act, 1970. The appellant along with three others were tried for offences punishable Under Section 302 read with Section 34, I.P.C. The appellant was also charged Under Section. 302 simpliciter. The trial companyrt acquitted all the accused rejecting the testimony of the sole eye-witness, P.W. 7, who is widow of the deceased. The State preferred an appeal to the High Court. The learned Judge of the High Court while companyfirming the acquittal of A-2 to A-4 companyvicted the appellant A-l under Section 302, I.P.C and sentenced him to undergo imprisonment for life. Mr. P.H. Parekh, learned Counsel for the appellant submits that the evidence of P.W. 7 suffers from serious infirmities and she companyld number have witnessed the occurrence as she was sleeping. At any rate the version given by her is highly unreliable and that her companyduct subsequent to the occurrence is highly unnatural. His further submission is that the view taken by the trial companyrt is reasonable one and the High Court has grossly erred in interfering with the matter. The prosecution case is that the deceased Waman Budha Bhil was the brother of P.W. 5 and husband of P.W. 7. The husband and wife were living in a hut in the field. It appears that there was enmity between A-l and the deceased and his wife on the ground that A-l had illicit sexual relations with Meerabai, P.W. 9, the sister of P.W. 7. There were some disputes. On the date in question i.e. 24-6-1975 at about 8.30 p.m. P.W. 7 and deceased were sleeping. P.W. 7 woke up for urination and again was lying down. At that juncture, it is alleged that A-l to A-4 entered the hut. There was a kerosene lamp burning in the wall pocket in the hut and that P.W. 7 identified that A-l had the big stone, A-2 had an axe and the other two accused had small stones with them. They went round the deceased and A-2 threatened P.W. 7 and made her known to raise numbercries. It is further alleged that the A-l threw the stone on the head of the sleeping deceased as a result of which he died subsequently and all the accused left the place. Thereafter P.W. 7 raised cries and hearing the same P.W. 5 and others came there. P.W. 10 also came there. But numberreport was given to him. However, P.W. 5 went to police station on the next morning and gave a report on the basis of which FIR was registered and investigation was done. The dead body was sent for postmortem. The doctor P.W. 8 companyducted the post-mortem. He numbericed a vertical companytused lacerated wound on the right frontal region above the right eye-brow extending all over the right frontal region and extending up to the right pariatal region of the dead body. He also found a vertical fracture all over the right frontal region extending all over the right parietal region. He found that the injuries companyld have been caused by blunt objects and they were sufficient to cause death in the ordinary companyrse of nature. After companypletion of the investigation a charge-sheet was filed. The prosecution mainly relied on the evidence of P.W. 7 and some companyroborating evidence of P.W. 9. The learned Sessions Judge pointed out several discrepancies in the evidence and held that it is highly unsafe to rely and ultimately acquitted the accused. From the High Court judgment we find that the P.W. 7s evidence is accepted only to the overt act attributed to the appellant. It may number be necessary for us to examine her evidence in detail for the reason that the evidence of P.W. 5 companypletely demolishes P.W. 7s evidence. P.W. 5 is numberother than the brother of the deceased. He also lives in the same vicinity. On the fateful night when he was sleeping his daughter told him that somebody was shouting in the field of the deceased. P.W. 5 also heard the shouts. His father told him that somebody had beaten the deceased. Thereupon P.W. 5 went to the hut of the deceased and saw that P.W. 7 was there. He found the deceased lying on the bed and there was a head injury. He immediately asked P.W. 7 as to what had happened. She did number say anything. P.W. 5 thereafter went to police patel and he was number in the house. Next morning he went to the police station and gave the report. The witness, however, in the examination itself stated that the whole of the report is number companyrect. In the cross-examination by the accused it is clearly stated that P.W. 7 did number tell anything to the police patel in the presence of P.W. 5. This is a serious infirmity regarding the present version that has been put forward. If P.W. 7 told P.W. 5 that she was fast asleep and somebody had beaten the deceased then the present version of P.W. 7 becomes highly unreliable. This and many other infirmities had been pointed out by the trial companyrt. In such a situation we are of the view that the High Court ought number to have interfered in the matter. The appeal is allowed. The companyviction and the sentences of the appellant are, set aside. He is on bail. |
K. MATHUR, J. This appeal is directed against an order of the Karnataka High Court whereby the Division Bench of the High Court has acquitted all the six accused persons by its order dated April 3,1998 passed in Criminal Appeal No.962 of 1996. Hence the present appeal has been filed against the order of acquittal of the aforesaid six accused persons. Brief facts which are necessary for disposal of this appeal are that a charge-sheet was filed by Kavalande Police-Station against 17 accused persons under Sections 143, 147, 148, 341, 302 and 324 of the Indian Penal Code hereinafter to be referred to as I.P.C. read with Section 149, I.P.C. Allegations were that accused 1 to 17 on March 24, 1996 at about 4.00 p.m. at Mallahalli village, Nanangud Taluk, formed an unlawful assembly with the companymon object to cause the death of Dasanaika, husband of P.W.1. In pursuance of such companymon object such assembly was formed and they were armed with deadly weapons like Chopper, iron rod, clubs and stones. All the accused persons wrongfully restrained Dasanaika and murdered him intentionally causing injuries. They also caused injuries on P.W.4 by stone. It is alleged that there are rival factions in the village and the whole incident leading to lodging of F.I.R. is alleged to have taken place in the early hours of March 24, 1996 when P.W.1 Malligamma, went to the village well for fetching water. It is alleged that she had filled one pitcher and she was drawing water to fill the next pot, at that time Jayaraju, son of Puttamada Nayak- A-3, came there to fetch water for his bullocks. Jayaraju allowed the bullocks to take water from one pitcher filled by Malligamma. This was objected to by P.W.1. Thereupon, Jayaraju kicked the water pitcher and kicked P.W.1. However, with the intervention of other elderly women Karigamma, Nanjamma and Kempanaik , she was persuaded to go back to her house. In the afternoon at 2.30 P.M. when her husband came back from Nanjangud Court she narrated whole incident of the maltreatment given by Jayaraju to her and she asked him to lodge a companyplaint. But her husband went to his younger brother, Puttaswamy for companysultation and thereafter they went to their elder brother, Ponnanaika. The houses of Puttaswamy and Ponnanaika are adjacent to each other. It is alleged that at 4.00 P.M. she heard some shouting and she saw her husband, Dasanaika was being chased by a group of 10 to 12 persons. They were all persons of other factions of the village and they were chasing her husband towards the house of Chairman-Dasanayaka. It is alleged that A-1, Papanaika was holding a chopper, A-2, Mahadevanaika Mahadeva Chikkavanu son of Govindanaika was armed with an iron rod and A- 7 A-8 were holding clubs and other accused persons had clubs or stones in their hands. When her husband, Dasanaika came near the house of Chairman-Dasanayak, A-1 gave a blow by his chopper on the head of her husband and on other parts of the body. Similarly, A- 2, Mahadevanaika beat her husband by means of an iron rod on different parts of the body and rest of the accused persons beat her husband with the clubs and stones. She ran towards her husband to rescue him and she raised her hands to ward off the blows on her husband the blows fell on her right hand and caused injuries to her wrist. Her husband fell down and became unconscious. Meanwhile, one Shankar, P.W.4, son of Ponnanaika came running to rescue her husband but he was also beaten with stones and clubs which hit his forehead and all over his body. He fell down near the house of Ramanaika and became unconscious. A report of this incident was immediately lodged at the Police-Station and on the basis of the statement of the P.W.1, an F.I.R. was chalked out. Thereafter, Dasanaika, the injured was immediately taken to the hospital and ultimately he succumbed to his injuries. He received as many as 29 injuries on dissection of his body, 9 injuries were also found including fracture of parietal and occipital bones and fractures on the hands and feet. After necessary investigation, the police filed challan against 17 accused persons. Prosecution examined as many as 36 witnesses and got a large number of documents exhibited. The police arrested the accused persons, the chopper and iron rod were recovered at the instance of the accused persons. Out of the 36 witnesses, there are seven eye witnesses examined by the prosecution and rest of the witnesses were to the recovery of the seized articles and the medical evidence. The case was ultimately companymitted to the Court of Session and learned II Addl. Sessions Judge, Mysore after scrutinizing all the evidence came to the companyclusion that so far as the guilt of the accused, A- 1 to A-6, it is fully established and companyvicted and sentenced A-1 to undergo R.I. for one month under Section 341, for two years under Section 324 and imprisonment for life under Section 302 read with Section 149, I.P.C. A2 to A-6 were sentenced to undergo R.I. for one month for the offence u S 341 I.P.C. and imprisonment for life for the offence under Section 302 read with Section 149 I.P.C. Aggrieved against the said order of companyviction and sentence, A-1 to A-6 preferred an appeal before High Court and the Division Bench of the High Court acquitted all the accused persons on the ground that when the witnesses were disbelieved for large number of accused persons involved, therefore, it is number trustworthy to uphold the companyviction of the six accused persons on the basis of the same evidence. Hence, the learned Division Bench acquitted all the accused persons. Aggrieved against the said order of acquittal dated April 3,1998 passed by the Karnataka High Court, the present appeal was filed by the State of Karnataka. Learned companynsel for the appellant-State submitted that in view of the companysistent and reliable statement of the eye witnesses, the Division Bench of the High Court has companypletely gone wrong in reversing the order of companyviction into an acquittal simply on the ground that the evidence of some of the witnesses were inconsistent about the alleged occurrence and moreover large number of accused persons had been acquitted by the learned trial companyrt, therefore it is number safe to believe this evidence to uphold the companyviction for remaining accused. Learned companynsel for the appellant read out to us the statement of the eye witnesses and tried to persuade us that small discrepancy in the version is just but natural and relationship between the parties cannot be a ground to disbelieve all the eye witnesses. Learned companynsel for the appellant also invited our attention to some of the decisions of this Court in his support which we will deal at appropriate stage. As against this, learned companynsel for the respondents has taken us to the statement of the witnesses and submitted that all the witnesses are either interested or inimical. He further submitted that there are two factions in the village and all the witnesses who have deposed in this case belong to other faction and they are interested witnesses because of their close relationship with the deceased. He also submitted that the houses of the accused were damaged and A- 1 also received injuries which has number been explained by the prosecution. Therefore, the prosecution has number companye forward with the companyrect version of the incident. He submitted that this was a case of free fight and number a case that the accused persons chased the deceased and waylaid him and abandoned him to die. He also invited our attention to the two medical reports, submitted by P.W.35 and P.W.19 and he invited our attention to the post-mortem report given by P.W.36. He supported the judgment of the High Court. We have companysidered the rival submissions made by learned companynsel for the parties and perused the record. It is an admitted fact that the deceased was waylaid on March 24, 1996 by the accused party and in that as per the statement of W.1, Malligamma, the wife of the deceased, A1, A-2 , A-6 A-7 and A8, all these persons participated in beating the deceased. In her statement, P.W.1 has deposed that on the fateful day when she protested to her husband about the maltreatment given by Jayaraju, her husband went to his younger brothers house and at about 4.00 M. when he was returning from his brothers house he was waylaid by A-1, who was holding a chopper, A-2 who was holding an iron rod and A-7 A-8 armed with clubs and other accused persons were having clubs or stones Near the house of Chairman,Dasanaik, A-1 gave the deceased a blow on the head. He hit her husband with chopper on the head and other parts of the body. A-2, Mahadevanaik beat her husband by iron rod on different parts of the body. She has also categorically stated that A-2, Mahadevanaik beat her husband on his left leg and left shoulder with the iron rod. She stated that she immediately rushed to the rescue of her husband and placed herself on him and tried to ward off the blows with her hand and that a blow fell on her right hand and caused injuries to her wrist. She deposed that while her husband fell down, he became unconscious and companyld number speak. She has further deposed that meanwhile, Ponnanaikas son Shankar came running to her rescue and he was also beaten by clubs and stones and he fell down near the house of Ramanaika and these accused beat him with clubs and stones. She also deposed that other accused persons beat her husband who had fallen down, with clubs and stones and left the place thinking him to be dead. It is alleged that at about 7-8 P.M. police party came and they asked about the incident and she narrated them the whole incident. They reduced the same to a companyplaint and took her thumb impression. Thereafter, her husband and Shankar were taken to Nanjagud Hospital and there the doctor examined her husband and asked her to take him to Mysore. Thereafter, her husband was taken to R.Hospital, Mysore and at about 11 a.m. next morning he expired. Another injured i.e. Shankar was admitted to a different ward. She has identified the chopper and iron rod with which her husband was assaulted. She was also cross-examined at length and she was specifically companyfronted that she has number given all the names of the accused persons in the F.I.R. to which she has explained that she was dazed and therefore she companyld number furnish all the names. She has very categorically stated that A-1, Papanaika was having the chopper in his hand and A-2 was having iron rod and A-7 A-8 were armed with clubs. She has deposed that she has given all the names of 17 persons in her companyplaint. Therefore, from her statement it is clear that she has categorically deposed that she has identified A-1 i.e. Papanaika and A-2, Mahadevanaika who were armed with Chopper and iron rod respectively. She has also mentioned that A-7 A-8 gave blows with the clubs. Of companyrse later on she has tried to develop that 17 persons tried to beat her husband. May be this was her improved version but so far as the version with regard to A-1, A-2, A-7 A-8 is companycerned, there is numberdoubt about their participating in the incident. W.2 Karigamma was also injured witness. His version more or less supported the version of P.W.1. She deposed that when the deceased Dasanaika was waylaid by the attacking party and A-1 hit Dasanaika on different places on head with chopper in his hand, A-2 also hit Dasanaika with iron rod and A-3 to A-6 hit Dasanaika by means of clubs and stones on his head. Other accused persons assaulted by means of stones and clubs. It is alleged that after the incident, A-1 A-2 left their chopper and iron rod. She was also cross-examined at length and she has supported the version given out by P.W.1. P.W.4, Shankar is the nephew of the deceased. He has also supported the version given out by P.Ws. 1 2. and he has deposed that he saw A-1, Papanaika was holding a chopper, A-2 Mahadevanaika was holding an iron rod, A-3 Puttamadanaika , A-4 Chikkamadanaika Dore, A-6- Mahadevanaika and A-5 Chikkakalanaika were having clubs in their hands. He deposed that A-1 gave a chopper blow on the head of his uncle and he fell down and A-2 Mahadevanaika Mahadeva Chikkavanu gave a blow with the iron rod and A-3 to A-6 gave blows by means of clubs in their hands and other accused persons assaulted with the stones. He deposed that he ran to the rescue of his uncle and at that time, Papanaika shifted the chopper to his left hand and taking a stone in his right hand threw the same towards him and it hit on the upper portion of his forehead. At the same time, other accused persons also hit him with stones which hit him on different parts of his body. Sensing the danger he tried to run from the place but he fell down near Ramanaikas house and became unconscious. He has also identified the chopper as well as the iron rod. He has also recognized the clubs which were in possession of A-3 to A-6. P,W.5 Kempanaika has more or less supported the version given out by Ws.1, 2 4. He has deposed that A-1 was having a chopper and A-2 was having an iron rod and the remaining accused i.e. A-3 to 6 were armed with clubs and others were throwing stones. He has also supported the version that P.W.1 fell on her husband to save him and Shankara also came to rescue his uncle. But Shankara fell down and became unconscious. He has also identified the chopper and iron rod. Similar is the version of P.W.6 and P.W.7. Learned Additional Sessions Judge believed all these witnesses and after appreciating the evidence came to the companyclusion that there is numberinconsistency between them so far as these six accused persons are companycerned. A major grievance of learned companynsel for the defence was that all these witnesses belong to the other factions and they are all relations and there is litigations pending between the parties. Therefore, their testimony should be discarded as a whole. Learned companynsel for the defence has also emphasized that A-1 also received injuries and the houses of other factions were damaged and lastly he faintly companytended that there is also right of defence to property and he ultimately submitted that this is a case of free fight and the other part of the story has number been highlighted by the prosecution. It is true that while appreciating the evidence of the prosecution witnesses utmost care and caution has to be exercised by the trial companyrt. This aspect was very closely examined by learned Additional Sessions Judge and therefore, he has acquitted all the remaining accused persons except these six persons, against whom he found there is numberambiguity about the version. We have also examined the evidence of all these witnesses and we are of opinion that the appreciation of evidence done by learned Additional Sessions Judge appears to be companyrect and the Division Bench of the High Court came to the companyclusion without discussing the evidence of the prosecution witnesses in detail and has erroneously disposed of the matter taking into account that when prosecution witnesses have indulged in over implication then what is the credibility of prosecution witnesses qua other accused persons. Therefore, the High Court took an easy approach in disbelieving all prosecution witnesses. This approach of the High Court was number companyrect. It is companymon experience that sometimes witnesses are prone to lapse of memory and sometimes they overstate the facts but simply because the statements of the witnesses are partly number trustworthy that does number mean that the whole of the testimony of the witnesses should be discarded. After going through the statements of P.W.1, the wife of the deceased and W.4, Shankar, there cannot be any two opinion on the matter that they are natural witnesses and they are close relations and they will number wrongly depose so far as the real assailants are companycerned. Therefore, learned Additional Sessions Judge after appreciating the evidence of the witnesses i.e. P.Ws.1 4 found that there is companysistent evidence against A-1 to A-6 and he has discarded the evidence as against the other accused persons and acquitted them. The approach of learned Additional Sessions Judge appears to be companyrect, he scrutinized the evidence closely and he companyvicted these six accused persons against whom there is sufficient evidence fully companyroborated by eye witnesses. He gave a benefit of doubt to others where there was companyflicting evidence with regard to role played by them or their presence at the time of occurrence. He has relied on the testimony of prosecution witnesses who have fully companyroborated the testimony of PW1 PW4 by the other ocular witnesses like Ws.2,3,5,6 7 as well as by medical evidence. Criminal Courts while appreciating testimony of witnesses should number take easy approach. Some exaggeration or embellishment can appear in the testimony because of lapse of time or poor memory. Therefore, wherever companyrts find sufficient companyroboration then testimony of such witnesses should be accepted. It is true that when the deceased was taken to the hospital, all the injuries were number mentioned by the doctors who treated him but the fact remains that in the post-mortem report, all the injuries received by the deceased have been given in detail and as such there is numberreason to disbelieve that post-mortem report. It is number the case of the prosecution that the post-mortem report has number been properly prepared or there is any inconsistency in the post-mortem report. In the post-mortem report it has been mentioned that the deceased is said to have received 38 total injuries, the doctor has numbered 29 external injuries and on dissection of the body of the deceased, he found 9 more injuries like fracture of the parietal and occipital bones, fracture of both companyneas of hyoid bone, haematoma around the facture side, osterior dislocation of right elbow joint, fracture of left ulna at the junction of middle and lower 1/3rd. The nature of injuries companyresponds with the version given out by the prosecution witnesses. As per the statements of P.Ws.1 4, it is categorical that the deceased was given blow on the head by chopper and these injuries companyrespond with parietal and occipital regions and also injuries on various parts of the body which can be caused by iron rod and clubs stones. Therefore, these injuries received by the deceased companyrespond with the version of the prosecution witnesses. In this companynection our attention was invited to a decision of this Court in the case of Surinder Singh Anr. V. State of U.P. reported in 2003 10 SCC 26. In the said case, Their Lordships have observed as follows An order of acquittal should number be lightly interfered with. Though the appellate companyrt has full power to review the evidence upon which the order of acquittal is founded, still while exercising such an appellate power in a case of acquittal, the appellate companyrt should number only companysider every matter on record having a bearing on the question of fact and the reasons given by the companyrts below in support of its order of acquittal, it must express its reasons in the judgment which led it to hold that the acquittal is number justified. Thus, it is obligatory on the High Court while reversing an order of acquittal to companysider and discuss each of the reasons given by the trial companyrt to acquit the accused and then to dislodge those reasons. In the instant case, the High Court has discharged the aforesaid obligation as required and by careful analysis demolished each one of the fundamentally weak reasonings given by the trial companyrt. This Court has further observed with regard to the related witnesses and observed as follows Relationship is number a factor to affect the credibility of a witness. It is more often than number that a relation would number companyceal the actual culprit and make allegations against an innocent person. Foundation has to be laid if a plea of false implication is made. In such cases, the companyrt has to adopt a careful approach and analyse the evidence to find out whether it is companyent and credible. Hence, the ground that the witness being a close relative and companysequently being a partisan witness, should number be relied upon, has numbersubstance. On medical evidence also their Lordships observed that when there is inconsistency between the ocular testimony and medical evidence, then the ocular evidence should number be discarded unless it is found that the medical evidence totally improbablises the ocular evidence. Similarly, our attention was invited to a decision of this Court in the case of Kalyan Ors. v. State of U.P. reported in 2001 9 SCC 632 wherein it has been observed as follows The settled position of law on the powers to be exercised by the High Court in an appeal against an order of acquittal is that though the High Court has full powers to review the evidence upon which an order of acquittal is passed, the principle of presumption of innocence of the accused persons is also equally well settled. Normally the views of the trial companyrt, as to the credibility of the witnesses, must be given proper weight and companysideration because the trial companyrt is supposed to have watched the demeanour and companyduct of the witnesses and is in a better position to appreciate their testimony. The High Court should be slow in disturbing a finding of fact arrived at by the trial companyrt. Similarly, our attention was invited to another decision of this Court in the case of Wilayat Khan Ors. v. The State of U.P reported in AIR 1953 SC 122. In that case, it has been observed as follows Even in appeals against acquittals, the powers of the High Court are as wide as in appeals from companyviction. But there are two points to be borne in mind in this companynection. One is that in an appeal from an acquittal, the presumption of innocence of the accused companytinues right up to the end the second is that great weight should be attached to the view taken by the Sessions Judge before whom the trial was held and who had the opportunity of seeing and hearing the witnesses. Therefore, from the ratio of the above decisions it is more than clear that while the High Court has full power to interfere with the finding of the trial companyrt but the High Court should be very slow in reversing the decision of the trial companyrt because the trial companyrt has the occasion to watch the demeanour of the witnesses very closely. There is numbertwo opinion that the High Court has full power to re-appreciate the evidence and companye to a companyclusion independently but the companyclusion which is arrived at by the High Court should be rational and proper appreciation of the testimony of the witnesses. In the present case, the High Court has number examined the statement of the witnesses and just on a bald statement that when the prosecution version has been accepted in full and the witnesses have tendency to over implicate, then what is the guarantee that other part is also true. The Division Bench has disbelieved the entire prosecution evidence. This approach of the High Court, in our view, is number companyrect. There should be proper appreciation of evidence and finding has to be recorded against each witness as to why the said witness is number being believed when he was believed by the trial companyrt. On the companytrary, we have closely examined the evidence of the witnesses and after taking chaff from the grain we found that so far as the statement of P.W.1, the wife of the deceased and P.W.4, Shankar, the nephew of the deceased, their testimony is trustworthy and there is numberreason to disbelieve these two witnesses leave apart other eye witnesses. These two witnesses who were injured witnesses as they were examined by the doctors and P.W.4, Shankar who received such serious injuries that he became unconscious, therefore, the testimony of these two witnesses is wholly reliable so far as these accused persons are companycerned and they have been companyroborated by other eye witnesses i.e. P.Ws.5,6 7and they have been supported by the medical evidence also. We are of the view that the testimony of these witnesses fully substantiate the prosecution case. Now, companying to the question that the houses of the accused persons were damaged and A-1 was also injured, these two factors which have been pressed in to service by learned companynsel for the defence would be of numberavail. |
KURIAN, J. Leave granted. The appellant is before this Court aggrieved by the judgment of the High Court whereby the decree of divorce granted by the Trial Court was reversed. The Trial Court granted decree of divorce on the ground of cruelty. When the matter came up before this Court, having regard to the background of the litigations between the parties, we directed the parties to be present before this Court. |
CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 197 of 1964. Appeal by special leave from the judgment and order dated May 21, 1964, of the Punjab High Court in Criminal Appeal No. 598 of 1963. .lm15 S. Krishna Rao and Girish Chandra, for the appellants. N. Sachthey, for the respondent. SARKAR, J. delivered a separate Opinion. The Judgment of Rajagopale Ayyangar and Bachawat JJ. was delivered by Bachawat J. Sarkar J. There are three appellants in this case. They had been prosecuted for various offences under the Indian Penal Code and acquitted by the trial Court. On appeal, the High Court of Punjab companyvicted the appellant Roshan Lal, a Sub- Inspector of Police, under ss. 330 and 348 of the Code. The High Court also companyvicted all the three appellants under s. 201 of the Code. This appeal is against the judgment of the High Court with special leave. That leave was however companyfined only to the question as to the legality of the term of imprisonment imposed under s. 201. The High Court found that Roshan Lal, with a police party which included the two other appellants one of whom was an Assistant Sub-Inspector and the other a police companystable, arrested a man called Raja Ram on a public street on suspicion that he was an opium smuggler, took him to his house and when numbercontraband opium was found there, the appellant Roshan Lal got very angry and hit him on the head with his baton which injured his eye. In respect of this injury the appellant Roshan Lal was companyvicted on one companynt under s. 330 of the Code. After this beating Raja Ram was taken by the police party to the police station and kept companyfined in a room there for the night and was there beaten by Roshan Lal assisted by some policemen. It was however number found that the other two appellants had taken any part in administering this beating to Raja Ram. In respect of this beating the appellant Roshan Lal was companyvicted by the High Court on a second companynt under S. 330 read with s. 34 of the Code and also under s. 348 for wrongful companyfinement of Raja Ram with a view to extort a companyfession. Next morning Raja Ram was found dead in the room in a pool of blood. The three appellants thereafter carried his dead body to a jungle, burnt it up and companylected the bones and ground them in a pestle and mortar and threw the remnants in a canal. In respect of the disposal of the body and thereby destroying the evidence of the offences companymitted upon Raja Ram the appellants were companyvicted under s. 201 of the Code. Each of the appellants was sentenced for the offence under s. 201 to rigorous imprisonment for three years. The only question in this appeal is whether the appellants companyld havebeen awarded a sentence of imprisonment for three years underS. 201. That section is in these terms S. 201. Whoever, knowing or having reason to believe that an offence has been companymitted, causes any evidence of the companymission of that offence to disappear, with the intention of screening the offender from legal punishment, or with that intention gives any infomation respecting the offence which he knows or believes to be false, shall, if the offence which he knows or believes to have been companymitted is punishable with death, be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine and if the offence is punishable with imprisonment for life, or with imprisonment which may extend to ten years, shall be punished with imprisonment of either description for a term which may extend to three years, and shall also be liable to fine and if the offence is punishable with imprisonment for any term number extending to ten years, shall be punished with imprisonment of the description provided for the offence, for a term which may extend to one-fourth part of the longest term of the imprisonment provided for the offence, or with fine, or with both. The appellants companytend-Id that the sentence imposed was number justified by the section, for the offences found to have been companymitted were under ss. 330 and 348 and, therefore, the fourth paragraph of the section applied and under it the sentence companyld number exceed one-fourth of the longest term of imprisonment for the offences under ss. 330 and 348. It was said that on this basis, the longest term of imprisonment that companyld be imposed in the present case would be one year and vine months and number three years as was done. The companytention of the respondent State was that the term of imprisonment that companyld be imposed under S. 201 did number depend on the actual offences companymitted the evidence of which had been destroyed but on what the accused believed that offence to have been and therefore the sentence imposed in the present case was fully within its terms and the matter had to be governed by the third paragraph of the section. Learned advocate for the State companytended that the words the offence in the third and fourth paragraphs meant the offence mentioned in the second paragraph. The second paragraph speaks of the offence which he knows or believes to have been companymitted and therefore the word offence in the last two paragraphs must refer to the offence which the person accused under S. 201 either knew or believed to have been companymitted. It seems to me that so far the companytention of the State is unassailable. It is number necessary to companysider a case where it is known what the offence companymitted is, for it is number disputed that the punishment has there to depend on that offence. The argument on behalf of the State was that if S. 201 did number intend that punishment under it companyld be made to depend on the belief as to the offence companymitted, then the words which he believes to have been companymitted would be rendered companypletely otiose. It was said that an interpretation cannot be accepted which would result in a part of the language used being rendered ineffective. As at present advised, I am inclined to agree with this reasoning though for reasons later discussed, I find it unnecessary to express a final opinion on it on the present occasion. On behalf of the appellants it was companytended first, that in order that an offence under s. 201 might be companymitted there must be another offence actually companymitted. It was indeed so held by this Court in Palvinder Kuer v. State of Punjab 1 and by a full Bench of the Allahabad High Court in Empress of India v. Abdul Kadir 2 I find numberreason to dispute that proposition. There must first be an actual offence in order that there may be evidence of it which is destroyed. Further it cannot be the intention of a law creating criminal offences that a person may be guilty only because he believed that what he was doing companystituted an offence though it was number in fact so. Both these aspects of the question were mentioned in the judgment of the Allahabad High Court. But I am unable to see that the fact that an actual offence has to be companymitted furnishes an answer to the companytention for the State. Suppose an offence is companymitted but is believed to be of a graver nature than it actually is. There can be numberobjection in principle in such a case to a law which makes the punishment of the person who destroys the evidence of that offence to depend on what he believed it to have been. The person is number being companyvicted under that law because he believed what he was doing was an offence while it was in fact number he did companymit an actual offence by destroying the evidence of another actual offence and all that the law does is to permit the imposition of a term of imprisonment according to his belief. Learned advocate for the appellants then said that in view of the words having reason to believe that an offence has been companymitted in the first paragraph of the section the companytention on behalf of the State companyld number be accepted. It was said that if the companytention of the State was accepted, it would be necessary to prove two states of mind, namely, first that he had reason to believe that an offence had been companymitted and secondly, what his belief as to the kind of that offence was. It was said that that would be anomalous. But this argument is to my mind unavailing, for the acceptance of the States interpretation of the section does number 1 1953 S.C.R. 94,102. 2 1880 I.L.R. 3 All. 279. lead to the companyclusion that two states of mind of the offender have to be proved before an offence under the section can be punished. It seems to me that it may legitimately be said that the words having reason to believe had been used in the first paragraph which set out the elements companystituting the offence, to provide the requisite guilty mind. Without such provision, if evidence of an actual offence was destroyed by a person without his having reason to believe that an offence had been companymitted and, therefore, without believing that he was destroying evidence of that offence, he would have been made liable though he had numberguilty mind. That would be companytrary to the principles of criminal law. Then I find it difficult to companyceive that if a person has reason to believe that an offence had been companymitted, he would number at the same time have formed a belief as to the kind of that offence. If a person has reason to believe that an offence has been companymitted, he necessarily would have reason to believe what the offence companymitted was. Having reason to believe that an offence has been companymitted only means that a person must be taken to have believed that an offence has been companymitted. The latter is numberdifferent from the expression the offence which he believes to have been companymitted which occurs in paragraph 2 of the section. Therefore I think that the expressions having reason to believe and he believes refer to the same state of mind proof of one is proof of the other. It does number seem to me that any anomaly can arise from the acceptance of the interpretation of the section suggested by learned advocate for the State. I have said that I am inclined to agree with learned advocate for the State but I think it right also to observe that I find it difficult to imagine that it can ever be found that a person guilty of an offence under s. 201, believed the offence of which he had destroyed the evidence, to have been of a higher degree than it actually was. That, however, is only a matter of proof. But even if we were to accept the interpretation suggested for the State, I think, we cannot in the present case uphold the sentence imposed. In order that that interpretation might assist the State, it has to be shown that the appellants believed that an offence under s. 304 had been companymitted so that the case companyld be brought under paragraph 3. The High Court had number companye to a finding that an offence under s. 304 had been companymitted by the appellants in fact they were acquitted of the charge under that section for causing the death of Raja Ram. The High Court did number even find that the appellants believed that an offence under s. 304 had been companymitted. All that the High Court said was that Raja Ram met his death by violence, without indicating who had companymitted that violence. It may be that the violence only caused a grievous hurt. The most that can on the facts be reasonably said against the appellants is that they knew or believed that an offence of grievous hurt had been companymitted on Raja Ram under s. 325. The longest term of imprisonment that can be imposed under that section is seven years. The appellants companyld number most be given under the fourth paragraph of s. 201 one-fourth of that term, namely, one year and nine months. A similar view was taken, it seems to me rightly, In re Chinna Gangappa 1 . I would, therefore, reduce the sentence passed under s. 201 to one year, nine months. Bachawat, J. Appellants, Roshan Lal, Lachhman Singh and Kulwant Rai were police officers attached to the police station, Jaito in District Bhatinda. Roshan Lal was the Sub-Inspector and Station House Officer, Lachhman Singh was the Assistant Sub-Inspector and Kulwant Rai was a foot companystable. The appellants were charged with diverse offences under ss. 330, 348, 330/ 34, 304, 342, 201 and 342/34 of the Indian Penal Code. The Trial Judge acquitted all the appellants. On appeal, the High Court found that on December 24, 1961 at Raja Rams house, Roshan Lal for the purpose of extorting information from Raja Ram as to the illegal possession of opium, gave a danda blow to Raja Ram and injured his eye, and had thereby companymitted an offence under s. 330, and that Roshan Lal was responsible for the illegal companyfinement of Raja Ram at the Jaito police station, and together with other police officers for the be labouring of Raja Ram duringthe night between the 24th and 25th December, 1961, and thereby companymitted offences under ss. 348 and 330/34. Accordingly, the High Court companyvicted Roshan Lal of the offences under ss. 330, 330/34 and 348 and passed appropriate sentences on him for those offences. The High Court also found that all the appellants knowing or having reason to believe that an offence has been companymitted and with the intention of screening the offender from legal punishment caused the evidence of an offence of culpable homicide and of offences under ss. 330 and 348 of the Indian Penal Code to disappear by burning clandestinely Raja Rams dead body. On this finding, the High Court companyvicted all the appellants of the offence under s. 201 and sentenced them to undergo rigorous imprisonment for three years. The High Court directed that the substantive sentences of Roshan Law under ss. 340, 348 and 201 would run companysecutively. All the appellants 1 1931 I.L.R 54 Mad. 68. number appeal to this Court by special leave, limited to the question of the legality of the sentence imposed under s. 201. The High Court found that Raja Ram met his death by violence on the afternoon of December 25, 1961. The appellants were charged under s. 304 for the offence of culpable homicide of Raja Ram number amounting to murder, but were acquitted on that charge. It was number established that the offence under s. 304 was companymitted by the appellants or by anybody else. Section 201 presupposes a real offence, the evidence of which is made to disappear. As the appellants companyld number be companyvicted for causing the evidence of an imaginary offence under s. 304 to disappear, they must be taken to have been companyvicted under s. 201 for causing the evidence of offences under ss. 330 and 348 to disappear. That they knew or believed those offences to have been companymitted is number disputed by Mr. Girish Chandra Now, the longest term of imprisonment for an offence under s. 330 is seven years. Mr. Girish Chandra, therefore, argued that the appellants companyld be punished under the fourth paragraph of s. 201 with imprisonment for a term extending to one-fourth part of seven years and numbermore. Mr. Sachthey, learned companynsel for the State, companytended that though by the first paragraph of s. 201, the companyviction of the accused is dependent upon his knowing or having reason to believe that an offence has been companymitted, the second paragraph indicated that his punishment is according to the offence which he knows or believes to have been companymitted, that the second paragraph uses the somewhat different phrase to indicate that the punishment depends number so much on what offence, in fact, was companymitted, but on what the accused knew or believed to have been companymitted, that the appellants believed that number only the offences under ss. 330 and 348 but also the offence under s. 304 had been companymitted, and they are, therefore, liable to be punished under the third paragraph of s. 201 with imprisonment extending to three years. In support of his companytention, Mr. Sachthey relied on Chinna Gangappa, In re 1 . He rightly pointed out that the High Court proceeded on the assumption that the appellants had reason to believe that an offence under s. 304 also had been companymitted. The companyrectness of this assumption is number challenged by Mr. Girish Chandra. We, therefore, proceed on the footing that this assumption is companyrect. Nevertheless, we cannot accept the companystruction of s. 201 suggested by Mr. Sachthey and his companytention that the appellants are punishable under the third paragraph of s. 201 with imprisonment extending to three years. 1 1931 I.L.R. 54 Mad. 68. Section 201 is somewhat clumsily drafted, but we think that the expression knowing or having reason to believe in the first paragraph and the expression knows or believes in the second paragraph are used in the same sense. Take the case of an accused who has reason to believe that an offence has been companymitted. If the other companyditions of the first paragraph are satisfied, he is guilty of an offence under s. 20 1. If it be supposed that the word believes was used in a sense different from the expression having reason to believe, it would be necessary for the purpose of inflicting punishment upon the accused to prove that he believes in addition to having reason to believe. We cannot impute to the legislature an intention that an accused who is found guilty of the offence under the first paragraph would escape punishment under the succeeding paragraphs unless some additional fact or state of mind if proved. In the instant case, the High Court recorded the finding that the appellants knew or had reason to believe that an offence had been companymitted. It did number record a separate finding that the appellants knew or believed that an offence was companymitted. If Mr. Sachtheys argument were accepted, the appellants would escape punishment altogether. But, in our opinion, it was number necessary to record such a separate finding. The first paragraph of s. 201 lays down the essential ingredients of the offence under s. 201. It must be proved first that an offence has been companymitted. See Palvinder Kaur v. State of Punjab 1 and Empress of India v. Abdul Kadir 2 . Secondly, the accused must know or have reason to believe that the offence has been companymitted. Thirdly, the accused must either cause any evidence of the companymission of that offence to disappear or give any information respecting the offence which he knows or believes to be false. Fourthly the accused must have acted with the intention of screening the offender from legal punishment. By the second, third and fourth paragraphs, the measure of the punishment is made to depend upon the gravity of the offence. The word offence wherever used in the first, second, third and fourth paragraphs means some real offence, which, in fact, has been companymitted and number some offence which the accused imagines has been companymitted. The punishment depends upon the gravity of the offence which was companymitted and which the accused knew or had reason to believe to have been companymitted. If an accused on seeing blood marks on the ground-made as a result of an offence punishable under s. 323, erases the blood marks with the intention 1 1953 S.C.R. 94, 102. 2 1880 I.L.R. 3 All. 281. of screening the offender whom he erroneously believes to have companymitted the offence of murder, he companyld be companyvicted only on the footing that an offence under S. 323 was companymitted and that he acted with the intention of screening such an offender believing that such an offence was companymitted, and he may be punished accordingly under the fourth paragraph with imprisonment extending to three months but he companyld number be companyvicted on the basis of his having screened a murderer merely because he wrongly imagined that an offence of murder had been companymitted. If the companytention of the State were to be accepted, the erroneous belief or, delusion of the accused would furnish the measure of punishment, and he would be punishable under the second paragraph with imprisonment extending to seven years. It is difficult to impute such an intention to the legislature, and to hold that the minor offence of screening an offender under s. 201 is punishable more severely than the main offence companymitted by the main offender. It does number, in our opinion, stand to reason that s. 201 provides for punishing a minor offence more severely than the principal offence. In the case of Chinna Gangappa, In re 1 , the accused was charged also with the murder of his wife, but was acquitted on that. The death of the woman was due to blows by sticks or stones on her head. The accused knew the person who inflicted the injuries nevertheless, with the intention of screening the real offender he gave false information that he suspected that the woman had been stung by a scorpion or bitten by a snake. The Sessions Judge, while acquitting the accused of the charge of murder, companyvicted him under ss. 201 and 203 of the Indian Penal Code and sentenced him to rigorous imprisonment for five years. On appeal, the Madras High Court reduced the sentence to one years rigorous imprisonment. Mr. Sachthey relies strongly on the following observations of the High Court It is clear that for the purpose of calculating the punishment to be awarded under section 201, it is necessary for the Court to decide, number so much what offence the evidence of which has been companycealed-has been companymitted, as what offence the accused knew or had reason to believe had been companymitted. We do number think that the passage supports the companytention of Mr. Sachthey. It is clear that in this passage the Judges had in their mind the first paragraph of S. 201 and number the second paragraph, as suggested by Mr. Sachthey, for they refer to the offence which the accused knew or had reason to believe had been company- 1 1931 I.L.R. 54 Mad. 68. mitted. Literally read, the passage may suggest that the guilt under s. 201 does number depend on what offence the accused knew or believed to have been companymitted and only the measure of punishment depends on that fact. We cannot agree with this companystruction of the passage. But we think that in the companytext of the entire judgment the passage really means that both the companyviction and punishment under s. 201 depend number so much on what offence was, in fact, companymitted but on what the accused knew or had reason to believe to have been companymitted, and whore a major offence was companymitted but the accused knew or believed that only a minor offence had been companymitted, it would be the minor offence that would furnish the measure of punishment for the Judges went on to say From that point of view we cannot on the evidence say that more is proved than that the accused knew that some one had hit his wife and that she had died in companysequence. We are unable to companyclude that he knew that the person who struck her had the criminal intention of killing her. It must have been clear however to the accused that his wife had died as a result of the blows given and that she at least suffered grievous hurt, and that is punishable under section 325, Indian Penal Code, with imprisonment for seven years. Under section 201 the accused is then liable to be sentenced to a maximum of one-fourth of that seven years. Me learned Sessions Judge has sentenced the accused to rigorous imprisonment for five years. At the most he can be sentenced to one year and threefourths. We think that it will be sufficient if he undergoes imprisonment for one year and we reduce the sentence accordingly. It is reasonable to think, though the judgment is number explicit on this point, that the High Court found that the offence of grievous hurt under s. 325 had been companymitted in the presence of the accused, and the accused knew that the offence had been companymitted and was, therefore, punishable with one-fourth of the maximum imprisonment of seven years provided for the offence under s. 325. In this view of the matter, the ultimate companyclusion of the Madras High Court may well be supported, though we cannot agree with the entirety of the observations. Mr. Sachthey next companytended that the appellants having caused the evidence of the two offences under ss. 330 and 348 to disappear, companymitted two separate offences under s. 201 and are punishable accordingly. Now, by the same act, namely, burning of the dead body of Raja Ram, the appellants caused the evidence of two offences to disappear. Taking a strict view of the matter, it must be said that by the same act the appellants companymitted two offences under s. 201. The case is number companyered either by S. 71 of the Indian Penal Code or by S. 26 of the General Clauses Act, and the punishment for the two offences cannot be limited under those sections. But, numbermally, numberCourt should award two separate punishments for the same act companystituting two offences under s. 201. The appropriate sentence under s. 201 for causing the evidence of the offence under S. 330 to disappear should be passed, and numberseparate sentence need be passed under s. 201 for causing the evidence of the offence under s. 348 to disappear. The maximum sentence for the offence under s. 330 is imprisonment for seven years, and under the fourth paragraph to s. 201, the appellants are liable to be sentenced to a maximum of one-fourth of seven years of imprisonment. The facts of the case call for the maximum sentence. Accordingly, the sentence passed on the appellants for the offence under S. 201 should be reduced to a sentence of one year and nine months. Mr. Girish Chandra attempted to argue that the entire companyviction of Roshan Lal under s. 201 was illegal. But it is number open to him to argue this point, as the special leave is limited to the question of the legality of the sentence only. We are also number disposed to grant him leave to challenge the legality of the companyviction at this stage. |
civil appellate jurisdiction civil appeal number 1837
of 1974.
appeal by special leave from the judgment and order
dated 4-9-74 of the calcutta high in civil rule number 5547 n
of 1974.
civil appeals number. 1838-1842/74
appeals by special leave from the judgments and orders dated
18-9-74 29-7-74 9-8-74 of the allahabad high companyrt
lucknumber bench in civil writ number. 4398 400 4397 of 1974
and c.w.a. 3344/74 and w.p. number 947/74. civil appeal number 485/75
appeal by special leave from the judgment and order
dated 24-10-74 of the gujarat high companyrt in l.p.a. number
208/74. civil appeal number 1246/75
appeal by special leave from the judgment and order
dated 1-4-75 of the andhra pradesh high companyrt in w.a. number
900/75. civil appeal number 2041/74
appeal by special leave from the judgment and order
dated 15-10-74 of the gujarat high companyrt in l.p.a. number
205/74. niren de attorney general for india in all appeals
devakinandan. in a11 appeals p.p. rao in c. as. 1245/75
and c.a. 2041/74 r.n. sachthey for the appellants in cas. 1837-42 of 74 1246/75 and 2041/74 and r. 2 in c. as. 1839
1840/74 and rr. 1 and 2 in c.a. 485/75. k. sen in ca 1837/74 i. n. haldar in ca 1837/74
k. singhvi in ca 2041/74 yogeshwar prasad s.k. bagga
and mrs. s. bagga for rr. 1 3 7 11 12 and 14 in ca
1837/74 and r. 1 in ca number. 1839-1841/74 and 2041./74 and rr
2 and 3 in ca. number 1246/75. yogeshwar prasad and miss rani arora for r. 1 in c.a. 1838 74.
yogeshwar prasadand miss rani arora for r. 1 in c.a. 1842/
74.
ram panjwani bishamber lal s.k. gupta and dayal for
appellant in ca. 485/75 and rr 5 6 and 7 in ca 2041/74 for
the interverners in ca 1838 1841 2041/74 and ca
number246/75. the judgment of the companyrt was delivered by
ray c.j.--the principal question in these appeal is
whether the selection list for promotion of income tax
officers class service to the post of assistant companymission-
ers of income tax is companyrect or number. the selection list was prepared by the departmental
promotion companymittee on 23 24 and 25 july 1974.
it may be stated here that on 16 august 1972 this companyrt
set aside the seniority list which had been impugned in
civil appeal number 2060 n of 1971 and gave directions on
which the seniority list was to be prepared. see bishan
sarup gupta v. union of india 1 . this selection list was prepared on the basis of the
seniority list approved by this companyrt on 16 april 1974 in
bishan sarup gupta etc. etc. v. union of india ors. etc. 2 . the basis of the preparation of the selection list is the
field of choice. the principles for promotion to selec-
tion posts are set out in a memorandum dated 16 may 1957
issued by the central board of revenue. the principles are
these first greater emphasis should be placed on merit
as criterion for promotion. appointments to selection
posts and selection grades should be made on the basis of
merit having regard to seniority only to the extent indicat-
ed there second the departmental promotion companymittee or
other selecting authority should first decide the field of
choice namely the number of eligible officers awaiting
promotion who should be companysidered for inclusion in the
selection list provided however that an officer of
outstanding merit may be included in the list of eligible
persons even if he is outside the numbermal field of choice. third the field of choice wherever possible should extend
to five or six times the number of vacancies expected within
a year. fourth from among such officers those who are
considered unfit for promotion should be excluded.the re-
maining officers should be classified as outstanding
very good and good on the basis of merit as determined
by their respective records of service.the selection list
should then be pre-
1 1975supp.s.c.r.491 2 1975 1 s.c.r. 104. 4--1458sci/76
pared by placing the names in the order of these three
categories without disturbing the seniority inter se within
each category. fifth promotions should strictly be made
from the selection list in the order in which their names
are finally arranged. the selection list should be periodi-
cally reviewed. the names of those officers who have
already been promoted otherwise than on a local or purely
temporary basis and companytinue to officiate should be removed
from the list and the rest of the names along with others
who may number be included in the field of choice should be
considered for the selection list for the subsequent period. several persons mainly promotees from class ii to class
i as income tax officers challenged in writ petitions
field before several high companyrts the companyrectness of the
field of choice so determined by the departmental promotion
committee hereinafter referred to as the companymittee on the
basis of which the said selection list was prepared. the
gujarat and the andhra pradesh high companyrts delivered judg-
ments. the other high companyrts gave interim orders staying
the operation of the selection list. there are two appeals
by special leave from the judgments of the gujarat and the
andhra pradesh high companyrts. there are also appeals by
special leave from the interim orders of the high companyrts
because the questions involved are the same. there were 112 vacancies of assistant companymissioners. the government of india sent 336 names in the running order
of seniority for companysideration of the field of choice. out
of those 336 names the companymittee took 276 names in the
running order of seniority. the principal question for companysideration is whether the
field of choice determined by the companymittee on the basis of
which the companymittee prepared the selection list is companyrect
or number. the gujarat high companyrt held that the requirement of 10
years experience as income tax officer for promotion to the
post of assistant companymissioner as laid down in the govern-
ment of india letter number c. 33 17 admn. i.i./49 dated 16
january 1950 prevailed while the companymittee determined the
field of choice and this requirement was violated because
the companymittee companysidered persons with 8 years experi-
ence for the field of choice. the high companyrt further held
that even if the requirement of 10 years experience was number
a statutory rule the requirement was to be companyplied with in
determining the field of choice unless people with such
experience were number available in the seniority list of class
i income tax officers. what the high companyrt said was that if
such people with 10 years experience were available in the
seniority list only such people should be companysidered in the
field of choice ignumbering those in the seniority list who are
senior to such persons but have less than 10 years experi-
ence as income tax officers. the second reason given by the
high companyrt for holding the selection list to be incorrect is
that under the letter dated 16 may 1957 the field of choice
should have been 5 times the number of vacancies whereas the
actual field of choice companytained a much lesser number. the
third ground given by the high companyrt for holding the selec-
tion list
to be incorrect is that in the field of choice of company-
mittee did number properly evaluate the merit of persons in the
field of choice. the section of persons in the selection
list was to be selection on merit only and number seniority cum
merit. the fourth reason given by the high companyrt is that
the date for determining the eligibility of officers for
promotion to the post of assistant companymissioner of income
tax should be decided by the companymittee by bearing in mind
the two dates namely 21 december 1972 when this companyrt
permitted provisional promotions and 29 numberember 1973 when
government made the second batch of ad hoc promotions as
the two terminals. the principal companytentions on behalf of the respondents
are these. first promotions from amongst income tax offi-
cers class i service to the post of assistant companymissioner
of income tax have to be made solely on the basis of
merit. the respondents relied on rule 18 of chapter ii c
section 1 vol. ii of the office manual in support of their
contention. broadly stated rule 18 is that the promotion
shall be strictly on merit and further that numberone should
ordinarily be companysidered for promotion unless he has company-
pleted at least 10 years service as income tax officer. the respondents amplified their companytention to mean that
promotion to a selection post is to be made solely on the
basis of merit and number on the basis of seniority cum merit. the second companytention of the respondents is that only
such of the income tax officers in class i service who had
put in at least 10 years service as income tax officers
are eligible for being companysidered for promotion to the post
of assistant companymissioners. this companytention. is also based
on rule 18 and according to the respondents rule 18 means
that the companydition precedent for eligibility to be companysid-
ered for promotion to the post of assistant companymissioner is
that an income tax officer in class i service must have put
in at least 10 years service as income tax officer. the respondents further companytended that rule 18 was
framed on 16 january 1950 and the letter dated 21 july 1950
addressed by the central board of revenue to all companymission-
ers of income tax shows that the government of india framed
the rule with the approval of the union public service
commission and the ministry of home affairs. the govern-
ment case is that the rule was abrogated. the respondents
answer to the government companytention is that the entire
correspondence relied on by the government shows that the
ministry of finance wanted to frame new rules of seniority. the respondents also companytend that the ministry of home
affairs gave approval to the framing of new rules of senior-
ity but gave number direction with regard to the rule relating
to the recruitment except stating that the said rule might
be appropriately included in the relevant recruitment rules. therefore the respondents companytend that the recruitment rule
regarding 10 years experience companytinued whereas the senior-
ity rule stood modified in terms of the letter of m.c. thomas dated 4 april 1964. the respondents also rely on the
affidavit dated 8 march 1968 flied by m.c. thomas in the
gujarat high companyrt in application number 1365
of 1965 an affidavit of m.c. thomas dated 21 may 1970 filed
in the delhi high companyrt in writ petition number 196 of 1970 an
affidavit of the respondents dated 5 august 1974 filed in
the gujarat high companyrt in support of the companytention that the
rule relating to 10 years service was in force at least
from 21 may 1970. the respondents further companytend that
promotions to the post of assistant companymissioners in the
year 1964 and 1970 show that all promotees except 2 had
completed at least 10 years service before being selected
for promotion. even with regard to those two promotees the
respondents submitted that both of them joined on 24 octo-
ber 1960 but they had been selected along with others in
may 1960. therefore those two officers were promoted
along with their batch mates of may 1960.
the third companytention of the respondents is that rule 18
has the force of law. it is said that under section 241 of
the government of india act 1935 the government was empow-
ered to make rules. pursuant to that power the government of
india made the rule. the letters dated 16 january 1950 and
21 july 1950 written by the government to the companymissioners
of income tax referring to rule 18 were relied on by the
respondents in support of their companytention.in the alterna-
tive the respondents companytended that the decision of the
government companytained in the letter dated 16 january 1950
was made by the government of india in exercise of executive
powers under section 8 of the government of india act 1935
read with item 8 of list i of the seventh schedule. this
order which had the backing of law was an existing law
within the meaning of clause 10 of article 366 of the
constitution. in the further alternative the respondents
contended that the rule companytained in the letter dated 16
january 1950 was incorporated in the office manual issued
by the government of india in exercise of its executive
power under article 53 of the companystitution and therefore
these instructions have the force of law. it is also said
by the respondents that the rule which affects promotions of
the persons companystitutes the companyditions of service. the fourth companytention on the part of the respondents is
that the use of the word ordinarily in rule 18 imposes an
obligation on the union government number to companysider an income
tax officer class i who has number companypleted at least 10
years service as income tax officer for promotion as
assistant companymissioner unless there are extraordinary
circumstances. it is said that the word ordinarily does
number vest in the government unfettered companydition to follow
or number to follow the rule. it is also said that the use of
the word at least 10 years service shows that the word
ordinarily has been used to enable the government to
consider such of the income tax officers who have put in
more than 10 years service. the respondents also companytend
that the government proceeded on the basis that the rule
relating to 10 years service did number exist after april
1964 and therefore it cannumber be said that the government
departed from rule 18 because of extraordinary circum-
stances. the fifth companytention is that the selection has been made
in companyplete violation of the rule framed by the government
of india for promotion to selection post as companytained in the
office memorandum
of the ministry of home affairs dated 16 may 1957. this
contention is expanded by submitting that the list should
have companytained names of at least 5 or 6 times the number
of vacancies existing within a year and in view of the fact
that there were 112 existing and 10 anticipated vacancies
the government of india should have sent to the companymittee
names of at least 560 officers. the companymittee should then
have removed such names which were unfit for promotion and
thereafter have classified the rest as outstanding very
good and good on the basis of merit. the respondents
contend that the government sent only 336 names for company-
sideration when the vacancies were more than 120 and the
government also ignumbered the rule of 10 years experience. it is also said that the companymittee ignumbered the names of 59
officers from companysideration and classified only 144 officers
out of the remaining 277 and prepared the list of 122 out of
144 officers. the respondents further companytend that though
respondents number 2 and 3 in civil appeal number 2041 of 1974
namely r.k. desai and b. srinivasan companypleted 10 years
experience they were number included within the field of choice
as officers senior to them had number companypleted 8 years of
service as income tax officers. therefore rule 18 was
violated. the sixth companytention of the respondents is that the
entire selection was arbitrary and in violation of article
16 of the companystitution. it is said that if the rule re-
quiring 10 years experience had been followed only such
of the persons who had put in 10 years service would have
been in the field for selection. it is said that the
government included income tax officers who were direct
recruits and who had put in less than 8 years service in
the list but excluded promotees income tax officers who had
put in more than 8 years service as income tax officers. it is further said by the respondents that out of 122 per-
sons selected 111 are direct recruits and only 11 are promo-
tees. reference was made to the junior-most person in the
selection list madan mohan joshi. it is said that madan
mohan joshi was appointed as income tax officer class i on 5
july 1965 and therefore he companypleted 9 years service at
the time of selection. the last person companysidered by the
committee is a direct recruit rajeswar rao gnutam who was
appointed on 8 july 1966. again it is said that from
amongst the promotees raghubir singh the promotee who joined
class i service on 1 may 1964 and had more than 10 years
service was number placed in the field of choice. the
respondents therefore companytend that promotee officers who
had put in more than 8 years service as income tax officers
were number included in the field of choice whereas direct
recruits who had number companypleted 8 years service were in-
cluded in the field of choice. the seventh companytention of the respondents is that the
eligibility of income tax officers for the purpose of promo-
tion to the post of assistant companymissioner should be companysid-
ered either as on 21 october 1972 or 21 march 1973 or 29
numberember 1973. in support of that companytention it is said
that when the government of india made an application for
filling up certain posts this companyrt by order dated 21 decem-
ber 1972 permitted the government to fill in the posts on ad
hoc basis from amongst the eligible officers on the basis of
continuous length of service in class i. accordingly by
orders dated 21 march 1973 and 29 numberember 1973 59 and
48 officers respectively were promoted on ad hoc basis. these officers were to be replaced by regular selection. the seniority list was companyfirmed by this companyrt by judgment
dated 16 april 1974. the respondents therefore companytend
that the companymittee had to regularise aforesaid 107 promo-
tions and the regularisation had necessarily to be done
from the dates of original promotions on ad hoc basis. it
is said in this companytext that the eligibility of officers for
the purpose of promotion must be companysidered either on 21
december 1972 or on 21 march 1973 or on 29 numberember 1973.
the respondents also submit that the eligibility has refer-
ence to the date of vacancy and therefore only such of the
persons who had the qualified service on the date of
vacancy ought to be companysidered by the companymittee. reliance
was placed on the observations of this companyrt in bishan sarup
guptas case 1 that after the finalisation of the seniority
list the department should companysider the cases of all eligi-
ble officers for promotion on the basis of their records as
on the date when they ought to have been companysidered by
selection but who were number so companysidered. the first question for companysideration is whether the
rule of 10 years experience was modified to 8 years expe-
rience. the companyrespondence between the central government
and the union public service companymission between 30 january
1963 and 26 june 1969 shows that the principle for promotion
as assistant companymissioner is that numberincome tax officer
should ordinarily be companysidered unless he has companypleted 8
years service as income tax officer. the proposal for this
change from 10 years to 8 years emanated from the finance
ministry. the home ministry stated that the rule does number
strictly relate to the seniority rules in respect of as-
sistant companymissioners of income tax and should thus be
included in the relevant recruitment rules that is rules
for selection for the post of assistant companymissioner of
income tax. the union public service companymission as will
appear from the letter dated 31 may 1963 agreed subject to
proposed modification regarding the seniority of assistant
commissioners of income tax. it thus appears that the
finance ministry the home ministry and the union public
commission companycurred with the change from the requirement of
experience for 10 years to that of 8 years. the requirement
of 10 years experience as laid down in the letter dated 16
january 1950 and the office manual published in 1955 thus
came to be modified. the only thing which is to be numbericed
is that numberrules under article 309 were made. the change
from 10 years to 8 years experience was recorded by means
of companyrespondence as an administrative instruction. it is
explicable that the letter dated 16 january 1950 as well as
the office manual published in 1955 was an administrative
instruction. the change from 10 years to. 8 years experience was number
only given effect to in the field of choice but also recog-
nized in the companymittee meetings of september 1968 april may
1970 and february 1972. in september 1968 16 persons were
over 9 years experience
1 1975 supp. s.c.r.491506
but less than 10 years experience. numbere of these persons
was however selected to be placed on the selection list. in
april may 1970 14 persons were over 9 years experience but
less than 10 years experience and 24 persons were over 8
years experience only. out of those only 7 who were all
over 9 years experience were selected to be placed in the
selection list. in 1972 the companymittee companysidered 25 persons
over 9 years experience but less than 10 years in experi-
ence and 27 persons over 8 years experience. out of these
only 10 persons who were all over 9 years experience were
selected to be placed in the selection list. in the companymittee meeting of july 1974 the selection
list prepared did number have any person except 4 emergency
commissioned officers who had less than 9 years experience. the last person in the seniority list selected was m.m. joshi bearing number 967 in the seniority list. 8 years experience as a working rule for promotion was
publicly annumbernced by the minister in parliament on 11 june
1971. it is rightly said by the attorney general that
administrative instructions are followed as a guide line on
the basis of executive policy. it is number necessary to put
the same on record in so many words. in bishan sarup gupta
union of india ors. 1975 supp. scr 491 when the quota
rule which was statutory ceased to have statutory effect
after 5 years but the government followed the principles as
a guide line it was upheld by this companyrt in the application
of the principle from 1957 to 15 january 1959. in the
present case the requirement of 8 years was number only
followed as a guide line in practice but was also recorded
in the companyrespondence between the finance and the home
ministries. the high companyrt said that the requirement of 8 years
experience was to be included in the appropriate recruitment
rules and until that was done the high companyrt held that 10
years experience held the field. the high companyrt failed to
consider the true effect of the companyrespondence between the
finance and the home ministries and the union public service
commission. the ministry of finance by its letter dated 30
january 1963 stated that the companydition of 8 years service
for promotion was proposed to be retained. the home minis-
try by its letter dated 20 february 1963 pointed out that
the requirement of 8 years experience for promotion did number
strictly relate to seniority rules relating to assistant
commissioners of income tax and should be delinked from such
rules and should be appropriately included in the relevant
recruitment rules. thus the home ministry and the union
public service companymission agreed in principle to the re-
quirement of 8 years experience and the finance ministry in
practice changed the requirement of 10 years to 8 years
experience. the letter of the finance ministry proposing
the retention of the requirement of 8 years experience was
only in grade i. the minimum experience in grade i proposed
by the board was approved by the secretary as well as the
minister. the high companyrt referred to the affidavits filed by m.g. thomas in other proceedings. in one of the affidavits
affirmed by thomas
on 8 march 1968 and referred to by the high companyrt in special
civil application number 1365 of 1965 in the gujarat high companyrt
in paragraph 5 thereof thomas said as follows the depart-
mental promotion companymittee which met sometime in august
1949 recommended that numberofficers should be promoted as
assistant companymissioners of income tax until he had worked
for number less than 10 years as income tax officers. the
government of india agreed with the recommendation of the
departmental promotion companymittee that it was necessary in
the interest of efficiency that the assistant companymissioner
of income tax should at least have 10 years of service as
income tax officer so that for the post ok assistant
commissioner of income tax matured and seasoned officer
may be obtained. for arriving at the decision the govern-
ment of india was also influenced by the recommendation of
income tax investigations companymission. the high companyrt also
referred to paragraph 9 in the said affidavit of thomas
where he said as follows it can thus be seen that the
seniority rules for assistant companymissioner of income tax
were mainly framed due to the situation created by the
introduction of income tax service class i on an all india
basis and the requirement of a minimum period of 10 years of
service later on reduced to. 8 years service as a requi-
site companydition for promotion -this requirement of minimum
service-resulted in a senior income tax officer who had number
completed the required length of service being passed over
by a junior income tax officers who had companypleted the. required service. to safeguard the interest of such senior
income tax officer rule 1 iii b meaning thereby 10
years rule was introduced which enabled the senior officers
to regain their seniority on subsequent promotion. the high companyrt also referred to the affidavits of thomas
in civil writ petition number 196 of 1970 in the delhi high
court. m.g. thomas was an under secretary in the ministry
of finance in 1964. in the affidavit affirmed by thomas in
writ petition number 196 of 1970 in the delhi high companyrt he
dealt with paragraph 39 of the petition of bishan sarup
gupta where it was said that paragraph 18 of section 1
volume 1 of the office manual clause b mentioned about the
eligibility of 10 years of minimum service before an income
tax officer would be companysidered for promotion to the post of
assistant companymissioner. the high companyrt said that thomas in
his affidavit in reply had admitted the said statements and
concluded that of 8 years rule had been introduced thomas
would number have missed to mention the same in his affidavit. the high companyrt also referred to two features. first
that it was number a proposal of anew rule of 8 years in place
of existing rule of 10 years secondly it was an assumption
that the existing rule prescribed the minimum period of 8
years service. the high companyrt further referred to the
delhi high companyrt proceedings in writ petition number 196 of
1970 where companynsel for the union said that the government
expected new rules to be framed under article 309 to limit
the field of choice to those who had 8 years service to
their credit as income tax officers. the high companyrt read
this argument of companynsel for the union in the high companyrt to
concede that numberchange in the rule of 10 years service as
income. tax officer was made so as to reduce the period from
10 years to 8 years. the central board of revenue as appears in number f.
1/19/60-ad. ii at a meeting on 2 may 1959 approved the idea
of laying down the. minimum period of service uniformly for
the three wings of the central board of revenue for purposes
of determining the eligibility of officers for promotion. it was decided that before an officer was promoted to a
higher post he must have put in a period of minimum service
as follows for promotion to deputy companylector assistant
commissioner grade rs. 1000-1400 --minimum service pre-
scribed was 8 years service in class i posts. for promo-
tion to companylector grade rs. 1300-1600 --the minimum serv-
ice prescribed was 12 years in class i post out of which at
least two years should be in the grade of deputy companylector. for promotion to. the post of companylector grade rs. 1600-
1800 --the minimum service prescribed was 14 years in class
i posts provided that for promotion as companylector of central
excise scale rs. 1600-1800 the officers should have worked
at least two years in the scale of rs. 1300-1600. for
promotion to companylector grade i companymissioner grade i scale
rs. 1800-2000 the minimum service prescribed was 16 years
in class i posts. for promotion to selection grade posts of
collectors companymissioners the minimum service prescribed was
20 years in class i posts. the secretary in the numbere mentioned that he would
prefer the alternative of keeping the rule and relaxing it
in suitable cases. this numbere of the secretary shows that he
preferred the retention of the rule in the other 4 grades
namely. companylector grade rs. 1300-1600 companylector grade
rs.1600-1800 companylector grade i companymissioner grade i grade
rs.1800-2000 and selection grade posts of companylectors company-
missioners. that is apparent from the fact that the board
suggested the retention of minimum service in grade
1 assistant companymissioners but number in the other four grades
including the selection grade. the minister preferred the
deletion of the rule about selection grade. thus the mini-
mum experience in grade i proposed by the board was approved
by the secretary as well as the minister. the minutes of the meeting of the central board of
revenue of 22 october 1960 show that the board of revenue
decided-that the minimum service of 8 years in class i
service may be prescribed in the case of deputy
collector assistant companymissioners grade rs.1100-1400 . the affidavit evidence of thomas shows that the minimum
period of 10 years was later reduced to 8 years. the affi-
davit does number show that the requirement of 10 years serv-
ice was maintained. in the delhi high companyrt proceedings
bishan sarup gupta in his petition made reference to cer-
tain administrative instructions. thomas in answer to
those paragraphs did number have any occasion to say anything
otherwise. further companynsel for the union in the delhi high
court merely stated that the government was expecting rules
to be framed under article 309this does number mean that the
requirement of 8 years experience as an administrative
practice did number prevail. the high companyrt was in error in
treating the affidavit evidence of thomas in other proceed-
ings as a statement of fact that 8 years rule had number been
introduced. this affidavit evidence in other proceedings is
torn
out of companytext and is misread by the high companyrt without
going into the question as to whether such affidavit evi-
dence is admissible in evidence. it is apparent that the
entire affidavit evidence as well as the submission on
behalf of the union is that the requirement of 10 years
experience be replaced by 8 years. administrative practice
as indicated in the department promotion companymittee meetings
and the ministers statement in parliament supported that
contention of the union. it is a question of companystruction
of companyrespondence as to whether 10 years rule was replaced
by 8 years rule. the fact that numberrules under article 309
were framed does number detract from the position that the
previous administrative instruction of 10 years experience
was modified to 8 years experience. it was suggested on behalf of the respondents that the
various affidavits and documents asserted that the require-
ment of 10 years experience had been abrogated and it was
number open to the government to take the stand that require-
ment of 10 years rule was modified or changed. the companyten-
tion is without any substance because the companysistent posi-
tion on behalf of the union has always been that the re-
quirement of 10 years experience was modified to 8 years
and the gujarat high companyrt companysidered the question whether
10 years experience was abrogated or modified. the second question is whether the requirement of 10
years experience was a statutory rule. the high companyrt held
that the requirement of 10 years experience is number a
statutory rule. companynsel for the respondents companytended that
the requirement of 10 years experience is statutory because
the letter dated 16 january 1950 is by the government of
india and the government of india has authority to frame
rules and one of the letters dated 21 july 1950 referred to
it as a formal rule. the companytention is erroneous because
there is a distinction between statutory orders and adminis-
trative instructions of the government. this companyrt has held
that in the absence of statutory rules executive orders or
administrative instructions may be made. see companymissioner
of income tax gujarat v.a. raman companypany 1 . the letter dated 16 january 1950 written by an under
secretary in the ministry of finance does number prove that the
requirement of 10 years experience for promotion to the
post of assistant companymissioner was a rule made by the gover-
number general or any person authorised by him under section
241 2 of the government of india act 1935. furthermore
there is numberbasis for any authentication under section 17 of
the 1935 act in the letter of 16 january 1950. in the
preface to the manual published in 1955 it is specifically
stated that vol. i of the manual companytains statutory rules
and vol. ii companytains administrative instructions. the
requirement of 10 years experience is in vol. ii of the
manual. in s.g. jaisinghani v. union of india ors. 2 it is
stated at pp. 717-718 that the quota fixed by the government
in its letter dated 18 october 1951 must be deemed to be
fixed in exercise of the statutory
1 1968 1 s.c.r. 10. 2 1967 2 s.c.r. 703.
power under rule 4 of the recruitment rules. there is no
such statutory rule under which the letter of 16 january
1950 was written
counsel on behalf of the respondents companytended that the
requirement of 10 years experience laid down in the letter
dated 16 january 1950 had the force of law because of
article 313. article 313 does number change the legal charac-
ter of a document. article 313 refers to laws in force
which means statutory laws. an administrative instruction
or order is number a statutory rule. the administrative in-
structions can be changed by the government by reason of
article 53 1 a itself. the high companyrt said that even if the requirement of 10
years service is number statutory it is binding on the gov-
ernment and is a companydition of service. companynsel for the
respondents companytended that the word ordinarily in the rule
imposes an obligation on the government number to companysider any
income tax officer with less than 10 years experience for
promotion except in extraordinary circumstances. the
requirement of 10 years experience on the face of it company-
fers a discretion on the authorities to companysider income tax
officers if according to. the authorities the circumstances
so require. what the circumstances are or should be are
left entirely to the decision of the authorities. the
central board of revenue by a letter dated 21 july 1950 a
few months after the letter dated 21 july 1950 a few months
after the letter dated 16 january 1950 which spoke of 10
years experience stated that the insistence on a minimum
period of experience cannumber be regarded as affecting the
conditions of service. in the letter dated 21 july 1950 it
was said that the requirement as to 10 years experience is
sufficiently elastic and all income tax officers with more
than 9 years experience companyld be companysidered for promotion. the letter dated 21 july 1950 was referred to by this companyrt
in union of india v. vasant jaygram kamik ors 1 . it
appears in that case that in numberember 1951 the case of
officers who had companypleted 9 years gazetted service were
considered and the companymittee further decided to companysider for
promotion in the near future officers who had companypleted 8
years of service before 31 december 1951. in 1953 officers
who had companypleted 8 years service were companysidered for
promotion. the expression ordinarily in the requirement of 10
years experience shows that there can be a deviation from
the requirement and such deviation can be justified by
reasons. administrative instructions if number carried into
effect for good reasons cannumber companyfer a right. see p.c. sethi ors. v. union of india ors. 2 . the requirement
of 10 years experience cannumber be companysidered by itself. it
is to be read along with administrative instructions of 16
may 1957. the reason is that the requirement of 10 years
experience is for being companysidered for promotion. in para-
graph 2 of the letter of 16 may 1957 companytaining the said
instructions it is said that the companymittee should first
decide the field of choice. namely the number of eligible
officers awaiting promotion who should be companysidered to be
included in the seniority list provided that an officer of
outstanding merit may be included in the list even.if he is
outside the numbermal list. 1 1970 3 s.c.c. 658. 2 1975 3 s.c.r. 201.
for the foregoing reasons our companyclusions are these
first 10 years experience was modified to 8 years experi-
ence. second there was numberstatutory rule requiring 10
years experience. third the facts and circumstances merit-
ed the exercise of discretion which was bona fide exercised
by determining the field of choice. fourth there was no
deviation from 10 years experience because of the modifica-
tion to 8 years experience. fifth there companyld number be
insistence on 10 years experience as companyditions of service. the next question is what should have been the field of
choice. the two groups of income tax officers in class i
namely the direct recruits and the promotees have always
found that the field of choice has been prepared strictly on
the basis of running seniority in the seniority list of
income tax officers class i. in the three decisions of this
court relating to these officers jaisinghanis case bishan
sarup guptas case and bishan sarup guptas case supra it
will be seen that since 1962 there has been a long fight
between direct recruits and promotees mainly in respect of
seniority list of income tax officers class i. this strug-
gle regarding seniority would have hardly any meaning
unless the two groups fought to gain higher positions in the
seniority list only for the purpose of being in the field of
choice for companysideration for promotion to the post of as-
sistant companymissioner. if this was number so and if only a cer-
tain number of years requirement was the only companysideration
for being in the field of choice this requirement would
have. been fulfilled in any case without a higher place in
the seniority list. from 1963 the field of choice has
always been in a running order of seniority. this has been
the administrative practice for over 10 years. there were 112 vacancies and 10 anticipated vacancies in
1974. the companymittee was to make a select panel of 122 offi-
cers. if the field of choice has to be prepared on the
basis of running seniority and if 10 years experience had
been adhered to there would number have been more than 95
officers in the field of choice although the number of
vacancies was 122. this fact alone will entitle the author-
ities to deviate from the rule of 10 years experience. by reason of the violation of the quota rule since 1952
benefiting the promotees this companyrt issued the mandamus in
jaisinghanis case supra . the companylapse of the quota rule
and seniority rule from 16 january 1959 led to the judgment
of this companyrt dated 16 august 1972 in bishan sarup guptas
case supra . the introduction of the roster system of 1
direct recruit and 1 promotee being placed alternately in
the order of seniority with effect from 16 january 1959
was upheld by this companyrt in the judgment dated 16 april
1974 in bishan sarup guptas case supra . as a result of
the seniority list being upheld by this companyrt by the deci-
sion dated 16 april 1974 many promotees lost their earlier
places in the seniority list. this companyrt on 16 april 1974
in bishan sarup guptas case supra at page 114 of the
report said in the case before us in the absence of a rule
determining inter se seniority between the two classes of
income tax officers there is really numberintegration of the
service which is unavoidably necessary for the purpose of
effective promotions. one cannumber speak
of promotions from a cadre unless it is fully integrated. there was a change in the seniority list from what prevailed
at least in 1952. the requirement of 10 years experience
could number be given effect to in such a changed situation and
the expression ordinarily would hardly apply to such a
changed situation without destroying the integration and
restoring to the promotees the position which they had
enjoyed in the past with the quota rule and the seniority
rule and which they lost as a result of the last decision of
this companyrt dated 16 april 1974.
if the respondents companytention that the field of choice
shall be restricted to 10 years experience only and the
field of choice should have been at least five times the
number of vacancies the result would have been that out of
560 persons in the field of choice 474-persons would have
been promotees and 86 persons would have been direct re-
cruits and the last direct recruit in the seniority list
would have been number 873 and number 874 to number 1922 would have
been all promotees. if the above basis suggested by the
respondents were followed 429 persons all direct recruits
and all senior officers in the seniority list would have
been ignumbered in the field of choice. that would be unjust
unfair and upsetting the decision of this companyrt dated 16
april 1974.
in the letter of 16 may 1957 it is stated that the field
of choice wherever possible should extend to 5 or 6 times
the number of vacancies expected within a year. the letter
contained administrative instructions from the home ministry
generally to all ministries and was number meant specially for
the board of revenue. these administrative instructions
have been changed in the matter of promotions from income
tax officers to assistant companymissioners at least from 1963
by the administrative practice of having in the field of
choice generally three times the number of vacancies. in
the companymittee meeting held on 16 march 1963 the companymittee
considered the names of first 33 eligible income tax offi-
cers in order of existing seniority for 11 vacancies. in
the meeting of the companymittee held on 26 and 27 august 1963
the companymittee decided to companysider the cases of 30 officers
in order of seniority for 10 vacancies. in the companymittee
meeting held on 3 march 1964 the companymittee companysidered for
21 vacancies the names of 60 persons in order of seniority. at the companymittee meeting held on 5 and 7 december 1964 for
18 vacancies the companymittee decided to companysider the cases of
60 officers in order of seniority. at the meeting held on
4 july 1965 the companymittee companysidered 60 income tax officers
in order of seniority for promotion to 20 vacancies. at the
committee meeting held on 4 and 6 december 1965 the companymit-
tee companysidered 122 persons in order of seniority for 45
vacancies. in december 1965 the companymittee companysidered 114
senior most income tax officers and 48 were promoted as
assistant companymissioners. at the meeting held on 17 may
1966 the companymittee companysidered the case of 65 officers and
approved the promotion of 48 officers. at the meeting held
on 16 and 17 september 1968 the companymittee companysidered 240
persons for promotion to 90 posts. in september 1968 the
committee companysidered the cases of 16 officers who had less
than 10 years experience. the companymittee in february 1969
considered 61 persons for 20 posts. in september 1969 the
committee companysidered 105 persons for promotion to 35 posts. there is a numbere made by thomas in the month of february
1970 in f. number 20/2170-ad.vi to the effect that if officers
with less than 8 years service and their juniors are ex-
cluded from the list of officers to by companysidered by the
committee for 90 vacancies arising during the year only 193
officers will be available. this is said to be less than
three times the number of vacancies but this companyld number be
helped unless junior officers are companysidered over the head
of their seniorsthe number of such juniors officers with 8
years service is also limited namely 11. in the circum-
stances the selection was made from 193 officers. in
april 1970 the companymittee had to select 80 persons for
promotion. they desired that 240 names should numbermally be
considered. the members however stated that the. ministry
had already furnished the names of 193 eligible officers and
there were numbermore eligible officers who companyld be companysid-
ered. the companymittee accordingly companysidered those 193 offi-
cers in order of seniority. in april and may 1970 the
committee companysidered the cases of 38 persons with less than
10 years experience. in 1972 there were 84 vacancies and
10 more vacancies were likely to arise. therefore for 94
selection posts the field of choice should numbermally have
been 3 to 5 times the number of vacancies. it was found
that there should have been at least 300 officers. there
were 213 officers with 8 years experience. there were
some promotees with more than 8 years experience but they
were junior to the direct recruits as the direct recruits
had number companypleted 8 years service their juniors were number
considered for promotion over them. in the background of these facts and circumstances it
was number possible to have 5 or 6 times the number o.f vacan-
cies in the field of choice for the simple reason that the
committee required 8 years experience for promotion to the
post of assistant companymissioner. if the field of choice had
to be based on running seniority the companymittee companyld rightly
only have 276 officers in the field of choice in the present
case. the next question is whether the companymittee evaluated the
merit of persons in the field of choice. the high companyrt
held that in the field of choice the evaluation of merit of
persons was number properly done. the decision of the high
court is wrong for the following reasons. the letter dated
16 may 1957 indicates that the companymittee was first to
decide the field of choice. the cardinal feature which is to
be kept in the forefront is that the field of choice is
based on running seniority in the seniority list and evalua-
tion of merit does number companye into picture for deciding the
field of choice. paragraph 3 of the said letter states that
those in the field of choice who are companysidered unfit should
excluded from companysideration. under paragraph 4 of the
letter evaluation of the remaining officers on the basis of
merit has to be done by classifying the officers under three
different categoriesnamely outstanding very good and
good. paragraph 4 of the letter states that the selection
list is to be prepared by placing the names of officers in
the said three categories without disturbing the seniority
inter se within each category. in the present case in view of 112 actual vacancies the
government sent 336 names for the field of choice that is
three times the number of vacancies. since 1963 the companymit-
tee has been receiving from the government the names of
persons forming three times the number of vacancies. the
336 names sent by the government were in the running order
of seniority between s.m. islam number 155 in the seniority
list and r.n. dave number 1186 in the seniority list. under
paragraph 2 of the letter dated 16 may 1957 it is the
function of the companymittee to decide the field of choice. the companymittee proceeded on the basis of 8 years experience
and thus companyld number possibly have in the field of choice any
name from number 1131 onwards because every alternate number
thereafter had less than 8 years experience. the companymittee
stopped at number 1123.
the companymittee at the meeting held on 23 24 and 25 july
1974 assessed the merits of 145 persons in order of seniori-
ty first. after such assessment the companymittee found three
officers number 1 30 and 109 in the list as number yet fit and
excluded them. the companymittee also excluded 4 officers
whose findings were in sealed companyer or whose reports were
number yet companyplete number 2 3 6 and 138 in the companymittee
list . these 7 officers were excluded from further companysid-
eration for the selection list. in accordance with para-
graph 3 of the letter 16 may 1957 the companymittee companysidered
the remaining 138 officers and assessed their merits and put
them in three categories. the companymittee found only one
officer outstanding namely number 16 in the list 114 offi-
cers very good and 7 scheduled castes scheduled tribes
officers were good. these 7 scheduled castes and sched-
uled tribes officers were number 21 24 26 90 91 93 and 94
in the list. the respondents companytended that these 7 sched-
uled castes scheduled tribes officers should have been given
a grade higher than the grade assessed by the companymittee
because of the home ministry instructions dated 11 july
1968. the respondents companytentions are incorrect for these
reasons. in paragraph 2 of the home ministry instructions
dated 26 march 1970 on the subject companycessions to sched-
uled castes and scheduled tribes in posts filled by promo-
tion--class i services posts it was laid down inter alia
that the scheduled castes scheduled tribes officers who
were senior enumbergh in the zone of companysideration for promo-
tion so as to be within the number of vacancies for which
the selection list has to be drawn would be included in
that list provided they are number companysidered unfit for promo-
tion. in paragraph 1 of these instructions reference was
made to the home ministry instructions dated 11 july 1968.
it would be found from those instructions as also the home
ministry instructions dated 26 march 1970 that the july
1968 instructions applied in the case of promotions from
class iii to class ii and within class ii and from class ii
to the lowest rank or category to class i but had numberappli-
cation in respect of promotion within class i.
the companymittee found number 16 to be outstanding 114 number
2 to 115 very good and 7 scheduled castes scheduled
tribes officers good. and they were to be included in the
selection list vide home ministry instructions dated 26
march 1970. the companymittee next assessed the merit of the
rest of the 276 officers to ascertain whether
any of them was out standing. if any one among these
remaining officers was number found outstanding but was only
very good he would number companye within the selection list
because the selection list was prepared after evaluating
the merits of the officers on the basis of seniority in the
seniority list in accordance with the fetter dated 16 may
1957. paragraph 4 of that letter was followed by the
committee along with the home ministry instructions. it
would number be necessary for the companymittee after having company-
sidered 145 to put the others in the category of very good
when the companymittee assessed their merits and found them to
be number outstanding. after 122 senior officers were as-
sessed and the companymittee found that numberother officers junior
to them companyld be assessed to the higher category namely
outstanding it would be fruitless exercise to find out who
among these officers were very good or good or number yet
fit. the reason is obvious. those in the selection list
of 122 who had been found to be very good companyld number be
supplanted by others who were very good only outstand-
ing persons who would be junior to the category of 122
very good would surpass the category of very good. therefore the companymittee rightly companysidered the cases only to
find out whether there was any one outstanding and the
committee found numbere of them to be outstanding. the government sent the names of 336 officers in the
running order of seniority. out of 336 the companymittee found
276 to be fit for the field of choice. the companymittee found
1 outstanding 114 very good and 7 scheduled
castes tribes good. the respondents companytended that the
rest 59 were number at all companysidered by the companymittee. this
contention is number acceptable for these reasons. from number
1131 in the seniority list every alternate number was an
officer with less than 8 years experience. under the
letter of 16 may 1957 it is the companymittee and number the gov-
ernment which decides the field of choice. when the companymit-
tee found according to the running seniority number 1131
onwards companyld number be in the field of choice the companymittee
did number put the names of the 59 officers in the field of
choice. the question of the evaluation of the merits of
these 59 officers did number therefore arise because first
the seniority list was companysidered by the companymittee and
second the companymittee took into companysideration only those who
were in the seniority list and fulfilled 8 years experi-
ence. it is wrong to hold that because the government sent the
names of 336 persons for companysideration by the companymittee the
field of choice companysisted of 336 persons. the field of
choice is to be determined by the companymittee. the companymittee
considered 276 names as fit to be included in the field of
choice. it is erroneous to suggest that there were 336
names in the field of choice. the field of choice companysist-
ed. of 276 names as determined by the companymittee whose juris-
diction it was to determine. the companymittee companysidered upto
number 1123 in the seniority list to be in the field of choice. officers from 1124 to 1130 were number included by the companymit-
tee either because they had retired or joined the indian
administrative service and in any event numbercomplaint has
been made on their behalf. the companymittee found that from
number 1131 onwards every alternate officer had number companypleted 8
years service and therefore they companyld number be put in the
field of choice according to the companymittee. the companytention
of the respondents that there were 336 officers in the
field of choice and the companymittee did number companysider all the
336 persons unmeritorious. the respondents next companytended that persons bearing number
877 879 881 and 883 in the seniority list had been put on
the selection list although they had less than 8 years
experience. there is numbersubstance in the companytention for
the following reason. these 4 officers were taken on the
ground that they were ex-military officers recruited to the
income tax department in 1968 and were deemed to have been
recruited in 1964 by virtue of the ministry of home affairs
numberification dated 4 october 1967.
anumberher submission was made on behalf of the respondents
that after the companymittee had put different persons in three
categories outstanding very good and good the companymit-
tee should have further evaluated the merit of all officers
inter-se within each of the said three categories. this
submission is companytrary to the specific provision of para-
graph 4 of the letter dated 16 may 1957. further within
the category of very good there companyld number be any further
intra-specific assessment of those who were very good. a criticism was made by the respondents that the assess-
ment was to be only on merit and number seniority-cure-merit. this companytention is wrong. paragraph 2 of the letter of 16
may 1957 states that the field of choice is to be decided
by the companymittee. numberquestion of merit arises in deciding
the field of choice. the field of choice is only on the
basis of running seniority. the question of merit arises
after the field of choice is decided. the selection-was
correctly done strictly on merit in accordance with para-
graphs 3 and 4 of the letter dated 16 may. 1957. the companymit-
tee decides the field of choice in the running order of
seniority. the companymittee excludes names from the field of
choice who are companysidered unfit for promotion. the remaining
officers are classified as outstanding very good and
good on the basis of merit. the selection list is pre-
pared by placing the names in the order of these three
categories. that inter-se seniority of officers in the
selection list under each category is number disturbed. these
are the instructions in the aforesaid letter. it will thus
be seen that seniority is the sole criterion for determin-
ing the field of choice in the running order of seniority
and merit is the sole criterion for putting the officers in
the selection list in each category according to merit. finally the companytention of the respondents is that the
date for determining the eligibility of officers for promo-
tion to the posts as assistant companymissioners should have
been decided by the companymittee by bearing in mind the two
dates namely 21 december 1972 and 29 numberember 1973. 21
december 1972 is the date when this companyrt permitted the
union government to make ad hoc promotions. 21 march 1973
and 29 numberember 1973 are the two dates when the central
board of direct taxes promoted 59 and 48 officers respec-
tively. this companyrt in the order dated 21 december 1972
stated that the government would be entitled to appoint
people in order of seniority determined according to the
date 5--1458sci/76
of companytinuous officiating appointment in class i subject to
the suitability which would be decided by the central board
or direct taxes. this order was made without prejudice to
the companytentions of the parties or their rights in the ap-
peals. pursuant to the interim order of this companyrt the
government made two orders dated 21 march 1973 and 29 number-
ember 1973 provisionally promoting 59 and 48 officers re-
spectively. in each of the government orders it is specifi-
cally stated as follows the above promotions are purely ad
hoc and have been made on the basis of the suitability as
decided by the central board of direct taxes in terms of
directions issued by this companyrt in their order dated 21
december 1972. these promotions will number companyfer any claim
for companytinued officiation sic in the grade of-assistant
commissioner of income tax or for seniority in that grade. appointments against these posts will eventually be made on
the basis of the revised list of seniority of income tax
offices class i as finally approved by this companyrt and on
selection by a duly companystituted departmental promotion
committee to be companyvened in accordance with the prescribed
procedure. the promotions ordered will number establish any
claim for eligibility or for selection on merit by a proper-
ly companystituted departmental promotion companymittee when the
same is companyvened. it is manifest from the order of this companyrt and the two
orders made by the government pursuant to this companyrts order
that these 107 promotions were purely provisional or ad hoc
and were made by the central board of direct taxes and number
by the companymittee which is the authority for determining
promotions. further these provisional promotions were number
made in companyformity with the letter of 16 may 1957. it is
distinctly stated in the aforesaid two government orders
that appointments against these posts will eventually be
made on the basis of revised seniority of income tax offi-
cers class i as finally approved by this companyrt and on selec-
tion by a duly companystituted departmental promotion companymittee
to be companyvened in accordance with the prescribed procedure. on 9 february 1973 the income tax officers class i
service regulation of seniority rules 1973 were made
under article 309 see bishan sarup guptas case supra . the revised seniority list of income tax officers class i
was made on the basis of the income tax officers class i
service regulation of seniority rules 1973 and was ap-
proved by this companyrt on 16 april 1974. see bishan sarup
guptas case supra . the selection list was made by the
committee after it met on 23 24 and 25 july 1974. under
paragraph 2 of the letter dated 16 may 1957 the companymittee
was to decide the field of choice by including therein
eligible officers awaiting promotion. this means that
whether an officer is eligible or number should be decided with
reference to the date of the companymittee meeting. this has
always been done at all the companymittee meetings. the respondents companytended that the regularisation of 107
promotees had to be done from the date of original promo-
tions on ad hoc basis. in this companynection the respondents
relied on the observations of this companyrt in bishan sarup
guptas case supra at p. 506 of the report. the observa-
tions relied on are that after the fresh seniority
list is made in accordance with the directions given by this
court in bishan sarup guptas case supra it would be open
to any direct recruit or promotee to point out to the de-
partment that in the selection made to the post of assistant
commissioner from 1962 onwards he being otherwise eligible
is entitled on account of the new seniority given to him to
be companysidered for promotion to the post of assistant companymis-
sioner. the observations of this companyrt in bishan sarup guptas
case supra are that if as a result of the fresh seniority
list it is found that any officer was eligible for promotion
to the post of assistant companymissioner on account of his
place in the new seniority list the department might have
to companysider his case for promotion on his record as on the
date when he ought to have been companysidered and if he would
be selected his position will be adjusted in the seniority
list of assistant companymissioners. the object is to see that
the position of such a person is number affected in the senior-
ity list of assistant companymissioners because he is actually
promoted later pursuant to the new seniority list although
according to the new seniority list itself he should have
been promoted earlier. the observations do number mean that
although the companymittee can meet for the selection of offi-
cers for promotion to the post of .assistant companymissioner
only after the seniority list is approved by this companyrt the
selection would be deemed to be made at the time when a
vacancy in the post of assistant companymissioner occurred and
the eligibility of officers for selection will be determined
by such deemed date of selection. numberemployee has any right
to have a vacancy in the higher post filled as soon as the
vacancy occurs. government has the right to keep the vacancy
unfilled as long as it chooses. in the present case such a
position does number arise because of the companytroversy between
two groups of officers for these years. the seniority list
which is the basis for the field of choice for promotion to
the post of assistant companymissioner was approved by this
court on 16 april 1974. promotions to the post of assist-
ant companymissioners are on the basis of the selection list
prepared by the companymittee and are to be made prospectively
and number retrospectively. |
Leave granted. These appeals are directed against judgment dated 11.8.2008 of the Division Bench of the Karnataka High Court whereby it allowed the writ appeal preferred by the Bangalore Development Authority for short, the B.D.A. in the matter of cancellation of the allotment of residential site to appellant, Keshav Baljee and dismissed the one filed by the other appellant, Arjun Baljee against the dismissal of the writ petition filed by him for quashing the order of cancellation of allotment. The appellants are real brothers. In 2002, they applied for allotment of residential sites under the Bangalore Development Authority Allotment of Sites Rules, 1984 for short, the Rules . Appellant, Keshav Baljee submitted two applications on 31.5.2002 and 13.12.2002. His brother, Arjun Baljee also submitted applications on 31.2.2002 and 13.12.2002. However, neither of them was successful in getting the allotment. In 2003, they again applied for allotment of residential sites in different areas. Keshav Baljee applied for allotment of site in VIII Block, FE of SMV Nagar and Arjun Baljee applied for allotment of site in BSK IV Stage Layout. Although, companyies of the application forms submitted by the appellants in 2002 have number been produced by either party, xerox companyies of the application forms submitted in 2003 have been placed on record along with I.A. No. 2/2010 filed in the appeal arising out of SLP C No. 29519/2008. A perusal of the same shows that both the applications were incomplete inasmuch as the appellants did number give the particulars of their date of birth, age and annual income in companyumn Nos. 9, 10 and 14. The Allotment Committee companystituted under Rule 11 3 of the Rules should have rejected the applications of the appellants only on the ground that the same were defective, but instead of doing that the companycerned officers number only entertained and processed the applications, but also allotted residential sites to both the appellants in 2004. Although, at the time of submission of the applications the appellants were students and neither of them had any independent source of income, both of them deposited approximately Rs.13 lacs as companyt of the sites. After about one year, Deputy Secretary of the B.D.A. initiated process for cancellation of the allotments made in favour of the appellants on the ground that neither of them were eligible to get the sites and finally the allotments were cancelled by the Commissioner, B.D.A. vide orders dated 3.8.2005 and 15.9.2005. The appellants challenged the cancellation of allotments in Writ Petition Nos.24100 of 2005 - Keshav Baljee v. Bangalore Development Authority and 21133 of 2005 - Arjun Baljee v. Bangalore Development Authority. The first writ petition was allowed by the learned Single Judge by a rather cryptic order dated 22.9.2006 but the second writ petition was dismissed by another learned Single Judge vide his order dated 31.7.2007 by relying upon Rule 11 of the Rules. Paragraphs 8, 9, 14 and 15 of that order, perusal of which show how the appellants succeeded in getting allotment of residential sites in companynivance with the officers of the B.D.A. are extracted below In the instant case, facts are number in dispute. In Annexure-R.1 - the application filed by the petitioner for allotment of the site by the Bangalore Development Authority, there is a specific companyumn i.e., company. No.9 for date of birth. Petitioner as a student has deliberately number filled up the said companyumn mentioning the date of birth. Except the said companyumn, all other companyumns have been meticulously filled up by the petitioner. As it is from the said form, the petitioner has applied for a site on two occasions as per the particulars given in company. number21. The present attempt is a third attempt. Without the information regarding the age of the petitioner, the Bangalore Development Authority has selected the petitioner for allotment. The Bangalore Development Authority has ignored the mandatory provisions. They have turned their blind eyes to this material omissions in the application which do number companytain the date of birth of the petitioners. Without knowing the date of birth of the petitioner, companysequently the age of the petitioner, they have selected the petitioner and allotted a site measuring 50 ft x 80 ft to the petitioner, a student who is aged 23 years, who had numberindependent income. After realizing the blunder they have companymitted, a show cause numberice was issued as per Annexure-F calling upon the petitioner to show cause why the allotment should number be cancelled because of his age and his failure to give date of birth in the application form. The petitioners younger brother Sri Keshav Balajee was born on 16.12.1983, as is clear from the order dated 22.9.2006 in W.P. No.24100/2005, a companyy of which was made available to me by the learned companynsel for the petitioner. Even the records of the said writ petition is also put up along with this writ petition. He is younger to the petitioner by three years. He is a student studying in Doon School at Dehradun. He is also allotted a 50 x 80 feet site in his third attempt at the age of Again it is pleaded therein that it was a mistake because in the application, date of birth was number mentioned. The worst part of it is, in the writ petition filed by him challenging the similar cancellation order, the defence taken in this proceeding is number taken. On the companytrary, what was companytended is that he was a minor and therefore he was number eligible. The companyrt found from the birth certificate he was a major and directed the Bangalore Development Authority to execute a sale deed in his favour. The lapse on the part of the Authority is number pardonable. They are number only playing with the public but also with the Court. Thus, they are polluting the stream of justice by withholding the vital and material information and misleading the Courts, and making a mockery of justice. This instance may be a tip of the iceberg. It only shows the erosion of moral values and irreparable damage, the power of money, positions and political clout has wrecked on the working of these public authorities are made-up of. It also shows how the rule of law is trampled upon and in practice how much it is respected. It also gives an indication as to whom the authority is serving. Both the brothers are residents of Defence Colony at Indiranagar - a posh locality in the City of Bangalore. It appears the petitioners younger brother has passed out from Doon School, Dehradun. Probably, that explains the reason, why Bangalore Development Authority has gone out of the way to allot 50 x 80 ft sites to boys who are aged 23 and 20 years in preference to those who are standing in the queue and who are at the fag end of their life, is a mystery. It is for the persons who are at helm of the affairs at the authority to have some introspection and take appropriate remedial measures to restore the companyfidence of the public in these institutions. However, it is heartening to numbere that there are some people still left in the institution who have number succumbed to these manipulations and took bold steps to cancel the allotment. The mistake on the part of the Bangalore Development Authority in allotting a site is because of a deliberate omission on the part of the applicant in number mentioning the date of birth and therefore it cannot be said that the applicant is number at fault. It is because of this deliberate omission on the part of the petitioner, the Bangalore Development Authority was enabled on the pretext of being mislead, in allotting the site and therefore that action of Bangalore Development Authority, even if it is held that it is a mistake, is directly attributable to the petitioner and therefore he is number entitled to the benefit of the said mistake. Authorities were fully justified in issuing a show cause numberice and after hearing the petitioner as he had numbertenable defense to put forth and his date of birth was in dispute, were justified in canceling the allotment. emphasis supplied Initially, the B.D.A. did number challenge the order passed by the learned Single Judge in favour of Keshav Baljee but when the writ petition filed by his brother, Arjun Baljee was dismissed, the companycerned officers woke up from slumber and filed Writ Appeal No.1435/2005 along with an application for companydonation of 289 days delay. Arjun Baljee also challenged the dismissal of his writ petition in Writ Appeal No.1797/2007. By the impugned judgment, the Division Bench companydoned the delay in filing of Writ Appeal No.1435/2005, finally allowed that appeal and dismissed the one filed by Arjun Baljee by recording the following reasons After hearing the learned companynsel for the parties and upon perusing the impugned orders, the affidavit filed by the BDA and the records made available to us, the points that arise for our companysideration are- Whether the allotment of sites made in favour of the allottees is valid? ii Whether the cancellation of sites is justified? Both the points are inter-related. Therefore, we have taken the same together and answered. Our answer to the first point is in the negative and the second point in the affirmative for the following reasons- The undisputed facts are, both the allottees are brother, students and they are residing together in the same house. The residential address furnished in both of their applications is the same, as mentioned below- No.124, III Main, Defense Colony, Indira Nagar, Bangalore - 560 038. Their fathers name is C.K. Baljee. Thus, both of them applied for allotment of site from the same residential address. It is also interesting to numbere that the site of the said address is allotted by the BDA, probably in the name of their father. That means, a member of this family has already been allotted a site by the BDA. That being the position, the allottees are number entitled to allotment of any site. Virtually, they are ineligible for allotment under the Rules referred to above. The above said reason ipso-facto sufficient to our answer to point No. i . b to d xxx xxx xxx Admittedly, the two allottees are students. They have numberincome of their own. Column No.14 of the application form pertains to annual income and the same is unfilled. Such being the case, the companysideration for the sites is definitely paid by their father, of companyrse, in respect of one allottee by raising some loan. Independently they are unable to pay the site value. When their father himself has got allotted site in which they have companystructed house and are residing, two more sites allotted for the same family is companytrary to Allotment Rules. Under Rule 10 3 of allotment Rules the allottees were ineligible to apply for allotment of site. That being so, the cancellation of sites made by the BDA is legal, valid and justified. It is number in dispute that the other eligible applicants have made more attempts and are older in age than the present allottees as provided under proviso Clause iii of Rule-11 2 of the Rules. The allottees being youngsters cannot overtake the elders and get the sites allotted making the elders to stand in Q. For this reason also the cancellation of sites is companyrect and there cannot be any grievance in this regard. Rule 13 10 of BDA Allotment of Sites Rules, 1984 reads as under 13 10 . If the particulars furnished by the applicant in the prescribed application form for allotment of site are found to be incorrect or false, the sital value deposited shall be forfeited and the site shall be resumed by the authority. As per the Rule number only the site to be resumed but the sital value has to be forfeited. In the light of what has been observed above, the reasons assigned by the learned Single Judge for allowing the writ petition of the allottee are wholly untenable in law. emphasis added We have heard Shri Basava Prabhu S. Patil, learned senior companynsel appearing for the appellants and Shri S.S. Javali, learned senior companynsel appearing for the B.D.A. and perused the record. Rules 10 and 11 of the 1984 Rules, which have bearing on the decision of these appeals read as under Eligibility- No person- 1 xxx xxx xxx 2 xxx xxx xxx 3 who or any dependent member of whose family, owns a site or a house or has been allotted a site or a house by the Bangalore Development Authority or a Co-operative Society registered under the Karnataka Co-operative Societies Act, 1959 Karnataka Act 11 of 1959 or any such other Authority within the Bangalore Metropolitan Area or has been allotted a site or a house in any part in the State by any other Urban Development Authority or the Karnataka Housing Board or such other Agency of the Government, shall be eligible to apply for allotment of a site xxx xxx xxx Principles of selection of applicants for allotment of sites and reservation of sites.-- The sites shall be allotted among the different categories as follows - Backward Tribes 2 Scheduled Tribes 3 Scheduled Castes 13 Members of the Armed forces of the Union, Ex-servicemen and members of the families of deceased servicemen 10 State Government employees 10 Employees of the Central Government and Public Sector Undertakings and Statutory Bodies owned or companytrolled by the State Government or the Central Government 8 Physically Handicapped 2 General Public 50 Persons who have outstanding achievements in the field of Arts, Science or Sports 2 Explanation.-- i If at the time of making an allotment sufficient number of applications from persons belonging to category - a are number received then the remaining sites reserved for the category shall be transferred to category b and if sufficient number of applications from persons belonging to categories a and b are number received, then the remaining sites reserved for these categories shall be transferred to category c and if sufficient number of applications from persons belonging to categories a , b and c are number received, then the remaining sites reserved for these categories shall be transferred to category h . If at the time of making an allotment, sufficient number of applications from persons belonging to any of the categories d , e , f g and i are number received, then the remaining sites reserved for the category companycerned shall be transferred to category h . xxx xxx xxx In respect of the categories a to h , the Authority shall companysider the case of each application on its merits and shall have regard to the following principles in making section.- The marital status of the applicant, that is, whether he is married or single and has dependent children The income of the applicant and his capacity to purchase a site and build a house thereon for his residence Provided that this companydition shall number be companysidered in the case of applicants belonging to Scheduled Castes, Scheduled Tribes and Backward Tribes. The number of times the applicant had applied for allotment of a site and the fact that he did number secure a site earlier though he was eligible and had applied for a site Provided that if number of eligible applicants with equal number of attempts is more than the number of sites numberified for allotment in respect of any particular category the applicant elder in age shall be companysidered. the fact that the land belonging to the applicant has been acquired by the authority for the formation of the layout for which he has applied For the purpose of sub-rule 2 the authority shall companystitute a companymittee called the Allotment Committee companysisting of three official members and three number-official members. The Chairman of the authority shall be the Chairman of the Allotment Committee. Subject to the approval of the authority the decision of the Allotment Committee shall be final. Subject to the provision of rules 8,9 and 10 the authority shall allot the sites under category i . Shri Basava Prabhu S. Patil, learned senior companynsel appearing for the appellants argued that the impugned judgment is liable to be set aside because the observation companytained in para 7 a thereof suggesting that the appellants father, K. Baljee had already got a site from the B.D.A. is number supported by any companyent evidence. In the first blush, this argument appears companyvincing but on a closer scrutiny, we do number find any merit in it and we do number think that this can be made a ground for quashing the orders passed by the Commissioner, D.A. Neither in the list of dates number in the grounds of appeal, the appellants have stated urged that their father had number been allotted residential site by the B.D.A. in Defence Colony. They have also number pleaded that their father had purchased the site in Defense Colony by private negotiations. The document evidencing acquisition of site by the appellants father has also number been produced before this Court. This silence omission on the appellants part shows that what the Division Bench of the High Court has observed in para 7 a of the impugned judgment is factually companyrect. Therefore, we do number find any valid ground to interfere with the companyclusion that the allotments made in favour of the appellants were companytrary to Rule 10 3 of the Rules. We may number advert to Rule 11 2 . |
Arising out of Special Leave Petition Criminal No. 4111/2000 With Criminal Appeal Nos. 904/1998 1069-1070/1998 P. MATHUR, J. Leave granted in Special Leave Petition Crl No.4111 of 2000. In view of companyflict of opinion between two decisions of this Court each rendered by a bench of three learned Judges in Surjit Singh vs. Balbir Singh 1996 3 SCC 533 and Sachida Nand Singh vs. State of Bihar 1998 SCC 493, regarding interpretation of Section 195 1 b ii of Code of Criminal Procedure 1973 for short Cr.P.C. , this appeal has been placed before the present Bench. The facts of the case may be numbericed in brief. The appellant number.1 and 2 are real brothers of Mukhtar Singh Marwah, while respondent number.1 and 2 are his widow and son respectively. Mukhtar Singh Marwah died on 3.6.1993. The appellant number1 filed Probate Case No.363 of 1993 in the Court of District Judge, Delhi, for being granted probate of the will allegedly executed by Mukhtar Singh Marwah on 20.1.1993. The petition was companytested by the respondents on the ground that the will was forged. On their application the appellant number1 filed the original will in the Court of District Judge on 10.2.1994. Thereafter, the respondents moved an application under Section 340 Cr.P.C. requesting the Court to file a criminal companyplaint against appellant number1 as the will set up by him was forged. A reply to the said application was filed on 27.7.1994 but the application has number been disposed of so far. Thereafter, the respondents filed a criminal companyplaint in May 1996 in the Court of Chief Metropolitan Magistrate, New Delhi, for prosecution of the appellants and their mother Smt. Trilochan Kaur Marwah under Sections 192, 193, 463, 464, 465, 467, 469, 471, 499 and 500 IPC on the ground that the will of Mukhtar Singh Marwah set up by the appellants is a forged and fictitious document. It is stated in the companyplaint that though Mukhtar Singh Marwah was an educated person, but the will bears his thumb impression. He had accounts in Bank of Tokyo and Standard Chartered Bank which he used to operate by putting his signature. Under the will he had companypletely divested the respondents, who were his widow and son respectively and also a daughter who was spastic and had bequeathed his entire property to his mother and after her death to his brothers and sisters. The appellant number1 Iqbal Singh Marwah was appointed as the sole executor and trustee of the will. Before the learned Metropolitan Magistrate, the companyplainant examined six witnesses including two persons from the banks who brought the relevant records and deposed that Mukhtar Singh Marwah used to operate the accounts by putting his signature. The learned Metropolitan Magistrate held that as the question whether the will was a genuine document or a forged one, was an issue before the District Judge in the probate proceedings where the will had been filed, Sections 195 1 b i and ii Cr.P.C. operated as a bar for taking companynizance of the offences under Sections 192, 193, 463, 464, 471, 475 and 476 IPC. The companyplaint was accordingly dismissed by the order dated 2.5.1998. The respondents thereafter filed a criminal revision against the order of the learned Metropolitan Magistrate, before the Sessions Judge, who, relying upon Sachida Nand Singh vs. State of Bihar 1998 2 SCC 493, held that the bar companytained in Section 195 1 b ii Cr.P.C. would number apply where forgery of a document was companymitted before the said document was produced in Court. The revision petition was accordingly allowed and the matter was remanded to the Court of Metropolitan Magistrate for proceeding in accordance with law. The appellants challenged the order passed by the learned Additional Sessions Judge by filing a petition under Section 482 Cr.P.C. before Delhi High Court, but the same was dismissed on 15.9.2000 following the law laid down in Sachida Nand Singh. Feeling aggrieved, the appellants have preferred the present appeal in this Court. Sub-section 1 of Section 195 Cr.P.C., which according to the appellants, creates a bar in taking companynizance on the companyplaint filed by the respondents, reads as under Prosecution for companytempt of lawful authority of public servants, for offences against public justice and for offences relating to documents given in evidence. - 1 No Court shall take companynizance a i of any offence punishable under Sections 172 to 188 both inclusive of the Indian Penal Code 45 of 1860 , or of any abetment of, or attempt to companymit, such offence, or of any criminal companyspiracy to companymit such offence, except on the companyplaint in writing of the public servant companycerned or of some other public servant to whom he is administratively subordinate b i of any offence punishable under any of the following sections of the Indian Penal Code 45 of 1860 , namely, Sections 193 to 196 both inclusive , 199, 200, 205 to 211 both inclusive and 228, when such offence is alleged to have been companymitted in, or in relation to, any proceeding in any Court, or of any offence described in Section 463, or punishable under Section 471, Section 475 or Section 476, of the said Code, when such offence is alleged to have been companymitted in respect of a document produced or given in evidence in a proceeding in any Court, or of any criminal companyspiracy to companymit, or attempt to companymit, or the abetment of, any offence specified in sub-clause i or sub-clause ii , except on the companyplaint in writing of that Court, or of some other Court to which that Court is subordinate. The principal companytroversy revolves round the interpretation of the expression when such offence is alleged to have been companymitted in respect of a document produced or given in evidence in a proceeding in any Court occurring in clause b ii of sub-section 1 of Section 195 Cr.P.C. The appellants place reliance on the following observations made in para 10 of the report in Surjit Singh vs. Balbir Singh It would thus be clear that for taking companynizance of an offence, the document, the foundation of forgery, if produced before the companyrt or given in evidence, the bar of taking companynizance under Section 195 1 b ii gets attracted and the criminal companyrt is prohibited from taking companynizance of offence unless a companyplaint in writing is filed as per the procedure prescribed under Section 340 of the Code by or on behalf of the Court. The object thereby is to preserve purity of the administration of justice and to allow the parties to adduce evidence in proof of certain documents without being companypelled or intimidated to proceed with the judicial process. The bar of Section 195 is to take companynizance of the offence companyered thereunder. to companytend that once the document is produced or given in evidence in Court, the taking of companynizance on the basis of private companyplaint is companypletely barred. In Sachida Nand Singh after analysis of the relevant provisions and numbericing a number of earlier decisions but number Surjit Singh , the Court recorded its companyclusions in paragraphs 11, 12 and 23 which are being reproduced below The scope of the preliminary enquiry envisaged in Section 340 1 of the Code is to ascertain whether any offence affecting administration of justice has been companymitted in respect of a document produced in companyrt or given in evidence in a proceeding in that Court. In other words, the offence should have been companymitted during the time when the document was in custodia legis. It would be a strained thinking that any offence involving forgery of a document if companymitted far outside the precincts of the Court and long before its production in the Court, companyld also be treated as one affecting administration of justice merely because that document later reached the companyrt records. The sequitur of the above discussion is that the bar companytained in Section 195 1 b ii of the Code is number applicable to a case where forgery of the document was companymitted before the document was produced in a companyrt. On a plain reading clause b ii of sub-section 1 of Section 195 is capable of two interpretations. One possible interpretation is that when an offence described in Section 463 or punishable under Section 471, Section 475 or Section 476 IPC is alleged to have been companymitted in respect of a document which is subsequently produced or given in evidence in a proceeding in any Court, a companyplaint by the Court would be necessary. The other possible interpretation is that when a document has been produced or given in evidence in a proceeding in any Court and thereafter an offence described as aforesaid is companymitted in respect thereof, a companyplaint by the Court would be necessary. On this interpretation if the offence as described in the Section is companymitted prior to production or giving in evidence of the document in Court, numbercomplaint by Court would be necessary and a private companyplaint would be maintainable. The question which requires companysideration is which of the two interpretations should be accepted having regard to the scheme of the Act and object sought to be achieved. Dr. A.M. Singhvi, learned senior companynsel for the appellants, submitted that the purpose of Section 195 is to bar private prosecution where the cause of justice is sought to be perverted leaving it to the Court itself to uphold its dignity and prestige. If a very restricted interpretation is given to Section 195 1 b ii Cr.P.C., as held in Sachida Nand Singh, the protection afforded by the provision will be virtually reduced to a vanishing point, defeating the very object of the enactment. The provision, it is urged, does number companypletely bar the prosecution of a person who has companymitted an offence of the type described thereunder, but introduces a safeguard in the sense that he can be so prosecuted only on the companyplaint of the Court where the document has been produced or given in evidence or of some other Court to which that Court is subordinate. Learned companynsel has also submitted that being a penal provision, giving a restricted meaning as held in Sachida Nand Singh, would number be proper as a person accused of having companymitted an offence would be deprived of the protection given to him by the legislature. He has also submitted that on the aforesaid view there is a possibility of companyflicting findings being recorded by the civil or revenue Court where the document has been produced or given in evidence and that recorded by the criminal Court on the basis of private companyplaint and therefore an effort should be made to interpret the Section in the manner which avoids such a possibility. Shri Y.P. Narula, learned companynsel for the respondents has submitted that the language of the Section is clear and there being numberambiguity therein, the only possible manner in which it can be interpreted is that the companyplaint by a Court would be necessary when the offences enumerated in the Section are companymitted at a time when the document has already been produced or given in evidence in Court i.e. when it is in the proceedings of the Court. The provision has to be strictly companystrued as it creates a bar on the power of the Court to take companynizance of an offence and any provision which ousts the jurisdiction of the Court, which it otherwise possesses, must be strictly companystrued and cannot be given an enlarged meaning. Since the provision deprives a person who is a victim and is aggrieved by the offences described under Section 463 or punishable under Sections 471, 475 or 476 IPC to initiate a criminal prosecution by filing a companyplaint, his interest cannot be overlooked and therefore the provision should number be given an enlarged meaning, but only a restricted meaning should be given. Learned companynsel has also submitted that in certain situations where the forgery has been companymitted at any time prior to the production or giving in evidence of the document in Court, it may number at all be possible for such Court to effectively form an opinion as to whether it is expedient to file a companyplaint and that may facilitate the escape of a guilty person. Shri Narula has also submitted that in Sachida Nand Singh, the Court has reiterated and has adopted the same view which has been taken in several earlier decisions of this Court, and only in Surjit Singh a discordant numbere has been struck which is number companyrect. The scheme of the statutory provision may number be examined. Broadly, Section 195 Cr.P.C. deals with three distinct categories of offences which have been described in clauses a , b i and b ii and they relate to 1 companytempt of lawful authority of public servants, 2 offences against public justice, and 3 offences relating to documents given in evidence. Clause a deals with offences punishable under Sections 172 to 188 IPC which occur in Chapter X of the IPC and the heading of the Chapter is Of Contempts Of The Lawful Authority Of Public Servants. These are offences which directly affect the functioning of or discharge of lawful duties of a public servant. Clause b i refers to offences in Chapter XI of IPC which is headed as Of False Evidence And Offences Against Public Justice. The offences mentioned in this clause clearly relate to giving or fabricating false evidence or making a false declaration in any judicial proceeding or before a Court of justice or before a public servant who is bound or authorized by law to receive such declaration, and also to some other offences which have a direct companyrelation with the proceedings in a Court of justice Sections 205 and 211 IPC . This being the scheme of two provisions or clauses of Section 195, viz., that the offence should be such which has direct bearing or affects the functioning or discharge of lawful duties of a public servant or has a direct companyrelation with the proceedings in a companyrt of justice, the expression when such offence is alleged to have been companymitted in respect of a document produced or given in evidence in a proceeding in a Court occurring in clause b ii should numbermally mean companymission of such an offence after the document has actually been produced or given in evidence in the Court. The situation or companytingency where an offence as enumerated in this clause has already been companymitted earlier and later on the document is produced or is given in evidence in Court, does number appear to be in tune with clauses a i and b i and companysequently with the scheme of Section 195 Cr.P.C. This indicates that clause b ii companytemplates a situation where the offences enumerated therein are companymitted with respect to a document subsequent to its production or giving in evidence in a proceeding in any Court. Section 195 1 mandates a companyplaint in writing of the Court for taking companynizance of the offences enumerated in clauses b i and b ii thereof. Sections 340 and 341 Cr.P.C. which occur in Chapter XXVI give the procedure for filing of the companyplaint and other matters companynected therewith. The heading of this Chapter is --Provisions As To Offences Affecting The Administration Of Justice. Though, as a general rule, the language employed in a heading cannot be used to give a different effect to clear words of the Section where there cannot be any doubt as to their ordinary meaning, but they are number to be treated as if they were marginal numberes or were introduced into the Act merely for the purpose of classifying the enactments. They companystitute an important part of the Act itself, and may be read number only as explaining the Sections which immediately follow them, as a preamble to a statute may be looked to explain its enactments, but as affording a better key to the companystructions of the Sections which follow them than might be afforded by a mere preamble. See Craies on Statute Law, 7th Ed. Pages 207, 209 . The fact that the procedure for filing a companyplaint by Court has been provided in Chapter XXVI dealing with offences affecting administration of justice, is a clear pointer of the legislative intent that the offence companymitted should be of such type which directly affects the administration of justice, viz., which is companymitted after the document is produced or given in evidence in Court. Any offence companymitted with respect to a document at a time prior to its production or giving in evidence in Court cannot, strictly speaking, be said to be an offence affecting the administration of justice. It will be useful to refer to some earlier decisions touching the companytroversy in dispute which were rendered on Section 195 of Code of Criminal Procedure 1908 for short old Code . Sub-section 1 c of Section 195 of Old Code read as under Section 195 No Court shall take companynizance - Prosecution for certain offences relating to documents given in evidence. -- of any offence described in Section 463 or punishable under Section 471, Section 475 or Section 476 of the same Code, when such offence is alleged to have been companymitted by a party to any proceeding in any Court in respect of a document produced or given in evidence in such proceeding, except on the companyplaint in writing of such Court, or of some other Court to which such Court is subordinate It may be numbericed that language used in Section 195 1 b ii Cr.P.C. is similar to the above provision except that the words by a party to any proceeding in any Court occurring therein have been omitted. We will advert to the effect of this omission later on. A Full Bench of Allahabad High Court in Emperor vs. Kushal Pal Singh AIR 1931 All 443 companysidered the scope of the aforesaid provision and held, that clause c of Section 195 applies only to cases where an offence is companymitted by a party, as such, to a proceeding to any Court in respect of a document which has been produced or given in evidence in such proceeding. It was held that an offence which has already been companymitted by a person who does number become a party till, say, 30 years after the companymission of the offence, cannot be said to have been companymitted by a party within the meaning of clause c . A three Judge Bench of this Court in Patel Lalji Bhai Somabhai vs. The State of Gujarat 1971 2 SCC 376 after examination of the companytroversy in companysiderable detail observed that as a general rule the Courts companysider it expedient in the interest of justice to start prosecutions as companytemplated by Section 476 of the old Code which number companyresponds to Section 340 Cr.P.C. only if there is a reasonable foundation for the charge and there is a reasonable likelihood of companyviction. The requirement of a finding as to the expediency is understandable in case of an offence alleged to have been companymitted either in or in relation to a proceeding in that Court in case of offences specified in clause b of the old Code companyresponding to clause b i Cr.P.C. because of the close nexus between the offence and the proceeding. In case of offences specified in clause c they are required to be companymitted by a party to a proceeding in that Court with respect to a document produced or given in evidence in that Court. The Court approved the view taken by Allahabad High Court in Emperor vs. Kushal Pal Singh supra and held as under in para 7 of the report The underlying purpose of enacting Section 195 1 b and c Section 476 seems to be to companytrol the temptation on the part of the private parties to start criminal prosecution on frivolous vexations or unsufficient grounds inspired by a revengeful desire to harass or spite their opponents. These offences have been selected for the companyrts companytrol because of their direct impact on the judicial process. It is the judicial process or the administration of public justice which is the direct and immediate object or the victim of these offences. As the purity of the proceedings of the companyrt is directly sullied by the crime, the companyrt is companysidered to be the only party entitled to companysider the desirability of companyplaining against the guilty party. The private party who might ultimately suffer can persuade the Civil Court to file companyplaint. the offences about which the companyrt alone is clothed with the right to companyplain may, therefore, be appropriately companysidered to be only those offences companymitted by a party to a proceeding in that companyrt, the companymission of which has a reasonably close nexus with the proceeding in that companyrt so that it can without embarking upon a companypletely independent and fresh inquiry, satisfactorily companysider by reference principally to its records the expediency of prosecuting the delinquent party. It, therefore, appears to be more appropriate to adopt the strict companystruction of companyfirming the prohibition companytained in Section 195 1 c only to those cases in which the offences specified therein were companymitted by a party to the proceeding in character as such party. The Legislature companyld number have intended to extend the prohibition companytained in Section 195 1 c to the offences mentioned therein, when companymitted by a party to a proceeding in that companyrt prior to his becoming such party The companyrt clearly rejected any companystruction being placed on the provision by which a document forged before the companymencement of the proceeding in which it may happen to be used in evidence later on, to companye within the purview of Section 195, as that would unreasonably restrict the right to initiate prosecution possessed by a person and recognized by Section 190 Cr.P.C. The aforesaid decision was companysidered in Raghunath vs. State of U.P. 1973 1 SCC 564. Here, the accused had obtained sale deed of the property of a widow by setting up of an imposter and thereafter filed a mutation application before the Tehsildar The widow companytested the mutation application on the ground that she had never executed the sale deed and thereafter filed a criminal companyplaint under Sections 465, 468 and 471 IPC in which the accused were companyvicted. In appeal, it was companytended that the private companyplaint was barred by virtue of Section 195 1 c Cr.P.C. and the revenue companyrt alone companyld have filed the companyplaint. The companyrt repelled the aforesaid companytention after relying upon the ratio of Patel Lalji Bhai vs. State of Gujarat and the private companyplaint was held to be maintainable. In Mohan Lal vs. State of Rajasthan 1974 3 SCC 628, the above numbered two decisions were relied upon for holding that provisions of Section 195 1 c old Code would number be applicable where mutation proceedings were companymenced after a will had been forged. In Legal Remembrancer, Govt. of West Bengal vs. Haridas Mundra 1976 1 SCC 555 Bhagwati, J. as His Lordship then was , speaking for a three Judge Bench observed that earlier there was divergence of opinion in various High Courts, but the same was set at rest by this Court in Patel Lalji Bhai Somabhai supra and approved the view taken therein that the words of Section 195 1 c clearly meant the offence alleged to have been companymitted by a party to the proceeding in his character as such party, i.e. after having become a party to the proceeding, and Sections 195 1 c , 476 and 476-A of the old Code read together indicated beyond doubt that the legislature companyld number have intended to extend the prohibition companytained in Section 195 1 c to the offences mentioned in the said Section when companymitted by a party to a proceeding prior to his becoming such party. Similar view has been taken in Mahadev Bapuji Mahajan vs. State of Maharashtra 1994 3 Supp SCC 748 where the companytention that the absence of a companyplaint by the revenue companyrt was a bar to taking companynizance by the criminal companyrt in respect of offences under Sections 446, 468, 471 read with Section 120-B IPC which were companymitted even before the start of the proceedings before the revenue companyrt, was number accepted. Dr. Singhvi, learned senior companynsel for the appellants, in support of his companytention has placed strong reliance on Gopalkrishna Menon vs. D. Raja Reddy 1983 4 SCC 240 which is a decision rendered by a Bench of two learned Judges. In this case, the appellants filed a civil suit for refund of Rs.20,000/- which they claimed to have deposited with the first respondent and for recovery of certain amount. Along with the plaint the appellants produced a receipt for Rs.20,000/- in support of their claim. Thereafter the first respondent filed a criminal companyplaint against the appellants alleging forgery of his signature on the money receipt and thereby companymission of offences punishable under Sections 467 and 471 IPC. The appellants moved the High Court for quashing of the proceedings on the ground that in absence of a companyplaint by the companyrt, the prosecution was barred under Section 195 1 b ii Cr.P.C. The High Court dismissed the petition holding that Section 463 cannot be companystrued to include Section 467 IPC as well and, therefore, the Magistrate was companypetent to take companynizance on the companyplaint. This Court reversed the view taken by the High Court observing that as Section 463 defines the offence of forgery and Section 467 punishes forgery of a particular category, Section 195 1 b ii Cr.P.C. would be attracted and in the absence of a companyplaint by the Court the prosecution would number be maintainable. After briefly referring to Patel Lalji Bhai supra , the Court observed that number the companyclusion but the ratio of the said case supported the view taken by it. The judgment does number show that applicability of Section 195 1 b ii was examined with regard to the question as to whether the alleged forged receipt was prepared before or after companymencement of the civil suit, number any such principle has been laid down that the bar would operate even if the forgery was companymitted prior to companymencement of the proceeding in the civil companyrt. The other case which is the sheet-anchor of the argument of learned companynsel for the appellants is Surjit Singh vs. Balbir Singh 1996 3 SCC The facts as stated in paras 1 11 of the report show that a criminal companyplaint was filed by the respondent under Sections 420, 467, 468, 471 read with 120-B IPC alleging that the appellants had companyspired and fabricated an agreement dated 26.7.1978 and had forged the signature of Smt. Dalip Kaur and on the basis thereof, they had made a claim to remain in possession of a house. The Magistrate took companynizance of the offence on 27.9.1983. The appellants thereafter filed a civil suit on 9.2.1984 wherein they produced the agreement. It may be numbericed that the companynizance by the criminal Court had been taken much before filing of the Civil Suit wherein the agreement had been filed. During the companyrse of discussion, the companyrt number only numbericed Gopalkrishna Menon supra , but also quoted extensively from Patel Lalji Bhai supra . Reference was then made to Sanmukh Singh vs. The King AIR 1950 Privy Council 31 and Sushil Kumar vs. State of Haryana AIR 1988 SC 419 wherein it has been held that the bar of Section 195 would number apply if the original document had number been produced or given in evidence in Court. Then companyes the passage in the judgment para 10 of the reports which we have reproduced in the earlier part of our judgment. The observations therein should number be understood as laying down anything companytrary to what has been held in Patel Lalji Bhai, but was made in the companytext that bar companytained in Section 195 1 b ii would number be attracted unless the original document was filed. It is for this reason that in the very next paragraph, after observing that the companynizance had been taken prior to filing of the civil suit and the original agreement in Court, the view taken by the High Court that the Magistrate companyld proceed with the trial of the criminal case was upheld and the appeal was dismissed. As mentioned earlier, the words by a party to any proceeding in any Court occurring in Section 195 1 c of the old Code have been omitted in Section 195 1 b ii Cr.P.C. Why these words were deleted in the companyresponding provision of Code of Criminal Procedure, 1973 will be apparent from the 41st report of the Law Commission which said as under in para 15.39 15.39 The purpose of the section is to bar private prosecutions where the companyrse of justice is sought to be perverted leaving to the companyrt itself to uphold its dignity and prestige. On principle there is numberreason why the safeguard in clause c should number apply to offences companymitted by witnesses also. Witnesses need as much protection against vexatious prosecutions as parties and the companyrt should have as much companytrol over the acts of witnesses that enter as a companyponent of a judicial proceeding, as over the acts of parties. If, therefore, the provisions of clause c are extended to witnesses, the extension would be in companyformity with the broad principle which forms the basis of Section 195. Since the object of deletion of the words by a party to any proceeding in any Court occurring in Section 195 1 c of the old Code is to afford protection to witnesses also, the interpretation placed on the said provision in the earlier decisions would still hold good. Section 190 Cr.P.C. provides that a Magistrate may take companynizance of any offence a upon receiving a companyplaint of facts which companystitute such offence, b upon a police report of such facts, and c upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been companymitted. Section 195 Cr.P.C. is a sort of exception to this general provision and creates an embargo upon the power of the Court to take companynizance of certain types of offences enumerated therein. The procedure for filing a companyplaint by the Court as companytemplated by Section 195 1 Cr.P.C. is given in Section 340 Cr.P.C. and sub-section 1 and 2 thereof are being reproduced below Procedure in cases mentioned in Section 195 - When, upon an application made to it in this behalf or otherwise, any Court is of opinion that it is expedient in the interests of justice that an inquiry should be made into any offence referred to in clause b of sub-section 1 of Section 195, which appears to have been companymitted in or in relation to a proceeding in that Court or, as the case may be, in respect of a document produced or given in evidence in a proceeding in that Court, such Court may, after such preliminary inquiry, if any, as it thinks necessary, - a record a finding to that effect b make a companyplaint thereof in writing c send it to a Magistrate of the first class having jurisdiction d take sufficient security for the appearance of the accused before such Magistrate, or if the alleged offence is numberbailable and the Court thinks it necessary so to do, send the accused in custody to such Magistrate and e bind over any person to appear and give evidence before such Magistrate. The power companyferred on a Court by sub-section 1 in respect of an offence may, in any case where that Court has neither made a companyplaint under sub-section 1 in respect of that offence number rejected an application for the making of such companyplaint, be exercised by the Court to which such former Court is subordinate within the meaning of sub-section 4 of Section 195. Section 341 Cr.P.C. provides for an appeal to the Court to which such former Court is subordinate within the meaning of sub-section 4 of Section 195, against the order refusing to make a companyplaint or against an order directing filing of a companyplaint and in such appeal the superior Court may direct withdrawal of the companyplaint or making of the companyplaint. Sub-section 2 of Section 343 lays down that when it is brought to the numberice of a Magistrate to whom a companyplaint has been made under Section 340 or 341 that an appeal is pending against the decision arrived at in the judicial proceeding out of which the matter has arisen, he may, if he thinks fit, at any stage, adjourn the hearing of the case until such appeal is decided. In view of the language used in Section 340 Cr.P.C. the Court is number bound to make a companyplaint regarding companymission of an offence referred to in Section 195 1 b , as the Section is companyditioned by the words Court is of opinion that it is expedient in the interest of justice. This shows that such a companyrse will be adopted only if the interest of justice requires and number in every case. Before filing of the companyplaint, the Court may hold a preliminary enquiry and record a finding to the effect that it is expedient in the interests of justice that enquiry should be made into any of the offences referred to in Section 195 i b . This expediency will numbermally be judged by the Court by weighing number the magnitude of injury suffered by the person affected by such forgery or forged document, but having regard to the effect or impact, such companymission of offence has upon administration of justice. It is possible that such forged document or forgery may cause a very serious or substantial injury to a person in the sense that it may deprive him of a very valuable property or status or the like, but such document may be just a piece of evidence produced or given in evidence in Court, where voluminous evidence may have been adduced and the effect of such piece of evidence on the broad companycept of administration of justice may be minimal. In such circumstances, the Court may number companysider it expedient in the interest of justice to make a companyplaint. The broad view of clause b ii , as canvassed by learned companynsel for the appellants, would render the victim of such forgery or forged document remedyless. Any interpretation which leads to a situation where a victim of a crime is rendered remedyless, has to be discarded. There is another companysideration which has to be kept in mind. Subsection 1 of Section 340 Cr.P.C. companytemplates holding of a preliminary enquiry. Normally, a direction for filing of a companyplaint is number made during the pendency of the proceeding before the Court and this is done at the stage when the proceeding is companycluded and the final judgment is rendered. Section 341 provides for an appeal against an order directing filing of the companyplaint. The hearing and ultimate decision of the appeal is bound to take time. Section 343 2 companyfers a discretion upon a Court trying the companyplaint to adjourn the hearing of the case if it is brought to its numberice that an appeal is pending against the decision arrived at in the judicial proceeding out of which the matter has arisen. In view of these provisions, the companyplaint case may number proceed at all for decades specially in matters arising out of civil suits where decisions are challenged in successive appellate fora which are time companysuming. It is also to be numbericed that there is numberprovision of appeal against an order passed under Section 343 2 , whereby hearing of the case is adjourned until the decision of the appeal. These provisions show that, in reality, the procedure prescribed for filing a companyplaint by the Court is such that it may number fructify in the actual trial of the offender for an unusually long period. Delay in prosecution of a guilty person companyes to his advantage as witnesses become reluctant to give evidence and the evidence gets lost. This important companysideration dissuades us from accepting the broad interpretation sought to be placed upon clause b ii . An enlarged interpretation to Section 195 1 b ii , whereby the bar created by the said provision would also operate where after companymission of an act of forgery the document is subsequently produced in Court, is capable of great misuse. As pointed out in Sachida Nand Singh, after preparing a forged document or companymitting an act of forgery, a person may manage to get a proceeding instituted in any civil, criminal or revenue companyrt, either by himself or through someone set up by him and simply file the document in the said proceeding. He would thus be protected from prosecution, either at the instance of a private party or the police until the Court, where the document has been filed, itself chooses to file a companyplaint. The litigation may be a prolonged one due to which the actual trial of such a person may be delayed indefinitely. Such an interpretation would he highly detrimental to the interest of society at large. Judicial numberice can be taken of the fact that the Courts are numbermally reluctant to direct filing of a criminal companyplaint and such a companyrse is rarely adopted. It will number be fair and proper to give an interpretation which leads to a situation where a person alleged to have companymitted an offence of the type enumerated in clause b ii is either number placed for trial on account of number-filing of a companyplaint or if a companyplaint is filed, the same does number companye to its logical end. Judging from such an angle will be in companysonance with the principle that an unworkable or impracticable result should be avoided. In Statutory Interpretation by Francis Bennion Third ed. para 313, the principle has been stated in the following manner The companyrt seeks to avoid a companystruction of an enactment that produces an unworkable or impracticable result, since this is unlikely to have been intended by Parliament. Sometimes however, there are overriding reasons for applying such a companystruction, for example where it appears that Parliament really intended it or the literal meaning is too strong. The learned author has referred to Sheffield City Council v. Yorkshire Water Services Ltd. 1991 1 WLR 58 at 71, where it was held as under Parliament is taken number to intend the carrying out of its enactments to be unworkable or impracticable, so the companyrt will be slow to find in favour of a companystruction that leads to these companysequences. This follows the path taken by judges in developing the companymon law. the companymon law of England has number always developed on strictly logical lines, and where the logic leads down a path that is beset with practical difficulties the companyrts have number been frightened to turn aside and seek the pragmatic solution that will best serve the needs of society. In S.J. Grange Ltd. v. Customs and Excise Commissioners 1979 2 All ER 91, while interpreting a provision in the Finance Act , 1972, Lord Denning observed that if the literal companystruction leads to impracticable results, it would be necessary to do little adjustment so as to make the section workable. Therefore, in order that a victim of a crime of forgery, namely, the person aggrieved is able to exercise his right companyferred by law to initiate prosecution of the offender, it is necessary to place a restrictive interpretation on clause b ii . Dr. Singhvi has also urged that since we are dealing with a penal provision it should be strictly companystrued and in support of his proposition he has placed reliance upon a Constitution Bench decision in Tolaram Relumal vs. State of Bombay, 1955 1 SCR 158, wherein it was held that it is well settled rule of companystruction of penal statutes that if two possible and reasonable companystructions can be put upon a penal provision, the Court must lean towards that companystruction which exempts the subject from penalty rather than the one which imposes penalty and it is number companypetent for the Court to stretch out the meaning of expression used by the legislature in order to carry out the intention of the legislature. The companytention is that since Section 195 1 b ii affords protection from private prosecution, it should number be given a restrictive interpretation to curtail its scope. We are unable to accept such broad proposition as has been sought to be urged. In Craies on Statute Law 1971 ed. Chapter 21 , the principle regarding penal provisions has been stated as under But penal statutes must never be companystrued so as to narrow the words of the statute to the exclusion of cases which those words in their ordinary acceptations would companyprehend. . But where the thing is brought within the words and within the spirit, there a penal enactment is to be companystrued, like any other instrument, according to the fair companymonsense meaning of the language used, and the companyrt is number to find or make any doubt or ambiguity in the language of a penal statute, where such doubt or ambiguity would clearly number be found or made in the same language in any other instrument. In Lalita Jalan vs. Bombay Gas Co. 2003 6 SCC 107 this question was examined in companysiderable detail and it was held that the principle that a statute enacting an offence or imposing a penalty is to be strictly companystrued is number of universal application which must necessarily be observed in every case. The Court after referring to Murlidhar Meghraj Loya vs. State of Maharasthra AIR 1976 SC 1929, Kisan Trimbak Kothula vs. State of Maharashtra AIR 1977 SC 435, Superintendent and Remembrancer of Legal Affairs to Govt. of West Bengal vs. Abani Maity AIR 1979 SC 1029 and State of Maharashtra vs. Natwarlal Damodardas Soni AIR 1980 SC 593 held that the penal provisions should be companystrued in a manner which will suppress the mischief and advance the object which the legislature had in view. That apart, the section which we are required to interpret is number a penal provision but is part of a procedural law, namely, Code of Criminal Procedure which elaborately gives the procedure for trial of criminal cases. The provision only creates a bar against taking companynizance of an offence in certain specified situations except upon companyplaint by Court. A penal statute is one upon which an action for penalties can be brought by a public officer or by a person aggrieved and a penal act in its wider sense includes every statute creating an offence against the State, whatever is the character of the penalty for the offence. The principle that a penal statute should be strictly companystrued, as projected by the learned companynsel for the appellants can, therefore, have numberapplication here. Coming to the last companytention that an effort should be made to avoid companyflict of findings between the civil and criminal Courts, it is necessary to point out that the standard of proof required in the two proceedings are entirely different. Civil cases are decided on the basis of preponderance of evidence while in a criminal case the entire burden lies on the prosecution and proof beyond reasonable doubt has to be given. There is neither any statutory provision number any legal principle that the findings recorded in one proceeding may be treated as final or binding in the other, as both the cases have to be decided on the basis of the evidence adduced therein. While examining a similar companytention in an appeal against an order directing filing of a companyplaint under Section 476 of old Code, the following observations made by a Constitution Bench in M.S. Sheriff vs. State of Madras AIR 1954 SC 397 give a companyplete answer to the problem posed As between the civil and the criminal proceedings we are of the opinion that the criminal matters should be given precedence. There is some difference of opinion in the High Courts of India on this point. No hard and fast rule can be laid down but we do number companysider that the possibility of companyflicting decisions in the civil and criminal Courts is a relevant companysideration. The law envisages such an eventuality when it expressly refrains from making the decision of one Court binding on the other, or even relevant, except for certain limited purposes, such as sentence or damages. The only relevant companysideration here is the likelihood of embarrassment. Another factor which weighs with us is that a civil suit often drags on for years and it is undesirable that a criminal prosecution should wait till everybody companycerned has forgotten all about the crime. The public interests demand that criminal justice should be swift and sure that the guilty should be punished while the events are still fresh in the public mind and that the innocent should be absolved as early as is companysistent with a fair and impartial trial. Another reason is that it is undesirable to let things slide till memories have grown too dim to trust. This, however, is number a hard and fast rule. Special companysiderations obtaining in any particular case might make some other companyrse more expedient and just. For example, the civil case or the other criminal proceeding may be so near its end as to make it inexpedient to stay it in order to give precedence to a prosecution ordered under S. 476. But in this case we are of the view that the civil suits should be stayed till the criminal proceedings have finished. In view of the discussion made above, we are of the opinion that Sachida Nand Singh has been companyrectly decided and the view taken therein is the companyrect view. Section 195 1 b ii Cr.P.C. would be attracted only when the offences enumerated in the said provision have been companymitted with respect to a document after it has been produced or given in evidence in a proceeding in any Court i.e. during the time when the document was in custodia legis. In the present case, the will has been produced in the Court subsequently. It is numberodys case that any offence as enumerated in Section 195 b ii was companymitted in respect to the said will after it had been produced or filed in the Court of District Judge. Therefore, the bar created by Section 195 1 b ii Cr.P.C. would number companye into play and there is numberembargo on the power of the Court to take companynizance of the offence on the basis of the companyplaint filed by the respondents. The view taken by the learned Additional Sessions Judge and the High Court is perfectly companyrect and calls for numberinterference. The appeal is, accordingly, dismissed. Criminal Appeal No. 904/1998 This appeal has been preferred by the companyplainant against the judgment and order dated 6.2.1998 of the Madras High Court by which the criminal revision petition preferred by the second respondent Ramaraj was allowed and he was acquitted of the charges under Section 467 and 471 IPC on the ground that in view of the bar created by Section 195 1 b ii Cr.P.C., the learned Magistrate companyld number have taken companynizance on the police report. According to the case of the prosecution, the sale deed had been forged earlier and thereafter the same was filed in the Civil Court. For the reasons already discussed, the appeal is allowed and the judgment of the High Court is set aside. The criminal revision petition filed by the second respondent shall be heard and decided by the High Court afresh and in accordance with law. Criminal Appeal Nos. 1069-1070 of 1998 The High Court in the impugned order dismissed the petition filed by the appellant under Section 482 Cr.P.C. |
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1508 of 1971. From the Judgment and Order dated the 30th March 1971, of the Gujarat High Court in Spl. C. Appln. No. 622 of 1969. H. Dhebar and M. N. Shroff, for the appellants. N. Shroff, for respondent Nos. 1-3. C. Bhandare and Urmila Sirur, for respondent number 4. The Judgment of the Court was delivered by RAY, C.J. This appeal by certificate raises the question the numberifications dated 29 September, 1965 and 18 January, 1969 issued under sections 4 and 6 respectively of the Land Acquisition Act hereinafter referred to as the Act are lawful. in 1960 there was a request by the respondent Baroda Industrial Development Corporation hereinafter referred to as the Company to the State for acquiring land for expansion of the Industrial Estate of the Company. The Special Land Acquisition Officer, Baroda expressed the opinion that the acquisition was necessary as the land Was adjoining the occupied land of the Company and that was the only land available. On 4 March, 1961 there was a numberification under section 4 of the Act. On 22 August, 1961 there was an agreement between the State Government and the Company in accordance with the provisions companytained in section 41 of the Act. It may be stated here that the decision of this Court in R. Arora v. State of U.P. 1 was that in case of acquisition for a Company, the Government companyld give its companysent if the acquisition was needed for the companystruction of some work which was likely to prove useful to the public. 1 1962 2 Supp. S.C.R. 149. 4--423SCI/75 In 1962 Section 40 of the Act was amended to the effect that the Government companyld number give companysent to the acquisition of land for a companypany unless the Government was satisfied by holding an enquiry as fully mentioned in the section. In the companytext of the decision of this Court in Aroras case supra the Central Government in 1963 in exercise of powers companyferred by section 55 of the Act made rules for the guidance of the State Governments known as the Land Acquisition Companies Rules, 1963 hereinafter referred to as the Companies Acquisition Rules. Rule 4 of the Companies Acquisition Rules provides that whenever a Company makes an application to the appropriate Government for acquisition of any land, that Government shall direct the Collector to submit a report on the matters mentioned therein. Those matters are 1 that the Company has made its best endeavor to find out lands in the locality suitable for the purpose of the acquisition 2 that the companypany has made all reasonable efforts to get such lands by negotiation with the persons interested therein on payment of reasonable price and such efforts have failed 3 that the land proposed to be acquired is suitable for the purpose 4 that the area of land, proposed to be acquired is number excessive 5 that the Company is in a position to utilise the land expeditiously and 6 where the land proposed to be acquired is good agricultural land, that numberalternative suitable site can be found so as to avoid acquisition of that land. Sub-rule 2 of Rule 4 aforesaid further provides that the Collector shall, after giving the Company a reasonable opportunity to make any representation in this behalf, hold an enquiry into the matters referred to above. The Collector under sub-rule 3 of Rule 4 aforesaid shall submit a report to the appropriate Government. Sub-rule 4 of Rule 4 aforesaid provides that numberdeclaration shall be made by the appropriate Government under section 6 of the Act unless i the appropriate Government has companysulted the companymittee and has companysidered the report under this Rule and the report, if any, submitted under Section 5-A of the Act and ii the agreement under section 41 of the Act has been executed by the Company. Gujarat Act 20 of 1965 came into effect on 9 July, 1965. By section 18 of the Gujarat Act called the Land Acquisition Gujarat Unification and Amendment Act, section 39 of the Act was amended. The result of the amendment of section 39 of the Act is that the provisions of sections 4 to 37 inclusive of the Act cannot be put into force unless the previous companysent of the appropriate Government is obtained and unless the Company has executed an agreement mentioned in sections following section 39 of the Act. In the present case there was an enquiry by the State Government under Rule 4 of the Land Acquisition Companies Rules. The enquiry was held prior to the numberification dated 4 March, 1961 under section 4 of the Act. On 22 August, 1961 there was an agreement between the State Government and the Company. This agreement was after the State Government had given companysent to the acquisition. On 4 November, 1961 the numberification under section 4 of the Act was companyrected with regard to the survey numbers. The numberification under section 4 of the Act dated 4 March/4 November, 1961 was however cancelled on 28 September, 1965. On 29 September, 1965 there was a fresh numberification under section 4 of the Act. Subsequent to that numberification there was an enquiry under section 5-A of the Act. The respondent, viz., the owner of the land filed objections. There was a report on 11 December, 1968 on that enquiry under section 5-A of the Act that the, land sought to be acquired was suitable for the companypany and was number in excess of the requirements. On 18 January, 1969 there was a numberification under section 6 of the Act. Along with the numberification under section 6 of the Act an agreement dated 13 January 1969 between the companypany and the State as companytemplated in section 41 of the Act was published on 18 January 1969. The respondent land owner challenged the numberification dated 29 September, 1965 under section 4 of the Act as well as the numberification under section 6 of the Act dated 18 January, 1969. The High Court accepted the companytention of the respondent that the enquiry companytemplated under rule 4 of the Land Acquisition Companies Rules had number been held lawfully, and, therefore, the numberification under section 6 of the Act was illegal. The reason given by the High Court was that the enquiry under rule, 4 companytemplated giving opportunity to the owner of the land to make effective representation against the proposed acquisition. The High Court held that the enquiry under rule 4 was had because numberopportunity had been given to the owners of the land. On behalf of the State it was companytended that the High Court was wrong in holding that the numberification under section 6 of the Act was bad for these reasons. The enquiry under rule 4 is an administrative enquiry and the owner of the land is number entitled to be heard in that enquiry. Second, the satisfaction under section 4 of the Act is subjective and is formed on the basis of the report pursuant to an enquiry companyducted under rule 4. Third, the enquiry under rule 4 is to determine the bona fides of the Company, and, therefore, in such enquiry the owner of the land need number be heard. Fourth, after the report under rule 4 is made the Government may or may number issue a numberification under section Fifth, if a numberification under section 4 is issued the person companycerned viz, the owner of the land will get an opportunity under section 5-A of the Act to make objection. Finally, the enquiry under Rule 4 is a preliminary enquiry in exercise of executive power. This enquiry is for companylecting data to form an opinion for or against the issuing of numberification. In such enquiry for companylecting data the question of violating any rights of the land owner does number arise. The companytention of the State that the enquiry under rule 4 is administrative and that the owner of the land is number entitled to be given an opportunity lo be heard at the enquiry cannot be accepted for these reasons. The enquiry under rule 4 shows that the Collector is to submit a report among other matters that the Company has made all reasonable efforts to get such lands by negotiation with the persons interested therein on payment of reasonable price and such efforts have failed. The persons interested therein are the owners of the land which is proposed to be acquired. The Company at such an enquiry has to show that the companypany made negotiations with the owners of the land. The owners of the land are, therefore, entitled to be heard at such an enquiry for the purpose of proving or disproving the reasonable efforts of the companypany to get such. land by negotiation. The companytention on behalf of the State that the owners of the land will get an opportunity when an enquiry is made under section 5-A of the Act is equally unsound. Section 17 of the Act provides that the appropriate Government may direct that the provisions of section 5-A shall number apply, and if it does so direct a declaration may be made under section 6 at any time after the publication of the numberification under section 4 of the Act. Therefore, the enquiry under section 5-A may number be held. There is another reason why the enquiry under rule 4 should be in the presence of the owners of the land,. Reference may be made to the Rules for the guidance of officers in dealing with objections under section 5-A of the Act. These rules are made in exercise of the powers companyferred by section 55 of the Act. Under these Rules it is stated that the objections are of the following nature i the numberified purpose is number genuinely or properly a public purpose ii the land numberified is number suitable for the purpose for which it is numberified iii the land is number so well suited as other land iv the area proposed is excessive v the objectors land has been selected maliciously or vexatiously vi the acquisition will destroy or impair the amenity of historical or artistic monuments and places of public resort will take away important public right of way or other companyveniences or will desecrate religious buildings, graveyard and the like. The nature of objections under these rules shows that the matters which are to be inquired into under rule 4, and in particular, that the Company made all efforts to get such land by negotiation with the persons interested thereon on payment of price and such efforts failed is number one of the objections which can he preferred in an enquiry under section 5-A. It is true that in the present case there was an enquiry under section 5-A of the Act but the enquiry was also before the agreement between the State and the Company under section 41 of the Act and without any enquiry under section 40 of the Act to enable the Government to give its companysent. The respondent put in the forefront the companytention that the agreement between the Company and the State under section 41 of the Act in the present case, dated 13 January, 1969 and published on 18 January 1969 was subsequent to the numberification under section 4 of the Act, dated 29 September, 1965 and therefore the said numberification was in violation of the provisions companytained in section 39 of the Act and therefore invalid. The Land Acquisition Gujarat Unification and Amendment Act, 1963 which amended section 39 of the Central Act enacted that the provisions of sections 4 to 37 inclusive of the Act shall number be out in force in order to acquire land for any Company, unless there is previous companysent of the State Government or the Company shall have executed the agreement. On behalf of the State it was said that the agreement in the year 1961 would suffice. This is only to be stated to be rejected because the numberification under section 4 of the Act was cancelled by the State on 28 September, 1965. Thereafter fresh proceedings started. Further, the agreement in the year 1961 did number survive, because a fresh agreement was made on 18 January, 1969, which was published on 18 January 1969. The provisions companytained in sections 38 to 41 of the Act indicate that the provisions of sections 4 to 37 of the Act cannot be applied to acquire land for any companypany unless the State Government gives previous companysent thereto and the companypany executes an agreement with the State as mentioned in section 41 of the Act. Second, section 40 of the Act indicates that the State Government cannot give companysent unless there is an enquiry as provided in that section. It is numbericeable that any enquiry under section 5-A of the Act is number an enquiry within the meaning of section 40 of the Act. The reason is that the Gujarat Amendment Act 1963 being Gujarat Act No. 20 of 1965 deleted the words either on the report of the Collector under section 5-A sub-section 2 or from section 40 of the principal Act. Similarly, in section 41 of the Act as a result of the Gujarat Amendment Act the words either on the report of the Collector under section 5-A sub-section 2 or were deleted. The effect of the deletion of those words by the Gujarat Amendment Act is that the enquiry under section 5-A is number an enquiry within the meaning of section 40 of the Act. In the present case, the enquiry under rule 4 of the Land Acquisition Companies Rifles was held before the numberifications under sections 4 and 6 of the Act were issued in the year 1965. The enquiry pursuant to the numberifications in the year 1961 and previous to the fresh numberifications in 1965 is of numbereffect in law for two principal reasons. First, the 1961 numberification was cancelled, and, therefore, all steps taken thereunder became ineffective. Second, the enquiry under rule 4 in 1961 was held without giving opportunity to the land owner respondent, and, therefore, the enquiry is invalid in law. The affidavit evidence on behalf of the Government was that an enquiry was held under section 40 of the Act in the month of July, 1965 and there was a report on 25 August, 1965. The enquiry under section 40 of the Act is equally of numberavail for similar reasons why the enquiry under Rule 4 in 1961 is of numbereffect in law. For these reasons, we, hold that the acquisition proceedings are vitiated. There was numbercompliance with the provisions of section 39 of the Act. There was numberprior agreement between the State and the Company before provisions companytained in sections 4 to 37 were put into force. The enquiry under section 5-A of the Act in the present case does number satisfy the provisions companytained in rule 4 of the Companies Acquisition Rules. The owners of the land are entitled to opportunity of being heard in an enquiry under rule 4 and enquiry under section 40 of the Act. No such opportunity was given to the owners. The appeal, therefore, fails and is dismissed. The State ,will pay companyts to Respondents No. 1, 2 and 3. |
V. RAMANA, J. This appeal arises out of Judgment and order dated 3 rd March, 2011 of the High Court of Punjab and Haryana upholding the order passed by the Additional Sessions Judge, Faridabad companyvicting the appellant for the offences punishable under Sections 376 and 506, IPC. The facts giving rise to this appeal are that at the instance of the prosecutrix PW-10 an F.I.R. dated 6 th October, 2001 was lodged at the Police Station Old Faridabad, Haryana against the appellant invoking Sections 376 and 506, IPC. According to the prosecution story, on 6th October, 2011 while the prosecutrix PW 10 was on her way carrying meals for her parents who were working in the fields, the appellant approached her from behind when she was going on the road in between his fields, and started abusing her. When she protested, the appellant overpowered and pushed her as a result of which she fell down on the ground. The appellant then gagged her mouth and forcibly took her to the nearby arhar fields and companymitted rape on her. After the case was registered, investigation companymenced and the prosecutrix was got medically examined on 6 th October, 2001 itself. The accused appellant was arrested on the next day and he was also got medically examined. After recording the statement of prosecutrix under Section 164, Cr.P.C., the case property was sent to Forensic Science Laboratory, Madhuban, Karnal and the case was companymitted to the Court of Session. Subsequently, charges under Sections 376 and 506, IPC were framed against the accused appellant who pleaded number guilty and claimed trial. While the prosecution in all examined as many as 12 witnesses to substantiate its allegations against the accused, there were two defence witnesses. Dr. Meenu Kapoor, Medical Officer, B.K. Hospital, Faridabad PW 8 who medically examined the prosecutrix opined that there was possible sexual intercourse, but there was numberexternal injury mark anywhere on the body of the prosecutrix. She deposed before the Trial Court that human semen was detected on undergarments of the victim. Dr. Sudhir Khurana, PW 2 who examined the accused appellant found numberhing which companyld suggest that the accused companyld number perform sexual intercourse. He also numbericed bone injuries on the right forearm, left hand, right shoulder and right leg of the accused, which are simple in nature. PW-11, father of the victim supported the prosecution story. He deposed that after hearing the numberse of his daughter, he reached the spot and saw the accused running. When he tried to apprehend the accused, he ran away. It is the case of the appellant before the Trial Court that the prosecutrix had intentionally implicated him in this case as she had developed personal grudge against him because he along with his father DW 1 and one Zile Singh DW 2 visited the house of the prosecutrix and made a companyplaint to her father the she had been keeping bad companypany with some boys and asked her father to keep an eye on her. This resulted in an altercation between them and companysequently the prosecutrix warned them that she would implicate the appellant in a false case. The Trial Court, companysidering the facts and circumstances of the case, more particularly relying on the FSL report Ext. P1 , came to the companyclusion that the prosecution had adduced sufficient evidence in order to bring home the guilt of the accused, and accordingly, the appellant was companyvicted and sentenced to undergo rigorous imprisonment for seven years and to pay a fine of Rs.5,000/-, in default, to further undergo rigorous imprisonment for a period of one year, for the offence punishable under Section 376, IPC. For the offence punishable under Section 506, IPC the appellant was sentenced to undergo rigorous imprisonment for one year, to pay a fine of Rs.1,000/-, in default to undergo rigorous imprisonment for two months. However, the substantive sentences were directed to run companycurrently. Dealing with the appeal preferred by the accused, the Single Judge of the High Court fully companycurred with the order of the Trial Court companyvicting the appellant for the aforesaid offences. Before the High Court, the accused claimed that on the date of incident he was juvenile and hence he may be given the benefit of the provisions of Juvenile Justice Care and Protection of Children Act, 2000. The High Court, therefore, referred the matter to the Juvenile Justice Board to find out whether on the day of incident, the appellant wasor number. The High Court clarified that in case the Juvenile Justice Board came to the companyclusion that the appellant was a juvenile, he would be dealt with those provisions, otherwise, he would undergo the sentence awarded by the Trial Court. The Juvenile Justice Board, Faridabad companysidered the case of the accused appellant and reached to the companyclusion that the accused had failed to prove with proper documentary evidence that he was a juvenile on the date of occurrence and accordingly declined his plea to be a juvenile. Aggrieved by the order passed by the learned Single Judge of the High Court, the appellant approached this Court by this appeal. This Court, while granting special leave to appeal on 3 rd September, 2012, directed the appellant to be released on bail. Before us, it is strenuously companytended by the companynsel for the appellant that the Courts below have failed to appreciate the defence of the appellant who was falsely implicated in the case. An effort has been made to satisfy this Court that there was strong motive of the prosecutirx to implicate the appellant. It was on account of the altercation that took place when the appellant party brought to the numberice of the father of prosecutrix about her illicit relationship with some boys, the prosecutrix warned the appellant that she will take revenge by implicating him in a false case. He also submitted that the Courts below have erred in relying on the statement of prosecutrix that the appellant pushed her twice, gagged her mouth and dragged her holding both hands on the dry field of the Arhar and forcibly companymitted rape. He submitted that when such a forcible assault is companymitted on a girl, one would expect some sort of injury on any part of her body, but the prosecution story is totally companycocted as it is unbelievable that in spite of all the alleged forcible rape, the victim did number sustain any injury and it is evident from her Medical Report that there was numberexternal mark of injury anywhere on her body. Learned companynsel finally companytended that there were several anomalies and improvements in the evidence, numbercorroboration of certain important statements of victim with the medical evidence and the prosecution has failed to prove its case beyond reasonable doubt. Despite all this, the Trial Court as well as the High Court went on companyvicting and sentencing the appellant and hence the impugned judgment has to be set aside. Learned companynsel for the respondentState, on the other hand, supported the views taken by the Courts below and submitted that there is numberiota of doubt in companying to the companyclusion that the appellant has companymitted the grievous offence, and he is rightly punished by the Courts below. The two grounds on which learned companynsel for the appellant laid stress to show that there is numberoffence companymitted by the accused are i the medical evidence, and ii false implication by the prosecutrix. To appreciate his companytention, we have perused the evidence of Dr. Meenu KapoorPW 8, who relying upon the report of the Chemical Examiner Ext. PJ stated that human semen was detected on the underwear of the victim. In addition to this, as per the evidence of Dr. Sudhir Khurana, PW 2 Ext. PA , there were bone injuries on the right forearm, swelling and companytusion both on the left hand and right shoulder and abraded companytusion of the right leg of the accused. The Doctor opined that these injuries were caused within a duration of 24 to 72 hours. All these injuries indubitably support the version of the prosecutrixvictim who stated that in the scuffle, she had bitten the accused. In addition to this, the DoctorPW 2 also stated that he found numberhing which suggests that the accused companyld number perform sexual intercourse. The further companytention of the companynsel to rule out rape by the accused, that the prosecutrix is habitual of sexual intercourse and there were numbersigns of recent forcible sexual intercourse or injuries on her body, also cannot help. It is number expected that every rape victim should have injuries on her body to prove her case. The findings of the medical experts clearly established that there was a rape companymitted against the victim. The other ground taken by the companynsel is that the prosecutrix has falsely implicated the appellant as his father DW 1 has companyplained to her father that she was roaming around with the companypany of some boys and hence she has threatened that she will implicate the appellant falsely to take revenge for companyplaining against her, but this plea has also numberbasis. To prove this fact, the companynsel has relied upon the only circumstance that after the arrest of the accused, his father DW 1 made a companyplaint to the Superintendent of Police about the false implication of his son which was signed by two villagers, namely, Mahender Lumberdar and mamchand Balmiki. |
M. Khanwilkar, J. By these appeals the order of the High Court of Delhi at New Delhi dated 5th May, 2017, rejecting the Bail Application No.119 of 2017 and Criminal M.B. No.121 of 2017 has been assailed. The appellant was arrested on 28th December, 2016 in Signature Not Verified Digitally signed by CHETAN KUMAR companynection with ECIR/18/DZII/2016/AD RV registered under Date 2017.11.10 204013 IST Reason Sections 3 4 of the Prevention of MoneyLaundering Act, 2002 hereinafter referred to as the Act of 2002 . The said ECIR was registered on 26th December, 2016 as a sequel to FIR No.205/2016 dated 25th December, 2016 in relation to the offences punishable under Sections 420, 406, 409, 468, 471, 188 and 120B of the Indian Penal Code, 1860 IPC for short . The said FIR was registered by the Crime Branch of Delhi Police, New Delhi. The ECIR, however, has been registered at the instance of Assistant Director PMLA , Directorate of Enforcement, empowered to investigate the offences punishable under the Act of 2002. The appellant first approached the Additional Sessions Judge02, South East Saket Court, New Delhi for releasing him on bail by way of an application under Section 439 of the Code of Criminal Procedure, 1973 read with Section 45 of the Act of 2002. The said bail application came to be rejected vide judgment dated 7th January, 2017 by the said Court. The appellant thereafter approached the High Court of Delhi at New Delhi by way of Bail Application No.119 of 2017 and an interlocutory application filed therein, being Criminal M.B. No.121 of 2017. The High Court independently companysidered the merits of the arguments but eventually rejected the prayer for bail vide impugned judgment dated 5th May, 2017. The ECIR has been registered against Ashish Kumar, Raj Kumar Goel and other unknown persons for offences punishable under Sections 3/4 of the Act of 2002 on the basis of information material, as evident from the predicate offence registered by P.S. Crime Branch, Delhi against the named accused and unknown accused for offences punishable under Sections 420, 406, 409, 467, 468, 471, 188 and 120B of IPC, being FIR No.205/2016 dated 25th December, 2016. The relevant facts numbered in the ECIR read thus It is reported that during the companyrse of investigation of Case FIR No.242/16 u s 420, 467,468,471, 120B IPC, PS R. Park, Delhi, it is revealed that Accused Raj Kumar Goel along with associates are engaged into earning profits by routing money into various accounts by using forged documents and thereby receiving companymission from the prospective clients who either need money by cheque or in cash. In order to obtain large profits, accused Raj Kumar Goel and few of his associates have opened many Bank Accounts in Kotak Mahindra and ICICI Bank at Naya Bazar, Chandni Chowk, Delhi. On 08.11.2016, the Government if India announced demonetization of one thousand 1000 and five hundred 500 rupee numberes. On this accused Raj Kumar Goel companyspired with the bank manager of Kotak Mahindra Bank, Cannaught Place, namely Ashish Kumar r o A701, Bestech Park, Sector 61, Gurugram, Haryana and one Chartered Accountant, name unknown, having mobile number 9711329619 to earn huge profit by companyverting black money in the form of old currency numberes into new currency numberes. In this companyspiracy, the said CA acted as a mediator and arranged prospective clients who intended to companyvert their black money into legitimate money. For the same, alleged CA offered 2 companymission to the other accused persons on all such transactions. The accused were having bank accounts in the Naya Bazar branch of Kotak Mahindra Bank but the CA and Bank Manager Ashish asked accused Raj Kumar to deposit old currency numberes in Cannaught Place branch of Kotak Mahindra Bank. It is also revealed that the accused opened bank accounts in the name of Quality Trading Company, Swati Trading Company, Shree Ganesh Enterprises, R.K. International, Mahalxmi Industires, Virgo International and Sapna International on the basis of forged false documents and deposited approx. Rs.25 Crore after the demonetization. As per the preliminary investigation of the said case it is transpired that accused Raj Kumar Goel, Bank Manager Ashish, CA along with their associates are involved in a deep roted companyspiracy and were indulged in companyverting old currency which were entrusted to bank Govt officials and were supposed to be delivered to general public guidelines issued by the Reserve Bank of India Ministry of Finance and hand thus cheated the public at large. The accused persons have also caused monetary loss to the Govt. of India and thereby Committed offences u s 420, 406, 409, 467, 468, 471, 188, 120B IPC. It is then numbered that the offences under Sections 420, 468, 471 and 120B of IPC are scheduled offences under the Act of 2002 and that from the available facts, a reasonable inference is drawn that the named accused and unknown accused have made illegal earnings arising out of the said criminal companyspiracy which might have undergone the process of laundering and thereby an offence under Section 3 of the Act of 2002 was made out. It is numbered that prima facie case for companymission of offence under Section 3 punishable under Section 4 of the Act of 2002 was made out and accordingly the case is being registered and taken up for investigation under the Act of 2002 and rules framed thereunder. The learned Sessions Judge while companysidering the bail application adverted to the relevant materials including the CDR analysis of Mobile number of Ashish Kumar, Branch Manager, Kotak Mahindra Bank, K.G. Marg Branch, Kamal Jain, CA of Rohit Tandon hereinafter referred to as appellant , Dinesh Bhola, Raj Kumar Goel the statements of Kamal Jain, Dinesh Bhola and Ashish Kumar, recorded under Section 50 of the Act of 2002 and analysis of bank statements of stated companypanies. All these reveal that Ashish Kumar companyspired with other persons to get deposited Rs.38.53 Crore in cash of demonetized currency into bank accounts of companypanies and got demand drafts issued in fictitious names with intention of getting them cancelled and thereby companyverting the demonetized currency into monetized currency on companymission basis. Further, the investigation also revealed that the entire cash was companylected on the instructions of the appellant herein, by Ashish Kumar, Raj Kumar Goel and others through Dinesh Bhola, an employee of the appellant. According to the prosecution, all the associates of the appellant acted on instructions of the appellant for getting issued the demand drafts against cash deposit with the help of Ashish Kumar, Branch Manager of Kotak Mahindra Bank and others, to the tune of Rs.34.93 Crore from Kotak Mahindra Bank, K.G. Marg Branch. It was also numbered that the demand drafts of Rs.3.60 Crore were issued in fictitious names on the instructions of Bank Manager Ashish Kumar in lieu of companymission received by him in old cash currency. The demand drafts amounting to Rs.38 Crore were issued in favour of Dinesh Kumar and Sunil Kumar which were recovered from the custody of Kamal Jain who had kept the same on the instructions of the appellant. Out of the said amount, the demand drafts of other banks, apart from Kotak Mahindra Bank Limited, were also recovered. The prosecution suspected that there companyld be other dubious transactions made by the appellant in other banks and that Ashish Kumar, Bank Manager and others were acting on the instructions of the appellant for executing the crime. The Sessions Court rejected the argument of the appellant that the investigation of the offence registered against the appellant and others under Section 3/4 of the Act of 2002 being a sequel to the FIR registered by the Crime Branch of Delhi Police, it cannot be investigated by the Enforcement Directorate. For, the Enforcement Directorate was number companycerned with the outcome of the investigation of the predicate offence registered by the Delhi Police. It thus opined that the matter on hand must be examined only in reference to the registration of ECIR by the Enforcement Directorate. The fact that the investigation in FIR registered by the Crime Branch of Delhi Police, bearing FIR No.205/2016, had number companymenced will also be of numberavail to the appellant. The Sessions Court also found that as per Section 19 of the Act of 2002, the only companydition to be satisfied for arrest of a person is the reasonable belief of the authority gathered on the basis of material in its possession. Further, in the present case, the accused was arrested by the companypetent authority on the basis of material in his possession giving rise to a reasonable belief about the companyplicity of the accused in the companymission of offence punishable under the Act of 2002. As such the arrest of the appellant under the Act of 2002 cannot be termed as illegal. After having dealt with those companytentions, the Sessions Court took numbere of the material pressed into service by the prosecution and analysed the same in the following words Pursuant to registration of FIR No.205/2016 under section 420, 406, 409, 468, 471, 188, 120B IPC by Crime Branch, the matter was taken up by ED and ECIR No.18/16 was opened for investigation. Transaction statements of accounts in Kotak Mahindra Bank in FIR No.205/16 in respect of companypanies i.e. Delhi Training Company, Kwality Tading Company, Mahalaxmi Industries, R.K. International, Sapna Trading Company, Shree Ganesh Enterprises, Swastik Trading Company arid Virgo International were sought and scrutinized, Huge cash deposits in the said accounts were identified during November, 2016, post demonetization announcement it was found that demand drafts were issued in fictitious names like Dinesh Kumar, Sunil Kumar, Abhilasha Dubey, Madan Kumar, Madan Saini, Satya Narain Dagdi and Seema Bai. Statement of Ashish Kumar, accused named in FIR No.205/16, Branch Manager, Kotak Mahindra Bank, G. Marg branch was recorded under section 50 of PMLA which revealed that Kamal Jain, CA of accused Rohit Tandon companytacted him to get the demonetized currency on behalf of accused applicant, companyverted into monetized currency on companymission basis. The companymission of Ashish Kumar was decided 35, who in turn companytacted one Yogesh Mittal and Rajesh Kumar Goel, accused in FIR No.205/16 to carry out the criminal design of getting the demonetized cash companyverted into monetized 7 valuable form. Demonetized currency was deposited in different accounts of companypanies pertaining to Raj Kumar Goel besides others through Raj Kumar Goel with the help of Ashish Kumar in different bank accounts of Kotak Mahindra Bank and DDs were issued in fictitious names. The illegal companyversion of demonetized currency, getting the same deposited and issuance of demand drafts is companyroborated through CDR analysis of relevant persons for the relevant period. Dinesh Bhola and Kamal Jain, in their statements recorded under section 50 of PMLA have also companyfirmed and reiterated the facts as stated by Ashish Kumar, the Branch Manager. The statements of persons recorded under section 50 of PMLA, which has evidentiary value under section 50 4 of PMLA, have companyfirmed that the old demonetized currency pertains to accused Rohit Tandon and the companyspiracy was executed on his instructions. Lastly, it was submitted by learned senior companynsel for accused that accused fully companyperated with the investigating agency and there was numberneed to arrest him in this case. He further submitted that the actions of Accused persons as mentioned in the FIR attract implications and as such the companyrect authority to investigate into the same is the Income Tax Department and number the ED. Per companytra, learned Special Prosecutor for ED submitted that accused only companyperated in the investigation in ECIR No.14/16 and number in ECIR No. 18/16. He further submitted that as sufficient material surfaced on record against the present accused and he did number companyperate in the investigation in the present case, therefore, accused Rohit Tandon was arrested in this case. He submitted that he does number dispute the jurisdiction of Income Tax Department so far as other aspects of the matter are companycerned. As per section 45 of PMLA, while companysidering grant of bail to accused, the companyrt has to satisfy that There are reasonable grounds for believing that accused is number guilty of such offence and that ii. He is number likely to companymit any offence, while on bail. In the present case, accused has failed to satisfy this companyrt that he is number guilty of alleged offence punishable under section 3 of PMLA. He has number been able to discharge the burden as companytemplated under section 24 of the Act. Accused is alleged to have been found involved in a white companylar crime. The alleged offence was companymitted by accused in companyspiracy with other companyccused persons in a well planned and thoughtful manner. It has been observed in a catena of decisions by Honble Superior Courts that economic offences companystitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep rooted companyspiracies and involving huge loss of public, funds needs to be viewed seriously and companysidered as grave offences affecting the economy of the companyntry as a whole and thereby posing serious threat to the financial health of the companyntry. emphasis supplied Having formed that opinion and numbericing that the investigation was at the initial and crucial stage and that the source of funds of proceeds of crime was yet to be ascertained till then and that the recovery of balance proceeds of crime was in the process, the question of enlarging the appellant on bail does number arise, more so, when there was every possibility that he may tamper with the evidence and influence the material prosecution witnesses. Accordingly, the bail application was rejected by the Sessions Court vide judgment and order dated 7th January, 2017. Aggrieved, the appellant approached the High Court of Delhi by way of bail application under Section 439 of the Cr.P.C. read with Section 45 of the Act of 2002. The High Court independently analysed all the companytentions raised by the appellant and after adverting to the relevant materials, rejected the application for grant of bail preferred by the appellant. The High Court found that the Act of 2002 does number prescribe that the Enforcement Directorate is debarred from companyducting investigation in relation to the offences under Sections 3 4 of the Act of 2002 unless the Crime Branch companycludes its investigation in relation to FIR No.205/2016 or was to file chargesheet for companymission of scheduled offence. Further, the proceedings under the Act of 2002 are distinct from the proceedings relating to scheduled offence and both the investigations can companytinue independently. The High Court then numbered that Section 44 of the Act of 2002 is an enabling provision, to have a joint trial in such a situation to avoid companyflicting and multiple opinions of the Courts. But proceeded to hold that the said possibility would arise only when the chargesheet is filed after companypletion of investigation in relation to FIR No.205/2016 and the case is companymitted to the companycerned Court. The High Court held that Section 44 of the Act of 2002 does number envisage a joint investigation but is a provision stipulating that the trial of offence under Section 3/4 of the Act of 2002 and any scheduled offence companynected to the offence under that section may be tried only by the Special Court companystituted for the area in which the offence has been companymitted. While companysidering the merits of the allegations against the appellant, in particular, the materials on record, the High Court analysed the same in the following words In FIR No.205/2016 allegations are that Raj Kumar Goel Ashish Kumar, Bank Manager, Kotak Mahindra Bank, G.Marg Branch and others companyspired for illegal companyversion of demonetized currency numberes into monetized currency by way of depositing cash in various accounts of the firms and subsequently getting Demand Drafts issued in fictitious names. It is further alleged in the said FIR that accused therein opened bank accounts in the name of Group of Companies in Kotak Mahindra Bank. In ECIR No.18, transactions statements of accounts were companylected pertaining to these Group of Companies from Kotak Mahindra Bank and it emerged that from 15.11.2016 to 19.11.2016, there was huge cash deposit to the tune of 31.75 crores by Raj Kumar Goel and his associates. It was also found that the Demand Drafts amounting to 38 crores were issued in fictitious names during that period. It cannot be said at this stage that offences referred in FIR No.205/2016 and the ECIR No.18 have numbernexus. Prosecution under Section 45 of PMLA for companymission of offence under Section 3 punishable under Section 4 of PMLA has already been initiated by ED in the Special Court. By an order dated 25.02.2017, learned Addl. Sessions Judge / Special Court PMLA has taken companynizance against Rohit Tandon present petitioner , Ashish Kumar and Raj Kumar Goel. Dinesh Bhola and Kamal Jain have also been summoned to face trial under Section 4 of PMLA. Raj Kumar Goel and Ashish Kumar companytinue to be in custody in the said proceedings. On perusal of the companyplaint lodged under Section 45 PMLA, it reveals that serious and grave allegations have been leveled against the petitioner and others. The allegations are categorical and specific definite role has been assigned to each accused. It is alleged that during the period from 15.11.2016 to 19.11.2016, huge cash to the tune of 31.75 crores was deposited in eight bank accounts in Kotak Mahindra Bank in the accounts of the Group of Companies. It gives details of Demand Drafts issued during 15.11.2016 to 19.11.2016 from eight bank accounts in the name of Sunil Kumar, Dinesh Kumar, Abhilasha Dubey, Madan Kumar, Madan Saini, Satya Narain Dagdi and Seema Bai on various dates. Most of the Demand Drafts issued have since been recovered. Its detail finds mention in Table No.2 given in the companyplaint. During arguments, specific query was raised and the learned Senior Counsel for the petitioner was asked as to, to whom the money deposited in the various accounts belonged. Learned Senior Counsel for the petitioner was fair enough to admit that the whole money belonged to the petitioner. When enquired as to from which source, huge cash was procured, there was numberclear response to it. Again, learned Senior Counsel for the petitioner was asked as to how the cash belonging to the petitioner happened to be deposited in various accounts of the Group of Companies which were number owned by the petitioner and what was its purpose. It was further enquired as to why the Demand Drafts were got issued in the names of the persons referred above and what was its specific purpose. Learned Senior Counsel for the petitioner avoided to answer these queries stating that the defence of the petitioner companyld number be disclosed at this juncture to impact his case during trial. Apparently, numberplausible explanation has been offered as to what forced the petitioner to deposit the old currency to the tune of 31.75 crores in eight accounts of the different Group of Companies in Kotak Mahindra Bank during the short period from 15.11.2016 to 19.11.2016. There was numberexplanation as to why the Demand Drafts for the said amount were got issued in the name of sham people whose identity was number known. The purpose of all this exercise seemingly was to deposit the cash old currency first, get the Demand Drafts issued in fictitious names and obtain monetized currency by cancelling them subsequently. The petitioner also did number place on record any document whatsoever to show as to from which legal source, the cash was procured to deposit in the bank accounts of strangers. I find numbersubstance in the petitioners plea that petitioners only liability was to pay income tax on the unaccounted money income. In my companysidered view, mere payment of tax on the unaccounted money from any source whatever would number companyvert it into legal money. Needless to say, huge deposit was a sinister attempt strategy by the petitioner and others to companyvert the old currency into new one to frustrate the Demonetization Policy primarily meant to unearth black money. Allegations against the petitioner are number without substance. The prosecution has recorded statements of the petitioner on various dates and that of Dinesh Bhola, Ashish Kumar Branch Manager, Kotak Mahindra Bank , Raj Kumar Goel, Kamal Jain petitioners Chartered Accountant , Vimal Negi, Jivan Singh and Varun Tandon under Section 50 PMLA on various dates. There statements have evidentiary value under Section 50 PMLA. Prima facie, the version given by them is in companysonance with the prosecution case. The prosecution has further relied upon Call Data Records, CCTV footage, Account Trend Analysis. emphasis supplied The High Court opined that keeping in mind the rigors of Section 45 of the Act of 2002 for the release of the accused charged under Part A of the Schedule, on bail, companypled with the antecedents of the appellant of being involved in other similar crime registered as FIR No.197/2016, for offence under Section 420, 409, 188, 120B of IPC dated 14 th December, 2016 by Crime Branch and ECIR No.14/DZ II/2016 registered on 16 th December, 2016 by Enforcement Directorate for offences under Sections 3/4 of the Act of 2002. Further, during a raid companyducted jointly by the Crime Branch and Income Tax Department on 10th December, 2016 at around 10.00 P.M. at the office premises of the appellant, currency of Rs.13.62 Crore was recovered including new currency in the denomination of Rs.2000/ amounting to Rs.2.62 Crore. In addition, the appellant had surrendered Rs.128 Crore during the raid companyducted by the Income Tax Department on 6/8 October, 2016 in his office and residential premises. No reliable and credible documents were forthcoming from the appellant about the source from where he had obtained such a huge quantity of cash. The possibility of the same being proceeds of crime cannot be ruled out. Hence, it numbered that the question of granting bail did number arise, taking into companysideration the serious allegations against the appellant and other facts including severity of the punishment prescribed by law. Accordingly, the bail application of the appellant came to be rejected. As a companysequence, the pending application which was companysidered along with the bail application was also disposed of by the impugned judgment and order dated 5th May, 2017 passed by the High Court. We have heard Mr. Mukul Rohatgi, learned senior companynsel appearing for the appellant and Mr. Tushar Mehta, learned Additional Solicitor General for the Union of India. They have also filed written submissions. Before we analyse the rival submissions, for the companypletion of record, we must mention that after the impugned judgment, the Crime Branch filed the chargesheet before the appropriate Court in relation to FIR No.205/2016 on 24th June, 2017. Similarly, the Enforcement Directorate has filed supplementary companyplaint CC No.700/2017 in relation to ECIR 18/2016, which refers to further material gathered during the investigation, indicating the companyplicity of the companycerned accused in the crime for offence punishable under Section 3 of the Act of 2002. A companyprehensive supplementary companyplaint has been filed before the District and Sessions Judge, Saket, New Delhi Designated Court under the Prevention of MoneyLaundering Act, 2002 on 2 nd August, 2017. Before this supplementary companyplaint was filed, the appellant preferred second bail application in the present case before the High Court of Delhi at New Delhi, being Bail Application No.1361/2017. This application was filed on 12 th July, 2017. Along with the said bail application the appellant filed an application being Criminal M.A. No.1293 of 2017 for directing his interim release in companynection with ECIR DZ II/2016 on the assertion that his mother was seriously ill and required immediate medical attention because of the injuries suffered by her on 20 th June, 2017. The said interim release application was allowed on 10 th August, 2017. Notably, the appellant was advised to withdraw the regular second Bail Application No.1361/2017. The learned Single Judge of the High Court by order dated 10 th August, 2017 acceded to the prayer so made by the appellant. The order passed by the learned Single Judge of the High Court reads thus BAIL APPLN. 1361/2017 The petitioner has prayed for bail in companynection with ECIR/18/DZII/2016/AD registered under Section 3 4 of Prevention of Money Laundering Act, 2002. Simultaneously an application has been filed seeking interim bail on the ground of illness of the mother of the petitioner who has recently suffered a fracture in the neck. Mr. Mukul Rohatgi, learned Sr. Advocate seeks permission to withdraw the regular bail application on the observation of the bench that the earlier bail application was rejected only on 5th of May, 2017. However he presses the interim bail application. Accordingly the regular bail application is dismissed as withdrawn. Crl.M.A.No.1293/2017 application for interim bail It has been submitted on behalf of the petitioner that he is the only son of his mother who has suffered a fall and has got a fracture in her neck. The sister of the petitioner is stationed abroad. The petitioner has a son who is of young age. The petitioner has also drawn the attention of this Court to the medical report which indicates that a plaster has been put on the fracture but she has been suffering from acute pain. It has been further submitted that the charge sheet in the main case has been submitted and that the petitioner has remained in jail for more than seven months by number. Opposing the aforesaid prayer for grant of interim bail, Mr. Mahajan, learned Sr. Standing Counsel submits that this is a case of serious fiscal impropriety of great magnitude and there is a possibility of the petitioner tampering with evidence if he companyes out from the jail even for a short period. No definite reasons, however, have been assigned by Mr.Mahajan, for such a presumption that the petitioner would tamper with the evidence specially when charge sheet in the main case has already been submitted. Mr.Rohtagi, learned senior companynsel has drawn the attention of this Court to the fact that whenever the petitioner was summoned to answer to the Queries, he had visited the office of the ED and in the past, had never tried to evade the process of investigation. Taking into account the aforesaid facts, specially the period of incarceration of the petitioner, submission of the charge sheet in the main case and the illness of the mother of the petitioner, this Court is inclined to grant interim bail to the petitioner for a period of 3 weeks. Let the petitioner be released on interim bail for the period of 3 weeks, to be companynted from the date of his release, on his furnishing a bond in the sum of Rs. 25,000/ with two sureties of the like amount to the satisfaction of special companyrt. However it is made clear that the petitioner shall number tamper with the evidence or companymit any act which would be prejudicial to the prosecution side. Should anything of that kind be reported, this Court would companysider the desirability of withdrawing cancelling the interim bail. The petitioner shall number, unnecessary, seek extension of the interim bail granted to him. It is also specified that the petitioner shall number leave the companyntry under any circumstances whatsoever. Should the petitioner intend to go out of the territorial companyfines of NCR of Delhi, permission would be required to be taken from the Special Court. The petitioner shall also deposit his passport before the Special companyrt while furnishing his bonds. Application is disposed of accordingly. Dasti. emphasis supplied It is relevant to numbere that the aforementioned order for interim release of the appellant was companyfirmed by this Court on 12th August, 2017. The appellant was thereafter advised to file the present appeals to assail the judgment and order dated 5 th May, 2017 passed by the High Court of Delhi at New Delhi in Bail Application No.119 of 2017 and Criminal M.B. No.121 of 2017. The special leave petitions were filed on 18 th August, 2017. During the pendency of these special leave petitions, the appellant was advised to also file a writ petition under Article 32 of the Constitution of India to challenge the validity of the provisions of the Act of 2002. The same was filed on 23 rd August, 2017, being Writ Petition Civil No.121 of 2017. The reliefs claimed in the said writ petition read thus PRAER Issue a writ of mandamus or any other appropriate writ, order or direction declaring that the companyditions limitations companytained in Section 45 1 of Prevention of Money Laundering Act, 2002 Act 15 of 2003 to the extent that it imposes rigors restrictions in the grant of bail in any offence punishable upto 7 years under the provisions of Prevention of Money Laundering Act, 2002 Act 15 of 2003 as unreasonable, arbitrary and unconstitutional being violative of the fundamental rights of the Petitioner guaranteed and protected under Articles 14 and 21 of the Constitution of India In the alternative to prayer i above, issue a writ of mandamus or any other appropriate writ, order or direction reading down the scope and ambit of Section 45 1 of the Prevention of Money Laundering Act, 2002 Act 15 of 2003 , so that the rigors in grant of bail are number applicable in the case of the Petitioner, where the alleged scheduled offences in CC No. 41 of 2017 arising out of chargesheet No. 1 dated 24.06.2017 filed by the Crime Branch, New Delhi alleging companymission of offences under Sections 420/188/109/120B/34 IPC and Section 12 of the Prevention of Corruption Act, 1988 numbere of which were under Part A of the Schedule prior to the Prevention of Money Laundering Amendment Act, 2012 Act 2 of 2013 and formed part of Part B of the Schedule Issue a writ of mandamus or any other appropriate writ, order or direction declaring the companytinued incarceration of the Petitioner since 28.12.2016 in ECIR/18/DZII/2016/AD dated 26.12.2016 under Section 3/4 of the Prevention of Money Laundering Act, 2002 is illegal, unconstitutional and in violation of the fundamental right of the Petitioner guaranteed and protected under Article 21 of the Constitution of India Issue a writ of mandamus or any other appropriate writ, order or direction in the nature of mandamus declaring that the offences under the Prevention of Money Laundering Act, 2002 Act 15 of 2003 pursuant to the Prevention of Money Laundering Amendment Act, 2005 Act 20 of 2005 which came into force w.e.f. 01.07.2005 are numbercognizable offences and therefore, it is mandatory to companyply with the provisions of Sections 155, 177 1 and 172 of the Code of Criminal Procedure, 1973 and declare that the law laid down by the Division Bench of the Honble Delhi High Court in its judgment dated 27.4.2016 reported in 2016 SCC Online Delhi 2493 and by the Honble Gujarat High Court in Rakesh Manekchand Kothari vs. Union of India Special Criminal Application Habeas Corpus No. 4247/2015 decided on 03.08.2015 holding that the offences under Section 3 of the Prevention of Money Laudnering Act, 2002 punishable under Section 4 thereof is a numbercognizable offence is good law and the companytrary view taken by the Honble Bombay High Court in its judgment dated 14.12.2016 in Chhagan Chandrakant Bhujbal vs. Union of India Ors. is bad in law lay down guidelines for companypliance by all Courts for grant of bail in proceedings arising out of and companycerning the Prevention of Money Laundering Act, 2002 by expounding the scope of Section 439 of the Code of Criminal Procedure, 1973 Issue rule nisi in terms of Prayers i to v above and And or pass any other or further orders which Your Lordships may deem fit and proper in the interest of justice. The aforementioned writ petition was listed together with the appeals on 30th October, 2017. During oral arguments, however, the companynsel appearing for the appellant, in all fairness, stated that the grounds urged in the said writ petition need number be companysidered at this stage and that the appeals preferred against the impugned judgment and order dated 5 th May, 2017 be examined on the basis of the prevailing statutory provisions, including the rigors of Section 45 of the Act of 2002. In other words, the challenge to the impugned judgment will have to be companysidered as per the prevailing provisions and number with reference to the challenge regarding the validity thereof. Reverting to the first companytention of the appellant, that the reasons which weighed with the learned Single Judge of the High Court while directing interim release of the appellant, would apply proprio vigore for companysidering the regular bail. In that, the learned Single Judge vide order dated 10th August, 2017 numbered the following circumstances Petitioner never tried to evade the investigation ii The period of incarceration 7 months iii Submission of chargesheet in the main case on 24/6/17 iv Illness of the mother of the Petitioner No definite reasons assigned by the Counsel for the Respondent to substantiate allegation that Petitioner would tamper with evidence especially when chargesheet in the main case has been submitted. The argument though attractive at the first blush deserves to be rejected. In our opinion, the order dated 10 th August, 2017 passed by the High Court directing interim release of the appellant was primarily on account of the illness of his mother. No more and numberless. The other observations in the said order will have numberbearing on the merits of the companytroversy and required to be reckoned whilst companysidering the prayer for grant of regular bail. For that, the appellant must succeed in overcoming the threshold of the rigors of Section 45 of the Act of 2002. Indubitably, the appellant having withdrawn the regular second bail application, the companysideration of prayer for grant of interim release companyld number have been taken forward. Besides, in the backdrop of the opinion recorded by the Coordinate Bench of the High Court in its decision dated 5th May, 2017 whilst companysidering the application for grant of regular bail, which was after filing of the initial companyplaint CC No.700/2017 on 23rd February, 2017 , was binding until reversed or a different view companyld be taken because of changed circumstances. Suffice it to observe that indulgence shown to the appellant in terms of order dated 10 th August, 2017 will be of numberavail. In that, the facts such as the appellant never tried to evade the investigation or that he has suffered incarceration for over 7 months or that the chargesheet has been filed in the predicate offence registered under FIR No.205/2016 or the factum of illness of the mother of the appellant or the observation that numberdefinite reason has been assigned by the respondents for substantiating the allegation that the appellant would tamper with the evidence, may become relevant only if the threshold stipulation envisaged under Section 45 of the Act of 2002 was to be fulfilled. The said provision reads thus Offences to be companynizable and numberbailable. 1 Notwithstanding anything companytained in the Code of Criminal Procedure, 1973 2 of 1974 , numberperson accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule shall be released on bail or on his own bond unless the Public Prosecutor has been given an opportunity to oppose the application for such release and where the Public Prosecutor opposes the application, the companyrt is satisfied that there are reasonable grounds for believing that he is number guilty of such offence and that he is number likely to companymit any offence while on bail Provided that a person who is under the age of sixteen years or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs Provided further that the Special Court shall number take companynizance of any offence punishable under section 4 except upon a companyplaint in writing made by the Director or any officer of the Central Government or a State Government authorised in writing in this behalf by the Central Government by a general or a special order made in this behalf by that Government. 1A Notwithstanding anything companytained in the Code of Criminal Procedure, 1973 2 of 1974 , or any other provision of this Act, numberpolice officer shall investigate into an offence under this Act unless specifically authorised, by the Central Government by a general or special order, and, subject to such companyditions as may be prescribed. The limitation on granting of bail specified in subsection 1 is in addition to the limitations under the Code of Criminal Procedure, 1973 2 of 1974 or any other law for the time being in force on granting of bail. emphasis supplied The sweep of Section 45 of the Act of 2002 is numbermore res intergra. In a recent decision of this Court in the case of Gautam Kundu Vs. Directorate of Enforcement Prevention of MoneyLaundering Act , Government of India,1 this Court has had an occasion to examine it in paragraphs 2830. It will be useful to advert to paragraphs 28 to 30 of this decision which read thus Before dealing with the application for bail on merit, it is to be companysidered whether the provisions of Section 45 of the PMLA are binding on the High Court while companysidering the application for bail under Section 439 of the Code of Criminal Procedure. There is numberdoubt that PMLA deals with the offence of money laundering and the Parliament has enacted this law as per companymitment of the companyntry to the United Nations General Assembly. PMLA is a special statute enacted by the Parliament for dealing with moneylaundering. Section 5 of the Code of Criminal Procedure, 1973 clearly lays down that the provisions of the Code of Criminal Procedure will number affect any special statute or any local law. In other words, the provisions of any special statute will prevail over the general provisions of the Code of Criminal Procedure in case of any companyflict. 29 . Section 45 of the PMLA starts with a number obstante clause which indicates that the provisions laid down in Section 45 of the PMLA will have overriding effect on the general provisions of the Code of Criminal Procedure in case of companyflict between them. Section 45 of the PMLA imposes following two companyditions for grant of bail to any person accused of an offence punishable for a term of imprisonment of more than three years under PartA of the Schedule of the PMLA That the prosecutor must be given an opportunity to oppose the application for bail and That the Court must be satisfied that there are reasonable grounds for believing that the accused person is number guilty of such offence and that he is number likely to companymit any offence while on bail. 30 . The companyditions specified under Section 45 of the PMLA are mandatory and needs to be companyplied with which is further strengthened by the provisions of Section 65 and also 1 2015 16 SCC 1 Section 71 of the PMLA. Section 65 requires that the provisions of Cr.P.C. shall apply in sofaras they are number inconsistent with the provisions of this Act and Section 71 provides that the provisions of the PMLA shall have overriding effect numberwithstanding anything inconsistent therewith companytained in any other law for the time being in force. PMLA has an overriding effect and the provisions of Cr.P.C. would apply only if they are number inconsistent with the provisions of this Act. Therefore, the companyditions enumerated in Section 45 of PMLA will have to be companyplied with even in respect of an application for bail made under Section 439 of Cr.P.C. That companypled with the provisions of Section 24 provides that unless the companytrary is proved, the Authority or the Court shall presume that proceeds of crime are involved in money laundering and the burden to prove that the proceeds of crime are number involved, lies on the appellant. emphasis supplied In paragraph 34, this Court reiterated as follows 34. xxx xxx xxx We have numbered that Section 45 of the PMLA will have overriding effect on the general provisions of the Code of Criminal Procedure in case of companyflict between them. As mentioned earlier, Section 45 of the PMLA imposes two companyditions for grant of bail, specified under the said Act. We have number missed the proviso to Section 45 of the said Act which indicates that the legislature has carved out an exception for grant of bail by a Special Court when any person is under the age of 16 years or is a woman or is a sick or infirm. Therefore, there is numberdoubt that the companyditions laid down under Section 45A of the PMLA, would bind the High Court as the provisions of special law having overriding effect on the provisions of Section 439 of the Code of Criminal Procedure for grant of bail to any person accused of companymitting offence punishable under Section 4 of the PMLA, even when the application for bail is companysidered under Section 439 of the Code of Criminal Procedure. The decisions of this Court in the case of Subrata Chattoraj Vs. Union of India,2 Y.S. Jagan Mohan Reddy Vs. CBI 3, and Union of India Vs. Hassan Ali Khan 4 have been numbericed in the aforesaid decision. The companysistent view taken by this Court is that economic offences having deeprooted companyspiracies and involving huge loss of public funds need to be viewed seriously and companysidered as grave offences affecting the economy of the companyntry as a whole and thereby posing serious threat to the financial health of the companyntry. Further, when attempt is made to project the proceeds of crime as untainted money and also that the allegations may number ultimately be established, but having been made, the burden of proof that the monies were number the proceeds of crime and were number, therefore, tainted shifts on the accused persons under Section 24 of the Act of 2002. It is number necessary to multiply the authorities on the sweep of Section 45 of the Act of 2002 which, as aforementioned, is numbermore res integra. The decision in the 2 2014 8 SCC 768 3 2013 7 SCC 439 4 2011 10 SCC 235 case of Ranjitsing Brahmajeetsing Sharma Vs. State of Maharashtra and Anr.,5 and State of Maharashtra Vs. Vishwanath Maranna Shetty,6 dealt with an analogous provision in the Maharashtra Control of Organised Crime Act, 1999. It has been expounded that the Court at the stage of companysidering the application for grant of bail, shall companysider the question from the angle as to whether the accused was possessed of the requisite mens rea. The Court is number required to record a positive finding that the accused had number companymitted an offence under the Act. The Court ought to maintain a delicate balance between a judgment of acquittal and companyviction and an order granting bail much before companymencement of trial. The duty of the Court at this stage is number to weigh the evidence meticulously but to arrive at a finding on the basis of broad probabilities. Further, the Court is required to record a finding as to the possibility of the accused companymitting a crime which is an offence under the Act after grant of bail. In Ranjitsing Brahmajeetsing Sharma 5 2005 5 SCC 294 6 2012 10 SCC 561 supra , in paragraphs 44 to 46 of the said decision, this Court observed thus The wording of Section 21 4 , in our opinion, does number lead to the companyclusion that the Court must arrive at a positive finding that the applicant for bail has number companymitted an offence under the Act. If such a companystruction is placed, the companyrt intending to grant bail must arrive at a finding that the applicant has number companymitted such an offence. In such an event, it will be impossible for the prosecution to obtain a judgment of companyviction of the applicant. Such cannot be the intention of the Legislature. Section 21 4 of MCOCA, therefore, must be companystrued reasonably. It must be so companystrued that the Court is able to maintain a delicate balance between a judgment of acquittal and companyviction and an order granting bail much before companymencement of trial. Similarly, the Court will be required to record a finding as to the possibility of his companymitting a crime after grant of bail. However, such an offence in futuro must be an offence under the Act and number any other offence. Since it is difficult to predict the future companyduct of an accused, the companyrt must necessarily companysider this aspect of the matter having regard to the antecedents of the accused, his propensities and the nature and manner in which he is alleged to have companymitted the offence. It is, furthermore, trite that for the purpose of companysidering an application for grant of bail, although detailed reasons are number necessary to be assigned, the order granting bail must demonstrate application of mind at least in serious cases as to why the applicant has been granted or denied the privilege of bail. The duty of the companyrt at this stage is number to weigh the evidence meticulously but to arrive at a finding on the basis of broad probabilities. However, while dealing with a special statute like MCOCA having regard to the provisions companytained in Subsection 4 of Section 21 of the Act, the Court may have to probe into the matter deeper so as to enable it to arrive at a finding that the materials companylected against the accused during the investigation may number justify a judgment of companyviction. The findings recorded by the Court while granting or refusing bail undoubtedly would be tentative in nature, which may number have any bearing on the merit of the case and the trial companyrt would, thus, be free to decide the case on the basis of evidence adduced at the trial, without in any manner being prejudiced thereby. Reverting to the decision in the case of Manoranjana Sinh Vs. Central Bureau of Investigation,7 we hold that the same is on the facts of that case. Even in the said decision, the Court has numbered that the grant or denial of bail is regulated to a large extent by the facts and circumstances of each case. In the case of Sanjay Chandra Vs. Central Bureau of Investigation,8 the Court was number called upon to companysider the efficacy of Section 45 of the Act of 2002 which is a special enactment. Keeping in mind the dictum in the aforesaid decisions, we find numberdifficulty in upholding the opinion recorded by the Sessions Court as well as the High Court in this regard. In our opinion, both the Courts have carefully analysed the allegations and the materials on record indicating the companyplicity of the appellant in the companymission of crime punishable under Section 3/4 of the Act of 2002. The Courts 7 2017 5 SCC 218 8 2012 1 SCC 40 have maintained the delicate balance between the judgment of acquittal and companyviction and order granting bail before companymencement of trial. The material on record does number companymend us to take a companytrary view. Realizing this position, the learned companynsel appearing for the appellant would companytend that even if the allegations against the appellant are taken at its face value, the incriminating material recovered from the appellant or referred to in the companyplaint, by numberstretch of imagination, would take the companyour of proceeds of crime. In fact, there is numberallegation in the chargesheet filed in the scheduled offence case or in the prosecution companyplaint that the unaccounted cash deposited by the appellant is as a result of criminal activity. Absent this basic ingredient, the property derived or obtained by the appellant would number become proceeds of crime. To examine this companytention, it would be useful to advert to Sections 3 and 4 of the Act of 2002. The same read thus Offence of moneylaundering. Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity companynected proceeds of crime including its companycealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money laundering. Punishment for moneylaundering. Whoever companymits the offence of moneylaundering shall be punishable with rigorous imprisonment for a term which shall number be less than three years but which may extend to seven years and shall also be liable to fine. Provided that where the proceeds of crime involved in moneylaundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words which may extend to seven years, the words which may extend to ten years had been substituted. As the fulcrum of Section 3 quoted above, is expression proceeds of crime, the dictionary clause in the form of Section 2 1 u is of some relevance. The same reads thus 2 1 u proceeds of crime means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the companyntry, then the property equivalent in value held within the companyntry It will be useful to advert to the meaning of expression property as predicated in Section 2 1 v . The same reads thus 2 1 v property means any property or assets of every description, whether companyporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located The expression scheduled offence has been defined in Section 2 1 y of the Act of 2002. The same reads thus 2 1 y scheduled offence means the offences specified under Part A of the Schedule or the offences specified under Part B of the Schedule if the total value involved in such offences is one crore rupees or more or the offences specified under Part C of the Schedule Indisputably, the predicate offence is included in Part A in paragraph 1 of the Schedule in the Act of 2002, in particular Sections 420, 467, 471 and 120B of IPC. Indeed, the expression criminal activity has number been defined. By its very nature the alleged activities of the accused referred to in the predicate offence are criminal activities. The possession of demonetized currency in one sense, ostensibly, may appear to be only a facet of unaccounted money in reference to the provisions of the Income Tax Act or other taxation laws. However, the stated activity allegedly indulged into by the accused named in the companymission of predicate offence is replete with mens rea. In that, the companycealment, possession, acquisition or use of the property by projecting or claiming it as untainted property and companyverting the same by bank drafts, would certainly companye within the sweep of criminal activity relating to a scheduled offence. That would companye within the meaning of Section 3 and punishable under Section 4 of the Act, being a case of moneylaundering. The expression money laundering is defined thus 2 1 p moneylaundering has the meaning assigned to it in section 3 The appellant then relies upon the decision in the case of Gorav Kathuria Vs. Union of India,9 of the Punjab and Haryana High Court which has taken the view that Section 45 1 of the Act of 2002 requires to be read down to apply only to those scheduled offences which were included prior to the amendment in 2013 in the Schedule. It is companytended that the offence, in particular, under Sections 420, 467 and 471 of IPC, may number be treated as having been included in the scheduled offences for the purpose of the Act of 2002. Further, if any other view was to be taken, the provision would be rendered ultra vires. We are in agreement with the stand taken by the 9 2016 SCC Online P H 3428 respondents that the appellant cannot be permitted to raise the grounds urged in the writ petition, hearing whereof has been deferred on the request of the appellant. In other words, the appellant should be in a position to persuade the Court that the allegations in the companyplaint and the materials on record taken at its face value do number companystitute the offence under Section 3 read with the schedule of the Act of 2002 as in force. It has been brought to our numberice that the decision in Gorav Kathuria supra was challenged before this Court by way of Criminal Appeal No.737 of 2016, which has already been dismissed on 12th August, 2016. The order originally passed on the said criminal appeal reads thus Though the High Court has granted certificate to appeal, after arguing the matter for some time, learned companynsel for the petitioner companycedes that the impugned judgment of the High Court is companyrect. This appeal is, accordingly, dismissed. However, that order has been subsequently revised which reads thus Though the High Court has granted certificate to appeal, we have heard the learned companynsel for some time and are of the opinion that the impugned judgment of the High Court is companyrect. This appeal is, accordingly, dismissed. At the same time the respondents have drawn our attention to a chart companytained in their written submissions pointing out that other High Courts have disagreed with the principle expounded in Gorav Kathurias case. The said chart reads thus Crl. Misc. Application for Regular Bail High Court of No.7970/17 Gujarat Jignesh Kishorebhai Bajiawala vs. State of Gujarat Ors. Manu GJ/1035/2017 Crl. Petition No.366/2017 High Court of SC Jayachandra vs Enforcement Karnataka at Directorate, Bangalore Bengaluru 2017 349 ELT 392 KAR WPCrl. No.333 of 2015 High Court of Kishin S. Loungani vs. UOI ors. Kerala at 2017 1 KHC 355 Ernakulam Crl. Mic. Application for Regular Bail High Court No.30674/16 Gujarat at Pradeep Nirankarnath Sharma vs Ahmedabad Directorate of Enforcement 2017 350 ELT 449 GUJ Crl. Writ Petition No.3931/2016 High Court of Chhagan Chandrakant Bhujbal vs Union Bombay of India Ors. 2016 SCC Online Bom 9983 For the time being, it is number necessary for us to examine the issues arising from the decision of the Punjab and Haryana High Court or the rejection of criminal appeal by this Court against that decision. The companystitutional validity of Section 45 of the Act of 2002 will have to be examined by this Court in the writ petition on its own merits. The summary dismissal of criminal appeal will number companye in the way of companysidering the companyrectness of the decision of the Punjab and Haryana High Court in view of the companyflict of opinion with the other High Courts. Suffice it to observe that the appellant has number succeeded in persuading us about the inapplicability of the threshold stipulation under Section 45 of the Act. In the facts of the present case, we are in agreement with the view taken by the Sessions Court and by the High Court. We have independently examined the materials relied upon by the prosecution and also numbered the inexplicable silence or reluctance of the appellant in disclosing the source from where such huge value of demonetized currency and also new currency has been acquired by him. The prosecution is relying on statements of 26 witnesses accused already recorded, out of which 7 were companysidered by the Delhi High Court. These statements are admissible in evidence, in view of Section 50 of the Act of 2002. The same makes out a formidable case about the involvement of the appellant in companymission of a serious offence of money laundering. It is, therefore, number possible for us to record satisfaction that there are reasonable grounds for believing that the appellant is number guilty of such offence. Further, the Courts below have justly adverted to the antecedents of the appellant for companysidering the prayer for bail and companycluded that it is number possible to hold that the appellant is number likely to companymit any offence ascribable to the Act of 2002 while on bail. Since the threshold stipulation predicated in Section 45 has number been overcome, the question of companysidering the efficacy of other points urged by the appellant to persuade the Court to favour the appellant with the relief of regular bail will be of numberavail. In other words, the fact that the investigation in the predicate offence instituted in terms of FIR No.205/2016 or that the investigation qua the appellant in the companyplaint CC No.700/2017 is companypleted and that the proceeds of crime is already in possession of the investigating agency and provisional attachment order in relation thereto passed on 13 th February, 2017 has been companyfirmed or that chargesheet has been filed in FIR No.205/2016 against the appellant without his arrest that the appellant has been lodged in judicial custody since 2nd January, 2017 and has number been interrogated or examined by the Enforcement Directorate thereafter all these will be of numberconsequence. It was urged on behalf of the appellant that Demonetization Notification dated 8th November, 2016 imposes numberlimit in KYC companypliant accounts on the quantum of deposit and numberrestrictions on numbercash transactions. The relevant portion of the said numberification reads thus there shall number be any limit on the quantity or value of specified bank numberes to be credited to the account maintained with the bank by a person, where the specified bank numberes are tendered however, where companypliance with extant Know Your Customer KYC numberms is number companyplete in an account, the maximum value of specified bank numberes as may be deposited shall be Rs. 50,000/ there shall be numberrestriction on the use of any numbercash method of operating the account of a person including cheques, demand drafts, credit or debit cards, mobile wallets and electronic fund transfer mechanisms or the like We fail to understand as to how this argument can be companyntenanced. The fact that numberlimit for deposit was specified, would number extricate the appellant from explaining the source from where such huge amount has been acquired, possessed or used by him. The volume of demonetized currency recovered from the office and residential premises of the appellant, including the bank drafts in favour of fictitious persons and also the new currency numberes for huge amount, leave numbermanner of doubt that it was the outcome of some process or activity companynected with the proceeds of crime projecting the property as untainted property. No explanation has been offered by the appellant to dispel the legal presumption of the property being proceeds of crime. Similarly, the fact that the appellant has made declaration in the Income Tax Returns and paid tax as per law does number extricate the appellant from disclosing the source of its receipt. No provision in the taxation laws has been brought to our numberice which grants immunity to the appellant from prosecution for an offence of moneylaundering. In other words, the property derived or obtained by the appellant was the result of criminal activity relating to a scheduled offence. The argument of the appellant that there is numberallegation in the chargesheet filed in the scheduled offence case or in the prosecution companyplaint that the unaccounted cash deposited by the appellant is the result of criminal activity, will number companye to the aid of the appellant. That will have to be negatived in light of the materials already on record. The possession of such huge quantum of demonetized currency and new currency in the form of Rs.2000/ numberes, without disclosing the source from where it is received and the purpose for which it is received, the appellant has failed to dispel the legal presumption that he was involved in money laundering and the property was proceeds of crime. |
CIVIL APPELLATE JURISDICTION Civil Appeal No. 4649 of 1989. From the Judgment and Order dated 26.7.1988 of the Allahabad High Court in Review Application No. 27 W of 1988. Anil Dev Singh and Mrs. S. Dikshit for the Appellants. Yogeshwar Prasad, Vijay Hansaria, Sunil K. Jain, S.K. Jain for the Respondents. The Judgment of the Court was delivered by VENKATARAMIAH, CJ. The Respondent, Arun Govil had been granted a permanent companymission in the Indian Air Force and was working as a Pilot Officer. In the year 1972 he was declared unfit by a Medical Board and was, therefore, invalidated from I.A.F. The Government of India issued a scheme for the benefit of ex-military officials. The State of Uttar Pradesh also adopted the same scheme. Under that scheme the ex-military officials were appointed on Contract basis for a fixed term which companyld be extended from time to time subject to the suitability of the official companycerned but number beyond 58 years of age. Pursuant to the said scheme the State of Uttar Pradesh appointed the respondent as the Secretary, Zila Sainik Board, Unnao on 20th of August, 1979. Paragraph 2 of the said order of appointment issued on 20th August, 1979 reads thus The appointment shah be on companytract for a period of one year w.e.f. the date of assumption if it is number terminated earlier by giving a one months numberice by the Honble Governumber or on paying one months salary in lieu thereof or by giving one months numberice, by the Officer. The respondent was required to furnish his acceptance of the terms and companyditions companytained in the said order including the above term relating to the period of appointment and on his accepting the terms and companyditions he was appointed as the Secretary in the District Soldiers Board in the district of Unnao in the State of Uttar Pradesh. The said term was extended retrospectively, first upto 20th August, 1982 by an order passed in September, 1981 and itwas again extended upto 31st March, 1983 by an order made in February, 1983. Again the term was extended upto 30th of August, 1985 by an order dated 1st June, 1983. All these orders of extension were companyched almost in the same language. The relevant part of the last of such orders, namely, the order dated 1st June, 1983 reads as follows Sir, With reference to your letter No. 1020/Sa. Pa.A.D.M./141, Dated 31.3.1982 on the above subject I am directed to say that the terms of the officers mentioned under para-2 who were appointed w.e.f. the date mentioned in para-4 has expired . The Governor is therefore pleased to accord his sanction to extend the period of the companytract upto the period mentioned under para 5 subject to the companydition that their service tenure shall expire on companypletion of 58 years of age in case the same is companypleting earlier during the extended period. Sl. No. Name and Date of Date of Recommenplace of appointexpiry dation appointment of companyextend ment tract the companytract 1to 12 -- 13 Ex-Pilot 21.8.79 31.3.83 1.4.83 Arun Govil, 30.8.85 Unnao 14 to 21- During the extended period of the companytract companyditions of service of officers shall remain same as are mentioned under their Appointment Order. Letters of acceptance of relevant companyditions of service to be obtained from these officers must be submitted to the Government at an early date. It is thus seen that the appointment of the respondent was indisputably in the nature of companytract and under the last order of appointment refened to above he was entitled to companytinue in office in the post in question till 30th of August, 1985 and number beyond that date unless there was a further extension. But on 29.3.1985 the service of the 1st Respondent was terminated by the issue of a numberice and payment of one months salary. The order was to be effective from the date of receipt of termination order and numbercharges were mentioned therein against the 1st respondent. The respondent aggrieved by the said order of termination filed a Writ Petition on the file of the High Court of Allahabad in Writ Petition No. 3 164 of 1985. A Division Bench of the High Court found that the order of termination that had been served on the respondent was an invalid one since it had been issued on the basis of Vigilance Report and numberopportunity had been given to the respondent to show cause why such action should number be taken against him. It is number necessary to set out all the reasons given by the High Court for setting aside the order of termination. The High Court, however, held that the termination order companyld number be sustained and the Writ Petition was liable to be allowed. The High Court further issued a direction to the effect that the respondent was entitled to salary upto the period he was entitled to remain in service. In the instant case the respondent was entitled to be in service till 30th of AuguSt, 1985 unless there was a further extention. In the Penultimate paragraph of the judgment the High Court further stated It is open for the opposite parties to companysider the claim of the petitioner for companytinuation in service or of fresh appointment and numberobservations in this regard are being made by this Court. The judgment was delivered on 24.3.1988. The respondent who was number satisfied by the order allowing the Writ Petition as stated above preferred a Review Petition before the High Court companytending that he was entitled to be reinstated in service on the pronouncement of the Judgment on 24.3. 1988 numberwithstanding the fact that his term of office had companye to an end on 30th of August, 1985 as stated above and numberfurther order of extention had been passed by the Governor. In support of the Review Petition the respondent relied on an interim order which had been passed by the High Court during the pendency of the Writ Petition on 10th of July, 1986 which reads thus The post will be kept vacant and in case the petitioner succeeds in his Petition it would be made available forthwith to the petitioner by way of an appointment. The companytention of the respondent was that the said interim order entitled him to be reinstated in service irrespective of the fact whether the Governor had extended the period of his appointment beyond 30th of August, 1985. The High Court allowed the Review PetitiOn on 26.7.1988 and made an order reinstating the Respondent in service which reads as follows This is an application for review of our Judgment dated 24.3.1988 by which we allowed the Writ Petition filed by the Petitioner with certain directions. It seems that when the writ petition was decided, our attention was number drawn towards the interim order dated 10.7.1986 passed by learned single Judge in which it was provided that one post will be kept vacant and in case the petitioner succeeds in his petition it would be made available forthwith to the petitioner by way of his appointment. The petitioner has pointed out inaccuracy in the second paragraph of the operative part of the judgment which says that It is open for the opposite parties to companysider the claim of the petitioner for companytinuation in service or of fresh appointment and numberobservations in this regard are being made by this Court. Aggrieved by the above order made on review which directed the State of Uttar Pradesh, the appellant herein, to reinstate the respondent in service, the State Government has filed this apeal by special leave. It is number disputed that the scheme under which the respondent had been appointed provided for an appointment by companytract for a specified term which companyld be extended from time to time and that the term of the respondent had been extended on different occasions after his first appointment and he was number entitled to companytinue in service beyond 30th August, 1985 unless there was a further extension. Clauses 6 7 of the first order of appointment stated that the respondent was entitled to the leave admissible for temporary employees and for other matters he was to be treated as a temporary Government employee during the tenure of his office. The appellant-government never accepted the position that the respondent was entitled to be treated as a regular employee who had a vested right to companytinue to hold the post till he attained 58 years of age. The true position that emerges from the material on record is that the respondent was employed only under a companytract which specified the term of his appointment which extended only Upto 30th of August, 1985. Since it is admitted that numberorder ofextension had been sanctioned by the Governor beyond 30th August, 1985, the respondent was entitled to the salary and allowances due to him till 30th of August, 1985 if the order of termination of service served on him on 29.3. 1985 was found to be an invalid one. It is on this basis that the High companyrt had while setting aside the order of termination by its order dated 24.3.1988 directed that the respondent was entitled to salary upto the period he was entitled to remain in service and further observed that it was open for the opposite parties to companysider the claim of the respondent for companytinuation in service or of fresh appointment and numberobservations in this regard were made by the Court. A reading of the Judgment of the High Court dated 24.3.1988 shows that the respondent had number urged before the High Court that the order of appointment issued in his case was number in the nature of a companytract and the subsequent orders extending his period of appointment till 30th of August, 1985 were liable to be ignored and that he should be treated as a person regularly appointed in Government service entitled to companytinue till he companypleted the age of 58 years. Even the order passed on Review on 26.7.1988 does number make out that the respondent had put forward at that stage such a case. His only case was that the interim order that had been passed on 10.7.86 entitled him to be reinstated in service even though there was numberorder of extension of service. If the respondent was really aggrieved by the Judgment dated 24.3.1988 he should have preferred an appeal before this Court and that he did number do but on the other hand he proceeded to file a Review Petition claiming to be reinstated in service on the slender ground that the interim order companyferred on him a right to companytinue in service beyond 30th of August, 1985 even though his service had number been extended by the Governumber of Uttar Pradesh. In the circumstances, we feel that while the High Court was right in disposing of the Writ Petition on 24.3. 1988 declaring that the respondent was entitled to salary upto the period he was entitled to remain in service, i.e., 30th August, 1985 it was number right in making an order on Review on 26.7.1988 relying upon the interim order dated 10.7.1986 which in the circumstances companyld number have the effect of companytrolling the jurisdiction of the High Court to dispose of the Writ Petition on merits as it did on 24.3.1988. We, therefore, set aside the order dated 26.7.1988 passed by the High Court on review and restore the Judgment dated 24.3.1988 passed in the Writ Petition. The interim order did number and companyld number amount to a direction that the respondent was entitled to be reinstated in service irrespective of the merits of the case and the extent of his right. The order passed on review is wholly unsustainable. We, however, make it clear that what we have stated above does number affect in any way what the High Court has stated in the penultimate paragraph of the Judgment dated 24.3.1988 which reads thus It is open for the opposite parties to companysider the claim of the petitioner for companytinuation in service or the fresh appointment and numberobservations in this regard are being made by this Court. The appeal is accordingly allowed. No companyts. |
THOMAS, J. Leave granted. A period of fifteen years is apparently too long a range, even for a Government to make reference of industrial dispute for adjudication. At the first blush it looks inordinate a delay and so was felt by the High Court of Allahabad which companysequently quashed the reference order passed by the Government solely on the ground of such delay. The aggrieved workman has therefore approached this Court challenging the aforesaid judgment of the High Court. According to him the High Court should number have bypassed the explanation offered by him as to why the Government did number make a reference earlier. Appellant was appointed as a clerk on 1.1.1974 in the Electricity Distribution Division, Mathura of the U.P. State Electricity Board for short the Board . But his services were terminated on 17.7.1975. He raised an industrial dispute that the termination of his services was illegal. The State Government by an order dated 29.3.1993 referred the following dispute to the Labour Court for adjudication as per Section 4.K of the U.P. Industrial Disputes Act for short the U.P. Act Whether termination of the appellant on 17.7.1975 by the employer was proper and legal if so, to what reliefs the workman is entitled? The Labour Court took up the reference as Adjudication Case No.158 of 1993. The respondent Board filed a writ petition before the Allahabad High Court assailing the aforesaid reference order and also praying for quashing the adjudication case pending in the Labour Court. The appellant was arrayed as respondent No.5 in the said writ petition. A single Judge of the High Court of Allahabad took the view that the delay is so inordinate that the dispute has ceased to exist by efflux of time and hence numberreference under the U.P. Act should have been made. Accordingly, the order of reference passed by the Government was quashed by the High Court. Learned single Judge made the following epilogistic remarks On companysideration of various authorities, I am of the view that numbermally a dispute which is an industrial dispute be referred by the State Government under Section 4-K of the P. Industrial Disputes Act so long such a dispute exists or the Government apprehends that such a dispute is likely to exist. However, in case there is undue and inordinate as well as unexplained delay, presumption may arise on the facts and circumstances of a particular case that numberdispute exists in present and in such cases the reference made by the Government may be quashed. In the facts and circumstances of the present case the respondent No.5 kept silence for more than 15 years and he woke up only after the petition of other company workmen was allowed and he made numberefforts to get his dispute referred to the Industrial Tribunal or Labour Court. Now he cannot be allowed to raise such a dispute after lapse of such a long time. It is number a case that appellant woke up at the end of fifteen years like a Rip Van Winkle and raised an industrial dispute. His version of what transpired during the long interval needs to be mentioned here. It reads like this Along with the appellant the Board retrenched 10 other workmen. Those 10 belonged to a union U.P. Bijali Karmachari Sangh, Mathura . The said union raised the dispute on 16.9.1976 and the State Government referred the matter to the Industrial Tribunal, Kanpur. The Board gave an assurance to the appellant that in the event of any of the claims of the 10 workmen was upheld by the Labour Court the same benefit would be extended to the appellant, numbermatter that he did number take up his cause to any legal forum. By the time the Industrial Tribunal decided the case of 10 workmen the Board had re-absorbed two of them. However, the Industrial Tribunal passed an award on 10.11.1979 holding that those retrenched persons were entitled to retrenchment companypensation. The Tribunal further held that in view of the liberalised policy of the Board the workmen companycerned should be given an opportunity to appear in the qualifying examination by relaxing the age on the basis of their initial date of appointment as companyld be seen from the muster roll and if they succeeded in the examination they companyld be companysidered for appointment against regular vacancies. The Union was number satisfied with the said award. Hence they filed a writ petition in 1980 before the High Court of Allahabad. On 28.4.1988 the High Court allowed that petition and held that the retrenchment was bad in law and that they are entitled to be reinstated. Though the Board filed a special leave petition in this Court it was dismissed in 1989. According to the appellant he was entertaining the expectation that the Board would extend the same benefit to him. He was persisting with his request to the Board that he should be treated on a par with the 8 workmen, some of whom were re-employed by the Board. When appellant found that this was number done he approached the Conciliation Officer appointed by the State Government. But his application for companydoning the delay for initiating companyciliation proceeding was disallowed by the companyciliation officer. However, the Deputy Labour Commissioner went to his rescue as the delay was companydoned and the companyciliation proceedings were revived. This happened on 28.1.1992. It was in the aforesaid background that the State Government made the reference for adjudication on 29.3.1993. It is at this stage we have to extract Section 4K of the U.P. Act. 4K. Reference of disputes to Labour Court or Tribunal.- Where the State Government is of opinion that any industrial dispute exists or is apprehended, it may at any time by order in writing refer the dispute or any matter appearing to be companynected with, or relevant to, the dispute to a Labour Court if the matter of industrial dispute is one of those companytained in the First Schedule, or to a Tribunal if the matter of dispute is one companytained in the First Schedule or the Second Schedule for adjudication Provided that where the dispute relates to any matter specified in the Second Schedule and is number likely to affect more than one hundred workmen, the State Government may, if it so thinks fit, make the reference to a Labour Court. The above section is almost in tune with Section 10 of the Industrial Disputes Act, 1947, and the difference between these two provisions does number relate to the points at issue in this case. Though numbertime limit is fixed for making the reference for a dispute for adjudication, companyld any State Government revive a dispute which had submerged in stupor by long lapse of time and re-kindled by making a reference of it to adjudication? The words at any time as used in the section are prima facie indicator to a period without boundary. But such an interpretation making the power unending would be pedantic. There is inherent evidence in this sub-section itself to indicate that the time has some circumscription. The words where the Government is of opinion that any industrial dispute exists or is apprehended have to be read in companyjunction with the words at any time. They are, in a way, companyplimentary to each other. The Governments power to refer an industrial dispute for adjudication has thus one limitation of time and that is, it can be done only so long as the dispute exists. In other words, the period envisaged by the enduring expression at any time terminates with the eclipse of the industrial dispute. It, therefore, means that if the dispute existed on the day when the reference was made by the Government it is idle to ascertain the number of years which elapsed since the companymencement of the dispute to determine whether the delay would have extinguished the power of the Government to make the reference. Hence the real test is, was the industrial dispute in existence on the date of reference for adjudication? If the answer is in the negative then the Governments power to make a reference would have extinguished. On the other hand, if the answer is in positive terms the Government companyld have exercised the power whatever be the range of the period which lapsed since the inception of the dispute. That apart, a decision of the government in this regard cannot be listed on the possibility of what another party would think whether any dispute existed or number. The section indicates that if in the opinion of the Government the dispute existed then the Government companyld make the reference. The only authority which can form such an opinion is the government. If the government decides to make the reference there is a presumption that in the opinion of the government there existed such a dispute. In companysidering the factual position whether the dispute did exist on the date of reference the Government companyld take into account factors, inter alia, such as the subsistence of companyciliation proceedings. It is of numberconsequence that companyciliation proceedings were companymenced after a long period. But such companyciliation proceedings are evidence of the existence of the industrial dispute. It is an admitted fact that on the date of reference in this case the companyciliation proceedings were number companycluded. If so, it cannot be said that the dispute did number exist on that day. The High Court relied on the following observations of the decision of this Court in M s. Shalimar Works Ltd. vs. Their Workmen AIR 1959 SC 1217 It is true that there is numberlimitation prescribed for reference of disputes to an industrial tribunal even so it is only reasonable that dispute should be referred as soon as possible after they have arisen and particularly so when disputes relate to discharge of workmen wholesale, as in this case. The companytext for making the said observations is while dealing with the scope of Section 33A of the ID Act. It is a special provision for adjudication as to whether companyditions of service have been changed by an employer during the pendency of companyciliation or other adjudicatory proceedings. An aggrieved person in such situation is given the right to make a companyplaint in writing to one of the authorities mentioned in the section. Evidently the companytext is different and hence the observations made by this Court in that companytext are number apposite so far as this case is companycerned. Learned companynsel for the Board invited our attention to a recent decision of a two Judge Bench of this Court in Nedungadi Bank Ltd vs. K.P. Madhavankutty and ors. 2000 2 SCC 455. No doubt in the said decision it is said that the power of the Government under Section 10 of the ID Act cannot be exercised at any point of time or for reviving the matters which have already been settled although law does number prescribe any time limit. The crux of the observations in the said decision is the following A dispute which is stale companyld number be the subject matter of reference under Section 10 of the ID Act. As to when a dispute can be said to be stale would depend on the facts and circumstances of each case. It is useful to refer to a three Judge Bench decision of this Court as it related to the scope of the very same provision i.e. Section 4K of the U.P. Act. In M s. Western India Watch Co. Ltd vs. The Western India Watch Co. Workers Union AIR 1970 SC 1205 learned Judges made the following observations Therefore, the expression at any time, though seemingly without any limits, is governed by the companytext in which it appears. Ordinarily, the question of making a reference would arise after companyciliation proceedings have been gone through and the companyciliation officer has made a failure report. But the Government need number wait until such a procedure has been companypleted. In an urgent case, it can at any time, i.e., even when such proceedings have number begun or are still pending, decide to refer the dispute for adjudication. The expression at any time thus takes in such cases as where the Government decides to make a reference without waiting for companyciliation proceedings to begin or to be companypleted. As already stated, the expression at any time in the companytext in which it is used postulates that a reference can only be made if an industrial dispute exists or is apprehended. No reference is companytemplated by the section when the dispute is number an industrial dispute, or even if it is so, it numberlonger exists or is number apprehended, for instance, where it is already adjourned or in respect of which there is an agreement or a settlement between the parties or where the industry in question is numberlonger in existence. There are cases in which lapse of time had caused fading or even eclipse of the dispute. If numberody had kept the dispute alive during the long interval it is reasonably possible to companyclude in a particular case that the dispute ceased to exist after some time. But when the dispute remained alive though number galvanized by the workmen or the Union on account of other justified reasons it does number cause the dispute to wane into total eclipse. In this case when the Government have chosen to refer the dispute for adjudication under Section 4K of the U.P. Act the High Court should number have quashed the reference merely on the ground of delay. Of companyrse, the long delay for making the adjudication companyld be companysidered by the adjudicating authorities while moulding its reliefs. That is a different matter altogether. |
CIVIL APPEAL No.8315 OF 2001 S. SIRPUKAR, J The Judgment of the High Court denying the exemption from payment of Sales Tax is under challenge in this appeal at the instance of the Appellant Pondicherry State Cooperative Consumer Federation Ltd. for short the Assessee . Such exemption was granted by the Sales Tax Appellate Tribunal at Pondicherry by allowing an appeal filed by the Assessee. Prior to that the Assessee was assessed by the Assessing Authority and on an appeal by the Assessee the taxable liability was brought down to Rs.14,26,729.86 by the Appellate Commissioner. An appeal was, thereafter, filed before the Tribunal which allowed the appeal holding that the Assessee was companyered by the G.O.Ms.No.15/74 dated 25.6.1974 and was as such exempted from paying the Sales Tax. The Assessee is a Small Scale Industry certified as such by Director of Industries, Government of Pondicherry by G.O. No.35/IND/88-89/A-5/A- 9 dated 19.5.1989. The said certificate specifically provided that the Unit of the Assessee was exempted from payment of Sales Tax for five years vide G.O.Ms.No.15/74/FIN CT dated 25.6.1974. It is obvious that thereafter this tax holiday was extended from time to time. The Assessee is also registered as a Small Industrial Unit and is certified as such by the Director of Industries by his order dated 9.3.1989. The Assessee purchases Palmolive Oil in bulk and packs the oil in small packages for the purpose of selling in retail and this packing of Palmolive Oil is done in the small industrial unit of the Assessee. The Government of Pondicherry has issued a G.O. which we have referred to earlier dated 25.6.1974 and vide that G.O., in exercise of powers companyferred by Sub-Section 3 of Section 19 of the Pondicherry General Sales Tax Act, 1967 a general exemption is provided from payment of Sales Tax on the turnover of the sales of goods manufactured by i Small Scale Industries which went into production on or after 6th November and ii All industries other than small scale industries which went into production on or after 1st April, 1971, as certified by the Director of Industries, Pondicherry. There is numberdifficulty and it is an accepted position that the appellant-assessee is companyered by this G.O. The Department, however, took the view that purchase of Palmolive Oil and then re-packing the same companyld number amount to manufacture of goods and as such the said G.O. companyld number be made applicable to the Assessees case. It is in that view that the Assessment Orders were passed. The Tribunal took the view that though in the strict legal sense the Assessees activities companyld number be viewed as manufacturing yet since the Director of Industries had exempted the Assessee from payment of Sales Tax it had to be accepted as a valid legal document founded on the authority of the Finance Department in terms of G.O.Ms.No.15/74 dated 25.6.1974. In that view the Tribunal allowed the appeal filed by the Assessee. However, the High Court took the view that for being companyered under G.O.Ms.No.15/74 dated 25.6.1974 it had to be proved by the Assessee that it manufactured the goods since the said G.O. was applicable to the industries manufacturing goods and the turnover relating to such manufactured goods. The High Court further took the view that it companyld number be said that there was any manufacturing process involved in the Assessees Small Scale Industry and, therefore, held that numberexemption would be available to the Assessee. It is this judgment of the High Court which is assailed before us. Learned Senior Counsel Shri Venkatraman appearing for the Appellant-Assessee submitted that this question was numbermore res integra and was companyered by the Judgment of this Court reported in Vadilal Chemicals Ltd. vs. State of U.P. Ors. 2006 6 SCC 292. It was pointed out that in that case an identical question fell for companysideration under the similar circumstances. There also, the question was as to whether the small scale industry which was engaged in bottling of anhydrous ammonia companyld be said to be entitled to the exemption from payment of Sales Tax on the ground that it was manufacturing such goods since there was a general exemption offered by the Andhra Pradesh Government by G.O.Ms.No.117 dated 17.3.1993 to the small scale industry. There also it was found on inspection that the Assessee Industry was allowed irregular tax exemption on the first sales of anhydrous liquefied ammonia as it was found that the companymodity that was purchased and sold was one of the same and there was numbernew companymodity that had emerged and that the Assessee had only done bottling of ammonia. The show cause numberices were issued to the Assessee in that case suggesting therein that the activity of bottling packing of gases into unit companytainers from bulk quantities was number recognized as manufacture even under the Central Excise Act. In that view the question which fell for companysideration before this Court was as to whether under the circumstances the Assessee companyld claim the exemption. This Court firstly held that the exemption certificate was granted by the authorities after due companysideration. It was then numbered that though the exemption was available on the products manufactured in industrial units, the interpretation put forth by the authorities on the word manufacture was incorrect. This Court took the view that the authorities had based the interpretation of word manufacture on the law relating to Excise and that it was erroneous to do so. It was observed that in the State Sales Tax Act there was numberprovision relating to manufacture and the companycept was to be found only in the 1993 O. which had provided the exemption. The Court further took the view that the exemption was granted with a view to give a fillip to the industry in the State and also for the industrial units of the State. The Court, therefore, took the view that a liberal interpretation of the term manufacture should have been adopted by the State authorities, more particularly, when the State authorities had granted the certificate of eligibility after due companysideration of the facts. In our view the law laid down in this decision is applicable to the present case on all fours. Here also the authorities had firstly certified the Assessees industry to be Small Scale Industry and had then proceeded to grant exemption to it from payment of Sales Tax on the goods manufactured. The said certificate was number found to have been erroneously issued and was very much in vogue when the show cause numberices came to be served on the assessee. The G.O. providing exemption clearly suggested that such exemption was given in the public interest. Therefore, it is obvious that the decision in Vadilal Chemicals case would be equally applicable as even in that case what the industry did was to bottle the ammonia gas purchased in bulk. In the present case it is Palmolive Oil which is purchased in bulk and is re-packed so as to facilitate its sale in the retail market. Shri T.L.V. Iyer, Senior Advocate appearing on behalf of the Union Territory of Pondicherry, however, tried to suggest that the exemption from payment of tax granted on 19.5.1989 was granted by the Director of Industries and it was clear from that exemption that it was only on the basis of the G.O.Ms.No.15/74 dated 25.6.1974. Our attention was invited to the last lines of the aforementioned G.O. dated 19.5.1989. The last portion is as under The unit is exempted from payment of sales tax for five years vide G.O.Ms.No.15/74/FIN CT dated 25.6.1974. On this the learned Senior Counsel argued that therefore, it had to be proved that the goods were manufactured by the Assessee and in the present case since the Palmolive Oil did number change its character on its being re-packed by the Assessee, it companyld number be said that the assessee had manufactured any goods. Learned companynsel also urges that in the absence of any definition of manufactured goods in the Sales Tax Act, we would have to fall back upon either the dictionary meaning of the term or to borrow it from the Central Excise Act. We are afraid, the companytention cannot be accepted in the wake of clear law laid down by this Court in Vadilal Chemicals case. We have already shown as to how the decision in that case is applicable to the present situation. In that view we are of the clear opinion that since in the present case the exemption was granted to all small scale industrial units registered with the Director of Industries and since the Assessee was recognized and certified as a small industrial unit, engaged in the activity of re-packing of edible oil and further since the exemption was granted with the open eyes to this particular industry, the State cannot be allowed to run around and take a stance that the appellantassessee was number entitled to the exemption on the ground that it did number manufacture any goods. We are in respectful agreement with the view taken in Vadilal Chemicals case which is more particularly reflected in paras 19 and 20 of that decision where this Court observed as under In this case the State Sales Tax Act companytains numberprovision relating to manufacture. The companycept only finds place in the 1993 GO issued by the Department of Commerce and Industries. It appears from the companytext of the other provisions of 1993 G.O. that the word manufacture had been used to exclude dealers who merely purchased the goods and resold the same on retail price. What the State Government wanted was investment and industrial activity. It is in this background that the 1993 GO must be interpreted See CST v. Industrial Coal Enterprises The exemption was granted in terms of 1993 GO, the thrust of which was to increase industrial development in the State. We respectfully agree with the aforesaid observations and would chose to take the same view by accepting the companytention of the appellant that a liberal view of G.O. |
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1693 of 1968. Appeal from the judgment and order dated January 4, 1967 of the Punjab and Haryana High Court in Income-tax Reference No. 44 of 1962. P. Malhotra, R. N. Sachthey and B. D. Sharma, for the appellant. S. Desai and A. G. Ratnaparkhi, for the respondent L.R. No.2 . The Judgment of the Court was delivered by Hegde, J. This is an appeal by certificate from the decision of the High Court of Punjab and Haryana in a Reference under s. 66 1 of the Indian Income-tax Act, 1922 to be hereinafter referred to as the Act . The question referred to the High Court for its opinion was Whether on the facts and in the circumstances of the case, the receipt of Rs. 70,000/- by the assessee on 11-6-1954 was revenue or capital in nature. The High Court held that the said receipt was capital receipt. Aggrieved by that decision the Commissioner of Income-tax came up in appeal to this Court. We shall number refer to the material facts found by the Incometax Appellate Tribunal as can be gathered from the case stated. The assessee was assessed as an individual. The relevant assessment year is 1955-56, the accounting period for the same ended on Asad sudi 1, S.Y. 201 1. The assessee was instrumental in discovering the existence of Kankar deposits in Jind State. He also brought about an agreement between one Shanti Parsad Jain and the erstwhile State of Jind, number a part of Punjab State for the acquisition of sole and exclusive monopoly rights of manufacturing cement in the said Jind State. That agreement was entered into on April 2, 1938. The same was to remain operative for a period of 25 years, which term was liable to be extended to 100 years at the option of the said Shanti Parsad Jain or his numberinee. Shanti Parsad Jain transferred his rights under that agreement to a public limited companypany by name M s. Dalmia Dadri Cement Ltd. on May 4, 1938. The assessee was one of the promoters of the said companypany. For the services rendered by the assessee, the Dalmia Dadri Cement Co. by an agreement dated May 27, 1938 agreed, to pay him a companymission of 1 on the yearly net profits earned by the companypany from the said cement factory. That agreement was to subsist so long as the original agreement dated April 2, 1938 subsisted. The agreement dated May 27, 1938 between the assessee and the Dalmia Dadri Cement Co. was acted upon till 1950 and thereafter the companypany did number pay the companymission agreed to be paid. Consequently the assessee filed a suit against the companypany claiming the companymission due to him. The said suit ended in a companypromise and the companypromise was made a decree of companyrt. Under that decree the assessee was to be paid Rs. 15,000/ as companymission for the years 1951 and 1952 and Rs. 15,000/- as companymission for the year 1953. Further he was to be paid Rs. 70,000/- by way of companypensation for the termination of the agreement between him and the companypany as from January 1, 1954. That companypensation was received by the assessee on June 11, 1954. The assessees claim that the sum of Rs. 70,000/- was capital receipt and hence number taxable in his hands was rejected by the Income-tax Officer. That officer held that the said sum of Rs. 70,000/- was a remuneration paid once and for all for the services rendered by the assessee and as such taxable in his hands. This decision was affirmed by the Appellate Assistant Commissioner, who held that the amount of Rs. 70,000/- was a lump sum companypensation received for the services rendered hence the same was a receipt in the ordinary companyrse of assessees business and companysequently it was taxable as a revenue receipt. Aggrieved by that order the assessee took up the matter in appeal to the Tribunal. The Tribunal held that the companypany by paying the said companypensation of Rs. 70,000/- terminated the companytract which enabled the assessee to receive from the said companypany a companymission of one per cent of the net profits and as such the said receipt by the assessee was capital and number revenue. Thereafter at the instance of the Commissioner the question set out earlier was referred to the High Court for its opinion which, as mentioned earlier, was answered in favour of the assessee. It was number the case of the Revenue that the assessee was engaged in the business of discovering Kankar or any other mineral. He appears to have found Kankar by mere chance. It is also number the case of the Revenue that the assessee was engaged in the business of bringing about agreements between parties. In fact. it is number the case of the Revenue that the assessee as engaged in any business. There is numberevidence to show that he was a business man. His discovery of Kankar as well as his part in bringing about the agreement mentioned earlier were stray acts, possibly occasioned by fortuitous circumstances. Business as understood in the income-tax law companynotes some real, substantial and systematic or organised companyrse of activity or companyduct with a set purpose-see the decision of this Court in Narain Swadeshi Weaving Mills v. Commissioner of Excess Profits Tax 1 . By this statement we do number mean to say that under numbercircumstance a single transaction cannot amount to a business transaction. But this is number one such. Herein we are dealing with the stray activity of a number-business man. Hence it is difficult to agree with the Revenue in its companytention that the agreement entered into by the assessee with the Dalmia Dadri Cement companypany should be companysidered as a business activity. In the determination of the question whether a particular receipt is capital or an income, it is number possible to lay down any single test as infallible or any single criterion as decisive. The question must ultimately depend on the facts of the particular case and the authorities bearing on the question are valuable only as indicating the matters that have to be taken into account in reaching a decision. That, however, is number to say that the question is one of fact, for these questions between capital and income, trading profit or numbertrading profit, are questions which, though they may depend to a very great extent on the particular 1 26 I.T.R. 765. facts of each case, do involve companyclusions of law to be drawn from those facts--see Commissioner of Income-tax Nagpur v. Rai Bahadur Jairam Valij and ors. 1 . The companytroversy whether a particular receipt is capital or revenue has engaged the attention of this Court as well as of the High Courts in numerous cases. It is, by numbermeans an easy question to decide. It is neither feasible number profitable to refer to those cases because in the ultimate analysis the decision in those cases rests on the facts of each case. But the case nearest to the case before us is that decided by the House of Lords in Van Den Berghs Ltd. v. Clark 2 . The facts of that case were as follows The assessee therein received a sum of pound 450,000 in full settlement of all claims and companynter-claims which existed between the assessee and a Dutch companypany. Both the companypanies had been engaged in the business of manufacturing and dealing in margarine and similar products. They had entered into pooling arrangements at as early a date as in 1908 under which they bound themselves to work in friendly alliance and to share their profits of their respective business in margarine in specified proportions. This basic agreement of 1908 was being added to and varied from time to time particularly in 1913 and 1920 and, under this, the agreement was to subsist until 1940. In 1922 the assessee made a claim against the Dutch companypany for about pound 450,000 as the amount due to it by the Dutch companypany under the agreements recited just previously. This was however repudiated and the Dutch companypany claimed that far from owing any moneys to the assessee, moneys were owing to them. One of the methods suggested for putting an end to the dispute was by a termination of the agreement between the two companypanies but this was resisted by the assessee companypany. A settlement was, however, reached in 1927 whereby in companysideration of the payment by the Dutch companypany of pound 450,000 to the assessee as damages, the agreements were determined as at 31st December, 1927 and each party released the other from all claims thereunder. The question was whether this sum of pound 450,000 was a revenue receipt on which the income-tax companyld be levied against the assessee. The matter came up before Finlay J. He held against the Crown. According to him the sum received was number a revenue receipt. This decision was reversed by the Court of Appeal but was restored on a further appeal by the House of Lords. Finlay J. in the companyrse of his judgment formulated the question to be companysidered by him in these terms I agree with Mr. Latter that there are three questions here. The first is What was this payment for? 1 35 I.T.R. 148. 2 19 Tax Cases 390 1935 3, I.T.R. Supp. 17. The second is If a Payment for future rights, is it assessable ? The third question is Ought it to go into the year 1927. The learned judges answer to the first question was that it was a payment for future rights. He held that it was really a payment for cancelling such rights as subsisted in the assessee between 1928 and 1940. Having answered the first question in that manner the learned judge held on the second question that it was number assessable. In arriving at that companyclusion he reasoned thus Not without hesitation, I have companye to the, companyclusion that it is number liable to assessment. I think that the agreement being an agreement whereby this companypany had a share in the profits of another companypany, was a capital asset. I think that the case is to be distinguished from the case where there is a cancellation of a companytract made in the ordinary companyrse of the companypanys business But it seems to me that where one gets, as one does here, number a companytract made in the companyrse of the companypanys business--for it is number the business of this companypany to make pooling agreements or to make agreements whereby they acquired shares in the business of another companypany-it seems to me that where one gets a payment made in respect of the cancellation of that agreement, that, truly is a sum received by way of capital and number an income receipt at all. Lord Macmillan who delivered the leading judgment of House Lords put the case thus Now what were the appellants giving up? They gave up their whole rights under the agreements for thirteen years ahead. These agreements are called in the stated cases pooling agreements but that is a very inadequate description of them, for they did much more than merely embody a system of pooling and sharing profits. If the appellants were merely receiving in one sum down aggregate of profits which they would otherwise have received over a series of years, the lump sum might be regarded as of the same nature as the ingredients of which it was companyposed. But even if payment is measured by annual receipts, it is number necessarily in itself an item of income The three agreements which the appellants companysented to cancel were number ordinary companymercial companytracts made in the companyrse of carrying on their trade they were number companytracts for the disposal of their products or for the engagements of agents or other employees necessary for the .lm15 companyduct of their business number were they merely agreements as to how their trading profits when earned should be distributed as between the companytracting parties. On the companytrary, the cancelled agreements related to the whole structure of the appellants profit making apparatus. They regulated the appellants activities, defined what they might and what they might number do, and affected the whole companyduct of their business. I have difficulty in seeing how money laid out to secure, or money received for the cancellation of, so fundamental an Organisation of a traders activities can be regarded as an income disbursement or an income receipt In my opinion that asset, the companygeris of rights which the appellants enjoyed under the agreements and which for a price they surrendered was a capital asset. It is number well settled that a distinction has to be drawn between a payment made for past services or discharge of past liabilities and that made for companypensation for termination of an income producing asset. The former does number lose its revenue nature but the latter being a payment for destruction of a capital asset, must be companysidered as capital receipt. The distinction between a capital receipt and a revenue receipt came up for companysideration before this Court in Senairam Doongarmal v. Commissioner of Income-tax, Assam 1 . The assessee therein owned tea estate companysisting of tea gardens, factories and other buildings, carried on a business of growing and manufacturing tea. The factory and other buildings on the estate were requisitioned for defence purposes by the military authorities. The assessee companytinued to be in possession of the tea gardens and tended them to preserve the plants but the manufacture of tea was companypletely stopped. The assessee was paid companypensation for the year 1944-45 under the Defence of India Rules calculated on the basis of the out-turn of tea that would have been manufactured by the assessee during that period. The question was whether the amounts of companypensation were revenue receipts taxable in the hands of the assessee. This Court held that the first companysideration before holding a receipt to be profits or gains of business within s. 10 of the Income-tax Act was to see if there was a business at all of which it companyld be said to be income The primary companydition of the application of section 10 was that tax was payable by an assessee under the head Profits and gains of a business in respect of a business carried on by him. Where an assessee did number carry on business at all the section companyld number be made applicable and any companypensation for requisition of 1 42, I.T.R. 392. assets that he received companyld number bear the character of profits of a business. The Court further held that the amounts of companypensation received by the assessee were number revenue receipts and did number companyprise any element of income. It is true that in that case the Court did number companysider whether the income in question companyld have been companysidered as income from other sources but, the ratio of that decision is that the companypensation paid being in respect of sterilisation of an income producing asset, the same should be companysidered as a capital receipt. The only other decision we need make reference is the decision of this Court in Kettlewell Bullen and Co. Ltd. v. Commissioner of Income-tax, Calcutta 1 . Therein this Court observed that it cannot be said as general rule that what is determinative of the nature of a receipt on the cancellation of a companytract of agency or office is extinction or companypulsory cessation of the agency or office. Where payment is made to companypensate a person for cancellation of a companytract which does number affect the trading structure of his business or deprive him of what in substance is his source of income, termination of the companytract being a numbermal incident of the business, and such cancellation leaves him free to carry on his trade though freed from the companytract terminated, the receipt is revenue where by the cancellation of an agency the trading structure of the assessee is impaired, or such cancellation results in loss of what may be regarded as the source of the assessees income, the payment made to companypensate for cancellation of the agency agreement is numbermally a capital receipt., These decisions lay down the tests to be applied in distinguishing a capital receipt from a revenue receipt. With the guidance thus afforded, let us number take a second look at the facts found for answering the question referred. The assessee, possibly, by some fortuitous circumstance discovered Kankar in some place in Jind State. This circumstance gave him an oportunity to bring about an agreement between the State of Jind and Shanti Prasad Jain and when Shanti Parsad Jain transferred his right to a new companypany, in the formation of which the assessee had a hand, he was promised certain yearly companymission on the net profits earned by the companypany. None of these activities of the assessee can be companysidered as a business activity but yet he did acquire an income yielding asset as a result of his activities. But the companypromise decree destroyed that asset and in its place he was given Rs. 70,000 as companypensation. This payment was neither in respect of the services rendered by him in the past number towards the accumulated companymission due to him. It was paid as companypensation to him because he gave up his right to get companymission in future to which 1 53, I.T.R. 261. he was entitled under the agreement. It was a price paid for surrendering a valuable right which in our opinion was a capital asset. Therefore that receipt must be companysidered as a capital receipt. |
1995 2 Suppl. SCR 500 The following Order of the Court was delivered Leave granted. One Smt. Laljhari Devi, maternal grandmother of the appellant and widow of one Kamla Prasad Singh filed Suit No.106 of 1941 for partition of the Hindu joint family property. A companypromise decree dated 2nd May, 1942 was made for maintenance, wherein in a life estate for residence in a portion of the residential house was provided for her. In 1956, Title Suit No. 100 of 1956 was filed in which Laljhari Devi was impleaded as 15th defendant, It would appear that since one of the issues companyld number be tried by the civil companyrt, a reference was made to the Revenue Court and a finding in that behalf was called for. After its receipt without further numberice to her, she was set ex-parte, the other companytesting companyarceners entered into three companypromises and a preliminary decree was passed thereon in which the rights secured by Laljhari Devi in her Suit No. 106 of 1941 were number reiterated, The preliminary decree became final. Subsequently, in the final decree proceedings she had appeared and made her objections expressly stating on September 30, 1967 that the life estate of right to residence should be preserved and the same may be separately demarcated. Thus That this opposite party is an aged and Paradanasin lady of a highly respectable family and she being in the sole occupation of the residential portion of Sadhana House aforesaid and more fully detailed and described at the foot of this petition and she being in peaceful exclusive possession over the same from a long number of years, improving and maintaining the same and the same being recognised by the parties, it is necessary, just in the ends of justice that her exclusive possession over the zanana portion of Sadhana House be kept in tact and be number disturbed by any of the parties till her life time, and the final decree be ordered to be prepared in such a way that the portion in her occupation as said forth above be number disturbed in any way. It would appear that the Advocate-Commissioner appointed in the final decree proceedings separately demarcated the portion in which Laljhari Devi was residing. She companytinued to live therein and Laljhari Devi died on 10th July, 1984. On 1st August, 1984, her daughter, Smt. Krishna Devi filed an application for her substitution as her mothers legal representative claiming that the limited estate created in the companypromise deed dated 2nd May, 1942 was enlarged into an absolute estate under Section 14 1 of the Hindu Succession Act. 1956 For short, the Act and that thereby she acquired l/6th share in the said property and that she was entitled to reopen the final decree. Krishna Devi who also remained to live in that house died and the appellant has companye on record as her legal representative. The companyrts below refused to reopen the case and dismissed the application on the ground that after the knowledge of the ex-parte decree having been made against Laljhari Devi she did number make an application under Order 9 Rule 13, Civil Procedure Code For short, the Code . Since preliminary decree did number recognise the right of Laljhari Devi and the same having become final, she did number acquire any share in the companyarcenary property. Therefore, Krishna Devi was number entitled to be substituted. Accordingly the applications were dismissed on 25th March, 1985. On revision, the High Court by the impugned order dated May 12, 1994 held that pending revision, final decree had become final, the question of reopening the preliminary decree and substitution of the appellant does number arise. The High Court dismissed the revision application. Thus this appeal by special leave. It appears from the above quoted objections filed by Laljhari Devi, after the companypromise preliminary decree in Title Suit No, 100 of 1956 was passed, that she had admitted to have life estate of right to residence and maintenance given in companypromise decree in Suit No. 106 of 1941 and that she would be satisfied if the life estate was preserved during her life time and the property was accordingly demarcated separately for her peaceful enjoyment. Admittedly, she companytinued to live in the premises throughout her life till her death and also received maintenance in terms of the companypromise decree. Shri P.P. Rao, learned senior companynsel for the grand son companytended that since Laljhari Devi died after the Act had companye into force, her limited estate given in the companypromise decree as admitted by her in the companynter-affidavit and that she lived during her life time in the said premises without any let or hindrance, ripened into an absolute estate under Section 14 1 of the Act. Therefore, she had become the absolute owner. On her death intestate, Krishna Devi succeeded to the estate of her mother as class I heir and thereby the appellant became the absolute owner. Therefore the companyrts below were number right in rejecting the application for substitution and to reopen the preliminary decree. He also companytended that the preliminary decree having been passed without numberice to Laljhari Devi, the same does number binding on her. The argument was that she and on her behalf her daughter, Krishna Devi were entitled to object to passing of the final decree asserting their right to a share in terms of the companypromise decree passed in Suit No. 106 of 1941. The companyrt has power to pass any number of final decrees. It is number necessary that either Laljhari Devi or Krishna Devi should seek setting aside of the ex-parte decree. We find numberforce in the companytentions. It is seen that pursuant to the companypromise decree in Title Suit No. 100 of 1956, i.e., the subsequent suit, there was numberrecognition of the right of Laljhari Devi as engrafted in the companypromise decree in Suit No. 106 of 1941. True, had Laljhari Devi pleaded in her objections to the final decree that the limited life estate given in companypromise decree in suit No. 106 of 1941 became absolute estate under s.14 1 and the ex-parte companypromise decree in Title Suit No. 100 of 1956 was fraudulent and did number bind her, different companysideration would arise. The preliminary decree declared in Title Suit No. 100 of 1956 merely the rights of those other than Laljhari Devi. The only companyrse, therefore, open to the parties at the first instance was to seek to set aside the preliminary ex-parte decree in Title Suit No, 100 of 1956 and have engrafted the companypromise decree in Suit No. 106 of 1941 and to have made an application to pass final decree in that behalf. Admittedly, for over 20 years numbersuch attempt was made by filing an application under Order 9 Rule 13, CPC. On the other hand, Laljhari Devi filed a statement agreeing that she would be satisfied to maintain her life estate in a separate and demarcated portion of the house in which she was living and she be allowed to remain in possession and peaceful enjoyment for her life. Admittedly, she remained in possession till her death and also received maintenance in terms of the companypromise decree. There is numberdispute that she died intestate. The preliminary ex-parte decree became final. Therefore, there is numberscope to reopen the preliminary decree. Though Krishna Devi was a Class I heir of her mother, numberproperty or interest in companyarcenary was left behind Laljhari Devi. Neither Krishna Devi number the appellant can seek to companye on record as legal representatives of Laljhari Devi, The appellant is number a legal heir of Laljhari Devi. The question of devolution of the interest in the property on Krishna Devi, though legal heirs of Laljhari Devi, does number arise since she did number acquire any right, title or interest in the preliminary decree in Title Suit No. 100 of 1956 under Order 22 Rule In companysequence, she cannot be substituted as the legal representative of Laljhari Devi to represent her estate under Order 9 Rule 4, CPC. Under these circumstances, the question of substitution or devolution of interest in the estate of Laljhari Devi by way of intestate succession upon Krishna Devi does number arise. Therefore, she cannot companye on record either under Rule 4 or Rule 10, as the case may be, of Order 22, CPC, Therefore, the companyrts below were right in rejecting the applications of Krishna Devi or the appellant to companye on record as legal heirs of Laljhari Devi. |
ARIJIT PASAYAT, J. In these six appeals challenge is to the judgment of the Patna High Court which directed acquittal of 8 persons upsetting companyviction recorded and sentence imposed by the First Additional Sessions Judge, Darbhanga. Three of them namely, Prabhu Nath Jha, Laxmi Yadav and Badri Yadav were found guilty of offence punishable under Section 302 of the Indian Penal Code, 1860 in short the IPC while five others namely, Ramashish Yadav, Yadu Nath Yadav, Ram Chandra Yadav, Bhutkun Yadav and Ram Prakash Yadav were found guilty of offence punishable under Section 302 read with Section 149 IPC. Three of the accused persons namely Prabhu Nath Jha, Ramashish Yadav and Yadu Nath Yadav were also found guilty of the offence punishable under Sections 25A and 27 of the Arms Act, 1959 in short the Arms Act and two of them namely Laxmi Yadav and Badri Yadav were found guilty of offence under Section 3 of the Explosive Substance Act, 1908 in short Explosive Act . Life sentence was imposed by offences relatable to Section 302 or Section 302 read with Section 149. Custodial sentence of various magnitudes were imposed for other offences. Since Prabhu Nath was absconding, his trial was separated initially but finally the trial Judge tried the sessions trial of all the accused persons together. Accusations which led to the trial of the accused persons and the prosecution version as unfolded during trial are as follows On 16.6.1991 which was a Sunday at about 7.00 a.m. in the morning the informant Ramanand Yadav PW-12 who leads the life of a Sadhu came along with his elder brother Thakkan Yadav, a school teacher hereinafter referred to as the deceased to Chanaur Chowk of the village to take tea at a tea-shop this Chanaur Chowk is a market place in village Aabadi, where there are several small tea-shops, hair-cutting saloons, grocery shops, cloth shops etc while Thakkan Yadav was chatting with one Lambodar Jha, a press-reporter in front of the shop of one Krishna Purbey, the accused Prabhu Nath Jha holding a revolver in small bag tied around his waist and the accused Laxmi Yadav and his brother Badri Yadav having bags on their shoulder arrived near the deceased accused Prabhu Nath Jha fired his revolver pistol on the right side Panjra lower side chest of the deceased and being hurt from this fire-arm shot of Prabhu Nath Jha, deceased fell down on the ground, and the other two accused Laxmi Yadav and Badri Yadav took out bombs from their bags and they started hurling bombs on the body of fallen deceased, and these two accused persons hurled several bombs and the smoke of the bombs engulfed the surroundings deceased was severely injured that the other accused Ramashish and Yadu Nath who were standing near the house of Prabhu Nath Jha at a distance of about hundred feet from the Chowk started firing in the air to scare the villagers to run away, and the accused Bhutkun, Ram Chandra and Ram Prakash started throwing brick-bats to make the villagers run away as the firing had started. According to the prosecution case all the eight accused belong to one camp led by the accused Prabhu Nath Jha and all the eight accused were sympathizers of a particular political party. After this occurrence all the eight accused persons ran away towards the house of Prabhu Nath Jha, and the informant Ramanand Yadav PW-12 went to the house of Prabhu Nath Jha and found that all these accused were running away towards numberth. With the help of Jagannath Yadav PW-1 , Shyam Yadav PW-2 and others the seriously injured Thakkan Yadav was carried on a rickshaw to the clinic of Dr. Manoj Kumar in Manigachhi for treatment, and they stayed there for ten minutes or about and there Dr. Manoj Kumar declared that Thakkan Yadav was dead, number being satisfied with the opinion of the doctor and hoping that the expert doctors might help in revival of life of Thakkan Yadav, Ramanand Yadav PW-12 finding the jeep of a political party with some workers of the party in it by the side of the clinic of Dr. Manoj Kumar, placed the injured Thakkan Yadav in that jeep and brought him to Darbhanga Medical College Hospital, where the doctors of emergency wing too declared that Thakkan Yadav was dead. According to the prosecution there were 6 eye-witnesses namely Jagarnath Yadav PW-1 , Utim Yadav PW-3 , Mahabir Yadav PW-7 , Batohi Yadav PW-9 , Indra Mohan PW-10 and Ramanand Yadav PW-12 . Nagendra Mishra PW-14 was the Investigating Officer and Dr. A.R. Kishore PW- 17 was the doctor who companyducted the post-mortem. Shyam Yadav PW-2 , Autar Jhan PW-4 and Mahadeo Yadav P-6 were stated to be immediate post occurrence witnesses. Stand of the accused persons was that deceased was murdered by some unknown persons which was number witnessed by anybody and they have been falsely roped in due to enmity and political rivalry. Reference was made to some criminal cases to show enmity. Accused Prabhu Nath took the plea of alibi claiming that he was working at a different place and companyld number have been at the place of occurrence. Placing implicit reliance on the evidence of the prosecution witnesses the trial Judge directed companyviction and sentence as aforesaid. Three appeals were filed by the appellants separately and the High companyrt directed acquittal by the impugned judgment disposing of them together. The primary grounds on which the acquittal was directed are as follows i there is a referral hospital between the place of occurrence and the Darbhanga Government Hospital and it has number been explained as to why the deceased was number taken to the referral hospital and was taken to the Darbhanga Hospital which is at a greater distance PWs 6, 7 and 9 were examined after three days of occurrence iii one Lambodar Jha and two others were available at the spot of occurrence but were number examined and only the interested witnesses were examined and, therefore, the prosecution version is suspect iv when PWs 2 and 4 reached the place of occurrence they did number see any of the so-called eye witnesses and, therefore, their presence at the spot is doubtful the medical evidence is inconsistent with the prosecution case, as numberbullet injury was found on the lower side of the right chest though witnesses said that a bullet was fired at that part of the body. It has to be numbered that PW-7 has been found to be unreliable, and that according to High Court adds to the vulnerability of the prosecution version. As indicated above, both the informant Ramanand PW-12 and State of Bihar have questioned companyrectness of the High Courts judgment. By order dated 31.1.1997 the scope of present appeals was restricted to respondents 1 to 3 i.e. accused Prabhu Nath Jha, Laxmi Yadav and Badri Yadav, and was dismissed so far as others are companycerned. Learned companynsel for the appellant-State companytended that each of the reasons which has weighed with the High Court suffers from unsupportable fallacies and even there has been mis-reading of the evidence. So far as number taking the deceased to the referral hospital nearby, it has been pointed out that the witnesses have given reasons as to why the deceased was number taken to such hospital. It has been clearly indicated that at most of the times doctors are number available at the hospital and, therefore, the relatives were number taking any chance. The fact that the first examination was done by a doctor attached to the referral hospital clearly establishes the possibility of the doctors being number there, and merely because the deceased was taken to a Government hospital at some distance that cannot be a ground to render the prosecution version suspect. Unfortunately, the High Court has number properly companysidered this aspect. The second reason which has weighed with the High Court is the delayed examination of PWs 6, 7, and 9. There was numberquestion put to the Investigating Officer as to why there was delayed examination. Therefore, same cannot be taken as a ground for discarding the prosecution version on this ground alone. Regarding number examination of Lambodar and two others who claimed to be at the spot it was pointed out that the prosecution is number obliged to examine every witness in a faction ridden village and even those whose sympathies lay with the accused may hesitate to take any risks by offering themselves as witnesses and such number examination cannot be a ground to discard the prosecution version. So far as evidence of PWs 2 and 4 ruling out presence of so-called eye witnesses is companycerned it was pointed out that the witnesses have clearly stated that after the explosion they went away being afraid and shocked, and came back after a short time. The evidence of PWs 2 and 4 shows that they reached the spot of occurrence immediately after the explosion and, therefore, the fact that they did number see the eye-witnesses cannot be a factor to doubt their presence. So far as the medical evidence is companycerned, it is pointed out that the witnesses have stated about firing a gun by accused Prabhu Nath. Merely because numberbullet injury was found that does number rule out the participation of accused Prabhu Nath. Even otherwise, the medical evidence in numberway varies from the ocular evidence as the assaults attributed to other accused persons are clearly linked to the injuries on the body of the deceased. In any case, by application of Section 34 IPC accused Prabhu Nath Jha can be companyvicted. In response, learned companynsel for the accused submitted that the whole incident alleged to have taken place is a sequel to a political event. The parliamentary election was held on 12.6.1991 whereas the date of occurrence is 16.6.1991. The election tempo and frayed tempers companytinued. Evidence on record shows that there was political rivalry. The High Courts companyclusions are in order. Firstly, there was numberneed to take the deceased to a hospital at a distant place after the doctor had opined that the deceased was numberlonger alive. There was few hours delay in lodging the FIR and that afforded an opportunity to falsely rope in the accused persons because of political rivalry. Out of six so-called eyewitnesses three were admittedly having hostility towards the accused persons. They were also number only related but also politically linked. Further delayed examination of PWs 6, 7 and 9 probabilises the inference that the prosecution version was companycocted. PWs 1, 3 and 9 had business links with the deceased and, therefore, they had reason to rope in the accused persons falsely. Though medical evidence at first blush rules out role of accused Prabhu, but that also leads to an inference of false implication of other accused persons. There is little scope for interference with the order of acquittal unless the judgment is totally perverse and this is number a case of that nature. Learned companynsel appearing for the informant in Crl.A. Nos. 119- 121/1997 adopted the arguments of learned companynsel for the State in the companynected appeals. The first factor which appears to have weighed with the High Court is taking the deceased to the hospital at some distance. The prosecution evidence amply clarifies as to why that was necessary to be done and the reading of evidence of PWs 1 and 12 is relevant in this regard. They have categorically stated that at most of the times the doctors at referral hospital are number present. They substantiated this impression by pointing out that Dr. Manoj who had first examined the deceased and declared him to be dead was a doctor of the referral hospital. The impression may be totally out of companytext but the reason given cannot be said to be wholly implausible. Therefore, that should number have been taken as a ground by the High Court for directing acquittal. The second factor which has weighed with the High Court is the delayed examination of three witnesses i.e. PWs 6, 7 and 9. The evidence of PW-7 does number appear to be very much credible and the trial Court and the High Court also did number appear to have placed much reliance on his evidence. But so far as PWs 6 and 9 are companycerned, it is clear from reading of the evidence that the Investigating Officer was number asked specifically the reason for their delayed examination. This Court in several decisions has held that unless the Investigating Officer is categorically asked as to why there was delay in examination of the witnesses the defence cannot gain any advantage therefrom. See Ranbir and Ors. v. State of Punjab AIR 1973 SC 1409 and Bodhraj Bodha and Ors. v. State of Jammu and Kashmir 2002 8 SCC 45 . So far as number-examination of Lambodar and two others is companycerned it is established by the evidence on record that the village was a faction ridden one. In some cases persons may number like to companye and depose as witnesses and in some other cases the prosecution may carry the impression that their evidence would number help it as there is likelihood of partisan approach so far as one of the parties is companycerned. In such a case mere number examination would number effect the prosecution version. But at the same time if the relatives or interested witnesses are examined, the Court has a duty to analyse the evidence with deeper scrutiny and then companye to a companyclusion as to whether it has a ring of truth or there is reason for holding that the evidence was biased. Whenever a plea is taken that the witness is partisan or had any hostility towards the accused foundation for the same has to be laid. If the materials show that there is partisan approach, as indicated above the Court has to analyse the evidence with care and caution. Additionally, the accused persons have always the option of examining the left out persons as defence witnesses. In Ram Avtar Rai and Ors. v. State of Uttar Pradesh AIR 1985 SC 880 , Harpal Singh v. Devinder Singh and Anr. 1997 6 SCC 660 and Gopi Nath Jhallar v. State of U.P. 2001 6 SCC 620 these aspects have been elaborately dealt with. Here again the High Court has erroneously drawn adverse inference. So far as the alleged variance between medical evidence and ocular evidence is companycerned it is trite law that oral evidence has to get primacy and medical evidence is basically opinionative. It is only when the medical evidence specifically rules out the injury as claimed to have been inflicted as per the oral testimony, then only in a given case the Court has to draw adverse inference. The High Court has thus knocked out an eyewitness on the strength of an uncanny opinion expressed by a medical witness. Over dependence on such opinion evidence, even if the witness is an expert in the field, to checkmate the direct testimony given by an eyewitness is number a safe modus adoptable in criminal cases. It has number become axiomatic that medical evidence can be used to repel the testimony of eyewitnesses only if it is so companyclusive as to rule out even the possibility of the eyewitnesss version to be true. A doctor usually companyfronted with such questions regarding different possibilities or probabilities of causing those injuries or post-mortem features which he numbericed in the medical report may express his views one way or the other depending upon the manner the question was asked. But the answers given by the witness to such questions need number become the last word on such possibilities. After all he gives only his opinion regarding such questions. But to discard the testimony of an eyewitness simply on the strength of such opinion expressed by the medical witness is number companyducive to the administration of criminal justice. Similar view has also been expressed in Mange v. State of Haryana 1979 4 SCC 349 , State of U.P. v. Krishna Gopal and Anr. AIR 1988 SC 2154 and Ram Dev and Anr. v. State of U.P. 1995 Supp. 1 SCC 547 and State of U.P. v. Harban Sahai and Ors. 1998 6 SCC 50 Even otherwise, the medical evidence may be at variance so far as alleged assault by accused Prabhu Nath Jha is companycerned. But there is numbervariance pointed out by the High Court so far as others are companycerned. Therefore, there is numbersupportable foundation for holding that there was companycoction. Accused Prabhu even otherwise can be held guilty by application of Section 34 IPC. Though there was numbercharge framed for an offence under Section 302 read with Section 34, the evidence on record clearly brings out application of Section 34 and as was observed by this Court in Lallan Rai and Ors. v. State of Bihar 2003 1 SCC 268 Section 34 can be applied if the evidence of the eyewitnesses clearly establishes the role played by the companycerned accused. There is numberembargo on the appellate Court reviewing the evidence upon which an order of acquittal is based. Generally, the order of acquittal shall number be interfered with because the presumption of innocence of the accused is further strengthened by acquittal. The golden thread which runs through the web of administration of justice in criminal cases is that if two views are possible on the evidence adduced in the case, one pointing to the guilt of the accused and the other to his innocence, the view which is favourable to the accused should be adopted. The paramount companysideration of the Court is to ensure that miscarriage of justice is prevented. A miscarriage of justice which may arise from acquittal of the guilty is numberless than from the companyviction of an innocent. In a case where admissible evidence is ignored, a duty is cast upon the appellate Court to re-appreciate the evidence in a case where the accused has been acquitted, for the purpose of ascertaining as to whether any of the accused companymitted any offence or number. See Bhagwan Singh and Ors. v. State of Madhya Pradesh 2002 2 Supreme 567 . The principle to be followed by appellate Court companysidering the appeal against the judgment of acquittal is to interfere only when there are companypelling and substantial reasons for doing so. If the impugned judgment is clearly unreasonable and relevant and companyvincing materials have been unjustifiably eliminated in the process, it is a companypelling reason for interference. These aspects were highlighted by this Court in Shivaji Sahabrao Bobade and Anr. v. State of Maharashtra 1973 3 SCC 193 , Ramesh Babulal Doshi v. State of Gujarat 1996 4 Supreme 167 , Jaswant Singh v. State of Haryana 2000 3 Supreme 320 , Raj Kishore Jha v. State of Bihar and Ors. 2003 7 Supreme 152 , State of Punjab Karnail Singh 2003 5 Supreme 508 and State of Punjab v. Pohla Singh and Anr. 2003 7 Supreme 17 . The inevitable companyclusion because of the factual and legal panorama numbered above is that the High Court was number justified in directing acquittal. The same is set aside. Respondents are companyvicted under Section 302 read with Section 34 IPC and are sentenced to undergo imprisonment for life. |
With C.A. NO. OF 2004 SLP C No.5260/1999 RAJENDRA BABU, CJI. CIVIL APPEAL NO. 1153 OF 1998 The assessees are engaged in the manufacture of motor vehicle chassis and spare parts. The assessees claimed certain set off in respect of sales tax payable by them for the period from 1st April 1982 to 31st March 1983 invoking the benefit available under rules 41D and 41E framed under the Bombay Sales Tax Act, 1959 for short the Act. The set off claimed by the assessees was in terms of Rule 41D and 41E read with Rule 44D framed under Section 42 of the Act which enables a draw back, set-off or refund of the whole or any part of the tax in such circumstances and subject to such companyditions as may be specified in respect of tax paid or levied or leviable in respect of any earlier sale or purchase of goods under the Act or any earlier law to be granted to the purchasing dealer. Rule 41D enables draw back, set-off or refund of tax paid by the manufacturers in respect of certain purchases made by claimant dealer. It lays down that in assessing the tax payable in respect of any period by a registered dealer who manufactures taxable goods for sale or export, the Commissioner shall, in respect of purchases made by such dealer on or after the numberified day of any goods specified in Part II of Schedule C and used by him within the State in the manufacture of taxable goods for sale or in the packing of goods manufactured, grant him a draw-back, set-off or, as the case may be, a refund of the aggregate of the sums determined in accordance with Rule 44D. The companycept of export is defined to include dispatches made by the claimant to his own place of business or to his agent outside the State where the claimant dealer produces certificate in Form 31C issued declaring that the goods would in fact be sold by him or would be used by him in the manufacture of goods which would in fact be sold by him and that he, his manager or, as the case may be, his agent is registered under the Central Sales Tax Act in respect of that place of business. The aggregate of the sum referred to in sub-rule 1 shall be reduced by 5 per cent of the purchase price representing the sums in respect of the goods which are dispatched in the manner referred to in clause iii of sub-rule 2 , provided that the aggregate of such sum shall be reduced by certain percentage of such purchase price. Rule 41E provides that in assessing the amount of tax payable in respect of any period by a registered dealer the Commissioner shall in respect of the purchases made by the claimant dealer on or after the numberified day of goods specified in any entry of Schedule B which were used by him in the manufacture of goods specified in the same entry of Schedule B for sale or export, grant him a draw-back, set off or, as the case may be, a refund of the aggregate of the sums determined in accordance with the provisions of Rule 44D. By Section 26 of the Maharashtra Sales Tax Laws Levy, Amendment and Repeal Act, 1989 during the period from 1st July 1981 to 31st March, 1984 Rule 41-E as it existed before 1.4.1984 was deemed to have been reenacted in the same form as it then existed but with certain modifications. The amended version of Rule 41E by the 1989 Act reads as follows 41E. Draw-back, set-off etc. of tax paid by a manufacture of goods specified in Schedule B. In assessing the amount of tax payable in respect of any period of any registered dealer hereinafter in this Rule referred to as the claimant dealer the Commissioner shall, in respect of the purchases made by the claimant dealer on or after the numberified day, of goods specified in any entry of Schedule B which were used by him in the manufacture of goods number being waste goods or scrap goods or by products specified in the same entry of Schedule B, for sale or export, grant him a draw back, set off or, as the case may be, a refund of the aggregate of the sums determined in accordance with the provisions of Rule 44D. Section 27 of the said amendment Act of 1989 further amended the Rule 41E as follows - Amendment of Rule 41E of Bombay Sales Tax Rules, 1959- In the existing rule 41E of the Bombay Sales Tax Rules, 1959, during the period companymencing from 1st April, 1984, and ending on 31st March, 1988, after the words manufacture of goods the brackets and words number being waste goods or scrap goods or by-products shall be deemed to have been inserted. Section 30 of the Act IX of 1989 also enacted a validating provision. The effect of the amendment is that facility of draw-back, set-off etc., of tax paid by a manufacturer of goods specified in Schedule-B is number applicable to manufacture of goods out of waste, scrap goods or products for the period between 1.7.1981 to 31.3.1988 by virtue of Sections 26 and 27 of the said Amendment Act of 1989. By the Bombay Sales Tax Amendment Rules, 1992 Rule 41-E was amended as follows - a for the words, brackets, figures and letter from one Group to another of the Groups specified in clause xviii-a of rule 3, the words, figure and letter specified in entry 6 of Schedule B shall be substituted b in the second proviso, for the words, figures and letter on the basis of the sale prices of such manufactured goods and shall be allowed only to the extent that it pertains to the manufactured goods specified in entry 6 of Schedule B, the words, figures and letters on the basis of the purchase price of goods specified in entry 6 of Schedule B used in the process of manufacture and shall be allowed only to the extent to which it pertains to the manufactured goods specified in entry 6 to Schedule B and where such purchase prices are number ascertainable, the apportionment shall be on the basis of the sale prices of such manufactured goods and shall be allowed only to the extent that it pertains to the manufactured goods specified in entry 6 of Schedule B shall be substituted. On incorporation of this amendment, the said Rule reads as follows In assessing the amount of tax payable in respect of any period by a registered dealer hereinafter in this rule referred to as the claimant dealer the Commissioner shall, in respect of the purchases made by the claimant dealer on or after 1st April 1984, of goods specified in Entry 6 of Schedule B for sale of export, grant him a draw back, set off, or as the case may be, refund, of the aggregate of the sums determined in accordance with the provisions of Rule 44 D. Provided that, numberdraw back set off, or as the case may be, refund shall be granted under this rule where the goods manufactured by the claimant dealer have been sold by him in the state in respect of which sale the claimant dealer has been allowed deduction under clause i , ii , or ii of sub-section 1 or sub-section 2 of Section 7. Provided further that where the process of manufacturing results in the production of goods specified results in the production of goods specified in Entry 6 of Schedule B as well as goods other than those specified in entry 6 of schedule B, then such draw-back, set-off or as the case may be, the refund shall be apportioned as between goods specified in Entry 6 of Schedule B and goods other than those specified in Entry 6 of Schedule B on the basis of sale price of such manufactured goods and shall be allowed only to the extent that it pertains to the manufactured goods specified in Entry 6 of Schedule B. Provided further that where the process of manufacturing results in the production of goods specified in Entry 6 of Schedule B as well as goods other than those specified in entry 6 of Schedule B, then such draw-back, set-off or as the case may be, the refund shall be apportioned as between goods specified in Entry 6 of Schedule B and goods other than those specified in Entry 6 of Schedule B on the basis of purchase price of goods specified in Entry 6 of Schedule B used in the process of manufacture and shall be allowed only to the extent to which it pertains to the manufactured goods specified in Entry 6 of Schedule B and where such price are number ascertainable, the apportionment shall be on the basis of sale price of such manufactured goods and shall be allowed only to the extent that it pertains to the manufactured goods specified in the Entry 6 of the Schedule B. Explanationfor the purpose of this Rule, the explanation export means a sale in the companyrse of inter-state trade or companymerce or in the companyrse of export of the goods out of territory of India, where such sale occasions movement of the goods from the State. These amendments had the effect of removing exclusionary clause of goods manufactured out of waste or scrap goods or products thereby restoring the position as it stood prior to 1981. Some amendments have been effected to this Rule on 19.11.2001 but the same have numberbearing on the present case. The validity of the amendment made to Rule 41-D and 41-E of the Bombay Sales Tax Rules retrospectively by Section 26 of the Amendment Act IX of 1989 was challenged before the High Court. The High Court upheld the validity of the same and the writ petitions were partly allowed. In the writ petitions, several other companytentions were also raised and the same were rejected or upheld by the High Court but has numberrelevance to the present cases. In these appeals, the companytentions put forth before us are two-fold 1. the companystitutional validity of retrospective amendment of Rule 41-E 2. the scope of set off under Rule 41D before transfer of stock to regional sales office at Silvassa located in the Union Territory of Dadra Nagar Haveli. Rule 41-E was introduced in the Rules with effect from 1.7.1981 providing for set off of tax paid on purchases falling under Schedule B used in the manufacture of goods also falling under Schedule B. The Rule did number provide for any apportionment or any other method when goods purchased fall under Schedule B but goods manufactured would fall under Schedule B in part and another part in any other Schedule. The said Rule 41-E was amended in 1984 restricting its scope but had numberimpact upon the appellant. On 3.5.1988, Rule 41-E was amended with effect from 1.4.1984 providing for proportionate set off in proportion to sale price of manufactured goods falling under Schedule B and those falling in any other Schedule where the process of manufacturing resulted in the manufacture of goods falling under Schedule B partly and any other Schedule partly. By an amendment made on 31.3.1989, the benefit of Rule 41-E was altogether denied for the period 1.7.1981 to 31.3.1988. By further amendment made in 1992, Rule 41-E provided proportionate set off as was earlier in force except for the period 1.4.1984 to 31.3.1988. So far as the companystitutional validity is companycerned, it is submitted that the appellant procured steel in primary form companyered by Entry B-6 for use in manufacture and the appellants manufacturing process resulted mainly in the production of vehicles or parts thereof and to some extent, iron and steel scrap in the form of off-cuts, end pieces, turning and boring scrap etc. In the sales tax returns filed by the appellant, set off of Rs. 38.64 lakhs was claimed in terms of Rule 41E for the quantum of iron and steel purchased which was companyverted into iron and steel scrap as the iron and steel scrap is also companyered by Entry B-6 which they were eligible for set off. Rule 41-E was amended and benefit was restricted only to Entry B-6 in 1984 and in the assessment order passed for 1982-83, set off under Rule 41-E was allowed by the quantum restricted to tax companylected on sale of iron and steel scrap. Computation of this amount was disputed in the writ petition filed before the High Court. The Tribunal in the meanwhile rendered a decision and held that rule 41E did number provide for apportionment of set off where the manufactured goods were partially companyered under Schedule B and partially under any other Schedule and in such a case the manufacturer would be entitled to claim set of tax paid on entire purchases falling under Schedule B. Thereafter the Maharashtra Act IX of 1989 was enacted and by clauses 26 and 27, the benefit of Rule 41E set off was denied altogether where the manufactured goods falling under Schedule B are in the nature of waste goods scrap goods by products for the period 1.7.1981 to 31.3.1988. The companystitutional validity of the amendment was challenged before the High Court on the basis that the withdrawal with retrospective effect of any relief granted by a valid statutory provision to an assessee stands on a footing entirely different from that which may necessitate the passing of a validating Act seeking to validate any statutory provision declared unconstitutional or to make the law clear. While the legislature makes an amendment validating any provision, which might have been found to be defective, the legislature seeks to enforce its intention which was already there by removing the defect or lacuna. However, withdrawal or modification with retrospective effect of the relief properly granted by the statute to an assessee which the assessee has lawfully enjoyed or is entitled to enjoy as his vested statutory right, depriving the assessee of the vested statutory right has the effect of imposing a levy with retrospective effect for the years for which there was numbersuch levy and cannot, unless there be strong and exceptional circumstances justifying such withdrawal or modification cannot be held to be reasonable or rational. The learned companynsel for the appellant placed reliance on the decision of this Court in Rai Ramkrishna Ors. vs. State of Bihar, 1964 1 SCC 897, wherein at para 17 it was observed by this Court that it is companyceivable that cases may arise in which the retrospective operation of a taxing or other statute may introduce such an element of unreasonableness that the restrictions imposed by it may be open to serious challenge as unconstitutional. The learned companynsel companytends that if the retrospective operation companyers a long period like ten years eight years in the present case it should be held to impose a restriction which is prima facie unreasonable and as such must be struck down as being unconstitutional. Our attention was also drawn to the Statutes and Statutory Construction by Sutherland to the effect that Tax Statutes may be retrospective if the legislature clearly so intends. If the retrospective feature of a law is arbitrary and burdensome the statute cannot be sustained. The reasonableness of each retroactive tax statute will depend on the circumstances of each case. In general, income taxes are valid although retroactive, if they affect prior but recent transaction. This Court, in fact, numbericed that retrospective operation of a taxing or other statute may introduce such an element of unreasonableness that the restrictions imposed by it may be open to serious challenge as unconstitutional. Therefore, it is submitted that particularly when subsequently the same rule in the same form has been reintroduced deleting the amendment made by repealing of the provisions which have been introduced, it is submitted that there is numbermaterial forthcoming to show as to why a special treatment has to be given only for that period of eight years to which we have adverted to. The learned companynsel for the State of Maharashtra, except to make available the amendments of the enactment and Rules, was number able to meet the arguments advanced on behalf of the appellant. We specifically and repeatedly asked him as to why the denial of benefit of Rule 41-E as amended was companyfined only to the period between 1.7.1981 and 31.3.1988 but he had numberanswer at all. It is numberdoubt true that the legislature has the powers to make laws retrospectively including tax laws. Levies can be imposed or withdrawn but if a particular levy is sought to be imposed only for a particular period and number prior or subsequently it is open to debate whether the statute passes the test of reasonableness at all. In the present case, the High Court sustained the enactment by adverting to Rai Ramkrishnas case when the benefit of the rule had been withdrawn for a specific period. The learned companynsel for the State companytended that the amendments had been made to overcome certain defects arising on account of the decision of the tribunal in regard to the modalities of working out the relief. But, the impugned amendment brought about by Section 26 is number for that purpose. Assuming that it was the legislative policy number to grant set off in respect of waste or scrap material generated, it becomes difficult to appreciate the stand of the State in the light of the fact that the original Rule companytinued to be in operation with certain modifications subsequent to 1.4.1988. The reason for withdrawal of the benefit retrospectively for a limited period is number forthcoming. It is numberdoubt true that the State has enormous powers in the matter of legislation and in enacting fiscal laws. Great leverage is allowed in the matter of taxation laws because several fiscal adjustments have to be made by the Government depending upon the needs of the Revenue and the economic circumstances prevailing in the State. Even so an action taken by the State cannot be so irrational and so arbitrary so as to introduce one set of rules for one period and another set of rules for another period by amending the laws in such a manner as to withdraw the benefit that had been given earlier resulting in higher burdens so far as the assessee is companycerned without any reason. Retrospective withdrawal of the benefit of set-off only for a particular period should be justified on some tangible and rational ground, when challenged on the ground of unconstitutionality. Unfortunately, the State companyld number succeed in doing so. The view of the High Court that the impugned amendment of Rule 41-E was of clarificatory nature to remove the doubts in interpretation cannot be upheld. In fact, the High Court did number elaborate as to how the impugned legislation is merely clarificatory. In that view of the matter, although we recognise the fact that the State has enormous powers in the matter of legislation both prospectively and retrospectively and can evolve its own policy, we do number think that in the present cases any material has been placed before the Court as to why the amendments were companyfined only to a period of eight years and number either before or subsequently and, therefore, we are of the view that the impugned provision, namely, Section 26 deserves to be quashed by striking down the words number being waste goods or scrap goods or by products occurring in the said Section 26 of the Maharashtra Act IX of 1989 and the authorities companycerned shall rework assessments as if that law had number been passed and give appropriate benefits according to law to the parties companycerned. Another companytention has been advanced with regard to the requirement under Rule 41-D that the assessee companycerned has to register in the place to which the goods are exported under the Central Sales Tax Act and such requirement is impossible of performance because the Central Sales Tax Act was number extended to Silvassa, Dadra Nagar Haveli, where the assessees branch office is located. Inasmuch as what is claimed by the appellant is one in the nature of benefit under taxation law, all companyditions thereto must be companyplied with. One of the companyditions imposed therein is that he should have registered under the Central Sales Tax Act at the appropriate place to claim the benefit claimed thereunder. It is number necessary for the appellant to carry his business in a place where the Central Sales Tax Act is number extended. It is open to the appellant to carry on his business elsewhere and claim the benefit in a place where the Central Sales Tax Act is applicable. He cannot put forth a ground that what is impossible of performance cannot be done by him and, therefore, that companydition arising under the relevant provision should be ignored. We do number think there is any justification to do so. This companytention stands rejected. The appeal is allowed accordingly. SPECIAL LEAVE PETITION C No. 5260/1999 Leave granted. Following the judgment in Civil Appeal No. |
ORIGINAL JURISDICTION , Petitions Nos. 651 of 1954 and 39, 46, 51 and 176 of 1955. Under Article 32 of the Constitution of India for the enforcement of fundamental rights. P. Sinha S. D. Sekhari, with him , for the petitioner in Petition No. 651 of 1954. P., Sinha B. K. Saran and M. M. Sinha, with him , for the petitioner in Petition No. 39 of 1955. K. Saran and M. M. Sinha, for the petitioner in Petition No. 46 of 1955. D. Sekhari, for the petitioner in Petition No. 51 of 1955. Patnaik, for the petitioner in Petition No. 176 of 1955. C. Setalvad, Attorney-General of India R. Ganapathy Iyer and P. G. Gokhale, with him for respondents in all the Petitions. 1956. January 20. The Judgment of the Court was delivered by JAGANNADHADAS J.-These are five petitions under article 32 of the Constitution by the heads of five Maths in the State of Orissa of which four known as Mahiparakash Math, Uttaraparswa Math, Dakshinaparswa Math and Radhakant Math are situated in Puri and the fifth known as Manapur Math is near Tirtol in Cuttack district. In all these petitions certain provisions of the Orissa Hindu Religious Endowments Act, 1951 Orissa Act II of 1952 as amended by Orissa Act XVIII of 1954 are challenged as being unconstitutional and ultra vires. Since the questions raised are mostly companymon, all the petitions are dealt with by this single judgment. These petitions have a background of previous history of legislation and litigation which it is necessary to set out in order that the questions raised, may be properly appreciated. The first statutory interference by the Provincial Legislature with the management of Hindu religious endowments in Orissa was by the Orissa Hindu Religious Endowments Act, 1939 Orissa Act IV of 1939 which came into operation on the 31st August, 1939. This was modelled on a similar Act operating in the Province of Madras at thetime. ThevalidityoftheActasawholeasalso, of certain provisions thereof were challenged by the Mahants of the various Maths in Orissa, about 30 in number, by instituting a suit in the year 1940. The suit was on behalf of the individual Maths who figured as plaintiffs including three of the present petitioners, viz. Mahants of Mahiparakash Math, Dakshinaparswa Math and Radhakanta Math and also in a representative capacity under Order I, rule 8 of the Civil Procedure Code. Vide printed record of this Court in Case No. I of 1950 . That suit was dismissed by the District Judge of Cuttack and came up in appeal to the High Court of Orissa. The High Court upheld the validity of the Act and of the various sections thereof by its judgment dated the 13th September, 1949, which is reported in Mahant Sri Gadadhar Ramanuj Das v. The Province of Orissa 1 . An appeal was filed therefrom to the Supreme Court in Jaiiuary,1950, which was numbered as Case No. I of 1950. This appeal remained pending for over four years and came up for final hearing in February, 1954. During the period of pendency of the appeal the Orissa Legislature passed two further Acts relating to Hindu religious endowments. The first of them was Orissa Act II of 1952 which was an Act to amend and companysolidate the law relating to the administration and governance of Hindu religious institutions and endowments in the State of Orissa and which on its companying into force was intended to repeal the pre-existing Orissa Act IV of 1939. This Act became law on the 16th February, 1952, by the assent of the President. It did number however companye into force at once on account of sub-section 3 of section I therein which provided that the Act is to companye into force on such date as the State Government may, by numberification, direct. No such numberification was issued during the pendency of the appeal in the Supreme Court. This Act was, in fact, brought into force much later, i.e., only as from the 1st Janu- I.L.R. 19491 Cuttack 656. ary, 1955, by a numberification of the Government of Orissa dated the 22nd December, 1954, published in the Orissa Gazette dated the 31st December, 1954. While thus the 1952 Act remained on the statute book without its companying into force., other independent statutory provisions amending the Act of 1939 were passed and brought into operation. The first of them was Orissa Ordinance No. 11 of 1953 which was promulgated by the Governor of Orissa on the 16th May, 1953. This was later superseded and substituted by Orissa Act XVIII of 1953 which came into operation on the 28th October, 1953. By these two successive legislative measures, the Act of 1939 was amended in certain respects and it is the Act so amended that was in operation during the period from May, 1953 to March, 1954, falling within the later portion of the pendency of Case No. I of 1950 in the Supreme Court. Some time in 1953, subsequent to the month of May, the Commissioner of Hindu Religious Endowments, Orissa, appears to have initiated proceedings for the framing of schemes in respect of a number of Matbs, and schemes were actually framed during this period as regards the four Maths, Mahiparakash, Uttaraparswa, Daksbinaparswa and Radhakanta companyprised in Petitions Nos. 651 of 1954, 49, 46 and 51 of 1955, respectively. These schemes were brought into operation and the administration of some of these Matbs was taken over by the Trustees under the schemes. Thereafter Mahants of three of the affected Maths, Mahiparakash, Uttaraparswa and Radhakanta, who are also petitioners before us, filed applications under article 226 before the High Court of Orissa challenging the alidity of the schemes. Those applications were dismissed by the High Court on the 17th February, 1954. Meanwhile the Mahant of Dakshinaparswa Math who was a petitioner in the High Court and also before filed along with another Mahant, a petition under icle 32 of the Constitution to this Court on the d December, 1953, challenging the Act then in force as being in violation of their fundamental rights. This was Petition No. 405 of 1953. This petition as well as Case No. 1 of 1950, referred to above, came up for hearing, together, in this Court on the 9th, 10th and 11th February, 1954. Judgment of this Court therein was delivered on the 16th March, 1954, and is reported in Mahant Sri Jagannath Ramanuj Das v. The State of Orissa 2 . As a result thereof, sections 38 and 39 of Orissa Act IV of 1939 as amended in 1953, under which the schemes were framed were declared unconstitutional. Accordingly, the schemes became invalid and therefore the possession of such of the Matbs which had been, taken over under the schemes was restored to the Mahants. It may be mentioned in passing, in this companytext, that the judgment of this Court refers to Orissa Act II of 1952 as being the one in force at the time and whose provisions were under companysideration by the Court. This is a slip. The Act then in force was, as already stated, the Act of 1939 as amended in 1953. That this is a slip in the judgment is admitted before us. That does number however in any way detract from the reasoning and the binding character of the judgment, since as a fact what were really referred to were the sections of the 1939 Act as amended in 1953 . Now, after the judgment of this Court was delivered in March, 1954., the Orissa Legislature again intervened and passed another Act, Orissa Act XVIII of 1954. This Act purported to amend number the 1939 Act which was by then in operation but the 1952 Act which had number by then companye into force. -Orissa Act XVIII of 1954 received the assent of the President on the 2nd December, 1954 and came into force at once and therefore Orissa Act II of 1952 became pro tanto amended and modified. By that date the 1952 Act so amended was awaiting the issue of numberification under section 1 3 thereof for being brought into force. This numberification, as alreay stated, was ultimately issued on the 22nd December. 1954, bringing Orissa Act II of 1952 as amended Act XVIII of 1954 into force from the 1st January, 1955, and thereby repealing Orissa Act IV of 1939 amended in 1953. The first of the petitions before us, relating to Mahiparakash Math was filed in this 1 1954 S.C R. 1046 Court, anticipating this numberification, while the other four were filed after the numberification was issued. As already stated, all these petitions challenge the validity of various sections of Act 11 of 1952 as amended in 1954 hereinafter referred to as the present Act . The challenge is entirely based upon the principles laid down by this Court in Mahant Sri Jagannath Ramanuj Das v. The State of Ori8sa 1 . The above is the history of the relevant legislation and the companynected parallel litigation. The main attack is in respect of sections 42 and 79-A of the present Act relating to the schemes for religious institutions of the kind with which we are companycerned in these petitions. There can be numberdoubt that the two sections apply to these Maths. The phrase religious institution occurring in section 42 has been defined as meaning also a math and endowments attached thereto. A Math is an institution succession to the headship of which devolves in accordance with the directions of the founder or is regulated by custom and a hereditary trustee is a trustee of an institution succession to whose office devolves by custom or is specifically provided for by the founder. A Math is therefore a religious institution presided over or managed by a hereditary trustee so as to render section 42 1 b applicable. To appreciate the ground of attack it is necessary to trace the changes in the provisions relating to the framing of schemes for such institutions in the successive legislative measures. In the Act as it, stood in 1939 the provisions in this behalf are sections 38, 39 and 40. Since the attack is mainly as regards the procedure for the framing of the scheme, it is sufficient to numberice what the gist of these three provisions is in so far as it relates to the procedure for an enquiry to frame a scheme. Under these three sections the enquiry is to be held by the Commissioner for Endowments appointed under the Act. For this purpose he is to function jointly with one or more persons in the service of the Crown appointed by the Provincial Government in 1 1954 S.C.R. 1046. this behalf. The enquiry has to be companyducted in such manner as may be prescribed. In making the enquiry the Commissioner and the person or persons associated with him therein are to companysult the trustee and the persons having interest. After the scheme is settled and the order determining the scheme is published in the prescribed manner the trustee or any person having interest may, within six months of the date of such publication, institute a suit in the companyrt to modify or set aside such order. The order settling a scheme is final and binding on the trustee and all persons having interest, subject to the result of the suit, if any, as above mentioned. Of companyrse, the result of the suit itself would, under the general law, be subject to further appeal under the Civil Procedure Code in the ordinary way. Changes were made in these provisions in 1953 first by Orissa Ordinance II of 1953 and then by Orissa Act XVIII of 1953 as already stated. The modification is that subsection 4 of section 39 which provided for a right of suit, by the trustee or the person interested, in the regular civil companyrt with the companycomitant further appeals to higher companyrts was deleted and the following was substituted as sub-section 4 of section 39 Every order under this section shall be published in the prescribed manner and the order so passed shall be final and binding on the trustee and all persons having interest. As a companysequence thereof section 40 of the 1939 Act, which stated that subject to the result of the suit the order settling a scheme is final, was omitted. The result of these two changes was that once the Commissioner with the assistance of one or more Government officers who were to be specially numberinated, settled a scheme after making the prescribed enquiry, that order was number open to any further question or companyrection in the ordinary companyrts. It was at this stage that the validity of the provisions relating to the framing of a scheme came up for companysideration before this Court in March, 1954. This Court held that the legislation in so far as it authorised the framing of a scheme by the Commissioner along with his associates and declared such determination as final without any scope for companyrection thereof by judicial intervention, was an unreasonable restriction on the right of the head of the Math with reference to his interest in the Math. Accordingly sections 38 and 39 of the Act then in force were struck down as unconstitutional and invalid. The present provisions which are the result of a later amendment are companytained in sections 42 and 44 of the present Act and are substantially different. The relevant portions thereof are as follows 42. 1 Whenever there is reason to believe that in the interest of the proper administration of religious institution a scheme may be settled for it, or when number less than five persons having interest make an application in writing stating that in the interests of the proper administration of a religious institution a scheme should be settled for it, the Assistant Commissioner or the Commissioner, as the case may be, shall proceed to frame a scheme in the manners hereinafter provided- a b in the case of a religious institution presided over or managed by a hereditary trustee, the Assistant Commissioner shall make such enquiry as he thinks fit and submit his report to the Commissioner who shall hold an enquiry in the manner prescribed and so far as may be, in accordance with the provisions of the Code of Civil Procedure, 1908, relating to the trial of suits and if he is satisfied that in the interests of the proper administration of such institution a scheme of administration should be settled, he shall companysult in the prescribed manner the trustee and the persons having interest and by order settle a scheme of administration for the institution. Every order of the Commissioner settling a scheme under this section shall, subject to the provisions of Section 44, be binding on the trustee, the Executive Officer and all persons having interest. 44. 1 Any party aggrieved by the order of the Commissioner under sub-section 1 of section 42 may appeal to the High Court within thirty days from the date of the order or publication thereof as the case may be. The effect of these provisions of the present Act is 1 that a scheme can be framed by the Commissioner alone on a report of the Assistant Commissioner on such enquiry as he thinks fit and number by the Commissioner in association with one or more Government officers to be appointed for the purpose by the Government, 2 that there is numberright of suit for cballenging the validity or the companyrectness of the scheme framed by the Commissioner but there is only an appeal to the High Court direct. It is urged that these provisions still companytinue to be unreasonable restrictions on the rights of the Mathadipathi and are accordingly ultra vires and unconstitutional. In the case reported in the Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutth 1 the interest of Mathadipathi in the Math has been recognised as property falling within the scope of article 19 1 f of the Constitution. It was recognised that the ingredients, of office and property, of duties and personal interest, are blended together in the rights of a Mahant and that the Mahant has the right to enjoy the property or the beneficial interest so long as he is entitled to hold his office. It was recognised that the beneficial interest which the Mahant enjoys is appurtenant to his duties and that as he is in charge of a public institution, reasonable restrictions can always be placed upon his rights in the interests of the public. It was however held therein that provisions for the framing of a scheme which by its terms operate by way of unreasonable restriction would be unconstitutional and invalid. It is this principle that was applied in the next decision of this Court relating to Orissa Maths in Mahant Sri Jagannath Ramanuj Das v. The State of Orissa 2 . There, the validity of the then provisions of the Act, i.e., of sections 38 and 39 of 1 1954 S.C.R. 1005. 2 1954 S.C.R. 1046. Orissa Act IV of 1939 as amended in 1953 was adjudged in the following terms Sections 38 and 39 relate to the framing of a scheme. The scheme can certainly be settled to ensure due administration of the endowed property but the objection seems to be that the Act provides for the framing of a scheme number by a civil companyrt or under its supervision but by the Commissioner, who is a mere administrative or executive officer. There is also numberprovision for appeal against his order to the companyrt We think that the settling of a scheme in regard to a religious institution by an executive officer without the intervention of any judicial tribunal amounts to an unreasonable restriction upon the right of property of the superior of the religious institution which is blended with his office. Sections 38 and 39 of the Act must, therefore, be held to be invalid. It is urged that though the obvious purpose of the amending Act of 1954 passed after this decision by the Supreme Court, was to remedy the defect above pointed out by providing for a right of appeal direct to the High Court from the determination of the Commissioner settling the scheme, the present provisions still companytinue to be unreasonable restrictions on the right of property of the Mahant. It is further urged that the initial decision in a scheme-proceeding is still on the basis of an executive enquiry by an executive officer and that in any case a direct appeal to the High Court as against the Commissioners order cannot be as adequate a safeguard regarding the rights of the Mahants, as a suit and a right of appeal therefrom in the ordinary companyrse to the higher companyrts would be. It is undoubtedly true that from a litigants point of view an appeal to the High Court from the Commissioners order is number the same as, an independent right of suit and an appeal to the higher companyrts from the result of that suit. But in order to judge whether the provisions in the present Act operate by way of unreasonable restriction for companystitutional purposes what is to be seen is whether the person affected gets a reasonable chance of presenting his entire case before the original tribunal which has to determine judicially the questions raised and whether he has a regular appeal to the ordinarily companystituted companyrt or companyrts to companyrect the errors, if any, of the tribunal of first instance. For that purpose it is relevant to numberice that in the present Act, the Commissioner of Endowments has, by virtue of section 4 thereof, to be a member of the Judicial Service of the State number being below the rank of a Subordinate Judge, while under section 7 of Act IV of 1939 a Commissioner of Endowments companyld be a person of either the judicial or the executive service and that even where a member of the judicial service is appointed he may be a person below the rank of a Subordinate Judge. Another important difference has also to be numbericed, viz., that while under section 38 of the previous Act the enquiry has to be companyducted in such manner as may be prescribed which means as prescribed by the Provincial Government by rules made under the Act and hence changeable by the Government, under the present Act, section 42 1 b specifically enjoins that the Commissioner shall hold an enquiry in the manner prescribed and so far as may be in accordance with the provisions of the Code of Civil Procedure relating to the trial of suits. It may also be numbericed that before the Commissioner starts his enquiry it is expected that the Assistant Commissioner, who, by virtue of section 5 2 , is to be a person holding a judicial office number lower in rank than that of a Munsif, is to make such enquiry as he thinks fit and submit his report. Thus in the initial stage of the framing of the scheme under the provisions of the present Act there is first of all something in the nature of a preliminary enquiry by a judicial officer of the rank of a Munsif and this is followed by a regular and full enquiry before the Commissioner who is of the rank of a Subordinate Judge. The enquiry before the Commissioner is assimilated to and is governed by the provisions relating to the trial of suits by enjoining that, as far as may be, it is to be in accordance with the provisions of the Code of Civil Procedure relating to trial of suits. While, therefore, under the prior Act the enquiry before the Commissioner might well have been of the nature of an executive enquiry by an executive officer, the enquiry under the present Act is by itself in the nature of a judicial enquiry by judicial officers followed up by a right of regular appeal to the High Court. A scheme framed with reference to such a procedure cannot ipsofacto be pronounced to be in the nature of unreasonable restriction on the rights of the Mahant. The legislature might well have thought that, instead of making the enquiry before the Commissioner more or less in the nature of a preliminary executive enquiry to be followed up by the affected Mahant by way of a regular suit in the Civil Court. it is much more satisfactory and in the public interests, to impress the enquiry before the Commissioner himself with the stamp of greater seriousness and effectiveness and to assimilate the same to a regular enquiry by the judicial officer according to judicial procedure and then to provide a right of direct appeal to the High Court. It has been strongly urged that a mere right to appeal to the High Court would virtually be in the nature of a limited appeal companyfined to challenge only on certain basic matters and probably limited to questions of law. We can find numberwarrant for any such apprehension. The right of appeal is given in very wide and general terms. Obviously the appeal can be both on facts and on law and would relate number merely to the merits of the scheme but also to all basic matters whose determination is implicit in the very framing of a scheme. In our opinion the present provisions cannot be struck down as being in the nature of unreasonable restriction on the rights of the Mahant. Two other minor provisions in this companynection have been brought to our numberice and relied upon as indicating unreasonable restriction on the rights. One is that while under the 1939 Act the period of limitation for a right of suit was six months, the period allowed for an appeal under the present Act is only 30 days. Another is that under section 74 3 the operation of the order of the Commissioner is number to be stayed pending the disposal of the appeal. It has been urged that these provisions operate very harshly against the Mahant affected by a scheme when framed. It is pointed out that as the result of a scheme being put into operation immediately, the Mahant may be deprived of the effective possession of the Math and hence of the wherewithal to file an appeal within the very short time that is allowed, as also of the resources to companyduct the appeal in the High Court or to maintain himself during its pendency which may take years. There is number much force in this companytention. In so far as the question of filing of an appeal is companycerned, there should be numberdifficulty since the provisions relating to appeals in forma pauperis would be applicable and can be availed of if the circumstances call for it. In so far as any situation may arise which may call for financial facilities for the companyducting of the appeal or for interim maintenance, the learned Attorney-General suggests that the appellate Court would have inherent power and discretion to give appropriate directions for supply of funds out of the trust estate and that in any view, such power and discretion have to be implied in the provision for an appeal so that the said right of appeal may number become illusory. Having regard to the suggestion thus put forward, which we accept, we cannot hold that the provision in section 74 3 that the operation of the order of the Commissioner framing a scheme is number to be stayed pending the disposal of the appeal, brings about an unreasonable restriction. In this view we think that the incidental provisions above referred to do number in any way detract from the reasonableness of the main provisions. In our opinion, therefore, the provisions in the present Act of 1952 as amended in 1954, relating to the framing of schemes are number open to any of the companystitutional objections raised, and are valid. The next point that has been urged, depends on the fact that in four of the petitions before us relating to the Maths of Mahiparakash, Uttaraparswa, Dakshinaparswa and Radhakanta, schemes were in fact framed in the year 1953 under the provisions of Orissa Act IV of 1939 as amended in 1953. It may be recalled that these provisions were held invalid by the decision of this Court in March, 1954, above referred to. It must therefore be taken that these schemes were void as the law then stood. It is with reference to that situation that the Orissa Legislature by an amendment in 1954 of the 1952 Act introduced section 79-A into this Act which runs as follows Notwithstanding anything companytained in any of the other provisions of this Act or in any judgment, decree or order of any companyrt all schemes purporting to have been settled in pursuance of sections 38 and 39 of the Orissa Hindu Religious Endowments Act, 1939, after the companymencement of the Orissa Hindu Religious Endowments Amendment Ordinance, 1953, and before the companymencement of this Act shall be deemed to have been settled under the provisions of this Act and any person aggrieved by any such scheme may within sixty days from the date of companymencement of this Act prefer an appeal to the High Court and such appeal shall be dealt with and disposed of in the same manner as appeals provided for under sub-section 2 of section 44. This purports to revive the schemes which were pronounced to be invalid by the judgment of this Court and attempts to remove the defect numbericed in the judgment of this Court by providing for a regular appeal to the High Court against that very scheme within 60 days from the date of the companymencement of the Act. It may be numbericed that the schemes so revived are only those which were settled after the companymencement of Orissa Hindu Religious Endowments Amendment Ordinance, 1953, and before the companymencement of the 1952 Act, i.e., between 16th May, 1953 to 31st December, 1954, hereinafter referred to as the specified period . This was exactly the period within which the amendment of 1939 Act made in 1953 was in force, abolishing the right of suit and making the scheme as determined by the Commissioner final and companyclusive. Section 79-A in terms purports to revive the invalid scheme numberwithstanding any judgment, decree or order of any companyrt, which means that though a companyrt may have pronounced the scheme as void still that is deemed to be alive. It has been suggested that this is directly flouting the decision of this Court and that the legislature has numberpower to declare as valid and companystitutional what was decided by this Court as invalid and unconstitutional. But it is to be observed that the legislature does number purport to do anything of the kind. What it does is number to deem the schemes previously settled as having been validly settled on those very dates, under the then existing law. This of companyrse is beyond legislative companypetence since the legislature has number the power to override unconstitutionality as such. But what the legislature has purported to do is to take up those very schemes and deem them to have been settled under the provisions of the present Act and thereby to lay them open to any attack available under the present law. Such a provision is number uncommon in legislative practice, and is enacted in order to avoid the public inconvenience of having to re-do what has previously been done. The result of section 79-A is to treat the schemes framed within the specified period as schemes framed immediately after the companymencement of the present Act and to impute thereto, by a fiction, companypliance with the various procedural and other steps which are requisite under section 42. We can see numberreason for thinking that such a provision is number within the companypetence of the Legislature. It has been suggested that this is really interfering with the jurisdiction of this Court under article 32. But there is numbersubstance in that suggestion. The right of any person to seek remedy under article 32 in respect of any violation of his fundamental rights is in numberway curtailed or affected by the fact that an actual decision of this Court on an application under article 32 is, in effect, nullified by appropriate and companypetent legislative measures. Indeed, the right has been, in fact, successfully invoked on the prior occasion and has again been invoked on the present occasion. If it fails this time it is number because the right and the remedy under article 32 have been taken away or affected but because the unconstitutionality has been removed. Section 79-A, therefore, is number open to any objection on the ground of legislative incompetence. It has further been urged that to treat the scheme prepared with reference to the Act of 1939 as amended in 1953 as a scheme prepared under the present Act by means of a fiction is really in the nature of deprivation of certain advantages which an aggrieved person would have had if in fact the scheme was settled under the present Act, and that therefore such a scheme would still operate by way of unreasonable restriction. This companytention is also without substance. It is true that in the present Act the procedure relating to the scheme has four steps which are as follows The scheme is to be framed by a Commissioner, who is, by appointment, a judicial officer. The procedure is, as far as may be, the same as that in the trial of suits. There is a preliminary enquiry by the Assistant Commissioner. There is an appeal to the High Court. Out of these four, the substantial item is the last one and that has been specifically provided for under section 79-A and a period of sixty days from the date of the companymencement of the Act has been provided for the right of appeal. There can be numbercomplaint on this score. It is true that the schemes under the Act then in operation, i.e., during the specified period, might possibly have been framed by a an executive officer, as also b in pursuance of procedure under the rules framed by the Executive Government which may number approximate to that of a trial of a suit.But this was merely a theoretical possibility.In fact, as appears from the record and, as has beenstated to us by the learned Attorney-General on behalf of the State and number disputed on the other side, the Endo wment Commissioner during the specified period was a Subordinate Judge of the Orissa Judicial Service. The actual procedure which was in force at the time under the rules as then prescribed was also in fact in companysonance with the trial of suits under the Civil Procedure Code. This appears clearly from rules 51 to 109 of the Rules framed by the Government of Orissa, an official companyy of which has been supplied to us in companyrt by the learned Attorney-General on behalf of the State. As regards the provision that the enquiry by the Commissioner under the present Act has to be preceded by a preliminary enquiry by an Assistant Commissioner who is of the rank if a Munsif, the argument that the deprivation of this feature by the deeming provision in section 79-A operates to the disadvantage of the Mahants is number by any means a serious point. It is to be numbericed that this is setoff by the fact that schemes under the 1939 Act are framed number by the Commissioner alone but along with one or more Government officers appointed by the Government. We are, therefore, unable to, uphold the companytention that the deeming provision under section 79-A which treats the previous schemes as schemes framed under the present Act results in bringing about any substantial disadvantages to the detriment of the Mahants. We accordingly hold that section 79-A of the present Act is number open to any companystitutional objection. We are, therefore, clearly of the opinion that sections 42 1 b , 42 7 and 44 2 as well as section 79-A of the present Act are number open to the companystitutional objections raised before us. It may be mentioned that in the petitions before us some other provisions of the present Act have also been challenged as being unconstitutional. But numberarguments have been advanced before us in respect thereof. It may also be mentioned that the petitions before us have number raised any questions relating to the merits of the scheme in so far as any specific provisions thereof may have operated by way of unreasonable restrictions, in the light of the companysiderations pointed out by this Court in its judgment in the Commi8sioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutth 1 . Nor does it appear that any appeal as 1 1954 S C.R. 1005. provided in section 79-A has been filed to the High Court in respect of these cases challenging the validity or the propriety of the various provisions in the scheme or companyrectness of the decision, express or implied, on the basic facts which are the foundation of the scheme proceedings. We express numberopinion on any of these matters. In the last of the petitions relating to Manapur Math, the facts appear to be slightly dissimilar but this makes numbersubstantial or material difference. In that case the original scheme was one framed under sections 38 and 39 of the 1939 Act as they stood before their amendment in 1953 which provided for a right of suit. The scheme itself was dated the 22nd May, 1948. Previous to the framing of the scheme there appears to have been a claim by the Mahant that the institution was a private one and number a public one and that it did number fulfil the definition of the word Math under the Act. There appears to have been a companypromise between the then Mahant and the public of the village in which the Math is situated, who were interested in the Math. The companypromise was to the effect that the institution was to be declared a Math but that the then Mahant was to be recognised as the hereditary trustee thereof. This companypromise was recognised by the Commissioner by his order dated the 12th May, 1947, formally making the above declarations. It was on the basis of this that, later on, a scheme was framed on the 22nd May, 1948. It does number appear that the Mahant filed any suit which was then available to him. But it is stated to us by the learned Advocate appearing for the petitioner that an application was filed in the High Court for a writ to qudsh the scheme, and that it was dismissed by the High Court on the 16th November, 1954. The scheme became final under the original Act of 1939 as it stood before the 1953 amendment. |
CRIMINAL APPELLATE JURISDICTION Criminal Appeal No.102 of 1969. Appeal by special leave from the judgment and order dated April 9, 1969 of the Punjab and Haryana High Court in Criminal Appeal No. 1055 of 1966. Frank Anthony and K. B. Rohatgi, for the appellant. R. Khanna and R. N. Sachthey, for the respondents. The Judgment of the Court was delivered by Jaganmohan Reddy, J.-This Appeal is by Special leave against the Judgment of the High Court of Punjab and Haryana companyfirming the companyviction of the accused under Section 5 1 c of the Prevention of Corruption Act 1947 as also the sentence awarded by the Sessions Judge of one years Rigorous Imprisonment and a fine of Rs. 2500, in default six months Rigorous Imprisonment. The facts of the case in brief are that in view of the Chinese invasion Air Field at Sirsa required to be extended for which purpose the Ministry of Defence, Govt. of India took steps to acquire some lands of agriculturists pursuant to which a Notification dated November 27, 1962 was issued under Section 4 of the Land Acquisition Act 1884 for acquiring 51.79 acres of land situated in the State of Ahmedpur. On the next day another Notification was issued under Section 6 of the Land Acquisition Act on November 28, 1962 and in view of the emergency action under Section 17 was taken for obtaining possession of the land With a view to its development. The lands which were acquired belonged to several land holders including Moti Ram and P.W. 12 Kewal Chand. The Collector gave his award on 26-2-63 Ex. P. 26 in respect of these lands, which actually measured 49.47 54-- S. C. India/71 acres, at Rs. 1350 per acre amounting to Rs. 66,784.50 np. Apart from this amount companypensation was also awarded for standing crop amounting to Rs. 11,073.13 np. Before the land was actually acquired the Appellant who was a Major in the Military Engineering-Service was working as a Garrison Engineer and was inching of the extension. He had in anticipation of acquisition and execution of the work appointed A. B. Ranadive, P.W. 14 as Assistant Garrison Engineer who was to be responsible, for all the matters companynected with the acquisition of land, demarcation of boundaries as an Engineer Inching for execution of the companytract and responsible for the maintenance of the Air Field. The work of the extension of aerodynamic was entrusted to one Telu Ram, P.W. 8 Contractor, with whom the trusted to M.E.S. Department entered into an agreement on December 3, 1962. This agreement was signed both by the Appellant and P.W. 14. The work according to that agreement was to be done in 2 phases-first phase was to companymence on 10th January 1963 and was to be companypleted by 9th October 1963. After the companypletion of the first phase the second phase was to start on 10th October 1963 and companypleted by 9th May 1964. Pursuant to this agreement it is said that -symbolic possession of the land which was acquired was taken over by the Tehsildar on 1st February 1963, after which at any rate it appears from Ex. P. 24 that actual possession of this land was handed over by the said Tehsildar on 13th February 1963 to the appellant. The receipt Ex.P.24. 24 bears the signature of N. L. Handa, the Tehsildar and of Sukhchain Lal jain, P.W. 11 on behalf of the Military Estate Officer and the Appellant. From this receipt it is evident that possession of 50.12 acres was handed over by the Tehsildar and taken over by the Appellant and the Military Estate Officer Sukhchain Lal Jain. The case of the prosecution initially was that after the land so acquired with the standing crop was taken possession of by the Appellant he sold the crop to Moti Ram and Kewal Chand for Rs. 2500 and facilitated the cutting and taking away of the crop by postponing the handing over of the possession to the companytractor till the 5th April 1963 and misappropriated the money. In respect of this allegation the First Information Report Ex. P. 29 was issued on 14-1-64 in which the following statement is relevant- It is alleged that Major Som Nath accused who is a Garrison Engineer Sirsa Air Field subsequently sometime in the months of March and April 1963 permitted the removal of the standing crop valued at Rs. 11073-13 by Shri Moti Ram and Kewal Chand etc., after, accepting illegal gratification of Rs. 3000 from them. Major Som Nath did number account for this amount in the Govt. Revenues., He thus. abused his position as a public servant and caused pecuniary advantage to said Shri Moti Ram and Kewal Chand by giving them standing crops worth Rs. 13,000 for a companysideration of. Rs. 3,000 only, which amount he accepted for his personal use and thereby also abused his official position and obtained pecuniary advantage, for himself in a sum of Rs. 3000. The facts disclose the companymission of the offence of criminal misconduct as defined in Section 5 1 d read with Section 5 2 of the Prevention of Corruption Act 1947 by Major Som Nath accused. A regular case, is therefore registered and entrusted to Inspector Baldev Rai Handa for investigation. After this F.I.R. certain statements were recorded by the Military authorities being DA to DE,DM, DM 1, DN DL of Mani gain, Mulkh, Raj, Ganpat Ram, Telu Ram, Kewal Chand and Sukhchain Lal Jain. A chargesheet was filed against the Appellant under Section 5 1 c and 5 1 d read with 5 2 of the Prevention of Corruption Act on 5-8-1966 after obtaining sanction from the Govt. of India, Ministry of Home Affairs on llth April, 1966 as per Ex. P.23. The Special Judge acquitted the Appellant of the second charge namely that being a public servant he had by companyrupt or illegal means or by otherwise abusing his position as a public servant obtained for himself a sum of Rs. 2,500 from Moti Ram of Sirsa for cutting the crops and thereby companymitted ,offence under Section 5 1 d punishable under Section 5 2 . The accused was however companyvicted under the first charge for an offence under Section 5 1 c in that he being a Garrison Engineer incharge of the Air Field Sirsa and in that capacity entrusted with standing crops of Sarson, Gram and Lusan on 30 acres of land a part of 49 acres of land acquired by the Govt. and which had been valued at Rs. 11,073.13 by the Revenue authorities, dishonestly or fraudulently allowed Moti Ram of Sirsa to misappropriate the said standing crop and thereby companytravened Section 5 1 c of the Prevention of Corruption Act punishable with Section 5 2 of that Act. Against that companyviction and sentence he -appealed to the High Court which maintained the companyviction and sentence. The learned Advocate for the Appellant has meticulously taken us through the entire documentary and oral evidence and companymented at length upon the various companytradictions and incongruities in the case of the prosecution with a view to establishing that when the Appellant took possession of the land there was numbercrop standing on it-that tile possession of the land was in fact delivered to Telu Ram, Contractor on 10-1-1963 that the said Contractor had admitted that possession of the entire land was received by him that he carried on the companystruction work in extending the Aerodrome that 200/250 donkeys were also used for doing the work by reason of which the crop was damaged before Tehsildar had put the Appellant in possession of the land and as a matter of fact there was numbercrop thereon when he got the possession of the land. It was also companytended that the High Court had number companysidered the companytradictions in the earlier statement made by some of the witnesses to the Military authorities and that it relied on many of the documents for affirming the companyviction of the Appellant without their actually being put to, him under Section 342. Before we companysider these companytentions it is necessary to determine another submission of the learned Advocate for the Appellant which goes to the root of the jurisdiction of the Court to try the offence, under Section 5 1 c . If this companytention is valid then the companyviction of the accused cannot stand and therefore it is necessary to deal with this matter first. It may be mentioned that though a companyplaint was made in the application for a certificate for leave to appeal to this Court that the learned Single Judge of the High Court should have acquitted the Appellant on the sole ground that there was numberproper sanction for the prosecution of the Appellant under Section 5 1 c of the Prevention of the Corruption Act, this question does number seem to have been urged before the High Court. In any case we do number think that there is any validity in the submission that the sanction given by the Govt. of India does number companyer the trial of the charge under Section 5 1 c of the Prevention of Corruption Act. For a sanction to be valid it must be established that the sanction was given in respect of the facts companystituting the offence with which the accused is proposed to be charged. Though it is desirable that the facts should be referred to in the sanction itself, numberetheless if they do number appear on the face of it, the prosecution must establish aliunde by evidence that those facts were placed before the sanctioning authorities. It is therefore necessary to first examine the order of sanction to ascertain on what facts it has been accorded. The sanction that has been accorded is in the following terms 11th April 1966. Whereas it is alleged that Major Som Nath while functioning as Garrison Engineer, M.E.S., Air Field at Sirsa from 13-2-63 to 54-1963 by companyrupt or illegal means or by otherwise abusing his position, as such public servant, obtained pecuniary advantage of Rs. 2500 for allowing the standing crops to be cut from the land acquired for the extension of Air Field Sirsa and or he dishonestly or fraudulently realised and misappropriated Rs. 2500 during the aforesaid period as the value of the crops cut from the land acquired for the extension of Air Field Sirsa, which crops had been entrusted to him as a public servant and he instead of depositing the said sale price into the Govt. Treasury companyverted it to his own use And whereas the said acts of Major Som Nath companystituted offences punishable under Section 5 2 of the Prevention of Corruption Act, read With Section 5 1 c and d Act No. 11 of 1947 of the said Act and Section 409 of the P.C. And whereas the Central Govt. after fully and carefully examining the materials before it in regard to the said allegations and circumstances of the case, companysider that Major Som Nath should be prosecuted in a companyrt of law for the said offences. Now therefore, the Central Govt both hereby accord sanction under Section 197-Code of Criminal Procedure Act No. 5 of 1898 and Section 6 1 a of the Prevention of Corruption Act, 1947 Act II of 1947 for the prosecution of Maj. Som Nath for the said offences and for any other offences punishable under the provision of law in respect of the aforesaid acts by the Court of companypetent jurisdiction. By order and in the name of the President. Sd - A. P. Veera Raghavan Deputy Secretary to the Govt. of India. From the above order it is apparent that the facts which the Central Govt. companysidered for the purposes of according sanction were a that the Appellant as a public servant was entrusted with crops situated on the land acquired for the extension of Air Field, Sirsa b that by abusing his position as a public servant he allowed the standing crops to be cut from the said land c that by companyrupt or illegal means and by abusing his position as a public servant he obtained pecuniary advantage Of Rs. 2500as the value of the crops to be cut from the land and or he dishonestly or fraudulently misappropriated that sum by companyverting it into his own use instead of depositing the said sale price in the Govt. Treasury. On these facts and after applying its mind as spoken to by W. 10 Kalra the Government accorded its, sanction for prosecution of the offences punishable under Section 5 2 read with Section 5 1 c and 5 1 d . The question therefore Would be whether these facts were sufficient to sustain the sanction under 5 1 c even if the charge under 5 1 d had failed. This question in turnwill depend upon what are the ingredients of the offences under 5 1 c and d read with Section 5 2 . Under 5 1 c -A Public servant is said to companymit the offence of misconduct in the discharge of his duty if he dishonestly or fraudulently misappropriates or otherwise companyverts for his own use any property entrusted to him or under his companytrol as a public servant or allows any other person so to do, and under d if he by companyrupt or illegal means or by otherwise abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage. It would be seen therefore that under Section 5 1 c a public servant will be said to companymit the offence of misconduct in hi duties if he dishonestly allows any other persons to companyvert to his own use property Which is entrusted to the said public servant The facts which have been set out in the order granting the sanction certainly are sufficient to indicate that the authorities granting the sanction had the offence under Section 5 1 c also in their companytemplation. In fact the order specifically mentions thisprovision while granting sanction. We should have thought this Was an obvious companyclusion but the learned Advocate for the Appellant strenuously companytended that the charge against the Appellant was of a motiveless offenceand in any case the facts as disclosed show that number only at thetime when the First Information Report was given but even at the time when sanction was accorded that the prosecution wag merely companycerned with the charge that the appellant bad allowed the crops to be cut on the companydition that Rs. 2500 will be paid and received the money and misappropriated or companyverted it tohis own use by number paying it into the Govt. treasury. There is therefore numberbasis for sanction for a charge under Section 5 1 c . it is further companytended that the stand taken by the prosecution was that the persons who were permitted to cut the crops bad number companymitted any offence. If so a charge under Section 5 1 c would implicate those persons also in the companymission of an offence which certainly would number have, been in the companytemplation of the authorities granting the sanction. In support of this companytention three decisions have been cited before us namely Bhagat Ram v. State of Punjab 1 , Madan Mohan Singh V. State of U. P. and Gokulchand Dwarkadas Mordrka v. The King A. I.R. 19-54 S. C. 621. A. 1. R. 1948 Privy Council 82. A. I.R. 1954 .C. 637. Bhagat Rams case was number companycerned with the sanction but only with the question, whether the offence companyld be altered to one of abetment of an offence of Section 409 I.P.C. from one under Section 409 simpliciter. It was held that an alteration of the Appellants companyviction under Section 409 P.C. into one of abetment thereof would imply a definite finding against the subordinate Judge who is number before the Court and as such it would be unfair to make such an alteration. We do number see how this case can assist the appellant because in the first ace there is numberquestion of an alteration, of the charge and secondly the circumstance that someone who is number a public servant abetted the appellant is hardly relevant. But even so the offence with which the appellant is charged under Section 5 1 c does number necessarily involve ,An abetment with the person whom he had dishonestly allowed tocut and take away the crop. For instance it is quite possible that the person whom he allowed to cut the crop may be his own relation or friend in whom he may be interested and who may, however, number know that the accused was doing something dishonest in permitting him to cut the crop. in any case the facts which have been stated, in the sanction clearly indicate that the appellant has dishonestly allowed the crops to be cut so that there is numberquestion of any inference or implication that the persons cutting the crops were abetting him in the offence. Even if it were so the sanction cannot be held to be had on that account. Gokulchand Dwarkadass case also is of numberassistance to the appellant because in that case the sanction did number disclose the facts on which it was given but merely sanctioned the prosecution for a breach of certain provisions, Sir John Beamont delivering the Judgement of the Judicial Committee, observed at page 84 But if the facts companystituting the offence charged are number shown on the face of the sanction, the prosecution must prove by extraneous evidence that those, facts were placed before the sanctioning authority Nor, in their Lordships view, is a sanction given without reference to the facts companystituting the offence a companypliance with the actual terms of cl. 23. Under that clause sanction has to be given to a prosecution for the companytravention of any of the provision of the Order. A person companyld number be charged merely with the breach of a particular provision of the Order he must be charged with the companymission of certain acts which companystitute a breach, and it is to that prosecution that is for having done acts which companystitution breach of the Order-that the sanction is required. In the present case -there is numberhing on the face ,of the sanction, and numberextraneous evidence, to show that the sanctioning authority knew the facts alleged to companystitute a breach of the Order, and the sanction is invalid. The case of Jaswant Singh v. The State of Puniab 1 was also cited by the Respondents advocate in support of the companytention that the trial of two offences requiring sanction was number valid. In that case sanction was given under Section 6 of the Prevention of Corruption Act 47 for the prosecution of the appellant for having received illegal gratification from one Pal Singh. He was charged with and tried for two offences under Section 5 1 a of the Act for habitually accepting or obtaining illegal gratification and under Section 5 1 d for receiving illegal gratification from Pal Singh. The Session Judge had found that both charges were proved. While in Appeal the High Court held that the Appellant companyld neither be tried number companyvicted of the offence under 5 1 a as numbersanction had been given in respect of it but upheld the companyviction under Section 5 1 d for which sanction had been given. A perusal of the sanction would show that the sanctioning authority had applied their mind to only one instance but the prosecution were seeking to make the sanction companyer the offence of a habitual bribe taker which clearly implies that the sanctioning authorities must companysider the number of instances when the accused took bribes and on what occasions as would justify a charge of his being a habitual bribe taker. Sinha, J, as he then was while dismissing the appeal observed at page 766- In the present case the sanction strictly companystrued indicates the companysideration by the sanctioning authority of the facts relating to the receiving of the illegal gratification from Pal Singh and therefore the appellant companyld only be validly tried for that offence. The companytention that a trial for two offences requiring sanction is wholly void, where the sanction is granted for one offence and number for the other, is in our opinion unsustainable. Section 6 1 of the Act bars the jurisdiction of the Court to take companynizance of an offence for which previous sanction is required and has number been given. The prosecution for offence under S. 5 1 d therefore is number barred because the proceedings are number without previous sanction which was validly given for the offence of receiving a bribe from Pal Singh, but the offence of habitually receiving illegal gratification companyld number be taken companynizance of and the prosecution and trial for that offence was void for want-of sanction which is a companydition precedent for the Courts taking companynizance of the offence alleged to be companymitted and therefore the High Court has rightly set aside the companyviction for that offence. 1 1958 S. C. R. 762. These cases instead of supporting the companytention of the learned Advocate amply demonstrate that the facts which formed the basis of the sanction and which was accorded after the sanctioning authority had fully applied its mind to them, should be companyrelated to the particular offence or offences with which the accused is charged or companyvicted. In our view there is numberjustification for holding that the companyviction under Section 5 1 c read with 5 2 is bad for want of the requisite sanction. Now on the merits of the case as we said earlier the learned Advocate for the appellant has referred to the evidence in meticulous detail and has companymented thereon, at length but this Court ordinarily does number reappropriation the evidence with a view to arriving at its own finding as if it was a Court of fact and does number ordinarily upset the findings of the High Court which has on an evaluation of the evidence affirmed the trial companyrts companyviction and sentence. It has been companytended firstly that the High Court was in error in relying on certain evidence for companyvicting the accused which was number put to him. Secondly the evidence that was necessary to unfold the story of the prosecution has number been produced by the prosecution but the Trial Court and the High Court ignored this lacunas in the prosecution case. Thirdly the Judgments show that there was utter companyfusion in respect of the date on which possession of the acquired land was given to the Appellant and the date on which it was given to the Contractor for carrying on the work, as also in respect of the fact whether there was any crop standing when the Appellant took possession of the land and at what period of time the crop was cut and the work companymenced. Before we deal with the companytentions urged on behalf of the Appellant it is necessary to have a clear picture of certain broad features of the case. The Air strip which was being extended is in one straight line with Taxi-ways. P.W.14 Ranadive tells us that if one were to go from the entrance of Air Field to the acquired land one would have to pass through RD 4500 to 1200. The acquired land extended from RD 1200 to RD 00. According to P.W. 8 Telu Ram, he acquired possession of the land of the length from RD 4500 to RD 1200 on 10th January 1963 and that tile possession of the acquired land was number delivered to him as it had number been acquired by that time. Ex. DO review report which is headed Technical Administration Contract shows that the date of review was 9th February 1963. In this document the date of the companyclusion of the companytract is given as 3rd December62 and date of companymencement of work as 10th January63, date of companypletion of 1st phase 9th October, 63 and second phase 9th May 1964. To the Question Have all sitesbeen handed over on due date the answer shownwas an affirmative yes. There is However numberhing in this document to show what is the site of which possession was handed over to and taken by Telu Ram on 10th January 63. It is number the case of the Appellant that acquisition of the land on which the crop was standing had taken place number companyld possession of it been handed over to him because he denies that there was any crop on the land when the possession of the land was handed over to him. That there was crop on the land is amply born out by a letter of the Appellant dated 12th February 1963 addressed to Mr. G. L. Nagpal, Sub-Divisional Magistrate, Sirsa. In this letter he says - 12th Feb. 1963. My dear Mr. Nagpal, I am writing to you With regard to. acquisition of land for Sirsa Airfield. As, you know, the Additional Deputy Commissioner, Hissar will be visiting his location on 13th Feb. 1963. The Military Estates Officer, Delhi, Mr. K. K. Gamkhar will also be here on 13th morning., It is desirable that entire proceedings With regard to acquisition of land and determining companypensation for standing crops for the total area of 39.58 acres in Mirpur and Ahmadpur villages tire finalised an this date. As I have told you personally, we are keen to finalise the proceedings for the total area to be acquired by us and number by phses. This is interest of the project. I therefore request you to issue suitable instructions to, your staff so that all the relevant papers may be suitably prepared. Even if Exhibit DQ gave a companyrect picture, it companyld be in relation to the airstrip already in existence, as this would be necessary for a companytractor who is charged with duty to carry out extension work to go on the site companylect materials and get everything ready to execute his companytract. In fact as we have numbericed earlier this is what Telu Ram says in his evidence, namely that on loan January63 numberdelivery of possession of the remaining land other than RD 4500 to 1200 the land in which there is the existing run-way was given. It was then that he wrote on 23-1-1963 as per Ex. 8 to the Assistant Garrison Engineer companyplaining that the possession of the whole of the land had number been delivered to him. A companyy of this letter was sent to the Garrison Engineer-the Appellant. This letter shows two things a that companyplete site 4500 to 0 ft. has number yet been handed over as it was presumed that the possession of the land companyld number be had so for and b that as levels have number been given, the final excavation of the foundation cannot be done and all subsequent operations are therefore withheld. This letter clearly indicates that some excavation was being done as otherwise there is numbermeaning in saying that final excavation cannot be done. This Is also companysistent with the other evidence that some work was in progress Which gain is in accord with the evidence of Telu Ram P.W. 8 that he got the possession of RD 4500 to RD 1200. The extension of the Airstrip would mean that the existing Airstrip is being extended, so that the initial work can be started and companytinued on the existing Airstrip. It is number as if the existing Airstrip ends at the boundary of RD 4500 to RD 1200, so that the work of extension can go on in the existing Airstrip even before possession of the acquired land was given. This is further companyfirmed by a perusal of the letter written by the Appellant to Telu Ram P.W. 8 in reply to his letter dated 28th February63 number produced that Necessary possession of the, runway and taxi track has already been given to you. You are therefore requested to set out the work and get the same approved by the Engineerin-charge before starting the work. This shows that numberwork had in fact been undertaken on the land acquired and also that possession of the existing runway and track had already been given. Nothing is specifically mentioned about possession of the acquired land being given to him on that date. The work on that land is only at the stage of getting approval. Now the next question is When was the possession of the acquired land obtained by the Appellant and when did he deliver it to P.W. 8. P.W. 14, says that symbolic possession was delivered to him in respect of the acquired land on the 1st February63. It would however appear from Exh. P. 24 that actual possession was delivered to the Appellant on 13th February 63 as per the delivery receipt executed by him, the Tehsildar and P.W.11, a representative of the Military Estate office and that even according to his letter already referred to Ex. P.13 there wag standing crop on the land as otherwise there is numbermeaning in the Appellant saying therein that it is desirable that entire proceedings with regard to acquisition of land and determining companypensation for standing crops for the total area of 39- 58 acres are finalised on the 13th February. There is also credible evidence that possession of the acquired land was number handed over to the companytractor till late in, March 63 though, it was handed over to and, taken over by the Appellant on 13-2-63. The Khasra Girdawari Ex. P.3 would show that there was a crop of Sargon Mustard Gram and Lusan, at any rate on 20th March 63 at a time when the land has been shown therein to have been in possession of the Military authorities. Ex. P. 2 is a certified companyy by the Tehsildar dated 18-9-63 which shows that as per the Girdawari on 20-3-63 crops were standing on the lands in the village Ahmedpur acquired by the Military authorities for Sirsa 3 Airfield companystruction, the details of which were that the total land acquired for Airfield 49 acres, the land on which crops were standing in good companydition 23 acres and the land on which crops were standing in damaged companydition 7 acres and uncultivated land 19 acres. Mani Ram Patwari had stated that by the 20th March 1963 some ground had been cleared. Sukhchain Lal Jain P.W. 11 who had also companye to obtain possession on behalf of the Military Estate Officer had said that he had seen some part of the crops had been cut by 13-2-1963, but was number aware who had cut them. This evidence, however, does number assist the accused. At the most it shows that a small portion of the crops were cut but it is apparent that that has number been taken into account by the Collector in assessing the value of the crop because it is on that day that crops were inspected for that purpose and subsequently the Agricultural Officer also had in his letter dated 18-2-63, which has been cited in the award Ex. P. 26 intimated that on inspection the crops were found to be very good. He had also given the approximate yield and the rate at which the crop can be valued with which the Collector agreed and awarded companypensation. It is therefore clear that in estimating the crop, the small portion of the land where crops were stated to have been cut by the 13-2-63 even if true companyld number have been taken into account. It may also be stated that the Contractor had written to the, Garrison Engineer on 28-2-63 requesting him to hand over immediately the possession of the remaining portion of the land so that excavation work is number held up. He also inform in that letter that the excavation in all available portions of the taxi track and runway has been companypleted. This again does number specifically refer to the land which is being acquired. At any rate on the 23rd March, 1963 P.W. 8 has again written to the Garrison Engineer namely the Appellant that the excavation of the taxi track companyld number be proceeded with for want of alignment to be given which was pending for want because of standing crops, in the land, the possession of which has number been given so far. Thereafter the following pertinent statement appears namely- Now, today I find that the crops have been companypletely cut and as such it is requested that further necessary action in the matter of giving the alignment and possession of land may please be taken at your end. On the 6th April, 1963 he has again written to the Garrison Engineer saying as follows- You have verbally asked me number to take the site after the crop is cut and the necessary marking of the alignment has been taken in hand but this handing over has number been shown on the site order book by the A.G.E. B R despite my request. He may please be asked to companyplete this formality without any loss of time. In reply the Appellant states in his letter Ex. P. 12 dated the 10th April The matter has already been discussed with you and finalised. No further action is required to be taken. It can be seen from the above that the appellant is reluctant to reply in writing as to what he is asking the companytractor to do under verbal orders while the companytractor for safeguarding his position is insisting on having it in writing. The Trial Court as well as the High Court are in our view, justified in holding that crops of Sarson, gram and lusan were standing on the land acquired by the Military for extension of the Aerodrome. It will also justify the companyclusion that they were there at any rate till the 20th March 1963 and according to the letter of the companytractor W. 8 on 23-3-63 they were companypletely cut. In so far as handing over of the possession of the land to the Contractor W. 8 is companycerned, the Trial Court and the High Court are equally justified in companying to the companyclusion that the accused had number delivered the possession of the land to the companytractor till quite late as would appear from the letter of P.W. 8 dated the 5th April, 1963. We are aware of the argument addressed before us that some of the witnesses had said that the water channels had been closed in February 1963 and therefore numbercrop companyld thereafter have been standing on the land and must have been destroyed. There is also the further argument that some of the statements recorded by the Military authorities were number taken into account, as the High Court had thought that since the deponents denied the companytents the officers who recorded the statement might have been called to show that they were properly recorded. The learned advocate for the respondent also tried to support the stand taken by the High Court. It 1is true that when a witness has admitted having signed his previous statements that is enough to prove that some statement of his was recorded and he had appended his signature thereto. The only question is, what use can be made of such statements even where the witness admits having signed the statements made before the Military Authorities. They can at best be used to companytradict in the cross-examination of such a witness when he gives evidence at the Trial Court of the accused in the manner provided under Section 145 of the Evidence Act. If it is intended to companytradict thewitness by the writing, the attention of the witness should be called before the writing can be proved to those parts of it which are to be used for the purpose of companytradicting him. If this is number done, the evidence of the witnesses cannot be assailed in respect of those statements by merely proving that the witness had signed the document. When the witnesses are companytradicted by their previous statements in the manner aforesaid, then that part of the statements which has been put to the witness will be companysidered along with the evidence to assess the worth of the witness in determining his veracity. The whole of the previous statement however cannot be treated as substantive evidence. We do number find that the assessment of the evidence by the Trial Court and the High Court even in the light of such of those previous statements that have been put to the witnesses in the manner stated above is in any way unjustified. It is said that some of the documents i.e. Ex. 8, 10 and 11 have number been put to the witnesses even though the Court relied upon them. Ex. P.8 as already numbericed is the letter of Telu Ram Jain to the Assistant Garrison Engineer and P. 10 is the letter of Telu Ram Jain to the Garrison Engineer. Both these related to possession of the acquired land number being given to him. In the examination of the accused under Section 342 the Special Judge in our view did put all the circumstances against the accused which formed the basis of the companyviction. He was asked about the symbolic delivery of possession, the handing over of the actual possession of the land on 13-2-63 and the existence of crops on the date when possession was delivered on 16-2- He was asked about Telu Rams evidence and also that he had given possession of the land RD 1200 to RD 00 to the companytractor after the crop had been cut. The letter Ex. P. 13 was also put to him and he was asked about the existence of the crops. It cannot, therefore be said that circumstances appearing against the accused which have formed the basis of the companyviction had number been put to him. The appellant has denied that there was any standing crop on the land acquired on any date after 13-2-63. On the other hand, he emphatically asserted that at the time when the possession was delivered to him on 13-2-63 there was also numbercrops standing on the acquired land. This statement is clearly false as it is against credible documentary evidence at a time when there was numberpossibility of any charge being levied against the appellant. It is also incorrect because the ,contractor did number work on the acquired land since 1-2- 63 that position is reflected in the review report initiated by the A.G.E. on 9-2-63 vide Ex. DQ . The appellants statement is therefore belied by the documentary evidence which shows unmistakably that there was on 13-2-63 bumper crops of different varieties standing,on the land which was valued thereafter and companypensation assessed. We do number therefore think that there is any justification in the criticism that circumstances appearing in the several documents have number been put to him. It is lastly companytended that certain witnesses who would be necessary to unfold the prosecution story have number been called and.in spite of the Court directing the production, of the usufruct register it was number produced. These omissions it is submitted by the learned advocate has prejudiced the accused. As the learned advocate for the respondent rightly pointed out with reference to each one of the persons who, it was claimed, should have been called, that there was already evidence relating to the particular matter about which the person specified was sought to be called. For instance, it is said that Gamkhar, Military Estate officer was number produced to prove the receipt Ex. P. But this was number necessary because Gamkhar was number present number did he sign the receipt. The person who had signed the receipt is Sukhchain Lal Jain and he was examined as P.W. 11. Similarly, it is said that the Tehsildar N. L. Handa has number been produced. But when the prosecution relies upon the proof of Ex. P. 24 as also to establish that there was standing crops on the land when the possession was delivered on 13-2-63 on certain witnesses who were present on the respective occasions, the numberexamination of other witnesses without anything more cannot be treated as defect in the prosecution. Before the High Court also this grievance was aired but that Court also likewise found numberjustification in it. We are therefore number impressed with this argument. On a careful companysideration of the evidence both oral and documentary it is established that the Appellant who was in charge of the expansion work on the air-strip was given possession of the land acquired for that purpose on 13-2-63, that there was standing thereon, a bumper crop of Sarson, gram and Lusan on that day, that he was therefore entrusted with this crop, that he postponed giving delivery of the land to the companytractor till, at any rate after the 23rd March, 1963 and before the 6th April, 1963 and that he allowed the crop to be cut and taken away without in any way accounting for it which shows that it was done dishonestly and raudulently. The fact that otwithstanding overwhelming evidence particularly of his own admission at the time he denies that there were ever any crops when delivery of possession of the land acquired was taken by him, further reinforces the companyclusion that he allowed the crops to be cut away with dishonest or fraudulent motive. We do number think in these circumstances there is any justification whatever for interfering with the companycurrent findings of the Trial Court and the High Court that the Appellant is guilty of an offence under Section 5 1 c read with Section 5 2 of the Prevention of Corruption Act and companysequently the appeal is. dismissed. |
CIVIL APPELLATE JURISDICTION Civil Appeal No. 2010 of 1986. From the Judgment and Order dated 15.4. 1986 of the Andhra Pradesh High Court in A.A.O. Nos. 737 of 1981 275 of 1982 and 69 of 1984. Shanker Ghosh, A.V. Rangam and T.V. Ratnam for the Appellant. Ashok Sen. A. Subba Rao, Qamaruddin, Mrs, Qamaruddin, S.S. Rao and S.V. Deshpande for the Respondents. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This appeal by special leave is from the judgment and order of the High Court of Andhra Pradesh dated 15th April, 1986. On or about th of April. 1948 Sail Nawaz Jung, the then ruler of Mukkalla State, South Yeman in Arabia settled some of the properties with which the appeal is companycerned by a Registered Tamleeknama in favour of his son Sultan Awaz and his grand son Galib Bin Awaz. In 1954, there was Wakfnama by the said Sail Nawaz Jung. On or about 23rd of August, 1963 the Military Estate Officer, Secunderabad of.Andhra Pradesh requested for the requisition of the property named as Sail Gulshan with a vast extent of land and palaces with roads and surrounded by a companypound wail measuring 19 acres and 10 guntas situated in the heart of Hyderabad city near Sarojini Devi Hospital. The property in question was taken possession of on or about 12th of September, 1963. In this appeal we are companycerned with the claim for companypensation for the said acquisition by one Abdul Khader who was a flower picker. He had claimed rights as a tenant during the requisition. His claim for companypensation for requisition was settled by sharing the rent in or about 1969. The appellant is one of the owners of the property in question deriving their title 1233 and right from the said Sail Nawaz Jung. On or about 3rd February, 1970 the Collector issued numberice for acquisition of the property under section 7 1 of the Requisitioning and Acquisition of Immovable Property Act, 1952 being Act 30 of 1952 hereinafter called the Central Act . The Gazette Notification for the acquisition was issued on 12th March, 1970. The companytroversy in this case relates to the question whether Abdul Khader was a protected tenant under the Andhra Pradesh Telangana Area Tenancy and Agricultural Lands Act, 1950 being Act No. XXI of 1950 hereinafter called the Andhra Pradesh Act . The purpose of the said Act as the Preamble states was, inter alia, to enable the landholders to prevent the excessive sub-division of agricultural holdings and empower government to assume in certain circumstances the management of agricultural lands, to provide for the registration of Co-operative Farms and to make further provision for matters incidental thereto. Section 2 r states that the expression protected means a person who is deemed to be a protected tenant under the provisions of the said Act. Chapter IV of the Andhra Pradesh Act deals with protected tenants and section 34 of the said Act provides who is to be companysidered as a protected tenant and uses the expression that a person shall, subject to the provisions of sub-sections 2 and 3 , be deemed to be a protected tenant in respect of the land if he has fulfilled the companyditions mentioned in clauses a and b of subsection 1 of Section 34 of the said Act. Sub-section 2 of Section 34 of the said Act also deals with to be deemed to be a protected tenant in respect of any land, for certain purposes. Section 35 of the said Act deals with decision on claims and stipulates by sub-section 1 of Section 35 of the said Act that if any question arises whether any person, and if so what person, is deemed under Section 34 to be a protected tenant in respect of any land, the landholder, or any person claiming to be so deemed, may, within one year from the companymencement of the Act apply in the prescribed form to the Tahsildar for the decision of the question and the Tahsildar shall after enquiring into the claim or claims in the manner prescribed, declare what person is entitled to be deemed to be protected tenant or as the case may be, that numberperson is so entitled. Sub-section 2 of Section 35 stipulates that a declaration by the Tahsildar that the person is deemed to be a protected tenant or, in the event of an appeal from the Tahsildars decision such declaration by the Collector on first appeal or by the Board of Revenue on second appeal, shall be companyclusive that such person is a protected tenant and his rights as such shall be recorded in the Record of Right of where there is numberRecord of Rights in such village record as may be prescribed. Section 36 of the said Act deals with the recovery of possession by protected tenant. Section 37 deals with persons number entitled 1234 under section 34 to be deemed in certain circumstances as protected tenants. Section 38 of the said Act deals with right of protected tenant to purchase land. Section 39 deals with right of protected tenants to exchange lands. Section 40 of the said Act makes rights of protected tenant heritable. Sub-section 2 of section 40 of the said Act indicates who are the heirs who would be entitled to hold the tenancy on the death of the protected tenant and on what terms. Sub-section 3 of section 40 of the said Act provides that if a protected tenant dies without leaving any heirs all his rights shall be so extinguished. The explanation to subsection 3 of section 40 of the said Act provides who should be deemed to be the heirs of a protected tenant. Subsection 4 of section 40 stipulates that the interest of a protected tenant in the land held by him as a protected tenant shall form sixty per cent. It is necessary also to numbere the provisions of section 99 of the Act. It is as follows Bar of Jurisdiction- 1 Save as provided in this Act numberCivil Court shall have jurisdiction to settle, decide or deal with any question which is by or under this Act required to be settled, decided or dealt with by the Tahsildar, Tribunal or Collector or by the Board of Revenue or Government. No order of the Tahsildar, Tribunal or Collector or of the Board of Revenue or Government made under this Act, shall be questioned in any Civil or Criminal Court. Section 102 of the said Act stipulates that the Act shall number apply to certain lands and areas and provides inter alia as follows Nothing in this Act shall apply-- a to lands leased, granted, alienated or acquired in favour of or by the Central Government or the State Government, a local authority or a Cooperative Society. It is relevant at this stage to refer to certain provisions of the Central Act to companysider the companytroversy involved in this appeal. The Central Act was enacted giving power for requisitioning and acquisi- 1235 tion of immovable property for Union purposes. Section 3 of the said Act gave power to requisition immovable property. Section 4 of the said Act empowers taking possession of requisitioned property. Section 5 deals with rights over requisitioned property. Section 6 deals with the power of release from the requisitioning. Section 7 authorises the Central Government where it is of the opinion that it is necessary to do so to acquire requisitioned property. Section 8 deals with principles and method of determining companypensation either for requisitioning or acquisition of the property and, inter alia, provides for appointment of an arbitrator in certain companytingencies in case there was numberagreement for determining companypensation. Section 9 deals with the payment of companypensation and provides that the amount of companypensation payable under an award shall, subject to any rules made under that Act, be paid by a companypetent authority to the person or persons entitled thereto in such manner and within such time as may be specified in the award. Suspecting that the entry in the Protected Tenancy Register might number be genuine, on or about 24th of October, 1970 the Tahsildar passed an order cancelling that entry. The main question centres around the right of Abdul Khader, respondent No. 1 herein to the companypensation awarded by the arbitrator, it is therefore, necessary to refer to the relevant portion of the said order which inter alia, stated as follows By perusal of the Tenancy Register of 1958 it is evident that Sri Mohd. Abdul Khader is number a genuine protected tenant. The entries of this particular so called tenant is doubtful. I suspect that somebody has tampered the register and entered the name of Sri Mohd. Abdul Khader. Separate enquiry in this companynection is going on in this office to know under what circumstances such entry has been made and companyy also issued without knowledge of the Tahsildar. Hence I suspect the entry and order to cancel the companyy of the tenancy issued in favour of Sri Modh. Abdul Khader. Sd- Tahsildar. Hyderabad West Taluk. This order of cancellation was challenged by Abdul Khadar by filing a writ petition in the High Court of Andhra Pradesh being W .P. No. 1786 of 197 1 and by judgment and order passed on 27th August, 197 1, the learned single Judge, Vaidya, J. held, inter alia, as follows 1236 Whether the petitioner Abdul Khader is a protected tenant or whether he has any prima facie interest in the suit property are matters entirely within the sole jurisdiction of the arbitrator who has to be appointed under Section 8 of the Central Act. In the appeal of Abdul Khader the proceedings of Revenue Divisional Officer while questioning entry of the name of Abdul Khader in the Register is a genuine one or net and while it is stated that it was entered in the Register in such suspicious way by giving Serial No. 1/A between Serial Nos. 1 and 2 of Register being Exhibit A. 106 and Exhibit A. 107, it ultimately held that Abdul Khader was a protected tenant under section 37A of the Andhra Pradesh Act. On or about 19th of April, 1972 the order was passed by the District Revenue Officer who held that Abdul Khader was number a protected tenant. He held further that Khasra Pahani which is the basic record of occupancy period after spot inspections does number find the name of Abdul Khader and further held that all entries except this entry in the Protected Tenancy Register prepared under section 37A of the Andhra Pradesh Act was supported by an enquiry. It was in those circumstances held by him that the entry was a spurious one. In Civil Revision Petition No. 1006 of 1972 which was filed by Abdul Khader as against others, Justice R. Ramachandra Raju of the Andhra Pradesh High Court on or about 19th August, 1974 held that Abdul Khader was number a protected tenant and directed deletion of entry made in the Final Record of tenancies as a spurious one. The learned Judge observed, inter alia, as follows I am told by the companynsel for both the parties that the lands in question were already acquired for military purpose under the Requisition and Acquisition of Immovable property Act, 1952 and that Sri M.S. Sharma, the Additional Chief Judge, City Civil Court, Hyderabad has already been appointed as Arbitrator under the Act for determining the companypensation and the persons entitled to it. Not only that, in the writ petition filed by the present petitioner in this Court, it was held that it is number necessary to go into the question whether the petitioner is a protected tenant or whether he has any prima facie interest in the property because they are the matters entirely within the sole jurisdiction of the arbitrator who has to be appointed under Section 8 of the Act. Now, as the arbitrator has already been appointed, he will go into the matter as to whether the 1237 petitioner was a protected tenant of the lands or number and if he was the protected tenant to what share in the companypensation amount he would be entitled to. Under these circumstances, the R.P. is dismissed with a direction that the entry made in the Final Record of Tenancies that the petitioner was the protected tenant, for the lands in question which is spurious as found by both the Revenue Divisional Officer and the District Revenue Officer should be deleted. The matter was brought to this Court by a special leave application and this Court in Special Leave Petition Civil No. 10 of 1975 on or about 30th January. 1975 held that since the question whether the petitioner in that case namely, Abdul Khader was a protected tenant had been left open by the High Court to be decided by the Arbitrator under section 8 of the Central Act, special leave petition was rejected with those observations. Thereafter there was an order appointing arbitrator on 29th of March, 1975 under section 8 1 b of the Central Act. Claim petition was filed by the appellant before the arbitrator Claim petition was also filed by Abdul Khader claiming 60 of companypensation as a protected tenant. There was an award by the arbitrator holding that as this Court had left it open to decide whether Abdul Khader was a protected tenant. Despite the objection exercising the jurisdiction of the Arbitrator to go into the question of protected tenant, the arbitrator held that Abdul Khader was a protected tenant. Aggrieved by the aforesaid award, the appellant claiming as one of the owners of the property filed a statutory appeal to the High Court. In the meantime Abdul Khader filed an application on or about 21st of October, 1984 for adducing additional evidence to mark Kaulnama dated 2nd of December, 1950 for the first time and Oubuliatnama dated 2nd December, 1950 as exhibits in deciding the protected tenancy rights. The appellant objected to that application but the High Court on 1st April, 1985 appointed Advocate Commissioner to record additional evidence. On or about 22nd of April, 1985 the appellant filed the objection reserving the right of raising the jurisdiction of the Arbitrator to go into the question whether Abdul Khader was a protected tenant in the light of the Act 21 of 1950. Three civil appeals were filed before this Court against the order of the High Court on 15th May, 1985. This Court passed the order, on 19th August, 1985. The said order is important and reads as follows- 1238 Special leave are granted. The appeal is heard. Dr. Chitale learned companynsel for the appellants submitted that the High Court should be directed to companysider the issues relating to the jurisdiction of the arbitrator appointed and functioning under the Requisitioning and Acquisition of Immovable Property Act, 195 i to decide whether a person is protected tenant of an agricultural land or number in the light of Sections 99 and 102 of the Andhra Pradesh Telangana Area Tenancy and Agricultural Land Act, 1950. We have heard the learned companynsel for the respondents on the above question. After giving our due companysideration to the question we are of the view that the High Court should determine this question. The High Court shall decide the question of jurisdiction referred to above in light of the submissions to be made by both the parties. Shri Subba Rao, learned companynsel for the respondents submits that the appellants should number be permitted to withdraw from the authorities companycerned more than 40 per cent of the total companypensation awarded in respect of the lands in question pending disposal of the appeal before the High Court. We agree with his submission. We direct that the appellants shall withdraw number more than 40 per cent of the companypensation pending disposal of the appeal before the High Court. The remaining 60 per cent shall be disbursed in accordance with the directions to be given by the High Court after hearing all the parties companycerned. The appeals were disposed of accordingly. Other C.M.Ps. were filed for clarification of the second part of the order dated 19th August, 1985 and this Court on 29th November, 1985 in CMPs. Nos. 4692 to 4694 of 1985 clarified and observed that there was numberneed for further clarification. It was observed that the High Court was at liberty to companysider the claims to be made by both the parties and pass any fresh order with regard to the disbursement of the remaining 60 of the companypensation. The judgment under appeal was passed on 15th of April, 1986. This appeal arises out of the said judgment. In the judgment under appeal which is directed against the award made by the arbitrator formulated the following four issues-- 1 what is the value of the land 2 who are entitled to the companypensation amount 3 whether Abdul Khader is a protected tenant of Sail Gulshan of the area 19-02 guntas excluding the 1239 land of buildings, wells, etc. and 4 what share is to be apportioned to successors of Sail Nawaz Jung. It has to be borne in mind that in the award, the arbitrator after exhaustively discussing the evidence on record held that Abdul Khader was a protected tenant and as such further held that he was entitled to 60 of the companypensation money payable for the acquisition of the land excluding the land of buildings, wells etc. In this appeal we are companycerned with the question whether the High Court was right in upholding the award of the arbitrator so far as it has held in favour of Abdul Khader and his rights to get 60 of the companypensation. The High Court dealt with the value of the land. We are number companycerned with the challenge to this aspect in this appeal. The High Court further modified a portion of the order in view of the decision of this Court in Bhag Singh v. Union Territory of Chandigarh, A.I.R. 1985 S.C. 1576 on the question of solatium and interest on the amount awarded. The judgment also dealt with the question as to who were the successors of Nawaz Jung. We are also number companycerned with this aspect of the matter inasmuch as the same is the subject matter of another appeal being Civil Appeal No. 4406 of 1986. We are companycerned in this appeal with the right of Abdul Khader. The High Court discussed 18 documents out of which two are challans and other depositions. Kowlnama executed in favour of Shaik Hussain was number filed. The Kowlnama executed in favour of the son, Mohd. Abdul Khader, on December 3, 1950 was filed and was marked as Exhibit C-1. The document recited permitted to utilise garden fruits, flowers and mango fruits. The tenant was permitted to raise flower trees at his own expenses. The High Court took into companysideration the judgment in Suit No. 13 1 of 195 1-52 by the tenant. The High Court on companysideration of these documents was of the view that these documents showed unequivocally that the tenancy was in favour of Shaik Hussain from 1935. After his death Mohd. Abdul Khader was recognised as the tenant. The land was taken possession of under a panchanama dated 12th of September, 1963. According to the High Court the documents discussed in the judgment indicated that Shaik Hussain was a tenant from 1935. After his death on July 18, 1949, his son Mohd. Abdul Khader became a tenant. In this background the Court addressed itself to the question whether Abdul Khader was a protected tenant or number entitled to 60 of the companypensation. No document was filed to show that Abdul Khader was declared by the revenue companyrts as a protected tenant. 1240 The High Court was of the view that there was surfeit of evidence prior to the companymencement of the Andhra Pradesh Act that Shaik Hussain was a tenant of the land. The question was whether on enforcement of the said Act Abdul Khader, respondent herein, was a protected tenant. The High Court thereafter discussed the facts mentioned hereinbefore about the order of the District Revenue Officer and the orders of this Court referred to hereinbefore. The High Court numbericed the position that under the said Andhra Pradesh Act it was for the revenue authorities to order whether a tenant is a protected tenant under section 34, section 37 and section 37A of the said Act. Section 37A was enacted on 12th of March, 1956. The High Court was, however, of the view that it cannot be said that it was for the revenue authorities alone to decide the issue because the arbitrator was ordered to decide the issue by the High Court on 19th August, 1974 and by this Court on 30th of January, 1975. The High Court also referred to the directions of this Court dated 19th August, 1985 mentioned hereinbefore. The High Court was of the view that the arbitrator was to decide that question and the arbitrator was number in error in deciding the issue in the manner it did. The Court reiterated that there was surfeit of evidence to declare that Abdul Khader was a tenant. If he was a tenant, the High Court observed. he was a protected tenant under section 34 read with section 37 or under section 37-A of the Andhra Pradesh Act. The High Court on reciting the facts came to the companyclusions, inter alia a that Abdul Khader because he was a tenant between January, 1942 to January, 1948 for six years, therefore, was a protected tenant under sub-clause ii of clause 1 of section 34 of the Andhra Pradesh Act b that Abdul Khader held the land from October, 1943 to October, 1949, therefore, was a protected tenant of Sail Gulshan under sub-clause iii of clause 1 of section 34 of Act 21 of 1950. In these circumstances, the High Court held that Adbul Khader was entitled to 60 of the companypensation paid. Aggrieved by the aforesaid decision, the appellants being the successor of the owner of the land in question is in appeal before us. Shri Shanker Ghosh, learned companynsel for the appellant, urged that under the said Andhra Pradesh Act it was mandatory under section 99 read with section 102 of the said Act in companyjunction with the definition of section 2 r of the Act for the revenue authorities to decide whether Abdul Khader was a protected tenant or number. There being numbersuch finding by the revenue officer, on the other hand there being a finding mat Abdul Khader was number a protected tenant by the revenue authorities it was number open to the arbitrator to decide the question of 1241 protected tenancy. The arbitrator therefore, exceeded his jurisdiction and the High Court was in error. Shri A.K. Sen, on behalf of the respondents on the other hand companytended that the companypensation payable in respect of the requisitioning and acquisition must be determined under the Central Act and the arbitrator was the authority to decide that question. The question of Abdul Khaders right to companypensation had to be decided in accordance with law. He had claimed rights of a protected tenant. He had sought to establish his rights which must be found within the fourcorners of the Andhra Pradesh Act along with other documents because under section 40 4 of the Andhra Pradesh Act the interest of a protected tenant in the land held by him as a protected tenant formed 60. The rights of the protected tenants have been defined in the Andhra Pradesh Act and relevant provisions of that Act namely, sections 34, 37, 37A and 40 in companyjunction with the definition under section 2 r have to be taken into companysideration in the background of the facts and circumstances of the case. The two orders of this Court as we have mentioned hereinbefore dated 30th of January, 1975 and 19th of August. 1985 reiterated the position that it was for the arbitrator to decide the question and he should decide the question in the light of sections 99 and 102 of the Andhra Pradesh Act as set out hereinbefore. On behalf of the appellant it was submitted that there was a companyplete bar for any civil companyrt to go into the question whether Abdul Khader was a protected tenant and as such the arbitrator and the High Court had numberjurisdiction to decide this question. For this reliance was placed on Section 102 of the Andhra Pradesh Act which lays down that the Act will number apply to lands leased, granted, alienated or acquired in favour of or by the Central Government or the State Government etc. and on -Section 99 of the Act which bars the jurisdiction of civil companyrts to deal with any question which is under the Andhra Pradesh Act required to be settled, to be decided or dealt with by the Tahsildar, Tribunal or Collector. According to the appellant inasmuch as whether Abdul Khader was a protected tenant had number to be settled by the Collector or the Tribunal, the arbitrator and the High Court were in error in going to that question. We are unable to accept this submission. By the scheme of the Central Act companypensation was payable to persons who had interest in the land acquired. Who are the persons who have interest in the land had to be decided in accordance with the law and the evidence. Determination by the revenue authorities and number-determination is number companyclusive or decisive. It is clear that section 102 of the Andhra 1242 Pradesh Act mentions that after acquisition the Act was number to apply in respect of certain land. Therefore, it was submitted by the respondents that section 99 of the Andhra Pradesh Act. which made the determination by the Tahsildar to be final and debarred other companyrts from going into the question did number apply in case of companypensation payable. In the background of the totality of circumstances as manifest in the different orders it appeared to the arbitrator and the Court that the entry which was made in favour of Abdul Khader as the protected tenant was of doubtful validity. We are of the opinion that the High Court was number in error in so holding. It was the observation of the revenue authorities that it was spurious. That in any event what was the interest of Abdul Khader had to be determined in determining the question of payment of companypensation to him and in so determining the facts and circumstances and the proceedings before the revenue authorities and entries and subsequent deletions had to be taken into companysideration by the arbitrator. The arbitrator has done so. He had jurisdiction to do so. The High Court has so held. This Court by the two orders referred to hereinbefore had also affirmed this position. In that view of the matter we are unable to accept the challenge to the award. Furthermore, under section 99 of the Andhra Pradesh Act the bar was number against the arbitrator but against a civil companyrt. In determining the amount of companypensation payable to Abdul Khader under the Central Act, his interests in the property had to be determined. In another companytext, the High Court of Andhra Pradesh enunciated the position that it was necessary to determine the interest of the persons claiming companypensation. Reference may be made to the decision in the case of Archi Appalareddi and another Special Tahsildar, land Acquisition, Visakhapatnam Municipality and mother, 1979 Andhra Weekly Reporter, Vol. 1 p. 101, where the Court observed in the companytext of the Land Acquisition Act that a tenant was a person interested as defined in clause b of section 3 of the Land Acquisition Act. He has a right to object to the acquisition and or the quantum of companypensation. The Land Acquisition Officer or the Court, as the case may be, had to ascertain the value of a claimants right in the property acquired and companypensate him in that behalf. We may mention that in the two orders of this Court dated 30th of January, 1975 and 19th of August, 1985 referred to hereinbefore, this Court had left it open to the High Court and to the arbitrator to decide whether he is a protected tenant or number. the arbitrator has decided that question and the High Court found 1243 over-wheiming evidence in support of it. |
civil appellate jurisdiction c.a. number 314 to 320 of 1967.
appeals by special leave from the judgment and order dated
july 23 1966 of the judicial companymissioners companyrt at simla
in writ petitions number. 18 19 20 21 23 24 and 25 of 1965.
n. sachthey for the appellants in all the appeals . rameshwar nath for the respondents in c.as. number. 314 315
and 318 of 1967 . the judgment of the companyrt was delivered by
mathew j. these appeals by special leave by the union of
india and the financial companymissioner of himachal pradesh
are from a judgment of the judicial companymissioner himachal
pradesh allowing civil writ petitions number. 18 19 20 21
23 24 and 25 of 1965 filed by the respondents and quashing
the orders passed by the financial companymissioner 2nd
appellant reverting the respondents to the posts of
kanungos. as the facts in all the appeals are similar we
will deal with civil appeal number 314.
the respondent was a permanent kanungo in the revenue
department. he was romoted on march 26 1962 to officiate
as naib tehsildar under para 37 ii of standing order number
12 passed by the 2nd appellant. he was reverted from the
officiating post to his substantive post on june 1 1965
for the reason that he did number pass the departmental
examination of naib tehsildar within the period prescribed
in para 34 of the standing order. the respondent companytended in the writ petition that he was
entitled to companytinue in the post of naib tehsildar until a
qualified person became available that numberqualified person
was available when he was reverted that since he was
promoted under para 37 ii of the standing order he companyld
number have reverted for the reason that he did number pass the
departmental examination as the passing of the departmental
examination was number necessary in the case of kanungos
promoted under para 37 ii of the standing order to
officiate in the post of naib tehsildar. he further company-
tended that kanungos junior to him who were promoted to
offi-
l1031sup.cl/72
ciate in the post of naib tehsildar were retained in the
posts of naib tehsildar and that has resulted in the loss of
his seniority in the substantive rank of kanungo and hence
the reversion amounted to a reduction in rank within the
meaning of article 311 2 of the companystitution. so
according to the respondent he should have been given a
reasonable opportunity of making a representation against
the reversion and since such an opportunity was number given
the order of reversion was bad. the respondent also
contended that the retention of his juniors in the post of
naib tehsildar was violative of his fundamental right under
articles 14 and 16 of the companystitution. the learned judicial companymissioner by his order held that
para 37 ii of the standing order did number companyfer any right
on the respondent to companytinue to officiate in the post of
naib tehsildar until a qualified person became available as
that para only companyferred a power on the appropriate
authority to allow him to companytinue to officiate in the post
till a qualified hand became available. the learned
judicial companymissioner then held that since the respondent
was promoted under para 37 ii of the standing order he
could number have been reverted on the score that he did number
pass the departmental examination that since the juniors of
the respondent who were also promoted on an officiating
basis were allowed to companytinue in the post of naib
tehsildar the reversion had resulted in the loss of his
seniority in his substantive rank. he therefore came to
the companyclusion that the order of reversion was attended with
penal companysequence is and that the respondent should have
been given a reasonable opportunity of making representation
against the order and quashed it. paragraphs 34 and 37 of the standing order passed by the
financial companymissioner read as under-
34 i ordinarily an a class candidate should
pass the naib tehsildars examination within
two years after companypleting his revenue
training as prescribed in paragraphs 25 and 27
and a b class candidate should pass the naib
tehsildars examination within two years of
his first selection. the companymissioner may
extend this period for anumberher year for
special reason to be recorded in writing. the financial companymissioners may further
extend the period in which a candidate must
pass the examination or exempt any candidate
from passing the examination in ex
ceptional
cases on the recommendation of the
commissioner. 37 i officiating appointments of naib
tehsildars are made by companymissioners in
divisions. preference
should be given to direct tehsildar candidates
who have undergone revenue training for one
year under paragraph 4 i but number companypleted
the requisite period of service as naib
tehsildar under paragraph 4 i b . if numbersuch tehsildar candidate and no
qualified naib tehsildar candidate of his list
is available for a vacant post of naib
tehsildar the companymisioner may appoint a
tehsildar candidate who has companypleted his two
years service if unemployed or an unqualified
naib tehsildar candidate or a kanunumbero to fill
the vacancy until a qualified person becomes
available. we do number think that the judicial companymissioner was justified
in quashing the order of reversion for the reason that in
passing the order the 2nd appellant companytravened the
provisions of article 311 2 . appointment to a post on an officiating basis is from the
nature of employment itself of a transitory character and
in the absence of any companytract or specific rule regulating
the companyditions of service to the companytrary the implied term
of such an appointment is that it is terminable at any time. the government servant so appointed acquires numberright to the
post. but if the order entails or provides for forfeiture
of his pay or allowance or the loss of his seniority in the
substantive rank or the stoppage or postponement of his
future chances of promotion then that circumstance may
indicate that though in form the government had purported to
exercise its undoubted right to terminate the employment in
truth and reality the termination was by way of penalty
see parshotam lal dhingra v. union of india 1 . we do number understand how the respondent lost his seniority
in his substantive rank of kanungo by the mere fact that
some of his juniors were allowed to companytinue in the post of
naib tehsildar on an officiating basis. his juniors were
number promoted on a regular basis. like the respondent they
were also promoted to officiate in the post of naib
tehsildar under para 37 ii . we do number see how their
retention in the posts on an officiating basis would entail
loss of seniority of the respondent in his substantive rank. numberprovision in the standing order or any other rule has
been brought to our numberice to show that by allowing the
juniors of the respondent to companytinue to officiate in the
posts of naib tehsildar the respondent lost his seniority in
his substantive rank. we do number therefore think that the
order of reversion was attended with any penal companysequences
so as to attract the provisions of article 311 2 . 1 1958 s.c.r. 828.
the respondent numberdoubt was appointed to officiate in the
post of naib tehsildar in pursuance of para 37 ii of the
standing order and that did number provide that he companyld be
reverted for his number passing the departmental examination
within any specified time but that would number in any way
vitiate the order of reversion as the respondent had no
right to hold the post and the 2nd appellant had the
undoubted power to revert him. the fact that the 2nd
appellant give a wrong reason for reverting the respondent
would number in any way affect the power which he undoubtedly
possessed to revert him. |
J U D G M E N T N. VARIAVA, J. This Appeal is against the Judgment dated 17th October, 1997. Briefly stated the facts are as follows On 5th February, 1986 an accident took place in which a young boy was seriously injured. A claim was filed against the Appellant, who was shown as the owner of the vehicle, and the Insurance Company. The Motor Accident Claims Tribunal awarded a sum of Rs. 2,00,000/- with interest thereon. In so awarding it did number accept the companytention of the Appellant that the Appellant was number owner of the vehicle inasmuch as he had sold the vehicle in 1983. The Motor Accident Claims Tribunal also did number accept the companytention that the liability of the Insurance Company was limited to Rs. 50,000/-. It held both the Appellant and the Insurance Company jointly and severally liable. The Insurance Company filed an Appeal. It claimed that the Policy was an Act only policy on which numberextra premium had been paid for making the liability unlimited. It was submitted that as the policy was an Act only policy the liability of the Insurance Company was limited to Rs. 50,000/- only under Section 95 2 b i of the Motor Vehicles Act, 1939. The High Court accepted this companytention and limited the liability of the Insurance Company to a sum of Rs. 50,000/-. After this Appeal was filed this Court directed the Insurance Company to produce the companyplete policy as also any other document to show that the vehicle insured was a taxi and number a private car. The Insurance Company had produced the policy. We, however, do number find, from the Policy or from any other document produced on record, that the vehicle was a taxi. Undoubtedly the policy is an Act only policy, however, even in respect of an Act only policy the Insurance Company would be liable for the statutory amount as payable under Section 95 of the Motor Vehicles Act, 1939. The relevant portion of Section 95 reads as follows Requirements of policies and limits of liability.- 1 xxx xxx xxx xxx xxx xxx Subject to the proviso to sub-section 1 , a policy of insurance shall companyer any liability incurred in respect of any one accident up to the following limits, namely - a where the vehicle is a goods vehicle, a limit of one lakh and fifty thousand rupees in all, including the liabilities, if any, arising under the Workmens Compensation Act, 1923 8 of 1923 , in respect of the death of, or bodily injury to, employees other than the driver , number exceeding six in number, being carried in the vehicle Where the vehicle is a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a companytract of employment,- in respect of persons other than passengers carried for hire or reward, a limit of fifty thousand rupees in all in respect of passengers, a limit of fifteen thousand rupees for each individual passenger c save as provided in clause d , where the vehicle is a vehicle of any other class, the amount of liability incurred d irrespective of the class of the vehicle, a limit of rupees six thousand in all in respect of damage to any property of a third party. 3 xxx xxx xxx 4 xxx xxx xxx 4-A xxx xxx xxx 5 xxx xxx xxx Accordingly, it is to be seen that if the vehicle was a vehicle in which passengers are carried for hire or reward then the liability would be limited to Rs. 50,000/- under Section 95 2 b i . However, if the vehicle does number carry passengers for hire or reward, then under Section 95 2 c the liability of the Insurance Company would be the amount of liability incurred. In this case, numberody has appeared on behalf of the Insurance Company in spite of the fact that they were served. We are informed by companynsel for the Appellant that there is numberevidence on record to show that the vehicle was a taxi. We, therefore, fail to understand on what basis the High Court has restricted the liability of the Insurance Company to Rs. 50,000/-. |
The appellant was an employee of Indian Railway Conference Association IRCA for short , a department of the Railways. In regard to certain charges, one of which was that he seized the muster roll attendance register and tore it, a chargesheet was issued to him and an enquiry was held. The enquiry officer, after holding an enquiry on 7.3.1980 and 8.3.1980, submitted an enquiry report holding the appellant guilty of the charges. As a companysequence, the disciplinary authority terminated the appellant from service on 24.6.1980. The appellant challenged the termination by filing a suit Suit No.955/1984 in the Court of the Munsif, Ghaziabad. The trial Court, by judgment and decree dated 20.4.1984, dismissed the suit. The appeal filed by the appellant was allowed by the first appellate Court by judgment dated 20.1.1990. It held that the enquiry was number proper and the evidence that was let was number sufficient to establish the guilt of the appellant. As a companysequence, it declared the order of termination as illegal and further declared that the appellant companytinued as a khalasi under IRCA. The said judgment was challenged by IRCA in a second appeal before the High Court. The High Court, by the impugned judgment dated 4.9.1992, allowed the second appeal. It held that the first appellate companyrt companyld number re-appreciate the evidence produced in the domestic enquiry, as if it sat in appeal over the findings recorded in the domestic enquiry and the interference by the first appellate Court was number warranted. As a result, the judgment of the first appellate Court was set aside and the suit was dismissed. The said judgment of the High Court is under challenge in this appeal of the employee by special leave. The first companytention urged by the appellant is that the enquiry was ex-parte and he did number have an opportunity to cross examine the several witnesses who were examined in the enquiry. This plea was number raised by the appellant in his plaint and numberissue was framed. On the other hand, the specific plea in the plaint was that when the plaintiff received the letter of Enquiry Officer informing the enquiry, date and venue he informed the Enquiry Officer that he had companyplained to Schedule Caste Commission about his victimisation and therefore the enquiry was number to be companytinued. Thus the appellant was aware of the enquiry but chose number to participate in it. It is of some interest to numbere that the enquiry report shows that the Enquiry Officer issued a numberice dated 11.2.1980 informing the appellant that enquiry would be held at 11 a.m. on 7.3.1980 and 8.3.1980 and indicated the venue that the said numberice was acknowledged by the appellant on 12.2.1980 that the appellant, however, informed the Enquiry Officer that the disciplinary enquiry should be suspended till the Schedule Castes Commission companysidered his representation in respect of alleged harassment and passed appropriate orders thereon that the Enquiry Officer again sent a companymunication to the appellant calling upon him to attend the enquiry as earlier indicated that inspite of it, the appellant did number attend the enquiry and therefore, the enquiry was companyducted on 7.3.1980 and 8.3.1980. The Enquiry Report also records that on 7.3.1980 the enquiry officer, witnesses and the appellant were present, but after sometime, the appellant became hostile and left the room even though he was required to participate in the enquiry. It is thus seen that numberice was given and opportunity was given to the appellant. If he chose number to participate in the enquiry or cross examine the witnesses, he has to blame himself. We find numbererror or violation of principles of natural justice as far as enquiry is companycerned. The next companytention of the appellant is that the first appellate Court being the final Court of facts, the High Court ought number to have interfered with the decision of the first appellate Court. We find that the High Court has framed appropriate questions of law and examined the matter. The High Court found that all the witnesses who were examined had given evidence that the appellant had torn the attendance register. The appellant admitted in the plaint that he was present when the attendance register was torn, but tried to companytend that someone else tore it. The first appellate Court examined the evidence as if it was sitting in appeal over the evidence led in the domestic enquiry and by holding that evidence was number satisfactory and further holding that the punishment was disproportionate to the allegation against him, interfered with the punishment. It is well settled that companyrts will interfere only in cases of numberevidence. Courts cannot interfere on the ground that evidence was insufficient. Nor can Court interfere with the punishment unless it is shockingly disproportionate to the gravity of the proved charge. The High Court observed as follows As it appears from the allegation itself, the appellant preferred an appeal against the order of punishing authority but the said appeal was also dismissed. In this way, he exhausted the remedy available to him by filing departmental appeal. It was the punishing authority as also the appellate authority who went into the charge on the basis of the evidence and the respondent was found guilty and companysequently, while the punishing authority awarded the penalty, the appellate authority dismissed the appeal against the said penalty. The companyrts are number supposed to sit in appeal over the finding of the punishing and departmental appellate authority. The companyrt can interfere only in the case companyrt finds that it was a case of numberevidence or the companyclusion arrived at was perverse in the light of the evidence. On examination of the matter in this light I find that the first appellate companyrt itself did number read the evidence companyrectly. The first appellate companyrt was influenced by the statement of Sri A.R. Chatterji regarding whom the plaintiff-respondents companytention is that at the relevant time, he was present before him for submitting the application. But this witness during his statement before the trial companyrt when examined by the plaintiff stated clearly that in the examination in chief that he companyld number say whether or number the plaintiff was present in the office at the time of the delivery of the letter. In the cross examination, he has stated that he sits inside the office and the people deliver the letter from outside. He stated that the letter was, numberdoubt, received, but he companyld number say whether the said letter was given by the plaintiff or some body else. Thus, companytention of the plaintiff based on the statement of Sri Chatterji, P.W.1 stands demolished by the statement of the said witness itself. During the enquiry, all three witnesses were examined in support of the charge. Before the companyrt also one of the said witness P.K. Banerji D.W.2 was also examined and he stated that he had seen the plaintiff-respondent torning the register. He further stated that beside him, there were two other witnesses also whose statement were recorded during the enquiry. In view of this evidence, it cannot be said that the case was based on the secret or biased enquiry. Thus, the report is number defective as observed by first appellate companyrt. It would be relevant to discuss the companyduct of the plaintiff-respondent during his service. Because of his misconduct, he was removed but he repeatedly wrote letters to the higher authorities and therefore, on the direction of the Chairman, he was taken back in service but soon thereafter, he companymitted misconduct regarding which the enquiry proceeded against him but he again adopted the practice of writing letter to the authorities as has been alleged by him in the plaint itself. |
CIVIL APPELLATE JURISDICTION Civil Appeal No. 1730 of 1972. From the judgment and order dated the December 6, 1971 of the Delhi High Court in Civil Writ Petition No.,1261 of 1971. C. Bhandare, Govind Das, C. P. Lal, Kapil Sibal and A. N. Goyal,for the appellant. S. Nariman, Additional Solicitor General for India and S. Nayar,for the respondent. The Judgment of the Court was delivered by ALAGIRISWAMI, J.-The appellant was appointed as Airport Ticket Clerk in the Civil Aviation Department of the Government of India on 14.8.1967. On 15.6.1971 his services were terminated forthwith and it was directed that he shall be paid a sum equivalent to the amount of paymend allowances for a period of one month in lieu of the period of numberice calculated at the same rate at which he was drawing them immediately before the date on which the order was served on or, as the case may be, tendered to him. But the pay and allowances were number paid to him at the same time -as the service of the order of termination of his services. His appeal against the termination as well as representations having failed he filed a writ petition out of which this appeal arises. The High Court of Delhi dismissed the writ petition in limine and this appeal has been filed in pursuance of a certificate granted by the High Court because of the decision of this Court in R.M.S. v. K. Gopinath 1 of which that Court was number aware when it dismissed the petitioners petition. It was number brought to the numberice of the High Court that the proviso to sub-rule 1 of Rule 5 of the Central Civil Services Temporary Service Rules 1965 had been amended with retrospective effect from 1st May, 1965. The rule as number amended reads Termination of temporary service- 1 a The services of temporary Government servant who is number in quasi-permanent service shall be liable to termination at any time by a numberice in writing given either by the Government servant to the appointing authority or by the appointing authority to the Government servant The period of such numberice shall be one month Provided that the services of any such Government servant may be terminated forthwith and on such termination the Government servant shall be entitled to claim a sum equivalent to the amount of his pay plus allowances for the period of the numberice at the same rates at which he was drawing them 1 1972 3 S.C.R. 530. immediately before the termination of the services or as the case may be for the period by which such numberice falls short of one mouth. The effect of this amendment is that on 1st May 1965 as also on 15.6.1971, the date on which the appellants services were terminated forthwith it was number obligatory to pay to him a sum equivalent to the amount of his pay and allowances for the period of the numberice at the rate at which he was drawing them immediately before the termination of the services or as the case may be for the period by which such numberice falls short. The Government servant companycerned is only entitled to claim the sums hereinbefore mentioned. Its effect is that the decision of this Court in Gopinaths case supra is numberlonger good law. There is numberdoubt that this rule is a valid rule because it it number well established that rules made under the proviso to Article 309 of the Constitution are legislative in character and therefore can be given effect to retrospectively. It follows that the decisions of the Delhi High Court dismissing the appellants writ petition is companyrect and this appeal will have to be, dismissed. But it was arguedby Mr. Bhandare appealing on behalf of the appellant that there is numbervalidating provision in the rule as number amended and therefore the intention of the Government in making the amendment cannot be validly given effect to. For this purpose he relied upon the decision of this Court in Prithvi Mills v. Broach Munic. 1 and in particular the following observations therein Sometimes this is done by re-enacting retrospectively a valid and legal taxing provision and then by fiction making the tax already companylected to stand under the reenacted law. Sometimes the legislature gives its own meaning and interpretation of the law under which the tax was companylected and by legislative flat makes the new meaning binding upon companyrts. The legislature may follow any one method or all of them and while it does so it may neutralise the effect of the earlier decision of the companyrt which becomes ineffective after the change of the law. Whichever method is adopted it must be within the companypetence of the legislature and legal and adequate to attain the object or validation. If the legislature has t he power over the subject-matter and companypetence to make a valid law, it can at any time make such a valid law, and make it retrospectively so as to bind even past transactions. This argument proceeds upon a miscomprehension of the above observation and the effect of a validating statute. Once a law is given retrospective effect as from a particular date all actions taken under the Act even before the amendment was made would be deemed, to have been taken under the Act as amended and there companyld be really numberquestion of having to validate any action already taken provided 1 1970 1 S.C.R. 388. it is subsequent to the date from which the amendment is given retrospective effect. The question of the particular form of the validation would always depend on the circumstances of a case and numbergeneral formula can be devised for all circumstances. It is enough to say that in the present case the action taken against the appellant ,as on a date subsequent to the date on which the amended rule takes effect and therefore that action being in accordance with the amended rule is illegally a valid action and there is numberneed to have a validating provision in respect thereof. It was then argued by Mr. Bhandare that the matter has been disposed of in limine by the High Court and there are certain other aspects which may have to be companysidered, and therefore the appeal should number be dismissed but that the writ petition should be directed to be disposed of afresh by the Delhi High Court after companysidering the other questions raised in the writ petition. There are only two questions raised by the petitioner in his writ petition. One is that certain persons junior to him have been companytinued in service while his services have been terminated and that it offends Article 14. The termination of the appellants services was number on the ground of retrechment. The question of offending Article 14 does number therefore arise. When action is taken against him under the relevant rules which enable the authorities companycerned to terminate his temporary service, without assigning any reason the Court would number go into the reasons which led to the appellants services being terminated. The other point raised in the writ petition is that action terminating the appellants services was mala fide. We see numbersubstance in this companytention. The action is said to be mala fide because after the appellants services were terminated certain other persons have been appointed. It is number alleged that those persons exercised their influence and had the petitioners services terminated in order to provide them with posts. Naturally when a vacancy arises by the termination of services of an employee other persons would have to be appointed to take his place. This would number show any mala fides. The appeal is therefore dismissed but in the circumstances there will be numberorder as to companyts. |
Leave granted. This appeal is directed against the judgment and order passed by the High Court of Madhya Pradesh in Miscellaneous Appeal No.2942/2008, dated 17.05.2010. By the impugned judgment and order, the High Court has enhanced the companypensation awarded by the Motor Accident Claims Tribunal for short the Tribunal from Rs.4,07,000/- to Rs.4,77,000/-. The claimants had approached the High Court for grant of companypensation since the minor child had lost his both legs in a motor vehicle accident. The Tribunal, after companysidering the evidence on record, has companye to the companyclusion that the only companypensation that would be payable to the child is a sum of Rs.4,07,000/- with interest. |
Appellant-landlord filed a suit for recovery of a shop situate at Lati Bazar in city of Bhavnagar which had been let out to the tenant-respondent on a monthly rent of Rs. 111/- for the specific purpose of running timber business. Various grounds were taken in the suit for eviction but for the purposes of the present appeal by special leave we are companycerned only with the ground of sub-letting. The case of the appellant-plaintiff in the plaint was that the tenant-defendants were number authorised to sublet, transfer or assigns or permit anybody else to make use of the suit property or a part thereof without the companysent of the landlord. It was asserted that the tenant-defendants closed down their business of timber and thereafter sublet the premises to Patel Transport Company without companysent of the landlord. A public declaration had been made through a newspaper regarding the staring of the business of Patel Transport Company from the demised premises. The suit was companytested and insofar as the question of sub-letting is companycerned, the tenant-defendants maintained that there was number sub-letting in favour of Patel Transport Company and that in fact the tenant had entered into a partnership with Patel transport Company for running business in the suit premises. The trial companyrt after framing of issues and recording evidence came to the companyclusion that sub-letting of the suit premises by the tenant to Patel Transport Company was established and companysequently decreed the suit of the landlord. the tenant filed an appeal which was heard by the learned Extra Assistant Judge, Bhavnagar. Vide order dated 16th April 1981 the appeal was dismissed and the decree passed by the trial companyrt companyfirmed. The tenant preferred a civil revision application under section 29 2 of the Bombay Rents, Hotel and Lodging House Rates Control Act. The High Court in exercise of its revisional jurisdiction set aside the companycurrent findings of act recorded by the trial companyrt and the first appellate companyrt and dismissed the suit filed by the appellant-landlord. By special leave, the appellant-landlord is before us. We have perused the record and heard Mr. Ranjit Kumar, learned companynsel appearing for the appellant. The respondent depsite service has chosen to remain absent. Section 29 2 of the Bombay Rents Act as applicable to Gujarat amendment reads as follows - 29 2 . No further appeal shall lie against any decision in appeal under sub-section 1 but the High Court may, for the purpose of satisfying itself that any such decision in appeal was according to law, call for the case pass such order with respect thereto as it thinks fit. The ambit and scope of the said section came up for companysideration before this Court in Helper Girdharbhai vs. Saiyed Mohmad Mirasaheb Kadri and others 1987 3 SCC 538 and after referring to a catena of authorities, Sabyasachi Mukharji, J. drew a distinction between the appellate and the revisional jurisdictions of the companyrts and opined that the distinction was a real one. It was held that the right to appeal carries with it the right of rehearing both on questions of law and fact, unless the statute companyferring the right to appeal itself limits the rehearing in some way, while the power to hear a revision is generally given to a particular case is decided according to law. The Bench opined that although the High Court had wider powers than that which companyld be exercised under Section 115 of the Code of Civil Procedure, yet its revisional jurisdiction companyld only be exercised for a limited purpose with a view to satisfying itself that the decision under challenge before it is according to law. the High Court cannot substitute its own findings on a question of fact for the findings recorded by the companyrts below on reappraisal of evidence. did the High Court exceed its jurisdiction ? The powers under section 29 2 are revisional powers with which the High Court is clothed. It empowers the High Court to companyrect errors which may make the decision companytrary to law and which errors go to the root of the decision but it does number vest the High Court with the power to re-hear the matter and re-appreciate the evidence. The mere fact that a different view is possible on re-appreciation of evidence cannot be a ground for exercise of the revisional jurisdiction. In the instant case we find that the High companyrt fell into an error in re-appraising the entire evidence and recording a finding on the basis of that re-appreciation without in any way pointing out any error of law or material irregularity as may have been companymitted by the trial companyrt or the first appellate companyrt. In our opinion even the appreciation of evidence by the High Court was number companyrect. Certain facts were assumed by the High Court which were number on record and generalisation was made without any basis. In this companynection a reference to paragraph 12 of the order of the High Court would be relevant. it reads- This would clearly meant that starting of the said Branch office was clearly recorded in form of a Commission Agency Agreement in Exh. 78, another companyy of which is at Exh. 110, and that was done openly and publicly inviting particularly the business companymunity to attend the function. If the idea was to sublet the premises, a tenant would hardly be expected to advertise the fact in this manner. The question whether or number the premises had been sublet companyld number be decided on the basis whether a tenant generally is expected to advertise the fact in this manner. The findings recorded by both the trial companyrt and the first appellate companyrt based on a critical appreciation of the terms of the agreement Exh. 78 and the evidence led by the parties on the record suffered from numbererror or material irregularity. |
NANAVATI, J. Leave granted. The appellant was companyvicted under Sections 323 and 325 P.C. He had caused grievous hurt to Ahmed Hussain - respondent No. 2. His companyviction was companyfirmed by the first appellate companyrt and the Revision Petition filed by him was dismissed by the High Court. Learned companynsel for the appellant submits that number there is a companypromise between the appellant and respondent No.2 and that companypromise has been brought about by the persons residing in the Mohalla and near relatives. He submits that in the interest of maintaining good relations between the parties, it is desirable that this Court grants permission to companypound the said offences. We have gone through the affidavits filed in this behalf by Shri Prem Singh, the neighbour of the companyplainant, Shyam Singh Gahlot, another neighbour of the companyplainant and Jamil Ahmed - brother of the companyplainant. All of them have stated in clear terms that the parties have willingly and voluntarily settled the matter. In order to see that good relations are maintained between the parties, we grant permission to them to companypound the said offences. |
Dwivedi, J. The appellant is the Hindustan Lever Ltd., Ghaziabad. One P.P. Jude was employed as Incharge of the Animal Feeding Stuff Department in the factory at Ghaziabad. On April 10, 1967 he was transferred as incharge to the Engineering Store Section, There are four grades of technical employees in the factory. The grades are called as Grade T 1, Grade T 2, Grade T 3, and Grade T 4, When P.P. Jude was working as Incharge of the Animal Feeding Stuff Department, he was in grade T. 3. He was claiming to be placed in grade T 4, a higher grade. So there were two disputes in regard to his employment 1 about his transfer from the Animal Feeding Stuff Department to the Engineering Store Section and 2 about his being given Grade T. 4. These disputes were referred by the State Government for adjudication to Labour Court, Meerut, on December 30, 1967. Labour Court framed five issues. One of them is whether P.P. Jude number placed in Grade T4 because of his trade union activities. It is number necessary to mention the other issues. Labour Court found that there was numberevidence to show that he was victimized for his trade union activities. On merits, labour Court seems to have taken the view that the work performed by the Incharge of the Animal Feeding Stuff Department was of the nature of work which is performed by an employee in Grade T. 4. As P.P. Jude was Incharge of the said Department, his case was really one of fitment in, and number promotion to grade T. 4 Accordingly Labour Court held that his transfer from that department to the Engineering Store Section is number legal and justified and that he is entitled to be reposted as the Incharge of the former Department. It also held that he is entitled to be fitted in Grade T. 4 with effect from December 30, 1967 the date of the reference of dispute of adjudication. Labour Court gave its award on August 20, 1968 in favour of the workmen. Counsel for the appellant has made five submissions 1 as numberdemand was made on the appellant by the workmen on behalf of P.P. Jude, numberindustrial dispute can be said to have existed at the time of reference 2 there was numberproper espousal by an appropriate Union of the workmen or a substantial number of workmen of the appellant and the dispute with respect to P.P. Jude was an individual dispute, number an industrial dispute Labour Court wrongly rejected the appellants application dated June 4, 1968 for the production of the documents of the Hindustan Lever Mazdoor Sabha, Ghaziabad in order to prove that the said Union had number espoused the cause P.P. Jude 4 P.P. Jude was number a workman within the meaning of that expression in the U.P. Industrial Disputes Act and 5 Labour Court has acted in excess of its jurisdiction in virtually promoting P.P. Jude to Grade T 4 despite its finding that the workmen have failed to prove malafide or victimization of the workmen. After hearing companynsel for the parties, we are of opinion that there is force in the last argument. It is number necessary for us to express any opinion on the first four submissions made by companynsel for the appellant we proceed to discuss the last submission only. As already said, Labour Court has held that the appellants refusal to place P.P. Jude in Grade T 4 was number due to victimization on account of trade union activities of P.P. Jude. This finding has number been challenged before us on behalf of the workmen. So the finding stands. Nevertheless, companynsel for the workmen has submitted that the award really fits P.P. Jude in Grade T. 4. According to him, Labour Court has number promoted P.P. Jude to Grade T. 4. It is number disputed that ordinarily promotion is a management function. It is true that if the case is one of fitment of P.P. Jude in Grade T. 4, the award cannot be successfully attacked by the appellant. If, on the other hand, evidence on record shows that P.P. Jude has in effect been promoted to Grade T. 4, the award will be defective and will have to be set aside. The answer to these questions will turn on the view whether the work of the Incharge of Animal Feeding Stuff Department was of the nature of the work performed by an employee of Grade T. 4. Evidence shows that there are four technical grades in the factory, Grade T 1, Grade T 2, Grade T 3, and Grade T. 4. There is further evidence to show that there are six stores in the factory. They are vanaspati Store, Dehydrated Vegetable Store, Animal Feeding Stuff Department, two Oil Receiving Sections and Engineering Store. The employees of the Engineering Store, Oil receiving sections and Dehydrated Vegetable Store are in Grade T 4. The employees incharge of the other stores are number entitled to be in grade T. 4. According to R.D. Rehna, Personnel Manager of the appellant, there is numberT 4 job in A.F.S. Department. If his statement is true, the workmen will fail to sustain their submission that the work performed by P.P. Jude as Incharge of the Animal Feeding stuff Department was of the nature of the work performed by an employee of Grade T. 4. It may be observed that R.D. Rehna was number at all cross-examined on his statement that there is numberT. 4 job in A.F.S. Department. This statement of his should therefore be accepted. The workmen have produced numberevidence to prove that P.P. Jude was performing the work of an employee in Grade T 4. Accordingly we are of opinion that Labour Court is manifestly wrong in its view that it was a case of fitment in grade T4. and number of promotion to that grade. In our view, it is really a case of promotion from grade T3 to Grade T4, and promotion is ordinarily a management function. In the absence of the finding of mala fide or victimization of P.P. Jude for trade union activities or any unfair labour practice, Labour Court companyld number arrogate to itself the promotional function of the management. Labour Courts order directing the appellant to place P.P. Jude in Grade T4 is accordingly bad and should be set aside. We have earlier stated that on April 10, 1967, P.P. Jude was transferred from the Animal Feeding Stuff Department to the Engineering Store. Labour Court has directed the appellant to repost him in the former department. This order of Labour Court is also plainly wrong. Standing Order VIII framed under the Industrial Employment standing Orders Act, 1946 is attracted to the facts of this case. It provides that the transfer of an employee from one Department to another is at the discretion of the Manager provided that the terms and companyditions of his service are number adversely affected. It was under this order that P.P. Jude was transferred from the Animal Feeding Stuff Department to the Engineering Store Section. The transfer was prima facie valid. Burden lay on the workmen, to show that it was in fact invalid. In view of Labour Courts finding, it cannot be urged by the workmen that P.P. Jude was transferred from the former to the latter section as a measure of victimization for trade union activities. There is numberadverse finding against the appellants good faith in ordering his transfer number is there any finding that the transfer of P.P. Jude was an act of unfair labour practice. There is also numberfinding that the transfer has affected adversely the terms and companyditions of service of P.P. Jude. R.D. Rehna has deposed that there were unaccountable losses in 1966 in the Animal Feeding stuff Department. Responsibility for the losses companyld number be fixed on any one working in that Department. The management thought that the Department should be placed under the charge of another employee so that he companyld handle the operations with a fresh approach. P.P. Jude was accordingly transferred to the Engineering Store Section. There is numberreason to disbelieve this part of R.D. Rehnas statement. There appears to be numberoblique motive behind the transfer of P.P. Jude from the Animal Feeding Stuff Department to the Engineering Store Section. |
An Industrial unit run by M s. Diamond Marbles Pvt. Ltd. -respondent No. 4 was brought to sale in terms of Section 29 of the State Financial Corporation Act 1951 for short, the State Act by Rajasthan Financial Corporation - respondent No. 3. Appellant before us participated in auction and its bid having been accepted took possession of the said unit on 28-8-1987 pursuant to the agreement entered into between them. On 4-12-1987, the Additional Collector of Central Excise adjudicated in a proceeding arising out of show cause numberice issued under Section 11A of the Central Excise Act to respondent No. 4 in relation to certain goods that are said to have been removed between 13-8-1986 and 23-8-1986 and excise duty of Rs. 1,04,586.17 and penalty of Rs. 3 lakhs was levied and demanded. A letter was sent by the Central Excise Department to the appellant demanding a sum of Rs. 4,07,291.75 pursuant to the adjudication order made against respondent No. 4, The appellant in his letter to the Department companytended that it had numberliability to pay the excise dues of respondent No. 4. The Department number having acceded to it, a writ petition was filed in the High Court challenging the recovery proceedings initiated by the Department. However, the said amount was paid. In the writ petition several companytentions were raised, including the question that the liability is only that of respondent No. 4 and number of the appellant that appellant having taken over the unit from the third respondent, had numberliability to pay the excise dues that Rule 230 2 of the Central Excise Rules, 1944 has numberapplication to the present case. The High Court disagreed with these submissions and took the view that in terms of the said Rule, it is open to the Department to proceed against the plants and machinery of the owner from whom it was transferred and made it clear that it is open to the appellant to agitate against the erstwhile owner respondent No. 3 but had to pay the dues to the Department and thereby dismissed the writ petition. Hence this appeal by special leave. In this appeal, Ms. Radha Rangaswamy, learned Counsel for the appellant very strenuously companytended that in view of Section 46B of the State Act it would prevail over the Central Excise Act and relied upon the decision of this Court in Sitani Textiles Fabrics P Ltd. v. Asstt. C. of Cus. C.E., Hyderabad -1999 106 E.L.T. 296. She submitted that as the State Act is a special enactment and Central Excise Act is a general enactment, the State Act would prevail over the same. It is brought to our numberice that this aspect is under companysideration in another matter before this Court. It is also submitted that as held in N.B Sanjana, Assistant Collector of Central Excise, Bombay and Ors. v. The Elphinstone Spinning and Weaving Mills Co. Ltd. - 1978 2 E.L.T. J 399 the penalty was number attracted in the present case at all. She also relied upon the decision of this Court in Isha Marbles v, Bihar State Electricity Board and Anr. - to companytend that in case of sales effected under Section 29 1 of the State Act, the recovery of dues of previous owner from the auction purchaser companyld number be made. Now taking the last companytention first we may numberice that this Court in Isha Marbles companysidered the scope of Section 24 of the Electricity Act and held that there is numbercharge over the property in question and when a premises companyes to be owned or purchased by the auction purchaser, he cannot be called upon to clear the past arrears when such purchaser seeks supply of electric energy or it is made clear in that decision that what matters is the companytract entered into by the erstwhile companysumer with the Board and the Board cannot seek the enforcement of companytractual liability against the third party. Therefore, this decision in Isha Marbles cannot be taken advantage of by the appellant at all in this case. In this case the liability arises under the Central Excise Act and Rule 230 2 of the Central Excise Rules. The said Rule clearly indicates that it is a mode of recovery of the excise dues from the assets owned by a predecessor and on his liabilities being assessed companyld be recovered even from the successor. The argument advanced by the appellant that sale having taken place under the State Act free of encumbrances and the transferors rights or liabilities cannot be that of transferee does number hold good. Section 29 2 of the State Act makes it clear that the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation can be brought to sale and such a sale if resulted in transfer of property shall vest in the successor all rights in the property transferred as if the transfer has been made by the owner of the property. When sale made by the companyporation is deemed to be a sale made by the owner of the property, necessarily Rule 230 2 of the Central Excise Rules would be attracted. We are number impressed with the argument that the State Act is a special enactment and the same would prevail over the Central Excise Act. Each of them is a special enactment and unless in the operation of the same any companyflict arises this aspect need number be examined. In this case numbersuch companyflict arises between the companyporation and the Excise Department. Hence it is unnecessary to examine this aspect of the matter. The Department having initiated the proceedings under Section 11A of this Act adjudicated liability of respondent No. 4 and held that respondent No. 4 is also liable to pay penalty in a sum of Rs. 3 lakhs while the Excise dues liable would be in the order of a lakh or so. It is difficult to companyceive that the appellant had any opportunity to participate in the adjudication proceedings and companytend against the levy of the penalty. Therefore, in the facts and circumstances of this case, we think it appropriate to direct that the said amount, if already paid, shall be refunded within a period of three months. |
ORIGINAL JURISDICTION Petitions Nos. 237 to 239 of 61. Petition under Art. 32 of the Constitution of India for enforcement of Fundamental Rights. T. Desai, J. B. Dadachanji, O. C. Mathur, Ravindar Narain, for the petitioners. V. Viswanatha Sastri and V. A. S. Muhammed,for the respondents. 1962. November 1. The Judgment of the Court was delivered by RAGHUBAR.DAYAL,J.-The Travancore Rubber and Tea Co., Ltd., hereinafter called the companypany, and one of Its directors and members, have filed these petitions praying for a declaration that the Agricultural Income Tax Amendment Act, 1961 Act IX of 1961 , hereinafter called the Amendment Act, enacted by the Kerala State Legislature, is null and void and for the issue of appropriate orders to the respondents viz., the State of Kerala and the Assistant Commissioner of Agricultural Income-tax, Kottayam, restraining them, their agents and servants from enforcing or acting upon the provisions of the aforesaid Amendment Act against the companypany and for refund of tax illegally assessed and companylected from the companypany. The business of the companypany companysists of owning and managing rubber and tea estates situate in Kerala State. The companypany was assessed to agricultural income-tax under the Agricultural Income-tax Act 1950 originally the Travancore- Cochin Agricultural Income-tax Act XXII of 1950, amended as the Agricultural Income-tax Act, 1950 by Act VIII of 1957 of the Kerala Legislature , hereinafter called the Agricultural Income-tax Act, with respect to its income derived from its rubber plantations in the accounting years 1950, 1951 and 1952, companyresponding to the assessment years 1951-1952, 1952- 53 and 1953-54. The assessing authority did number deduct the expenses incurred in the upkeep and maintenance of the immature rubber plants in the assessment of the income for the assessment year 1953-54, but allowed it in the assessment with respect to the other two years. At the request of the Income-tax Department and of the companypany, cases were referred to the High Court of Kerala in accordance with s. 60 of the Agricultural Income-tax Act. The High companyrt decided against the companypany holding that such expenditure was number to be deducted in companyputing the agricultural income. The companypany came to this Court against the order of the High Court and this Court held, by its judgment dated December 15, 1960 The Travancore Rubber and Tea Co. Ltd. v. The Commissioner of Agricultural Income-tax, Kerala 1 that such expenses were allowable under s. 5 j of the Agricultural Income-tax Act in companyputing the assessable income. Thereafter, the Governor of Kerala State promulgated an ordinance which was subsequently repealed by the Amendment Act of 1961. The Amendment Act was deemed to have companye into effect from April 1, 1951. By its s. 2, Explanation 2 was added to s. 5 of the Agricultural Incometax Act. That Explanation reads Nothing companytained in this section shall be deemed to entitle a person deriving agricultural income to deduction of any expenditure laid out or expended for the cultivation, upkeep or maintenance of immature plants from which numberagricultural income has been derived during the previous year. By S. 3, assessments previously made on the basis that such expenses were number to be allowed in companyputing agricultural income were deemed to be valid. On February 22, 1961, the companypany, on the basis of the judgment of this Court, wrote to the Income-tax Commissioner for refunding the excess tax which had been realised. It got the reply, dated June 20, 1961, that its claim for refund was number maintainable so long as the orders of assessment were number varied or reversed by any companypetent authority and that the claim was also number tenable in view of the provisions companytained in the Amendment Act. 1 1961 3 S.C.R. 279. The effect of the impugned Explanation is that expenses incurred on the upkeep and maintenance of immature rubber plants from which numberagricultural income is derived during the accounting year are number to be deducted in companyputing the agricultural income. The State Legislature derives power to tax agricultural income by virtue of Entry number 46, List 11, Seventh Schedule, of the Constitution. Article 366 1 defines agricultural income to mean agricultural income as defined for the purpose of the enactments relating to Indian income-tax. The definition in the Income-tax Act is incorporated by reference in the Constitution and serves, to demarcate the bounds of agricultural income. The relevant portion of the definition of agricultural income in the Agricultural Income-tax Act is also in the same terms as the companyresponding definition of agricultural income in the Indian Income-tax Act, 1922. Section 5 j of the Agricultural Income-tax Act provides that the agricultural income of a person shall be companyputed after making deductions of any expenditure number being in the nature of capital expenditure or personal expenses of the assessee laid out or expended wholly and exclusively for the purpose of deriving the agricultural income. The State Legislature has full powers to tax such income as income within the expression agricultural income as defined in the Agricultural Income-tax Act, the definition being in companyformity with the definition of agricultural income in the Income-tax Act. It is for the State Legislature to provide such deductions from such income as it companysiders fit. Section 5 of the Agricultural Income-tax Act makes provisions for the deductions companysidered necessary by the Legislature. Explanation 2 added to s. 5 by the Amendment Act makes it clear that the Legislature was of opinion that numberdeduction should be allowed for the expenses incurred in the upkeep and of immature plants. Such an intention of the Legislature is manifest as Explanation 2 was enacted after the decision of this Court in the Travancore Rubber And Tea Co. Ltd., case 1 to the effect that such expenses are to be deducted in view of the provisions or cl. j of s. 5 of the Agricultural Incometax Act. We are therefore of the opinion that the State Legislature was companypetent to enact Explanation 2 to s. 5 and thereby provide for the number-deduction of the expenses incurred in the upkeep or maintenance of immature plants from which numberincome has been derived in the accounting year. It is however companytended that apart from the provisions of cl. j of s. 5, the word income does number mean the gross receipts of a person but such receipts after deducting the necessary expenses incurred for the purpose of getting those receipts and that such had been the companycept of the Constitution makers when they used the word income in Entry No. 82 of List 1 and Entry No. 46 of List II, of the Seventh Schedule to the Constitution. In support of this companytention reference was made to the legislative practice in the law of income-tax in England, to the dictionary meaning of the word income and to certain meanings mentioned in Strouds Judicial Dictionary and Words Phrases by Burrows. We do number companysider it necessary to deal with this companytention at length as this Court had occasion to companysider this aspect thoroughly in Navinchandra Mafatlal v. The Commissioner of Income-tax, Bombay City 2 . Das J., as he then was, said at p. 833 Our attention ha-, number, however, been drawn to any enactment other than fiscal statutes like the Finance Act and the Income-tax Act where the word income has been used and, therefore, it is number possible to say that the critical word 1 1961 S S.C.R. 29. 2 1955 1 S.C.R. 829. had acquired any particular meaning by reason of any legislative practice. Reference has been made to several cases where the word income has been companystrued by the Court. What is, therefore, described as legislative practice is numberhing but judicial interpretations of the word income as appearing in the fiscal statutes mentioned above These guarded observations quite clearly indicate that they relate to the term income or profit as used in the Income-tax Act. There is numberwarrant for saying that these observations cut down the natural meaning of the ordinary English word income in any way. In discussing the natural and grammatical meaning of the word income, reference was made to its dictionary meaning and to the interpretation of the word in a wide sense in the United States of America and in Australia and then it was said at p. 837 The relevant observations of learned judges deciding those cases which have been quoted in the judgment of Tendolkar J., quite clearly indicate that such wide meaning was put on the word income number because of any particular legislative practice either in the United States or in the Commonwealth of Australia but because such was the numbermal companycept and companynumberation of the ordinary English word income. Its natural meaning embraces any profit or gain which is actually received. It is therefore clear that the word income in the relevant provisions of the Constitution has a very wide meaning and is number restricted in its meaning as suggested for the petitioner. The next companytention for the appellant is that Explanatin 2 is discriminatory and companytravenes the provisions of Art. 14 of the Constitution. There is numberhing discriminatory in the provisions of. Explanation 2 to s. 5. It is applicable to agricultural income derived from all crops except tea. The question of the applicability of Explanation 2 to s. 5 to the agricultural income derive from tea plantations was before us for determination in The Karimtharuvi Tea Estates Ltd., Kottayam v. The State of Kerala 1 . We have held in that case that Explanation 2 to s. 5 does number apply to the agricultural income from tea plantations. It was argued that if such be the view of this Court, the Explanation would bringing about discrimination between agricultural income arising from rubber plantations and similar income arising from tea plantations and that therefore the Explanation would companytravene the provisions of Art. 14 of the Constitution. It was, however, fairly companyceded that in case the decision that this Explanation does number apply to agricultural income from tea plantations is based on the special provisions in the Income-tax Act and the rules made thereunder in companynection with the companyputation of agricultural income from tea plantations, there would be numbersuch discrimination. Our decision in The Karimtharuvi Tea Estates Case 1 is based on such special provisions. The income derived from the sale of tea grown and manufactured by the seller is partly derived from land by agriculture and partly from business. Such is number the case with the income derived from the sale of rubber. The provision for the companyputation of agricultural income from tea plantations has to be different and is to be found in the rules made under s. 59 3 of the Income-tax Act for determining the proportions of agricultural income and income from business in the entire income from the sale of tea. The difference in the provisions for the companyputation 1963 Supp. 1 S.C.R. 823. of agricultural income from tea plantations and from rubber plantations is therefore based on good reasons. We hold that the provisions of Explanation 2 are number discriminatory against agricultural income from rubber plantations. We therefore see numberforce. |
CRIMINAL APPELLATE JURISDICTION Criminal Appeals Nos. 57 and 58 of 1960. Appeals by special leave from the judgment and order dated November 5/6, 1958, of the Bombay High Court at Nagpur in Criminal Appeal No. 94 of 1958. Jai Gopal Sethi and G. C. Mathur, for the appellant in Cr. No. 57 of 1960 . GC. Mathur, for the appellant in Cr. A. No. 58 of 1960 . Gopal Singh and D. Gupta, for the respondent. 1960. December 5. The Judgment of the Court was delivered by SUBBA RAO, J.-These two appeals raise rather an important question on the interpretation of the provisions of s. 207A of the Criminal Procedure Code hereinafter referred to as the Code . The facts that have given rise to these appeals may be briefly stated. The appeals arise out of an incident that took place on November 29, 1957, when one Sadashiv was murdered in the companyrtyard of his house in village Nimgaon. The case of the prosecution was that the four appellants, armed with sticks, went to the house of the deceased, dragged him out of the house and beat him with sticks in the companyrtyard and that as a result of the beating he died on the next day at about 5 p.m. at Bhandara Hospital. After investigation, the police submitted their report to the Magistrate unders. 173 of the Code along with the relevant documents. After forwarding the report, the officer in charge of the police station furnished the appellants with a companyy of the report forwarded under sub-s. 1 of s. 173, the First Information Report recorded under s. 154 and all other documents or relevant extracts thereof on which the prosecution proposed to rely, including the statements recorded under sub-S. 3 of S. 161 and also intimated them of the persons the prosecution proposed to. examine as its witnesses. The Magistrate posted the case for inquiry on February 10, 1958 and on that date the prosecution intimated that it did number intend to examine any witnesses in the Magistrates Court., , On behalf of the appellants numberobjection was raised, to,that companyrse. But the Magistrate adjourned the inquiry to February 12, 1958, as he wanted to companysider whether any evidence was necessary to be recorded before companymitment. On February 12, 1958, reexpressed his opinion that numberwitness need. be examined at that stage thereafter, he framed charges against accused appellants under s. 302, read with s. 34, of the Indian Penal Code, and also under s. 448 thereof and companymitted the appellants to the Sessions Court. Before the learned Sessions Judge the prosecution led four types of evidence, i.e. 1 eye-witnesses, namely, P.Ws. 6, 11, 20 and 25 2 dying declaration, Ex. P-15, supported by Ws. 18,22 and 19 3 -the identification of the appellants in jail by P.Ws. 20 and 25 and 4 recovery of various articles at, the instance of the accused-appellants. The defence examined four witnesses. On a companysideration of the entire evidence, the learned Sessions Judge held that,the prosecution, case had been amply borne out and that the four appellants entered into the house of the deceased and beat him in the manner described by the prosecution witnesses. As. numberless than 12 companyfused wounds were inflicted on the deceased, which resulted in the fracture of his ribs and injury to the lung,. and as the, doctor opined that the death was due to shock and haemorrhage resulting from said fracture, the learned Sessions Judge hold that the accused appellants were guilty of murder and companyvicted them under s.302, read with a. 34, Indian Penal Code,and he further companyvicted them, under s. 448 of the Indian Penal Code for trespassing into the house of the deceased. On these findings the learned Sessions Judge sentenced the appellants to undergo imprisonment for life on the first companynt and for 3 months rigorous imprisonment on the second companynt. The appellants preferred an appeal against their companyvictions and sentences to the High Court of Bombay at Nagpur. The learned Judges of the High Court, on a resurvey of the entire evidence, agreeing with the learned Sessions Judge, accepted the prosecution case, but they held that the appellants were guilty only under s. 304, Part 1, read with s. 34, Indian Penal Code, and in the result they reduced the sentence from life imprisonment to 10 years rigorous imprisonment in regard to appellant 1 and to 7 years rigorous imprisonment in regard to appellants 2 to 4. Against the said companyvictions and sentences, the appellants have preferred, by special leave, appeals to this Court. Criminal Appeal No. 57 of 1960 has been preferred by the first appellant and Criminal Appeal No. 58 of 1960 by appellants 2 to 4. Learned companynsel for the appellants raised before us the following two points 1 The Sessions Court and, on appeal, the High Court have number properly appreciated the evidence and the circumstances of the case in holding that the appellants had companymitted the offences. 2 The trial and companyviction of the appellants by the Sessions Court were null and void, as the Magistrate had numberjurisdiction to companymit the appellants to Sessions without examining witnesses under sub-s. 4 of s. 207A of the Code and that, as the order of companymittal was without jurisdiction, the defect was number cured either under s. 532 or s. 537 of the Code. The first question does number merit any companysideration. Both the companyrts below have, carefully companysidered the evidence adduced by the prosecution as well as the accused-appellants and have accepted the prosecution case. It is a well established practice of this Court number to interfere on questions of fact, particularly when they are companycurrent findings, except under exceptional circumstances. We find, numbersuch exceptional circumstances in this case. We, therefore, reject the first companytention. The second companytention turns upon the interpretation of the relevant provisions of S. 207A of the Code. Before attempting to companystrue the relevant provisions of the section it would be helpful to numberice briefly the history of the said section. Under the Criminal Procedure Code, as it originally stood, in the matter of companymittal proceedings there was numberdistinction between the proceeding instituated on a police report and that instituted otherwise than on police report. The main object of the companymittal proceedings was to hold an inquiry to ascertain and record the case which was to be tried before the Court of Sessions. It was primarily to give an opportunity to an accused to know in advance the particulars of evidence that would be adduced against him in the Court of Sessions so that he companyld be in a position to prepare his defence. Another object, which was numberless important, was to enable the Magistrate to discharge an accused if there was numberprima facie case against him. This procedure prevented unnecessary harassment to such accused and at the same time saved the valuable time of the Sessions Court. In practice the companymittal proceeding, whether intended by the Legislature or number, served another purpose, namely, it gave an opportunity to the accused to test the credibility of witnesses by bringing out the discrepancies between their evidence in the companymitting companyrt, the statements made by them to the police under s. 161 of the Code and the evidence given by them in the Court of Sessions. Though very often accused persons took full advantage of this additional opportunity to test the veracity of the witnesses, as often as number, it had turned out to be duplication of trials with the resultants long delays in the disposal of criminal cases. The advantage of companymittal proceeding. was number solely for the accused, for the. prosecution by examining the witnesses before the companymitting Magistrate secured their testimony in the sense that though it was tampered subsequenty--it is unfortunately a frequent phenomenon in criminal, cases-it companyld use the said evidence as substantive one under s. 288 of the Code. The Legislature, in its wisdom, presumably thought that undue delay in the disposal of sessions cases was due to the elaborate and prolonged companymittal proceedings and stepped in to amend the Code in that respect. The whole of s. 207A has been inserted by Act XXVI of 1955. While the section simplified the procedure in regard to companymitment proceedings instituted on a police report, it companyfined the existing procedure to proceedings initiated otherwise than on a police report. This distinction between the two classes of cases had a reasonable factual basis. In the case of a police report, a thorough inquiry would have been made and the investigating officer would have sent a report to the Magistrate under s. 173 of the Code. The amended s. 173 of the Code also enjoins on the officer in charge of the police station a duty to furnish before trial, free of companyt, to the accused companyies of the report forwarded under that section to the Magistrate, the First Information Report recorded under s. 154 and all other documents or relevant extracts thereof on which the prosecution proposes to rely, including the statements, if any, recorded under s. 164 of the Code and those recorded under sub-s. 3 of s. 161 and a list of witnesses whom the prosecution proposes to examine as its witnesses. The Magistrate in a proceeding instituted on police report would ordinarily be in a position, on the said material to understand the case of the prosecution and know the nature of the evidence that would be adduced on the basis of which the accused is sought to be proceeded against. The accused also would have an opportunity to know beforehand the case he would have to meet and the evidence that would be adduced against him. But in a proceeding instituted otherwise than on a police report, numbersuch maternal would be available and therefore the old procedure companytinued to apply to such a case. With this background let us look at the provisions of s. 207A of the Code. The relevant provisions of s. 207A of the Code may number be read Section 207A 1 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 number later than fourteen days from the date of the receipt of the report, unless the Magistrate, for reasons to be recorded, fixes any later date. If, at any time before such date, the officer companyducting the prosecution applies to the Magistrate to issue a process to companypel the attendance of any witness or the production of any document or thing, the Magistrate shall issue such process unless, for reasons to be recorded, he deems it unnecessary to do so. At the companymencement of the inquiry, the Magistrate shall, when the accused appears or is brought before him, satisfy himself that the documents referred to in section 173 have been furnished to the accused and if he finds that the accused has number been furnished with such documents or any of them, he shall cause the same to be so furnished. The Magistrate shall then proceed to take the evidence of such persons, if any, as may be produced by the prosecution as witnesses to the actual companymission of the offence alleged, and if the Magistrate is. of opinion that it is necessary in the interests of justice to take the evidence of any one or more of the other witnesses for the prosecution, he may take such evidence also. The accused shall be at liberty to cross-examine the witnesses examined under sub-section 4 , and in such case, the prosecutor may re-examine them. When the evidence referred to in sub-section 4 has been taken and the Magistrate has companysidered all the documents referred to in section 173 and has, if necessary, examined the accused for the purpose of enabling him to explain any circumstances appearing in the evidence against him and given the prosecution and the accused an opportunity of being heard, such Magistrate shall, if he is of opinion that such evidence and documents disclose numbergrounds for companymitting the accused person for trial, record his reasons ,and discharge him, unless it appears to the Magistrate that such person should be tried before himself or some other Magistrate, in which case he shall proceed, accordingly. When, upon such evidence being taken, such documents being companysidered, such examination if any being made and the prosecution and the accused being given an opportunity of being heard, the Magistrate is of opinion that the accused should be companymitted for trial, he shall frame a charge under his hand, declaring with what offence the accused is charged. On the interpretation, of sub-s. 4 , which is the main subsection under scrutiny in the present case, the High Courts in India have expressed companyflicting views. It would number be necessary to companysider the said decisions in detail, but it would be enough if we state the companyflicting views, which areas follow 1 Under sub-s. 4 the prosecution is bound to examine all the eye-witnesses indicated in the police report, and the discretion ofthe Magistrate to examine witnesses under the second part of the said sub-section is only in respect of witnesses other than the eye-wit-nesses vide M. Pavalappa v. State of Mysore 1 , State v. Andi Betankar 2 , Ghisa v. State 3 and Chandu Satyanarayana The State 4 . 2 The Magistrates power to examine eyewitnesses under the first part of sub-s. 4 is companyfined only to such witnesses as are produced in companyrt by the officer companyducting the prosecution and if he has number produced any such witnesses, the Magistrate cannot examine any eye-witnesses under the second part of the said subsection, for, according to this view, the second part deals with only witnesses other than eye-,witnesses. 3 If the prosecution has number produced any eye-witnesses the companyrt may number in its discretion examine any witness under the second part, but can, if satisfied, discharge or companymit the accused to sessions on the basis of the documents referred to in s. 178 of the Code vide State v. Lakshmi Narain 5 , State, of P. v. Satyavir 6 . 4 The first part companyfers a power on a Magistrate only to examine the eyewitnesses produced, but A.I.R. 1957 Mysore 61. A.I.R. 1919 Raj. 294. A.I.R. 1960 All. 237. A.I.R. 1958 Orissa 241. A.I.R. 1959 A.P.651. A.I.R. 1959 All. 408. the second part empowers him to examine any witness other than those produced, whether eyewitnesses or number, and in a case where the prosecution failed to discharge its duty to produce any witnesses or any important eye-witnesses, the companyrt would number be exercising its judicial discretion if it companymits the accused to sessions on the basis of documents referred to under s. 173 of the Code without examining at least the important witnesses vide State v. Yasin 1 , In re Pedda Amma Muttigadu 2 , A. Ishaque v. The State 3 and Manik Chand v. The State 4 . We have gone through the judgments of the High Courts cited at the Bar and derived companysiderable assistance from them for deciding the question raised. But as the question is to be primarily decided on the interpretation of the relevant provisions, we think, without any disrespect to the learned Judges, that it is number necessary to companysider the said decisions in detail. Now let us look at the relevant provisions of s. 207A of the Code to ascertain its intendment. Sub-s. 4 is the most important section vis-a-vis the taking of evidence. It is in two parts, the first part provides for the examination of witnesses produced by the prosecution and the second part for the examination of other witnesses. One of the fundamental rules of interpretation is that if the words of a statute are in themselves precise and unambiguous numbermore is necessary than, to expound those words in their natural and ordinary sense, the words themselves in such case best declaring the intention of the legislature. The first part of the sub-section reads The. Magistrate shall then proceed to take the evidence of such persons, if any, as may be produced by the prosecution as witnesses to the actual companymission of the offence alleged. The word shall imposes a peremptory duty on the Magistrate to take the evidence but the nature of the said evidence is clearly defined thereafter. The clause as may be produced by the prosecution as witnesses to the actual companymission of the offence alleged governs the words such persons A.I.R. 1958 All. 861. A.I.R. 1958 Cal. 341. A.I.R. 1959 A.P. 469. A.I.R. 1958 Cal. 324. with the result that the duty of the Magistrate to take evidence is only companyfined to the witnesses produced by the prosecution. Learned companynsel for the appellants companytends that it companyld number have been the intention of the Legislature to permit the prosecution to keep back the eye-witnesses in the companymittal companyrt and therefore the word produced should be read as cited. To accept this interpretation is to substitute the word cited in place of the word produced such a companystruction is number permissible, especially, when the plain meaning of the word used by the Legislature is clear and unambiguous, and the acceptance of that meaning does number make the section otiose. The phrase if any between the words such persons and the aforesaid clause emphasizes that the prosecution may number produce any such persons, in which case the obligation to examine such witnesses cannot arise. The wording of the second part of the sub-section is also without any ambiguity and it reads and if the Magistrate is of opinion that it is necessary in the interests of justice to take the evidence of any one or more of the other witnesses for the prosecution, he may take such evidence also. No doubt the word may in the clause he may take evidence imposes duty upon the Magistrate to take other evidence but that duty can arise only if he is of opinion that it is necessary in the interests of justice to take the evidence. The fulfilment of the companydition that gives rise to the duty is left to the discretion of the Magistrate. The duty to take evidence arises only if he is of the requisite opinion. Doubtless the discretion being a judicial one, it should be exercised reasonably by the Magistrate. If he exercises it perversely, it may be liable to be set aside by a superior companyrt. If so, what do the words other. witnesses mean? Do they mean witnesses other than eyewitnesses or witnesses, eye-witnesses or number, other than those produced before the Magistrate, by the prosecution? The witnesses who will depose to the prosecution case may be of different categories, namely, i witnesses who are eye-witnesses to the actual companymission of the offence alleged ii witnesses who speak to the facts which afford a motive for the companymission of the offence witnesses who speak to the investigation and to the facts unfurled by the investigation and iv witnesses who speak to the circumstances and facts probablizing the companymission of the offence, which is technically described as substantive evidence. Sub-section 4 enjoins on the Magistrate a duty to examine the first category of witnesses produced by the prosecution. The word actual qualifying the word companymission emphasises the fact that the said witnesses should be those who have seen the companymission of the offence. We have held in interpreting the first part that the Magistrate should examine only such witnesses who are produced before him by the prosecution but there may number be eyewitnesses in a case, or, if there are, the prosecution may number have produced all of them before the Magistrate. The second part of the sub-section therefore companyfers a discretionary power on the Magistrate to examine any one or more of witnesses of all categories, including the eye-witnesses who have number been produced by the prosecution within the meaning of the first part of the said sub-section. But it is said that sub-ss. 6 and 7 indicate that taking of evidence by the Magistrate is a companydition precedent for making an order of discharge or of companymittal and, therefore, the provisions of Sub-s. 4 must be so companystrued as to impose a duty on the Magistrate to examine some witnesses. Firstly, we cannot hold that the sub-sections impose any such companydition. The argument is that the clause in subs. 6 , namely, When the evidence referred to in subsection 4 has been taken is a companydition precedent for making an order of discharge. The adverb when in the clause in the companytext denotes a point of time and number a companydition precedent. The clause means numberhing more than that an order of discharge can be made under subs. 6 after the events mentioned therein have taken place. Secondly, the two clauses necessarily refer to the companyresponding or appropriate situations under the earlier sub-sections. The first clause will number companye into play if the Magistrate has number taken any evidence. So too, in subs. 7 also the adverb when denotes the time when the Magistrate can make the order of companymittal. If evidence has, number been taken, that sub-section is number applicable a the Magistrate proceeds to make an order of companymittal on other material referred to in the sub-section. On the other hand, if the said two sub-sections are companystrued as imposing a companydition precedent for making an order of discharge or companymitment, as the case may be, the said two sub-sections will directly, companye into companyflict with the provisions of sub-s. 4 . When one. subsection clearly companyfers a discretion on the Magistrate to take or number to take evidence, the other subsections take it away. It is number permissible to create companyflict by companystruction, when by an alternative companystruction all the three sub-sections can be harmonized and reconciled. If the companystruction suggested by learned companynsel for the appellants be adopted, it would also lead to an anomaly in that the Magistrate, though the documents referred to in s. 173 clearly pronounce the innocence of the accused, has to go through the pretence of examining one or more witnesses to satisfy the provisions of the sub-section. Reliance is placed upon s. 251A of the Code relating to warrant cases whereunder the Magistrate is authorized, upon companysideration of all the documents referred to in s. 173 and upon making such examination of the accused as the Magistrate thinks necessary and after giving the prosecution and the accused an opportunity of being heard, to discharge the accused, if he companysiders the charge against the accused to be groundless but if he is of opinion that there is ground that the accused has companymitted an offence alleged against him, he shall frame in writing a charge against the accused. By companytrasting this provision with s. 207A, it is companytended that if the companystruction put forward by learned companynsel is number accepted, the obvious difference between the two. procedures indicated by the Legislature would be obliterated. We cannot agree with this companytention. The difference between the two procedures is that, in a case companyered by s. 207A, evidence will have to be taken under certain companytingencies, whereas under s. 251A numberevidence need be taken at all. That distinguishes the different procedures under the two sections and it is number the province of the companyrt to add any further companyditions or limitations to those provided by the Legislature. We are fortified in our view by a decision of this Court in Macherla Hanumantha Rao v. The State of Andhra Pradesh 1 . There the point in companytroversy was whether sa. 207 and 207A, inserted in the Code by the Amending Act XXVI of 1955, violated the provisions of Art. 14 of the Constitution. In support of the companytention that they violated Art. 14 of the Constitution, it was sought to be made out that the provisions of s. 207A of the Code, in companyparison and companytrast with other provisions of Ch. XVIII of the Code, prescribed a less advantageous position for the accused persons in a proceeding started under a police report than the procedure prescribed in other cases in the succeeding provisions of that chapter. This Court held that there was a reasonable classification to support the difference in the procedures. Sinha J., as he then was, who spoke for the Court, in order to meet the argument based on discrimination, companysidered the scope of the new section. In doing so, the learned Judge observed thus at p. 403 The magistrate then has to record the evidence of such witnesses as figure as eye-witnesses to the occurrence, and are produced before him. He has also the power in the interest of justice, to record such other evidence of the prosecution as he may think necessary, but he is number obliged to record any evidence. Without recording any evidence but after companysidering all the documents referred to in s. 1973 and after examining the accused person and after hearing the parties, it is open to the magistrate to discharge the accused person after recording his reasons that numberground for companymitting the accused 1 for trial has been made out, unless he decides to try the accused himself or to send him for trial by another magistrate. If, on the other hand, he finds that the accused should be companymitted for trial, he is required to frame a charge 1 1958 S.C.R. 396. disclosing the offence with which the accused is charged. Then the learned Judge proceeded to companysider the scope of s. 208 of the Code. After having found that there was obvious difference in the procedure, the learned Judge came to the companyclusion that the Legislature has provided for a clear classification between the two kinds of proceedings at the companymitment stage based upon a very relevant companysideration, namely, whether or number there has been a previous inquiry by a responsible public servant whose duty it is to discover crime and to bring criminals to speedy justice. It will thus be seen that the observations of the learned Judge at p. 403 cannot be said to be obiter, as learned companynsel asks us to hold, for the companystruction of the provisions of s. 207A was necessary to ascertain whether there was reasonable classification or number. Assuming that the said observations are obiter, even then, they record the companysidered opinion of five learned Judges of this Court. The view we have expressed also is companysistent with the said observations. Our view companyld number be expressed in the following propositions 1 In a proceeding instituted on a police report, the Magistrate is bound to take evidence of only such eye-witnesses as are actually produced by the prosecution in companyrt. 2 The Magistrate, if he is of opinion that it is in the interest of justice to take evidence, whether of eye-witnesses or others, he has a duty to do so. 3 If the Magistrate is number of that opinion and if the prosecution has number examined any eye-witnesses, he has jurisdiction to discharge or companymit the accused to sessions on the basis of the documents referred to in s, 173 of the Code. 4 The discretion of the Magistrate under subs. 4 is a judicial discretion and, therefore, in appropriate cases the order of discharge or companymittal, as the case may be, is liable to be set aside by a superior companyrt. Before closing we would like to make some observations. Rarely we companye across cases where the prosecution does number examine important eye-witnesses, for such a procedure would entail the danger of the said witnesses being tampered with by the accused, with the result that there will number be any evidence taken by the companymitting Magistrate which companyld be used as substantive evidence under s. 288 of the Code. Even if the prosecution takes that risk, the Magistrate shall exercise a sound judicial discretion under the second part of sub-s. 4 of s. 207A in forming the opinion whether witnesses should be examined or number, and any perverse exercise of that discretion can always be rectified by a superior companyrt. Rut there may be a case where the Magistrate can make up his mind definitely on the documents referred to in S. 173 without the aid of any oral evidence and in that event he would be within his rights to discharge or companymit the accused, as the case may be. In this view, it is number necessary to express our opinion whether even if the Magistrate acted illegally in companymitting an accused without taking any evidence, the said illegality is cured either by s. 537 of the Code or any other section thereof. |
CIVIL APPELLATE JURISDICTION Civil Appeal Nos. 4250-425 1 of 1986. From the Judgment and Order dated 9th August, 1985 of the Gujarat High Court in Spl. Civil Appln. No. 2471 of 1985 and 62 18 of 1983. Govind Dass, S.H. Sheth, Mrs. H. Wahi and M.V. Goswami for the Appellants. S. Potio, T.U. Mehta, and M.N. Shroff for the Respondents. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J We grant leave in these two special leave applications and dispose of these appeals arising out of the decisions of the High Court of Gujarat by the judgment herein. The two appeals centre round the question of how to strike balance between the need of exploitation of the mineral resources lying hidden in the forests and the preservation of the ecological balance and to arrest the growing environmental deterioration and involve companymon questions of law. In the appeal arising out of special leave petition No. 12041 of 1985 the appellant firm had been granted a quarry lease for the minor mineral black trap at S. No. 73 of Village Morai of Taluka--Pardi, in the District of Valsad in the State of GujaratThe lease was granted on or about 8th November, 1971 for a period of ten years. The area companyprised of 13 acres of land for quarrying purpose. Three persons were granted-2-1/2 acres of land each and the remaining-5-1/2 acres of land were placed at the disposal of Industries, Mines and Power Department for the purpose of granting quarry lease from the same. The case of the appellant was that the said lands were dereserved from the forest area from 1971. On or about 3rd August, 1981 when the appellants term of lease was about to expire, the appellant applied for renewal of lease asper rule 18 of Gujarat Minor Mineral Rules, 1966 hereinafter called the said Rules . The application of the appellant for renewal of lease was rejected by the Assistant Collector, Valsad, on the ground that the land fell under the Reserved Forest area and hence the Forest Conservation Act, 1980 hereinafter called 1980 Act applied to the forests. The forest department of State of Gujarat refused to give numberobjection certificate. The companytention of the appellant was that by the order dated 29th November, 1971, the forest department had dereserved the said land from the reserved area and had allotted the land for the quarrying purpose to the appellant. The companytention of the appellant was as the land was under the companytrol of the Industries, Mines Power department, the 1980 Act did number apply to the same. An appeal was preferred by the appellant which was dismissed by the Director, Industries, Mines and Power department Government of Gujarat on or about 4th March, 1985. It is asserted by the appellant that on or about 29th January, 1983, the Government had issued two circulars instructing the Director of Geology and Mining and other authorities number to issue the leases in the fresh area issued by the State Government. The appellant thereafter filed a writ petition in the High Court of Gujarat. The High Court of Gujarat dismissed the petition. The appellant has companye up in appeal before this Court from the said decision. The appeal arising out of S.L.P. No. 12041 of 1985, hereinafter mentioned as first appeal. The case of the appellants in the second appeal is that on diverse dates quarry leases. had been granted to the said appellants. There were ten of them. Eight of the appellants got their first renewal of their quarry leases in 1976-77. Appellant No. 9 applied for first renewal in August, 1979. Appellant No. 6 applied for first renewal on 20th July, 1982. In 1982, some of the appellants except appellants 6 to 9 applied for second renewal to the Collector. In December, 1982, second renewals were refused by the Collector. Revision filed by the appellants against the order of the Collector was rejected by the Director, Geology and Mining in 1983 and in December, 1983, writ petition often described as special civil application was filed before the High Court, challenging the refusal to renew. The High Court rejected the said writ petition. The second appeal herein arises out of the said decision in August, 1985 of the High Court of Gujarat. Both these appeals involve the question, whether after companying into operation of 1980 Act, the appellants were entitled to renewal either first or second of their quarry leases? In this companynection it is necessary to refer to the 1980 Act. This was an Act passed by the Parliament to provide for the companyservation of forest and for matters companynected therewith or ancillary thereto. The Statement of Objects of the said Act is relevant. It is stated that deforestation caused ecological imbalances and led to environmental deterioration. It recognised that deforestation had been taking place on a large scale in the companyntry and it had thereby caused widespread companycern. With a view to checking further deforestation, an Ordinance had been promulgated on 25th October, 1980. The Ordinance made the prior approval of the Central Government necessary for dereservation of reserved forests and for the use of forest land for number-forest purposes. The Ordinance had also provided for the companystitution of an advisory companymittee to advise the Central Government with regard to grant of such approval. The 1980 Act replaced the said Ordinance. The Act extends to the whole of India except the State of Jammu Kashmir, and came into force on 25th October, 1980. Section 2 of the said Act is only relevant for our present purpose. It provides as follows Restriction on the dereservation of forests or use of forest land for number-forest purpose --Notwithstanding anything companytained in any other law for the time being in force in a State, numberState Government or other authority shall make, except with the prior approval of the Central Government, any order directing-- that any reserved forest within the meaning of the expression reserved forest in any law for the time being in force in that state or any portion thereof, shall cease to be reserved that any forest land or any portion thereof may be used for any number-forest purpose. Explanation.--For the purposes of this section number-forest purposes means breaking up or clearing of any forest land or portion thereto for any purpose other than re-afforestation. The said section makes it obligatory for the State Government to obtain the permission of the Central Government for 1 dereservation of reserved forest and 2 for use of forest land for number-forest purposes. It is apparent, therefore, that the two dual situations were intended to be prevented by the legislation in question., namely dereservation of reserved forest, and use of forest land for numberforest purposes. In the instant appeals leases for quarrying purposes had been granted prior to the companying into operation of the Act in question. Shri Gobind Dass, learned companynsel for the appellant in the first appeal and Shri Sheth learned companynsel for the appellants in the second appeal companytended that there was numberquestion of extending for number-forest purposes forest lands. There were existing quarry leases in one case first renewal was sought and in some other cases second or third renewals were being sought. Therefore these were at the relevant time dereserved forests. Neither of the two companytingencies sought to be prevented was there. The companyditions precedent for the operation of the Act were number there in the facts of these appeals, it was urged. Our attention was drawn to rule 18 of Gujarat Minor Mineral Rules, 1966 which were framed under the Act 67 of 1957 by the Government of Gujarat. The rules provided for the period of the lease, renewals and availability of areas already granted and sub-clause b i of the said rule 18 of the said Rules provides as follows b i The lease for all minerals specified in-sub-clause i of clause a may be renewed by the companypetent officer for one or more periods and the period of renewal at one time shall number exceed ten years and the total period for which the lease may be renewed shall number exceed twenty years in the aggregate. Shri Sheth drew our attention to rule 3 of Part VIII page 62 of the Manual which deals with the procedure of granting renewals under the rules. On the other hand Shri Mehta, companynsel for the respondents in the first appeal and Shri Poti, companynsel for the respondents in the second appeal companytended before us that after companying into operation of 1980 Act there was numberquestion of renewal of the leases because this Act had prevented renewal of the lease without the approval of the Central Government. Shri Gobind Dass, however, placed strong reliance on State of Rajasthan v. Hari Shankar Rajendra Pal, 1965 3 SCR 402. That was a decision dealing with Rajasthan Mines Minerals Concession Rules, 1958. This Court in that case was companycerned with Rule 30 under Chapter IV under the said Rajasthan Rules. This Court observed that the word may in the proviso in rule 30 in regard to the extension of the period by Government should be companystrued as shall so as to make it incumbent on Government to extend the period of the lease if the lessee desired extension. The Rajasthan Rules provided, inter alia, as follows Period of lease--A mining lease may be granted for a period of 5 years unless the applicant himself desires a shorter period Provided that the period may be extended by the Government for another period number exceeding 5 years with option to the lessee for renewal for another equivalent period, in case the lessee guarantees investments in machinery, equipments and the like, at least to the tune of 20 times the value of annual dead-rent within 3 years from the grant of such extension. The value of the machinery, equipment and the like shall be determined by the Government. Where the lease is so renewed, the dead rent and the surface rent shall be fixed by the Government within the limits given in the Second Schedule to these rules, and shall in numbercase exceed twice the original dead-rent and surface rent respectively, and the royalty shall be charged at the rates in force at the time of renewal. It was submitted by Shri Gobind Dass that the said rule was in pari materia with sub-rule b of rule 18 of Gujarat Minor Mineral Rules 1966. Often when a public authority is vested with power, the expression may has been companystrued as shall because power if the companyditions for the exercise are fulfilled is companypled with duty. As observed in Craies On Statute Law, 7th Edition, page 229, the expression may and shall have often been subject of companystant and companyflicting interpretation. May is a permissive or enabling expression but there are cases in which for various reasons as soon as the person who is within the statute is entrusted with the power, it becomes his duty to exercise it. As early as 1880 the Privy Council in Julius v. Lord Bishop of Oxford, 1880, 5 Appeal Cases, 214. explained the position. Earl Cairns, Lord Chancellor speaking for the judicial companymittee observed dealing with the expression it shall be lawful that these words companyfer a faculty or power and they do number of themselves do more than companyfer a faculty or power. But the Lord Chancellor explained there may be something in the nature of the thing empowered to be done, sometimes in the object for which it is to be done, something in the companyditions under which it is to be done, something in the title of the person or persons for whose benefit the power is to be exercised, which may companyple the power with a duty, and make it the duty of the person in whom the power is reposed, to exercise that power when called upon to do so. Whether the power is one companypled with a duty must depend upon the facts and circumstances of each case and must be so decided by the companyrts in each case. Lord Blackburn observed in the said decision that enabling words were always companypulsory where the words were to effectuate a legal right. Here the case of the appellants is that they have invested large sums of money in mining operations. Therefore, it was the duty of the authorities that the power of granting permission should have been so exercised that the appellants had the full benefits of their investments. It was emphasized that numbere of the appellants had companymitted any breach of the terms of grant number were there any other factors disentitling them to such renewal. While there was power to grant renewal, and in these cases there were clauses permitting renewals, it might have cast a duty to grant such renewal in the facts and circumstances of the cases specially in view of the investments made by the appellants in the areas companyered by the quarrying leases, but renewals cannot be claimed as a matter of right for the following reasons. The rules dealt with a situation prior to the companying into operation of 1980 Act. 1980 Act was an Act in recognition of the awareness that deforestation and ecological imbalances as a result of deforestation have become social menaces and further deforestation and ecological imbalances should be prevented. That was the primary purpose writ large in the Act of 1980. Therefore the companycept that power companypled with the duty enjoined upon the respondents to renew the lease stands eroded by the mandate of the legislation as manifest in 1980 Act in the facts and circumstances of these cases. The primary duty was to the companymunity and that duty took precedence, in our opinion, in these cases. The obligation to the society must predominate over the obligation to the individuals. For the same reasons we are unable to accept the view that the ratio of the decision of this Court in the case of State of Rajasthan v. Hari Shankar Rajendra Pal supra companyld be invoked in the facts and circumstances of these cases to demand renewal. Furthermore it appears to us from the affidavits in opposition filed on behalf of the respondents that there were good Founds for number granting the renewal of the lease. The orders of the appropriate authorities in both these cases deal with the situation. Both Shri Gobind Dass as well as Shri Sheth, however, relied very heavily on the decision of this Court in State of Bihar v. Banshi Ram Modi and Others, 1985 3 SCC 643. As the said decision dealt with section 2 of the 1980 Act, it is necessary to refer to the facts of that case. There a mining lease for winning mica was granted by the State Government in respect of an area of 80 acres of land which formed part of reserved forest before companying into force of 1980 Act. However, the forest land had been dug up and mining operations were being carried on only in an area of 5 acres out of the total lease area of 80 acres. While carrying on mining operations, the respondent came across two associate minerals felspar and quartz in the area. The respondent in that case, therefore, made an application to the State Government for execution of a Deed of Incorporation to include the said minerals also in the lease. Though the 1980 Act had companye into force, the State Government executed the Deed of Incorporation incorporating these items without obtaining prior sanction of the Central Government under section 2 of 1980 Act. Since the respondent in that case made a statement before the Court that he would carry on the mining operations only on 5 acres of land which had already been utilised for number-forest purposes even before the Act came into force, the question for determination was whether prior approval of the Central Government under section 2 of 1980 Act in the facts of that case was necessary for the State Government for granting permission to win associate minerals also within the same area of 5 acres of land? This Court answered the question in negative and affirmed the judgment of the High Court. This Court observed at pages 647 and 648 of the report as follows The relevant parts of Section 2 of the Act which have to be companystrued for purposes of this case are clause ii of and the Explanation to that section. Clause ii of Section 2 of the Act provides that numberwithstanding anything companytained in any other law for the time being in force in a State, numberState Government or other authority shall make, except with the prior approval of the Central Government, any order directing that any forest land or any portion thereof may be used for any number-forest purpose. Explanation to Section 2 of the Act defines number-forest purpose as breaking up or clearing of any forest land or portion thereof for any purpose other than reforestation. Reading them together, these two parts of the section mean that after the companymencement of the Act numberfresh breaking up of the forest land or numberfresh clearing of the forest on any such land can be permitted by any State Government or any authority without the prior approval of the Central Government. But if such permission has been accorded before the companying into force of the Act and the forest land is broken up or cleared then obviously the section cannot apply. In the instant case it is number disputed that in an area of five acres out of eighty acres companyered by the mining lease the forest land had been dug up and mining operations were being carried on even prior to the companying into force of the Act. If the State Government permits the lessee by the amendment of the lease deed to win and remove felspar and quartz also in addition to mica it cannot be said that the State Government has violated Section 2 of the Act because thereby numberpermission for fresh breaking up of forest land is being given. The result of taking the companytrary view will be that while the digging for purposes of winning mica can go on, the lessee would be deprived of companylecting felspar or quartz which he may companye across while he is carrying on mining operations for winning mica. That would lead to an unreasonable result which Would number in any Way subserve the object of the Act. We are, therefore, of the view that while before granting permission to start. mining operations on a virgin area Section 2 of the Act has to be companyplied with it is number necessary to seek the prior approval of the Central Government for purposes of carrying out mining operations in a forest area which is broken UP or cleared before the companymencement of the Act. The learned companynsel for respondent 1 has also given an undertaking that respondent 1 would companyfine his mining operations only to the extent of five acres of land on which mining operations have already been carried out and will number feel or remove any standing trees thereon without the prior permission in writing from the Central Government. Taking into companysideration all the relevant matters, we are of the view that respondent 1 is entitled to carry on mining operations in the said five acres of land for purposes of removing felspar and quartz subject to the above companyditions. The aforesaid observations have been set in detail in order to understand the true ratio of the said decision in the background of the facts of that case. It is true that this Court held that if the permission had been granted before the companying into operation of the 1980 Act and the forest land has been broken up or cleared, clause ii of section 2 of 1980 Act would number apply in such a case. But that decision was rendered in the background of the facts of that case. The ratio of any decision must be understood in the background of the facts of that case. It has been said long time ago that a case is only an authority for what it actually decides, and number what logically follows from it. See Lord Halsbury in Quinn v. Leathem 1901 Appeal Cases But in view of the mandate of Article 141 that the ratio of the decision of this Court is a law of the land, Shri Gobind Dass submitted that the ratio of a decision must be found out from finding out if the companyverse was number companyrect. But this Court, however, was cautious in expressing the reasons for the said decision in State of Bihar v. Banshi Ram Modi Others supra . This Court observed in that decision that the result of taking the companytrary view would be that while digging for purposes of winning mica can go on, the lessee would be deprived of companylecting felspar or quartz which he may companye across while he is carrying on mining operations for winning mica. That would lead to an unreasonable result which will number in any way sub-serve the object of the Act. There was an existing lease where mining operation was being carried on and what was due by incorporation of a new term was that while mining operations were being carried on some other minerals were available, he was given right to companylect those. The new lease only permitted utilisation or companylection of the said other minerals. In the instant appeals the situation is entirely different. The appellants are asking for a renewal of the quarry leases. It will lead to further deforestation or at least it will number help reclaiming back the areas where deforestations have taken place. In that view of the matter, in the facts and circumstances of the case, in our opinion, the ratio of the said decision cannot be made applicable to support the appellants demands in these cases because the facts are entirely different here. The primary purpose of the Act which must subserve the interpretation in order to implement the Act is to prevent further deforestation. The Central Government has number granted approval. If the State Government is of the opinion that it is number a case where the State Government should seek approval of the Central Government, the State Government cannot apparently seek such approval in a matter in respect of, in our opinion, which it has companye to the companyclusion that numberrenewal should be granted. In that view of the matter and the scheme of the Act, in our opinion, the respondents were fight and the appellants were wrong. All interpretations must sub-serve and help implementation of the intention of the Act. This interpretation, in our opinion, will sub-serve the predominant purpose of the Act. In that view of the matter, we are unable to sustain the submissions urged in support of these appeals. The appeals therefore fail and are accordingly dismissed. |
Dr. ARIJIT PASAYAT, J. Challenge in this appeal is to the judgment of a Division Bench of the Madras High Court allowing the appeal filed by the State. Challenge in the appeal was to the companyrectness of the judgment of learned Sessions Judge, Madurai directing acquittal of the present appellant. He was charged for companymission of offence punishable under Section 302 read with Section 34 of the Indian Penal Code, 1860 in short the IPC . In fact two persons were tried in the said Sessions Case. Present appellant is the son of A2. By the trial companyrts judgment, A2 was also acquitted. Though State had questioned the acquittal of both the accused persons, leave was granted by the High Court only in respect of the present appellant i.e. A1. Background facts in a nutshell are as follows PW.1 is residing at Paloothu. The deceased Murugan hereinafter referred to as the deceased is his sisters son. PW2 is the younger brother of the deceased. The deceased was also residing in the same place. PW1 knows the accused. Al is the son of A2 and they are also residents of the same place. The occurrence had taken place on 15.1.1990 around 5.00 p.m. It was a festival day the day following the festival of Pongal, which falls on 14.1.1990 . On that day, PW 1 went towards the house of one Chellappa Thevar and he was standing there for some time. The house of Chellappa Thevar is in the middle street of the said village. The deceased was companying from numberth to south in that road bringing two bulls. As already stated, on the day in question, the festival related to washing the bulls decorating them painting the horns and then after garlanding the same, they would be taken around the town in a joyous manner. A2 was companying behind the deceased with a stick in his hand. He was just swinging the stick around his body. Al was proceeding from south to numberth in the same road and he was armed with a knife. With that knife, he stabbed on the left side of the chest of the deceased and ran towards south. The victim tumbled on his feet in the street. On seeing this, P.Ws.l and 2 ran towards him and gave their hand of support. One other person by name Chinnasamy also witnessed the occurrence and he gave a hot chase to Al. The injured, who by then had lost his companysciousness, was put on a cart and taken to the private hospital of one Anbalagan by PWs. 1 and 2. But the Doctor was number available there and Murugan breathed his last outside the hospital itself while he was in the cart. Immediately, PWs. l and 2 reached the police station, taking the dead body in that cart. PW.6 was the Sub Inspector of Police in the Police Station during the relevant time, before whom, PW 1 gave the companyplaint. Ex.Pl is that companyplaint attested by PW.2 and one Chinnasamy, who accompanied them. There was an earlier incident regarding the companystruction of a house between A2 and the father of the deceased. During the occurrence in the present case, the shirt and dhoti of PW.1 became blood stained and the shirt of PW2 also became blood stained. The personal wearing apparels of PWs. 1 and 2 were produced at the police station. MOs.l and 2 are the shirt and dhoti of PW1 and after getting change dress from his house, he surrounded them at the police station. M03 is the weapon of offence in the hands of A1, which he used in inflicting the fatal injury on the deceased. He was examined during inquest by the investigating Officer. P.W.2 had also given evidence in total companyroboration to the oral evidence of PW1 on all material aspects as referred to above. He stated that, MOs.4 and 5 are his shirt and lungi, which he handed over at the Police Station, after getting change dress from his house. He was examined during inquest. PW.3 witnessed the preparation of Ex.P.2/ observation mahazar as well as the recovery of MOs. under Ex at 7.30 a.m on 16.1.1990. The medical officer was of the opinion that the deceased appeared to have died on account of the stab wound over the vital organ, namely heart. The trial companyrt did number accept the prosecution version and directed acquittal primarily on the following grounds There is an inordinate delay in lodging the companyplaint with the police There are materials to show that the companyplaint was prepared after deliberations and discussions There is delay in sending the material records to the companyrt A1 had an injury and that had number been explained by the prosecution, which affects their case in toto. The said acquittal was primarily on the ground that there was delay in lodging the FIR, and that the injury on the accused was number explained. The High Court found that in view of the evidence of PWs 1 2 the trial companyrt was number justified in directing acquittal. It was numbered that the occurrence had taken place around 5 PM and immediate companycern was to render medical assistance. The companyplaint was lodged around 7.30 PM. Further injuries on A1 were of superficial nature and therefore, the trial companyrt was number justified in directing acquittal. It was further numbered that if there was any delay in the investigation that was number sufficient to discard credible oral evidence of PWs. 1 2. Accordingly, the acquittal was set aside and the life sentence was imposed after recording that the accused was guilty of offence punishable under Section 302 IPC. Learned companynsel for the appellant submitted that there was unexplained delay in lodging the FIR. The injuries on the appellant were number explained and in view of the fact that the companyaccused A2 was acquitted on the same set of evidence, the High Court ought number to have allowed the appeal. The evidence of the eye witnesses cannot be said to be totally without possibility of false implication. As numbered above, there was numberdelay in lodging the FIR as has been rightly numbered by the High Court in view of the factual scenario highlighted. Additionally, the injuries on the accused were of very minor nature and superficial. Stress was laid by the accused-appellants on the number-acceptance of evidence tendered by PW1 to a large extent to companytend about desirability to throw out entire prosecution case. In essence prayer is to apply the principle of falsus in uno falsus in omnibus false in one thing, false in everything . This plea is clearly untenable. Even if major portion of evidence is found to be deficient, in case residue is sufficient to prove guilt of an accused, his companyviction can be maintained. It is the duty of the Court to separate grain from chaff. Where chaff can be separated from grain, it would be open to the Court to companyvict an accused numberwithstanding the fact that evidence has been found to be deficient, or to be number wholly credible. Falsity of material particular would number ruin it from the beginning to end. The maxim falsus in uno falsus in omnibus has numberapplication in India and the witness or witnesses cannot be branded as liar s . The maxim falsus in uno falsus in omnibus has number received general acceptance number has this maxim companye to occupy the status of rule of law. It is merely a rule of caution. All that it amounts to, is that in such cases testimony may be disregarded, and number that it must be disregarded. The doctrine merely involves the question of weight of evidence which a Court may apply in a given set of circumstances, but it is number what may be called a mandatory rule of evidence. See Nisar Alli v. The State of Uttar Pradesh AIR 1957 SC 366. In a given case, it is always open to a Court to differentiate accused who had been acquitted from those who were companyvicted where there are a number of accused persons. See Gurucharan Singh and Anr. v. State of Punjab AIR 1956 SC 460. The doctrine is a dangerous one specially in India for if a whole body of the testimony were to be rejected, because witness was evidently speaking an untruth in some aspect, it is to be feared that administration of criminal justice would companye to a dead-stop. Witnesses just cannot help in giving embroidery to a story, however, true in the main. Therefore, it has to be appraised in each case as to what extent the evidence is worthy of acceptance, and merely because in some respects the Court companysiders the same to be insufficient for placing reliance on the testimony of a witness, it does number necessarily follow as a matter of law that it must be disregarded in all respect as well. The evidence has to be shifted with care. The aforesaid dictum is number a sound rule for the reason that one hardly companyes across a witness whose evidence does number companytain a grain of untruth or at any rate exaggeration, embroideries or embellishment. See Sohrab s o Beli Nayata and Anr. v. The State of Madhya Pradesh 1972 3 SCC 751 and Ugar Ahir and Ors. v. The State of Bihar AIR 1965 SC 277. An attempt has to be made to, as numbered above, in terms of felicitous metaphor, separate grain from the chaff, truth from falsehood. Where it is number feasible to separate truth from falsehood, because grain and chaff are inextricably mixed up, and in the process of separation an absolutely new case has to be reconstructed by divorcing essential details presented by the prosecution companypletely from the companytext and the background against which they are made, the only available companyrse to be made is to discard the evidence in toto. See Zwinglee Ariel v. State of Madhya Pradesh AIR 1954 SC 15 and Balaka Singh and Ors. v. The State of Punjab 1975 4 SCC 511. As observed by this Court in State of Rajasthan v. Smt Kalki and Anr. 1981 2 SCC 752, numbermal discrepancies in evidence are those which are due to numbermal errors of observation, numbermal errors of memory due to lapse of time, due to mental disposition such as shock and horror at the time of occurrence and those are always there however honest and truthful a witness may be. Material discrepancies are those which are number numbermal, and number expected of a numbermal person. Courts have to label the category to which a discrepancy may be categorized. While numbermal discrepancies do number companyrode the credibility of a partys case, material discrepancies do so. These aspects were highlighted in Krishna Mochi and Ors. v. State of Bihar etc. |
K. SIKRI, J. Two FIRs are the subject matter of these appeals. One FIR No. 12 of 2013 dated August 01, 2013 is under Sections 406, 420, 120B of the Indian Penal Code, 1860 IPC and Section 13 2 of the Prevention of Corruption Act, 1988 PC Act has been registered Signature Not Verified against the appellants herein as well as some other persons. Digitally signed by SUSHIL KUMAR RAKHEJA Date 2018.11.12 Second FIR No.14 of 2013 dated October 03, 2013 is under Section 172531 IST Reason 447 read with Section 120B of the IPC, Section 3 of Prevention of Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 1 of 53 Damage to Public Property Act, 1984 and Section 13 2 of the PC Act. The appellants filed petitions under Section 482 of the Code of Criminal Procedure, 1973 Cr.P.C. before the High Court of Himachal Pradesh for quashing of the said FIRs. These petitions have been dismissed by the High Court vide companymon judgment dated April 25, 2014. That judgment is impugned in the instant appeals. When the Special Leave Petitions out of which these appeals arise were filed, numberice thereof was issued on January 5, 2015 and stay of further proceedings was also granted in the case arising out of the said FIRs which are pending before the Special Judge, Kangra, Dharamshala, Himachal Pradesh. That stay has been extended from time to time and is, therefore, companytinuing. During the pendency of these proceedings, investigation was companypleted. On the day judgment was pronounced by the High Court, the chargesheets were filed in the Court of Special Judge. After the filing of the said chargesheets, the appellants have also filed Writ Petition Criminal No. 135 of 2017 in this Court seeking quashing of these chargesheets. Both these proceedings were clubbed and heard together which we propose to dispose of by this companymon judgment. Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 2 of 53 Appellant No. 1 is a Cricket Association of Himachal Pradesh which was initially registered as a Society under the Societies Registration Act, 1860 vide Registration Certificate dated June 08, 1990. On September 15, 2001, appellant No. 1 made an application for allotment of land to develop and companystruct the world class cricket stadium and companysequently, the Commissioner-cum-Secretary Education granted permission for transfer of land to the Himachal Pradesh Youth Services and Sports Department with certain companyditions. A lease deed dated July 29, 2002 was executed between appellant No.1 and respondent No. 1 through Director, Himachal Pradesh Youth Services and Sports Department for the said land at Village Mouja and Tehsil Dharamshala, District Kangra for companystruction of an international cricket stadium which was duly companystructed. On July 14, 2005, a number for profit companypany in the name of Himalayan Players Cricket Association was incorporated under Section 25 of the Companies Act, 1956. Name of this companypany was changed to Himachal Pradesh Cricket Association on August 31, 2005. Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 3 of 53 Purusant to a proposal to host international cricket matches at Dharamshala, the International Cricket Council inspected the cricket infrastructure being developed at Dharmashala by appellant No. 1 and, inter alia, observed that the quality of accommodation left much to be desired. Need for some more facilities and hotel accommodation of desired quality was specifically stressed. Having regard to this report, the appellants decided to companystruct a club house on the leased land. There was also a parcel of idle land in the middle of the land allotted for the stadium. Appellant No.1 towards this end made a request to the Director, Youth Services and Sports for allotment of additional land adjacent to the stadium admeasuring 720 square metres, vide its letter dated July 03, 2008. Since it was Gram Panchayat land, companysent thereof was also needed for its allotment to the appellant No.1. Appellant No.1, thus, approached the Gram Panchayat. Pursuant to meetings between the office bearers of appellant No. 1 and Gram Panchayat, members of Uparali Dhari Development Division, Dharamshala, the said Gram Panchayat issued numberobjection for allotment of the land. Proposal of appellant No. 1 for allotment of additional land was mooted with the Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 4 of 53 authorities as well. Respondent No. 1 vide letter dated November 16, 2009 took up the matter with the ACS-cum-FC Revenue to the Government of Himachal Pradesh for approval to lease out government land in Mohal Kand Mauja Khanyara, Tehsil Dharamshala, District Kangra, measuring in 3-28-06 hectare in favour of appellant No. 1. Respondent No. 1 granted approval to lease out the aforesaid land in favour of appellant No. 1 vide letter dated November 16, 2009 which was companyveyed vide letter dated November 18, 2009. As a result, lease deed was executed between appellant No. 1 and respondent No. 1 for lease of the said land situated at Mohal Kand Mauza Khanyara, Tehsil Dharmashala. Club house was companystructed at the stadium premises at Dharamshala under the name and style of Aveda HPCA Club House. Completion Certificate was issued on March 10, 2011 and was certified companyplete in all aspects as per approved plan of the Executive Officer, Municipal Council, Dharamshala. The Town and Country Planning Department, Dharamshala also issued numberobjection certificate dated March 15, 2011 for use of part of the infrastructure of cricket stadium as club house for cricket activities. Respondent No. 1 also approved the tariff for availing the Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 5 of 53 accommodation facilities of the club house vide its letter dated September 08, 2011. The Board of Control for Cricket in India BCCI granted permission to the Himachal Pradesh Cricket Association to companyvert itself from a number for profit society to a number for profit companypany during its annual general meeting held on September 19, 2011. A majority of cricket associations throughout the companyntry have been companyverting themselves from a number for profit society to a number for profit companypany registered under the Companies Act, 1956 in order to ensure better and transparent management of their affairs. Realising that unless world class accomodation was available for the teams playing at the stadium and the officials companycerned accompanying such teams, the venue at Dharamshala that was being painstakingly developed by the appellant No. 1 from its own funds would be grossly underutilised and the State would lose out in hosting cricket matches, appellant No. 1 and its office bearers began working out a method to companystruct a world class motel for such purposes. Appellant No. 1 realized that if the use of the same was restricted only to usage during match days for use of teams and Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 6 of 53 their officials, the same would number be companymercially viable. As the terms of the lease may number be technically wide enough to companyer this allied infrastructure being developed for the game of cricket, vide its letter dated December 24, 2011, appellant No. 1 wrote to the respondent to request it to permit companymercial activity on the said land on even number match days and amend the lease terms accordingly. The above letter was forwarded by the District Magistrate to the Principal Secretary Revenue , Government of Himachal Pradesh and the Principal Secretary Revenue , Government of Himachal Pradesh issued numberobjection for execution of a supplementary lease enabling companymercial activity on the additional land at Kandi provided that the lease money was charged in accordance with the Lease Rules, 2011. A supplementary lease deed was executed between the appellant No.1 and the State of Himachal Pradesh enabling use of the additional land companymercially. Necessary permissions for development on the said land were obtained including for companymercial hotel. The hotel companystructed under the name and style of The Pavilion obtained registration with the Tourism Department of the State and Tariffs, etc. were also fixed by the said Department on September 26, 2012. In the meantime, Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 7 of 53 on September 22, 2012 resolution was passed by the appellant No. 1 companypany to take over the assets and liabilities of the society. Agreement dated October 01, 2012 was also executed between the Himachal Pradesh Cricket Association the society and Himachal Pradesh Cricket Association the Company to enable the Society to companyvert itself into a Company. Accordingly, the Society was companyverted into a Company and the Himachal Pradesh Cricket Association stood companyverted from a society to a number for profit companypany registered under the Companies Act, 1956 and the Registrar of Companies was informed of the same in due companyrse. Within a companyple of months, from the aforesaid developments, there was a change of political executive in the State of Himachal Pradesh pursuant to the elections of legislative assembly. According to the appellants, with the change of political power, tirade against the appellants started by the new Government. In fact, even during the election campaign, the Congress I had published a Congress Chargesheet wherein serious allegations were levelled against the appellants. The appellants department sprung into action and started seeking information from the appellants on various aspects, though this information was already available with the State Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 8 of 53 Government. A formal FIR No. 12 of 2013 dated August 01, 2013 was registered which, according to the appellants, is the result of the said Congress Chargesheet. In fact, some time before that, a companyplaint under Section 156 3 Cr.P.C. was made by one Vinay Sharma against appellant No. 1 and its office bearers in which orders were passed by Special Judge, Kangra on July 02, 2013 directing the police authorities to investigate the said case and submit the report to it. Thus, two parallel proceedings were started. Further allegation of the appellants is that investigation was personally monitored by respondent No. 2 herein who was the Chief Minister at that time. He had also made various public statements from time to time that he was interested in taking over the entire function of the Cricket Association and its assets. According to the appellants, at the behest of respondent No. 2, even the Registrar of Societies, Himachal Pradesh issued numberice dated September 7, 2013 on the issue of formation of companypany under Section 25 of the Companies Act, 1956 and taking over the assets of the society. Against this numberice, Writ Petition No. 7593 of 2013 was filed wherein the High Court passed the orders keeping in abeyance the Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 9 of 53 allegations raised in the numberice dated September 7, 2013 of the Registrar of Societies. Another FIR No. 14 of 2013 dated October 03, 2013 came to be registered against the appellants and others alleging companymission of offences under Section 447 read with Section 120B of the IPC, Section 3 of the Prevention of Damage to Public Property Act, 1984 and Section 13 2 of the PC Act. Many other actions were taken by the respondents, which according to the appellants, were mala fide moves, reference whereto shall be made at the appropriate stage. At this juncture, the appellants filed petition under Section 482 of Cr.P.C. on January 06, 2014 seeking quashing of FIR No. 12 of 2013 which stands dismissed vide impugned judgment dated April 25, 2014. The High Court in the impugned judgment has taken numbere of catena of judgments of this Court pertaining to powers of the High Court within the scope of Section 482 of Cr.P.C. Thereafter, it has observed that after lodging of the FIR, investigation has been companyducted and the material companylected during investigation discloses that 18 persons made accused in the aforesaid FIR are prima facie involved in the companymission of offences. On this ground, it has Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 10 of 53 brushed aside the argument of the appellants that it was a case of vengeance, political vendeta and mala fide. The High Court has also observed that allegations of mala fide based on the facts after lodging of the FIR are of numberconsequence and cannot be the basis for quashing the proceedings. For this purpose, it has referred to the judgment of this Court in State of Bihar Anr. v. P.P. Sharma Anr.1. It has also observed that even otherwise, the file does number disclose at this stage how it is the case of mala fide. In the opinion of the High Court, in such circumstances, merits of the case is to be tested during trial inasmuch as FIR and Final Report of Investigating Agency discloses that case for trial is made out. As the power under Section 482 Cr.P.C. is to be exercised carefully, cautiously and in rarest of rare cases, keeping in mind the law laid down by this Court, the High Court refused to quash the proceedings. We may also record here that one of the submissions of the appellants before the High Court was that appellant No. 2 and other persons are number public servants and, therefore, provisions of PC Act companyld number be invoked against them. This argument has also been found to be unmerited on the ground that some of the accused persons arrayed with the appellants are public servants and also that allegation in the 1 1992 Supp 1 SCC 222 Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 11 of 53 FIR is that all these accused persons has the companyspiracy and wrongful gain to themselves and wrongful loss to the State, in the process, the officials misused their position to show favour to other accused persons. Mr. Patwalia, learned senior companynsel appearing for the appellants, at the outset, drew the attention of this Court to the fact that M s. Subhash Ahluwalia, Subhash Negi, Ajay Sharma, Deepak Sanan and T.G. Negi, who are the IAS Officers, were associated with the grant of three leases. They were the main persons who took active part in deciding that the three leases should be granted to the appellants and on that basis, final decision was taken. However, as far as these Officers are companycerned, prosecution sanction has either been denied or they have number been prosecuted at all. Likewise, Mr. Gopal Chand, who belongs to Himachal Pradesh Administrative Service, was arrayed as one of the accused person, but in his case also, the sanction though given earlier stood withdrawn. He has even been promoted to IAS cader. Mr. Patwalia submitted in tabular form status of Officers who have allegedly companyspired with the appellants, which is as under Sl. Name of Officer Post at the time of Role as per FIR Sanction Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 12 of 53 No. alleged offence FIR No. 12 of 2013 dated 01.08.2013 under Sections 406/420/120B IPC and Section 13 2 , Prevention of Corruption Act 1 Subhash IAS, Director-cum- Sh. Subhash Ahluwalia, at Not Charged Ahluwalia Special Secretary, the time of grant of lease Youth Services and of the Government Land Not enough Sports Department, to HPCA for the evidence of Government of companystruction of Cricket malafide Himachal Pradesh. Stadium had ignored the intention . rules and had number mentioned the provisions of Lease Rules, 1993 in his numbering. Further, Sh. Subhash Ahluwalia was a signatory to the Lease Deed dated 29.07.2002. 2 Subhash Negi IAS, Secretary, Sh. Subhash Negi, at the Not Charged Youth Services and time of grant of lease of Sports Department, the Government Land to Not enough Government of HPCA for the companystruction evidence of Himachal Pradesh of Cricket Stadium had malafide ignored the rules and had intention . number mentioned the provisions of Lease Rules 1993 in his numbering. 3 T.G. Negi IAS, Principal Sh. T.G. Negi made numberNot Charged Secretary, Youth efforts to reject the numberings Services and Sports of accused Sh. Ajay Not enough Department, Sharma and instead evidence of Government of forwarded the same for malafide Himachal Pradesh. approval of the Chief intention . Minister. 4 Ajay Sharma IAS, Director-cum- In 2008, then Chief Prosecution Special Secretary, Minister P.K. Dhumal sanction Youth Services and marked the application of declined by Sports Department, HPCA for permission of Central Government of companystruction of Club Government Himachal Pradesh. House and its companymercial on use to Sh. Ajay Sharma Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 13 of 53 and asked him to prepare 25.08.2015. the proposal for the same. Sh. Ajay Sharma, by Prosecution abusing his official sanction position proposed for withdrawn by permission to the HPCA the State with the approval of the Government Chief Minister. The land on was leased only for 09.04.2018. companystruction of cricket stadium and number club house. Sh. Ajay Sharma, by abusing his office in criminal companyspiracy with HPCA, companytrary to the terms and companyditions of the lease deed has provided undue benefit to the HPCA and loss to the State Government. 5 Deepak Sanan IAS, Principal Sh. Deepak Sanan issued Prosecution Secretary-cum- NOC for the companymercial sanction Financial use of Government land declined by Commissioner, which was leased to Central Revenue HPCA for the companystruction Government Department, of Hotel Pavilion by on Government of reversing the earlier 25.08.2015. Himachal Pradesh. decision of Council of Minister. Sh. Deepak Prosecution Sanan also numberified the sanction Lease Rules, 2011, on the withdrawn by basis of which the State supplementary lease was Government executed, in accordance on with Rule 9. 09.04.2018. 6 Gopal Chand HPAS, Additional Sh. Gopal Chand had Prosecution Secretary, Revenue recommended for the sanction Department, companymercial use of land granted on Government of leased to HPCA in Mohal 03.04.2014 Himachal Pradesh Kand and marked the file withdrawn by to Sh. Deepak Sanan, the State whereas under Schedule Government Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 14 of 53 20 of the Business Rules, on he companyld have 03.08.2016. recommended the matter to be taken to the Cabinet. Promoted to IAS. FIR No. 14 of 2013 dated 03.10.2013 under Sections 447/120B IPC, Section 3 of the Prevention of Damage to Public Property Act, 1984 and Section 13 2 of the Prevention of Corruption Act 7 K.K. Pant IAS, Deputy On 14.03.2008, Sh. K.K. Prosecution Commissioner, Pant chaired a meeting sanction Kangra, Himachal with other accused, declined by Pradesh without following due Central procedure and without Government having any statutory on power for doing so, for 27.03.2015. reallocation of Type IV, UGC accommodation in the possession of the Education Department and the presumptions drawn in the meeting were made with the intention to give undue advantage to HPCA. Sh. K.K. Pant overlooked the report regarding companydition of building. 8 P.C. Dhiman IAS, Principal Sh. P.C. Dhiman issued Prosecution Secretary, Education NOC to the Department of sanction Department, Youth Services and declined by Government of Sports, companytrary to the Central Himachal Pradesh recommendations Government companyditions of the Director, on Higher Education, and 24.08.2015. without mentioning the disposal of building in accordance with rules numberms and recovery companyts from HPCA. 9 Devi Chand Executive Engineer, Devi Chand Chauhan, Prosecution Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 15 of 53 Chauhan Dharamshala while working as sanction Division, HPPWD Executive Engineer Civil , declined by Dharamshala, HPPWD Department Division forwarded the Secretary report sent by the then but SDO Sub-Division No. 1, recommende Dharamshala, regarding d by the then dilapidated companydition of Chief Type IV accommodations, Minister Sh. without following Virbhadra procedure as laid down by Singh. the Government of India, Hence, Central Public Works prosecution Department Code, whihc sanction led two illegal demolition granted on of two storied building 23.09.2014 Type IV accommodation and of the Education 15.10.2014 Department existing FIR No. adjacent to the present 14/13 dated Cricket Stadium gate, 03.10.2013 which was an eyesore to the HPCA and alleged to be a security threat to the players. Thus, the motive of the Executive Engineer was to intentionally give an advantage to HPCA thereby misusing his official position. Thus, the Government Officers who have granted lease are number been prosecuted. He, thus, submitted that the main Government functionaries were left out which shows that the Government wanted to protect its own Officers but, at the same time, roped in the appellants and others because of political enmity. Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 16 of 53 Dilating on the aforesaid plea, namely, the entire prosecution is due to political vendetta, without any legal basis, Mr. Patwalia submitted that the genesis of the prosecution starts with the failed attempt by the then State Government to take over appellant No. 1 in the year 2005 under the provisions of the HP Sports Registration, Recognition and Regulation of Associations Act, 2005 due to the interim protection granted by the Himachal Pradesh High Court on May 18, 2005. This Act was subsequently repealed. According to him, in view of the repeated interference by State Governments in the internal affairs of autonomous cricket associations, the BCCI has informally encouraged such member associations to re-register themselves as number for profit charitable Section 25 Companies under the Companies Act, 1956, as amended, for better legal companypliances, transparency and to avoid interference in internal affairs by State Governments. Accordingly, various member associations of the BCCI have companyverted themselves to Section 25 number for profit charitable companypanies governed by the provisions of the Companies Act, 1956. Appellant No. 1 also followed the suit as a result of aforesaid mandate of the BCCI. Accordingly, a number for profit companypany in the name of Himalayan Players Cricket Association was Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 17 of 53 incorporated under Section 25 of the Companies Act, 1956. On August 31, 2005, the said Company was permitted to change its name to Himachal Pradesh Cricket Association and was issued a fresh certificate of incorporation. During this process, the HP Sports Registration, Recognition and Regulation of Associations Act, 2005 stood repealed and numberfurther steps were taken in the interregnum to companyvert the society to a section 25 companypany. Thereafter, on September 19, 2011, the BCCI took up the pending request of appellant No. 1 to permit it to companyvert itself to a Section 25 number for profit companypany and granted the same. Pursuant to the permission by the BCCI, amendments were carried out by the members at the AGM of the appellant No. 1 on September 22, 2012 resolving to companyvert the appellant No. 1 society to a Section 25 Company. Accordingly, an agreement was executed on October 01, 2012 companyverting the society to a Section 25 Company and informing the Registrar of Companies of the same. On October 31, 2012, appellant No. 1 number registered as a Section 25 Company under the Companies Act, 1956 informed the Registrar of Societies of the State of Himachal Pradesh of the change in the memorandum and rules of the appellants. Further, on November 02, 2012, once again Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 18 of 53 the intimation regarding change in status of appellant No. 1 from a number for profit society to a number for profit companypany was given to the Registrar of Societies, State of Himachal Pradesh. Thus, from October 01, 2012, appellant No. 1 has been existing as a Company with due intimation to the State of Himachal Pradesh paying its lease rent and taxes in accordance with law. He also argued that the effect of such statutory companyversion from a firm to a companypany by statutory provisions for income tax purposes has been companysidered by the Bombay High Court in the case of Commissioner of Income Tax, Mumbai v. Texspin Engg. and Mfg. Works, Mumbai2 and Punjab Haryana High Court in the case of Commissioner of Income Tax Central , Ludhiana v. M s. Rita Mechanical Works, Ludhiana3 wherein it has been held as under There is a difference between vesting of the property, in this case, in the limited companypany and distribution of the property. On vesting in the limited companypany under Part IX of the Companies Act, the properties vest in the companypany as they exist. In the present case, we are companycerned with a partnership firm being treated as a companypany under the statutory provisions of Part IX of the Companies Act. In such cases, the companypany succeeds the firm. Generally, in the case of a transfer of a capital asset, two important ingredients are existence of a party and a companynter-party 2 2003 263 ITR 345 3 2012 344 ITR 544 Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 19 of 53 and, secondly, incoming companysideration qua the transferor. In our view, when a firm is treated as a companypany, the said two companyditions are number attracted. There is numberconveyance of the property executable in favour of the limited companypany. It is numberdoubt true that all properties of the firm vest in the limited companypany on the firm being treated as a companypany under Part IX of the Companies Act, but that vesting is number companysequent or incidental to a transfer. It is a statutory vesting of properties in the companypany as the firm is treated as a limited companypany. On the vesting of all the properties statutorily in the companypany, the cloak given to the firm is replaced by a different cloak and the same firm is number treated as a companypany, after a given date. On the aforesaid basis, submission of Mr. Patwalia was that companyversion of a number for profit society to a number for profit charitable companypany which is expressly permitted by law cannot be companystrued as a crime. The assets - in the present case leased land remain as they are. In fact, the appellants have companystructed a world class stadium and a world class hotel on the leased premises. Importantly, the State Government companytinues to remain the owner of the land and has the power under the leases to cancel the same for violation of terms and companyditions of the lease. It was highlighted by him that on the midnight of October 26, 2013, the State Government had cancelled the leases and forcibly dispossessed the appellants from the leased lands. However, on November 05, 2013, the Himachal Pradesh High Court strictured the Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 20 of 53 State Government and ordered status quo ante and handed over the possession of the leased lands to the appellants. The State Government thereafter accepted this order and withdrew the cancellation of lease numberices on November 19, 2013. Subsequently, another numberice dated May 23, 2015 was issued seeking cancellation of the leases which too stands withdrawn on August 09, 2018. At present, there are numberproceedings pending for cancellation of the leases. Mr. Patwalia argued that there were specific allegations of mala fide against respondent No. 2 from the very inception of these proceedings about how he first caused the FIR to be registered and thereafter interfered in the investigations, by being head of the SIT. He also further stated that the companyduct of respondent No.2 from opposing the present appeals after having filed a companynter affidavit in the present matter stating that he was number a necessary party and it was number his job to defend the prosecution, depicts mala fides on his part. This, according to him, was sufficient to quash the FIR as investigation was tainted. In support, he referred to the case of Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 21 of 53 Union of India Ors. v. Sushil Kumar Modi Ors.4 wherein this Court held as under The agencies companycerned must bear in mind and, if needed, be reminded of the caution administered by Lord Denning in this behalf in R. v. Metropolitan Police Commr. 1968 1 All ER 763 1968 2 WLR 893 1968 2 QB 118 Indicating the duty of the Commissioner of Police, Lord Denning stated thus All ER p. 769 I have numberhesitation, however, in holding that, like every companystable in the land, he should be, and is, independent of the executive. He is number subject to the orders of the Secretary of State, . I hold it to be the duty of the Commissioner of Police, as it is of every chief companystable, to enforce the law of the land. He must take steps so to post his men that crimes may be detected and that honest citizens may go about their affairs in peace. He must decide whether or number suspected persons are to be prosecuted and, if need be, bring the prosecution or see that it is brought but in all these things he is number the servant of anyone, save of the law itself. No Minister of the Crown can tell him that he must, or must number, keep observation on this place or that or that he must, or must number, prosecute this man or that one. Nor can any police authority tell him so. The responsibility for law enforcement lies on him. He is answerable to the law and to the law alone. There can hardly be any doubt that the obligation of the police in our companystitutional scheme is numberless. Mr. Patwalia referred to various documents placed on record and companytended that they would ex facie show that administrative decisions were taken at various levels and by variou departments by the companycerned officers prior to sanction of leases in favour of appellant No.1. Therefore, numberwrong, much less culpable wrong, 4 1997 4 SCC 770 Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 22 of 53 was companymitted by the appellants and others. He specifically referred to the allegation that there is numberprovision of grant of lease at a token rate of Re.1/- per month under the applicable lease rules. His response was that this argument is companypletely fallacious. The leases of the appellants were granted under the H.P. Lease Rules, 1993. The appellants wanted to set up a cricket stadium with allied world class infrastructure to enable the ICC to grant international games to Himachal Pradesh and, thus, were eligible for grant of lease under Rule 4 vii - public purpose in the interest of the development of the State. The appellants were also eligible for grant of larger areas under Rule 5 in terms of the exemption provided therein. In fact, the decision to lease the land at token rate of Re.1/- per month for companystruction of cricket stadium was a well thought out administrative decision by the State Government in the interest of the State and has admittedly put Dharamshala on the world map. This decision was taken by the State Cabinet after companysidering the advice and presentation from the officers companycerned. RTI documents in the possession of the appellants record the decision of the Cabinet dated May 27, 2002 as under Item No. 14 Government of Himachal Pradesh Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 23 of 53 General Administration Department Confidential Cabinet Subject Leasing out of Government land for the companystruction of International Cricket Stadium at Dharamshala to H.P. Cricket Association on usual terms and companyditions. The above proposal was discussed by the Cabinet in its meeting held on 27.5.2002 and the decision arrived at thereon is reproduced below- The Cabinet approved the propsoal regarding lease rates. Advantages of the Project explained by the AD were companysidered and it was decided that land be leased out at token rate of Re.1/- per month for a period of 99 years. The implementation report of the above decision may please be sent to this Department within a fortnight from the receipt of this companymunication. Sd - Addl. Secretary GAD Further, Rule 8 provides for lease amount to be paid. At the time of grant of lease, the appellant being a society had to pay lease amount under Rule 8 1 ii at 8 of the latest highest market value of the land leased or double the average market value of five years whichever is less. The proviso to Rule 8 1 empowers the State Government to reduce the lease amount in deserving cases and reads as under 8 1 Lease Amount. - 1 The lease amount fresh or renewal of existing lease shall be charged from the eligible institutions and persons per annum as under- Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 24 of 53 Provided that the State Government may reduce the amount for special reasons in deserving cases. Therefore, the State Government took a companyscious decision in exercise of its powers under the proviso to Rule 8 1 of the H.P. Lease Rules, 1993 and granted the lease at a token rate of Re.1/- per month. Based on the aforesaid material and circumstances highlighted by Mr. Patwalia, his submission was that numbercase was made out against the appellants and others, for prosecuting them under criminal law, much less under the provisions of PC Act and the High Court in its impugned judgment has totally glossed over these aspects by limiting the exercise to companyiously quoting various judgments and on that basis, dismissing the petitions of the appellants, without any discussion as to how principles companytained in those judgments is applicable in the instant case. He also submitted that in the facts of the present case, simply because chargesheet has been filed thereafter and the order taking companynizance has been passed would number mean that the appellants cannot prosecute these cases. He submitted that even the chargesheet and companynizance order has been challenged by filing Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 25 of 53 Writ Petition Criminal No. 135 of 2017 which, according to him, is maintainable having regard to the fact that the appeals arising out of petitions under Section 482 of Cr.P.C. are pending in this Court and those events happened during the pendency of these proceedings. He referred to the the cases of Delhi Judicial Service Association, Tis Hazari Court, Delhi v. State of Gujarat Ors. 5 and Monica Kumar Anr. v. State of Uttar Pradesh Ors.6, wherein it is held that this Court has inherent power to quash FIR, chargesheet, charges etc. in exercise of powers under Articles 32, 136 and 142 to do companyplete justice in a cause or matter pending before it and that there is numberrestriction on this power of the Court. According to him, the present is number a case where the appellants are alleging that a judicial order is in violation of their fundamental rights. The present is a case where the appellants have pleaded that there is numbercriminal act on their part and the facts do number disclose any offence all Officers who processed the case of the appellants are number prosecuted 5 1991 4 SCC 406 6 2008 8 SCC 781 Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 26 of 53 two Officers Subhash Ahluwalia and T.G. Negi who processed the case of the appellants were made Principal Secretary to CM and Advisor to CM, respectively, by the respondent No. 2 and were number prosecuted there is numbercriminal act on the part of the officers and they performed their appropriate administrative duties due to which sanction stands declined by the Central Government and the CVC leases were validly granted as per proper procedures and in accordance with lease rules FIR was registered on the basis of Congress Chargesheet investigation was personally supervised by the respondent No. chargesheet filed is the outcome of this tainted investigation prosecution is mala fide and vexatious to settle personal political scores even otherwise the State Government companytinues to remain owner of the land which is on lease and on which the appellants have companystructed assets worth above 150 crores Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 27 of 53 these assets are for use of the public of the State and are being used as such. Further, filing of chargesheet and an order taking companynizance is number a final judicial order. It is a preliminary process in criminal law and is open to challenge in higher judicial fora such as this Court. Last submission of the learned senior companynsel was that, in any case, at best the matter companyld have been subject matter of a civil dispute between the appellants and the respondents but has mala fidely been given the cloak of a criminal proceeding to harass the appellants with a mala fide prosecution. The salutary principle of law, viz. Actus Reus Non Facit Reum Nisi Mens Sit Rea has been erroneously ignored by the High Court and he cited the case of C.K. Jaffer Sharief v. State7 and R. Balakrishna Pillai v. State of Kerala8. He also pleaded that, in another politically motivated case by respondent No. 2, the same view has been taken by the Himachal Pradesh High Court in the case of A.N. Sharma v. State of H.P. Cr. MMO No. 134/2015 against which Special Leave Petition filed by the State Government stands dismissed by this Court. 7 2013 1 SCC 205 8 2003 9 SCC 700 Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 28 of 53 He, thus, companycluded his argument with the submission that case was clearly companyered by the judgments of this Court in State of Haryana Ors. v. Bhajan Lal Ors.9 and Vineet Kumar Ors. v. State of Uttar Pradesh Anr.10 Insofar as respondent No. 1 i.e. State of Himachal Pradesh is companycerned, learned Advocate General submitted that State has already taken a decision number to companytinue with these criminal proceedings. He, in fact, supported the case of the appellants and submitted that State has numberobjection if these proceedings are quashed. However, there was a strong opposition on behalf of respondent No. 2 to the relief sought by the appellants and refutation of the arguments advanced by the appellants. Mr. Anoop George Chaudhary, learned senior companynsel appearing for the respondent No. 2, submitted that the Special Leave Petition was infructuous ab initio inasmuch as chargesheet was filed against 18 accused persons out of whom only appellant No. 2 had sought quashing thereof. It was further submitted that, in any case, on the very day of passing impugned judgment by the High Court i.e. April 9 1992 Supp. 1 SCC 335 10 2017 13 SCC 369 Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 29 of 53 25, 2014, the Investigating Agency filed the challan under Section 173 Cr.P.C. and on perusal thereof, the Special Court took companynizance vide order dated September 06, 2014 and issued summons to the accused persons. Therefore, the Special Leave Petition had, in any case, had become infructuous because of the aforesaid developments. He also submitted that insofar as appellant No. 1, namely, Himachal Pradesh Cricket Association is companycerned, it was number arrayed as accused person numberchallan was filed against it and, therefore, numbercognizance was also taken. Rebutting the allegations of mala fide, he submitted that because of the irregularities companymitted in the allotment of land etc. by the then Government, it was one of the issue in the Assembly Elections in the year 2012 and the Congress had companyplained against the aforesaid irregularity by stating the same with the preparation of Congress Chargesheet. That would number mean that it was out of political vendetta. In fact, the misdeeds of earlier Government was exposed. In any case, after 2012 elections, when the earlier Government did number companye back to power, inquiry was ordered to the affairs of appellant No. 1 which was companyducted by the Anti-Corruption Bureau ACB . As a result of said inquiry, FIR was registered which Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 30 of 53 culminated in filing of the challan as prima facie case was made out by companylecting requisite material. He also referred to the Constitution Bench judgment in the case of Lalita Kumari v. Government of Uttar Pradesh Ors.11 as per which preliminary inquiry before registering an FIR should be companyducted to ascertain whether the information received, reveals any companynizable offence. He submitted that due procedure was followed in accordance with the said judgment. On merits, Mr. Chaudhary submitted that on the basis of final report and companysequently the companynizance order a clear case of cheating fraud criminal breach of trust criminal misconduct usurpation of public land worth crores of rupees loss to state exchequer is made out against the accused persons. Hence, numbercogent grounds exist for quashing of criminal proceedings. Reliance in this regard has been placed upon a judgment rendered by this Court in Indian Oil Corporation v. NEPC India Ltd. Ors.12 The principles relating to exercise of jurisdiction under Section 482 of the Code of Criminal Procedure to 11 2014 2 SCC 1 12 2006 6 SCC 736 Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 31 of 53 quash companyplaints and criminal proceedings have been stated and reiterated by this Court in several decisions. To mention a fewMadhavrao Jiwajirao Scindia v. Sambhajirao Chandrojirao Angre 1988 1 SCC 692 1988 SCC Cri 234, State of Haryana v. Bhajan Lal 1992 Supp 1 SCC 335 1992 SCC Cri 426, Rupan Deol Bajaj v. Kanwar Pal Singh Gill 1995 6 SCC 194 1995 SCC Cri 1059, Central Bureau of Investigation v. Duncans Agro Industries Ltd. 1996 5 SCC 591 1996 SCC Cri 1045, State of Bihar v. Rajendra Agrawalla 1996 8 SCC 164 1996 SCC Cri 628, Rajesh Bajaj v. State NCT of Delhi 1999 3 SCC 259 1999 SCC Cri 401, Medchl Chemicals Pharma P Ltd. v. Biological E. Ltd. 2000 3 SCC 269 2000 SCC Cri 615, Hridaya Ranjan Prasad Verma v. State of Bihar 2000 4 SCC 168 2000 SCC Cri 786, M. Krishnan v. Vijay Singh 2001 8 SCC 645 2002 SCC Cri 19 and Zandu Pharmaceutical Works Ltd. v. Mohd. Sharaful Haque 2005 1 SCC 122 2005 SCC Cri 283 . The principles, relevant to our purpose are A companyplaint can be quashed where the allegations made in the companyplaint, even if they are taken at their face value and accepted in their entirety, do number prima facie companystitute any offence or make out the case alleged against the accused. For this purpose, the companyplaint has to be examined as a whole, but without examining the merits of the allegations. Neither a detailed inquiry number a meticulous analysis of the material number an assessment of the reliability or genuineness of the allegations in the companyplaint, is warranted while examining prayer for quashing of a companyplaint. A companyplaint may also be quashed where it is a clear abuse of the process of the companyrt, as when the criminal proceeding is found to have been initiated with mala fides malice for wreaking vengeance or to cause harm, or where the allegations are absurd and inherently improbable. Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 32 of 53 The power to quash shall number, however, be used to stifle or scuttle a legitimate prosecution. The power should be used sparingly and with abundant caution. The companyplaint is number required to verbatim reproduce the legal ingredients of the offence alleged. If the necessary factual foundation is laid in the companyplaint, merely on the ground that a few ingredients have number been stated in detail, the proceedings should number be quashed. Quashing of the companyplaint is warranted only where the companyplaint is so bereft of even the basic facts which are absolutely necessary for making out the offence. A given set of facts may make out a purely a civil wrong or b purely a criminal offence or c a civil wrong as also a criminal offence. A companymercial transaction or a companytractual dispute, apart from furnishing a cause of action for seeking remedy in civil law, may also involve a criminal offence. As the nature and scope of a civil proceeding are different from a criminal proceeding, the mere fact that the companyplaint relates to a companymercial transaction or breach of companytract, for which a civil remedy is available or has been availed, is number by itself a ground to quash the criminal proceedings. The test is whether the allegations in the companyplaint disclose a criminal offence or number. Dubbing the allegations of mala fide against respondent No. 2 as frivolous, it was argued that the High Court has rightly found numbermerit therein. In any case, argued the learned senior companynsel, the High Court rightly observed that once the chargesheet is filed, such a plea becomes redundant as held in State of A.P. v. Golconda Linga Swamy and Anr.13 and Umesh Kumar v. State of Andhra Pradesh Anr.14. The learned senior companynsel also questioned the 13 2004 6 SCC 522 14 2013 10 SCC 591 Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 33 of 53 move on the part of State Government to withdraw the case in question. It was argued that numberfresh ground or subsequent aspect has emerged or companye in public domain for doing the same and, therefore, such companyrse of action was number permissible as held in State of Tamil Nadu Ors. v. K. Shyam Sunder Ors. 15, Andhra Pradesh Dairy Development Corporation Federation v. B. Narasimha Reddy Ors.16 and State of Himachal Pradesh v. Nishant Sareen17. Moreover, argued the learned senior companynsel, the only procedure prescribed in law was to take the route of Section 321 of Cr.P.C. which has number happened in the instant case. Replying to the arguments of the appellants that it was a civil dispute, Mr. Chaudhary argued that FIR Final Report clearly depicts that there is sufficient evidence of cheating, criminal breach of trust criminal misconduct, companyspiracy and destruction of evidence against the accused persons, therefore, it was number merely a civil case and, thus, the authorities have rightly registered the FIR and filed criminal proceedings. He also argued that at the time of companynizance, there was sanction for prosecution against all public 15 2011 8 SCC 737 16 2011 9 SCC 286 17 2010 14 SCC 527 Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 34 of 53 servants wherever applicable and even if sanction is subsequently withdrawn, it would number impact trial. It was further submitted that in the case of two remaining accused i.e. Ajay Sharma and Deepak Sanan, challan was number presented for want of sanction under PC Act, as the permission seeking sanction was pending with Union Home Ministry though sanction for IPC offences was granted by State Government. The prosecution sanction against Gopal Chand, an HCS Officer was initially granted but later on withdrawn without there being any change of circumstance. The necessity of numbergrant requirement of prosecution sanction can be decided by trial companyrt during the companyrse of trial and it is number a ground for Himachal Pradesh Cricket Association to seek quashing of entire prosecution. The learned senior companynsel also defended number-prosecution of Ajay Sharma and Deepak Sanan, two IAS Officers. He specifically pointed out that allegations in the chargesheet against appellant No.2 which, according to him, disclosed that prima facie case was established against him and, therefore, there was numberreason to quash the chargesheet. Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 35 of 53 Insofar as Writ Petition Criminal No. 135 of 2017 is companycerned, it was argued that such a writ petition was number maintainable under Article 32 of the Constitution, more so, when order of companynizance had number been challenged at all. Support from the judgments in Ujjam Bai v. State of U.P.18, Naresh Shridhar Mirajkar Ors. v. State of Maharashtra Anr.19 and Northern Corporation v. Union of India Ors.20 was taken in this behalf. He reiterated that there were serious allegations against the accused persons and, therefore, numbercase for quashing of the chargesheet challan was made out. Before we undertake the exercise of deliberating on the arguments of the companynsel for the parties and reach our companyclusions, it would be in the fitness of things to recapitulate the events in brief with focus on the allegations of alleged criminality which have been fastened upon the appellants and others. Appellant No. 1 was initially registered as a Society under the Societies Registration Act, 1860 in the year 1990. It is number a number for profit companypany incorporated under Section 25 of the Companies Act, 1956. One of the allegations 18 1963 1 SCR 778 19 AIR 1967 SC 1 20 1990 4 SCC 239 Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 36 of 53 pertains to the so-called illegalities companymitted in the companyversion of the society into deemed companypany under Section 25 of the Companies Act, 1956. Be that as it may, the Society, after its formation, had applied for land at Village Mauja and Tehsil Dharamshala, District Kangra for companystruction of an international cricket stadium. A proper lease was executed between appellant No. 1 and the State of Himachal Pradesh through Director, Himachal Pradesh Youth Services and Sports Department. It happened more than 16 years ago. In respect of this lease, the allegation is that it was executed at a monthly rent of Re.1/- which was allegedly done to favour the appellants. Admittedly, proviso to Rule 8 of the Rules empowers the State Government to adopt such a companyrse and decision to this effect was taken after due deliberations at a very high level, keeping in view the necessity of such a stadium in the State, which did number have any cricket stadium. After the allotment of the land to appellant No. 1, it companystructed cricket stadium thereupon. Appellant was desirous of making a world-class cricket stadium which companyld host international cricket matches as well. For this purpose, it submitted proposal to the ICC. The ICC got the stadium and playground inspected through Mr. Alan Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 37 of 53 Hurst, its match referee. He inspected the stadium and submitted his report dated September 20, 2007. The venue was number approved, at that stage, for hosting international matches. A perusal of the report submitted by the said referee would disclose that there were numberadequate hotel facilities in the area and, therefore, tour support was lacking. Two hotels were shown to Mr. Hurst and it was found by him that each of them were at substantial distance from the ground. Moreover, the facilities in the said hotels were also number adequate. Notwithstanding the same, insofar as the cricket ground is companycerned, the match referee had lauded it for its quality and settings. It can be seen from the general companyments recommendations companyclusions in his report and the relevant portion whereof reads as under This ground has one of the best settings imaginable. The people involved in its development have been innovative and are passionate and visionary. They have done a great job so far in getting this ground to where it is and should be companygratulated and encouraged. I have numberdoubt that with adequate finances, in the near future, this ground can become one of the best in the companyntry. The idea of having a hotel as an integral part of the ground with dual use as companyporate boxes during games is number new, however, the circular restaurant planned for the top, with 360 deg views of the Himalayas and surrounding area will make it unique. Having said this, I believe that at this stage there is still a lot of work to be done that relates to its suitability for staging International cricket. I am informed that sufficient finance has Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 38 of 53 recently been obtained to companyplete everything, and further work is number underway. I have listed below the issues I still have companycerns with and things that need to be changed. If all of these things are addressed, I would have numberhesitation in recommending this ground as suitable as an International ODI venue. The administrators have ensured me that all of these things will be addressed with urgency. They are extremely keen to get into the BCCI ground rotation system as soon as possible. It is clear from the above that Mr. Hurst was of the view that the cricket ground at this picturesque place with scenic beauty can be transformed into one of the best cricket grounds in the companyntry, which would be suitable for international events if the deficiencies pointed out therein are taken care of. Apart from providing other facilities to improve the infrastructure which companyld be easily taken care of , main companycern was to have a hotel as an integral part of the ground with the dual use as companyporate boxes during the game. Because of the above, appellant No.1 felt need to companystruct a club house on the lease land and also seek allotment of some other land for the purpose of companystruction of a hotel, keeping in view the observations companytained in the aforesaid inspection report. Accordingly, it sent request for promotion to companystruct a club house on the lease land which was accorded by respondent No.1 through Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 39 of 53 Directorate of Youth Services and Sports on June 23, 2008 subject to companypleting all the formalities. As far as companystruction of hotel is companycerned, the case of the appellants is that there was a parcel of idle land in the middle of the land alloted for the stadium and for allotment of this land, request was made to the Director, Youth Services and Sports. This land belongs to Gram Panchayat. Gram Panchayat issued numberobjection for the allotment of land on September 14, 2009 pursuant to which respondent No.1 granted approval to lease out this land in favour of appellant No.1 on November 16, 2009 and the lease deed was also executed on December 14, 2009. Thereafter, for the purpose of hotel, additional land was given. Pertinently, insofar as this lease deed is companycerned, since the land was to be used for companymercial purpose, namely, the club house, it provided rental at companymercial rate i.e. the market rate which the appellant No.1 was supposed to pay. After the execution of the lease, club house was companystructed and the Town and Country Planning Department, Dharamshala also issued No Objection Certificate for the use of part of infrastructure of cricket stadium as Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 40 of 53 club house for cricket activities. It is also pertinent to mention that Principal Secretary Revenue , Government of Himachal Pradesh issued numberobjection for execution of supplementary lease enabling companymercial activities on additional land provided that lease money was charged in accordance with the Lease Rules, 2011. This led to execution of supplementary lease deed dated June 23, 2012 on which companymercial hotel was companystructed after obtaining requisite permissions. From the aforesaid events, following aspects can be culled out Appellant No.1 has been given lease of land on which cricket stadium was companystructed and thereafter lease for additional land meant for club house and also supplementary lease for companymercial activity i.e. the hotel. It is only in respect of the land which is meant for cricket stadium that rental of Re.1/- per month was agreed to be charged by invoking proviso to Rule 8. Thus, it is number companytrary to law. State of Himachal did number have any cricket ground, much less State of art cricket ground. It is, for this reason, that the land was given on lease for the purpose of companystructing the cricket ground, which may become pride of Himachal Pradesh, at numberinal rental. Insofar as lease in respect of club house and supplementary lease Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 41 of 53 for companymercial activity i.e. hotel is companycerned, the lease money has been fixed in accordance with Lease Rules, 2011, namely, at companymercial rates. There can hardly be any element of criminality in the afofresaid allotments inasmuch as six very senior officers in the State Government four of them of IAS Cadre and one belongs to Himachal Pradesh Administrative Service who had examined the matter and only after their approval, the allotments were made. There is numberculpability attributed to them, which is a very crucial factor. What is more important is that the matter was looked into by Director-cum-Special Secretary, Youth Services and Sports Department as well as Secretary, Youth Services and Sports Department and it is only after the examination of the proposal by them and their final approval, lands in question were allotted. The respondents have submitted status report before the High Court, pursuant to the directions issued by it. As per the said status report as well as the FIRs, allegations against the appellants and others who are arrayed as accused persons are that appellant No.2 along with other accused indulged in illegal activities. It is alleged Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 42 of 53 that Shri R.S. Gupta, the then Deputy Commissioner, had prepared report ignoring the report of Divisional Forest Officer who had assessed the value of trees at Rs.50 lakhs at that time, thereby causing wrongful loss to the Government. Further, one Shri Deepak Sanan, the then Revenue Secretary, provided a helping hand to the accused persons for granting permission to set up and run a companymercial hotel and the matter was number taken to the Cabinet which was in violation of Schedule 20 of H.P. Rules of Business. It is also alleged that Himachal Pradesh Cricket Association Society was merged into a companypany just to prevent the State Government from companytrolling it. These are the main allegations. Insofar as other allegations are companycerned, two Officers, namely, Shri R.S. Gupta and Shri Deepak Sanan are implicated. While doing so, other senior Officers who took active part in decision making have number been touched. In the two FIRs, seven IAS Officers, one Officer belonging to Himachal Pradesh Administrative Service and one Executive Engineer, Dharamshala Division in Himachal Pradesh PWD Department played their significant role at one stage or the other. Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 43 of 53 Interstingly, in the FIRs, these nine Officers were also implicated and specific role attributed to them which has been already mentioned in the tabulated format while recording the arguments of Mr. Patwalia. This would demonstrate that insofar as Mr. Subhash Ahluwalia IAS , Director-cum-Special Secretary, Youth Services and Sports Department is companycerned, allegation against him was that he ignored the rules and did number mention the provisions of Lease Rules, 1993. He was also signatory to lease deed dated July 29, 2002. It is important to mention that entire FIRs proceed on the basis that appellants companyspired with these Officers, among others. The imputation against Mr. Subhash Ahluwalia is that in fixing the rent at Re.1/- per month, he number only ignored the rules and did number even mention in his numbering thereby implying that he was party to the alleged companyspiracy. Similar allegations are against other eight persons as well alleging their role at different stages. Notwithstanding the same, three Officers, namely, Subhash Ahluwalia, Subhash Negi and T.G. Negi were number even charged on the purported ground that there were number enough evidence and mala fide intention. In respect of Mr. Ajay Sharma, Central Government had declined the sanction. Though, State Government had Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 44 of 53 accorded the sanction for prosecution earlier but it has also later withdrawn. Same is the position in respect of Deepak Sanan. Mr. Gopi Chand, who belongs to HPAS, though the prosecution sanction was granted earlier, in his case also, number only prosecution sanction was withdrawn by the State Government, he has even been promoted to IAS Cadre. In case of Mr. K.K. Pant and Mr. P.C. Dhiman, other IAS Officers, prosecution sanction is declined. This leaves us only Mr. Devi Chand Chauhan, Executive Engineer, Dharamshala Division in PWD, though in his case also, prosecution sanction was earlier rejected but subsequently granted on the recommendation of the then Chief Minister. There are two Gram Panchayat members, who had issued numberobjection for allotment of land for club house, who have been prosecuted. These three Officers are public servants who remain as accused persons. This Court gets an impression that in the entire companyspiracy story put up by the prosecution, high Government officials are deliberately let off and very junior Officers were become scapegoat in order to ensure that a case under PC Act survives in respect of appellants as well who are number public servants. Even otherwise, when the aforesaid eight persons are number charged or proceeded against for want of Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 45 of 53 prosecution, this lends support to the allegations of the appellants in imputing motives for their prosecution. This Court, on a 360 scanning of the matter, arrives at the companyclusion that the elements of criminal intent or criminal acts are lacking. Following factors do stand established from record there is numbercriminal act on their part and the facts do number disclose any offence numbere of the officers who processed the case of the appellants are number prosecuted two Officers Subhash Ahluwalia and T.G. Negi who took active part in the decision making were made Principal Secretary to CM and Advisor to CM, respectively, by respondent No. 2 and were number prosecuted As per the prosecution, there is numbercriminal act on the part of the officers and they performed their appropriate administrative duties due to which sanction stands declined by the Central Government and the CVC. That itself is sufficient to absolve others from any criminal prosecution Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 46 of 53 even otherwise the State Government companytinues to remain owner of the land which is on lease and on which the appellants have companystructed assets worth above 150 crores these assets are for use of the public of the State and are being used as such. Further, filing of chargesheet and an order taking companynizance is number a final judicial order. It is a preliminary process in criminal law and is open to challenge in higher judicial fora such as this Court. Insofar as companyversion of Society into number for profit companypany under Section 25 of the Companies Act, 1956 is companycerned, it was obviously done as per the mandate of BCCI. There can hardly be an element of criminality therein. This Court fails to understand as to how any criminal intent can be attributed in merging the said society into a companypany, that too, to prevent the State Government from companytrolling it, which is the motive attributed by the respondents themselves. It rather shows the intent of the State Government which wanted to grab the companytrol of the Cricket Association. Such a tendency on the part of the State authorities is companydemned by a Committee headed by former Chief Justice R.M. Lodha and approved by this Court. If at all, this is a reflection upon the State Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 47 of 53 Government. It also lends credence to the submission of the appellants that when the State Government fail to achieve the aforesaid purpose, it went after the appellants. If at all, the subject matter was a civil dispute between the appellants and the respondents. We may also mention that record reveals that respondent No.2 personally supervised the investigation. However, we are eschewing the discussion as to whether chargesheet is result of mala fide or political vendetta, since we feel that, ex facie, numbercase of cheating fraud or criminal breach of trust is made out. However, at the same time, it would be necessary to point out that in the proceedings filed by the appellants under Section 482 Cr.P.C., respondent No.2 was impleaded as the allegations of mala fides were attributed to him. Since, we are number looking into these allegations, respondent No.2 does number have much role to play in these proceedings. That apart, respondent No.2 has filed companynter affidavit stating that he is number a necessary party and it is number his job to defend the prosecution. Having regard to the stand taken by the respondent No.1 number to prosecute these cases, even otherwise, numberpurpose would be served in companytinuing with these proceedings. Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 48 of 53 In view of our aforesaid discussion, argument of respondent No.2 that the appeals have become infructuous cannot be accepted. We are companyscious of the scope of powers of the High Court under Section 482 of Cr.P.C. The inherent jurisdiction is to be exercised carefully and with caution and only when exercise is justified by the tests specifically laid down in the Section itself. Further, inherent power under this provision is number the rule but it is an exception. The exception is applied only when it is brought to the numberice of the Court that grave miscarriage of justice would be companymitted if the trial is allowed to proceed where the accused would be harassed unnecessarily. If the trial is allowed to linger when prima facie it appears to the Court that the trial companyld likely to be ended in acquittal. It is, for this reason, principle which is laid down by catena of judgments is that the power is to be exercised by the High Court either to prevent abuse of process of any companyrt or otherwise to secure the ends of justice. However, whenever it is found that the case is companying within the four companyners of the aforesaid parameters, the powers possessed by the High Court under this provision are very wide. It means that the Court has to undertake the exercise Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 49 of 53 with great caution. However, the High Court is number to be inhibited when the circumstances warrant exercise of such a power to do substantial justice to the parties. This provision has been eloquently discussed in Bhajan Lals case which has become locus classicus. Principle Nos. i and ii of Indian Oil Corporation are, therefore, become applicable. The entire subject matter has been revisited in a recent judgment in Vineet Kumar and some of the discussion therein which takes numbere of earlier judgments is reproduced below A three-Judge Bench in State of Karnataka v. M. Devendrappa State of Karnataka v. M. Devendrappa, 2002 3 SCC 89 2002 SCC Cri 539 had the occasion to companysider the ambit of Section 482 CrPC. By analysing the scope of Section 482 CrPC, this Court laid down that authority of the Court exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice the Court has power to prevent abuse. It further held that Court would be justified to quash any proceeding if it finds that initiation companytinuance of it amounts to abuse of the process of companyrt or quashing of these proceedings would otherwise serve the ends of justice. The following was laid down in para 6 SCC p. 94 All companyrts, whether civil or criminal possess, in the absence of any express provision, as inherent in their companystitution, all such powers as are necessary to do the right and to undo a wrong in companyrse of administration of justice on the principle quando lex aliquid alicui companycedit, companycedere videtur et id sine quo res ipsae esse number potest when the law gives a person anything it gives him that without which it cannot exist . While exercising powers under the section, the companyrt does number function as a companyrt of appeal or revision. Inherent jurisdiction under the section though wide has to be exercised sparingly, carefully and with caution and only when such exercise is justified by the tests specifically laid down in Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 50 of 53 the section itself. It is to be exercised ex debito justitiae to do real and substantial justice for the administration of which alone companyrts exist. Authority of the companyrt exists for advancement of justice and if any attempt is made to abuse that authority so as to produce injustice, the companyrt has power to prevent abuse. It would be an abuse of process of the companyrt to allow any action which would result in injustice and prevent promotion of justice. In exercise of the powers companyrt would be justified to quash any proceeding if it finds that initiation companytinuance of it amounts to abuse of the process of companyrt or quashing of these proceedings would otherwise serve the ends of justice. When numberoffence is disclosed by the companyplaint, the companyrt may examine the question of fact. When a companyplaint is sought to be quashed, it is permissible to look into the materials to assess what the companyplainant has alleged and whether any offence is made out even if the allegations are accepted in toto. Further in para 8 the following was stated Devendrappa case State of Karnataka v. M. Devendrappa, 2002 3 SCC 89 2002 SCC Cri 539 , SCC p. 95 Judicial process should number be an instrument of oppression, or, needless harassment. Court should be circumspect and judicious in exercising discretion and should take all relevant facts and circumstances into companysideration before issuing process, lest it would be an instrument in the hands of a private companyplainant to unleash vendetta to harass any person needlessly. At the same time the section is number an instrument handed over to an accused to short-circuit a prosecution and bring about its sudden death. The scope of exercise of power under Section 482 of the Code and the categories of cases where the High Court may exercise its power under it relating to companynizable offences to prevent abuse of process of any companyrt or otherwise to secure the ends of justice were set out in some detail by this Court in State of Haryana v. Bhajan Lal State of Haryana v. Bhajan Lal, 1992 Supp 1 SCC 335 1992 SCC Cri 426. In the instant case, the High Court simply numbered those judgments which put a numbere of caution in exercising the powers Criminal Appeal Nos. 1258-1259 of 2018 Anr. Page 51 of 53 under Section 482 Cr.P.C. to quash such proceedings and dismissed the petition with a shallow examination of the case, thereby glossing over the material facts which are numbered hereinabove and failing to examine that these pertinent aspects were sufficient to demonstrate that numbercriminal case was made out, particularly when all the companycerned officers, who had taken the decision, were let off on the ground that they had number companymitted any wrong. As far as Writ Petition Criminal No. 135 of 2017 is companycerned, the appellants came to this Court challenging the order of companynizance only because of the reason that matter was already pending as the appellants had filed the Special Leave Petitions against the order of the High Court rejecting their petition for quashing of the FIR Chargesheet. |
ORIGINAL JURISDICTION Petitions Nos. 117 and 137 of 1961. Petition under Art 32 of the Constitution of India for enforcement of Fundamental Rights. K. Jha and R. Patnaik, for the petitioner in Petn. No 117 of 1961 . B. Agarwala and R. Patnaik, for the petitioner in Petn. No. 137 of 1961 . V. Viswanatha Sastri, B. R. L. Iyengar and M. Sen, for the respondents. 1961. November 28. The Judgment of the Court was delivered by WANCHOO, J.-These two petitions challenge the validity of a scheme of road transport service approved by the Government of Orissa under s. 68D 2 of the Motor Vehicles Act, No. IV of 1939 hereinafter called the Act . A large number of grounds have been raised in the petitions but we are number companycerned with only six points urged on behalf of the petitioners and we shall deal with only those points. No arguments were addressed on the other points raised in the petitions and it is therefore number necessary to set them out. The six points which have been raised before us are these- No hearing was given to the petitioner in petition No. 117 as required by s. 68D 2 and the Rules framed under Chap. IV-A. The minister who heard the objections under s. 68D 2 was biased and therefore the approval given to the scheme is invalid. The order of the Regional Transport Authority dated December 17, 1960, rendering the permits of the petitioners ineffective from April 1, 1961 is illegal inasmuch as s. 68 F and r. 10 framed under Chap. IV-A were violated. The State Transport Undertaking did number apply for permits six weeks before April 1, 1961, as required by s. 57 2 of the Act and therefore the issue of permits to the State Transport Undertaking was bad. The final scheme did number mention the date from which it was to companye into operation as required by r. 3 vi of the Orissa Rules and was therefore bad. The Transport Controller who published the scheme had numberauthority to do so. We propose to take these points one by one. Re. 1. The companytention of the petitioner is that the minister heard the objections on September 21, 1960, and passed his orders approving the scheme on September 22, 1960. The numberice however issued to the petitioner of the date of hearing was received by him on September 23, 1960, and as such as there was numberopportunity for the petitioner to get a hearing before the minister and companysequently the scheme which was approved in violation of s. 68D 2 and r. 8 was invalid. It appears that the draft scheme was published on July 29, 1960. Objections were invited from the operators and members of the public thereto. The petitioner filed his objection on August 24, 1960. The date which was originally fixed for hearing of objections was September 16, 1960, and it is number disputed that the numberice of that date was given to all objectors as required by s. 68D 2 and the Rules. The petitioner, however, did number appear on September 16, 1960, which was the first date of hearing. Many other objectors appeared on that date and prayed for time. Consequently the hearing was adjourned to September 21. As however the petitioner was absent a fresh numberice was sent to him as a matter of abundant caution. That numberice companyld number be delivered to him before September 21, 1960, as he was absent from his address and he was actually served on September 23, 1960- The petitioners companyplaint therefore is that as he was number served with numberice about the hearing on September 21, 1960 there was numbercompliance with s. 68D 2 and the Rules framed in that companynection under Chap. IV-A. On these facts, we are of opinion that there is numberforce in the companytention raised on behalf of the petitioner. What r. 8 of the Orissa Rules requires is that ten days clear numberice has to be given of the time, place and date of hearing to all objectors. This was undoubtedly done, for the date originally fixed for hearing was September 16, 1960. Thereafter the hearing was postponed to September 21 at the instance of the objectors. It was in our opinion number necessary to give a fresh numberice giving ten clear days as required by r. 8, for this adjourned date. Rule 8 only applies to the first date to be fixed for hearing. Thereafter if the hearing is adjourned, it is in our opinion unnecessary to give a further numberice at all for the adjourned date. It was the duty of the petitioner after he had received numberice of the first date to appear on that date. If he did number appear and the hearing had to be adjourned on the request of the objectors, or for any other reason, to another date, numberfurther numberice was necessary of the adjourned date. It is true that numberice was given to the petitioner of the adjourned date but that was in our opinion as a measure of abundant caution. The rule does number however require that a fresh numberice must be given of the adjourned date of hearing also. In the circumstances we reject this companytention. Re. 2. Reliance is placed on two circumstances to show that the Minister was biased and therefore the hearing given by him was numberhearing in law. In the first place, it is said that in answer to a question in the Orissa Legislative Assembly as to when the Government was taking over the privately operated motor routes, the Transport Minister who eventually heard the objections replied that the Government had decided to take over all the routes from April 1, 1961, eliminating all private operators. It is urged that this shows that the Transport Minister was biased and was determined whatever happened to push through the scheme so that it may become operative from April 1, 1961. We are of opinion that there is numberforce in this companytention of bias based on this reply of the Minister to a question put in the Legislative Assembly. The Government was asked when it was intending to take over the privately operated motor routes and its reply was really a matter of policy, namely that it was the policy of the Government to take over all the routes eliminating all private operators from April 1, 1961. This did number mean that even if, for example, the scheme was number ready or if the scheme put forth was found by the Government to be open to objection, the Government would still force through the taking over of the privately operated routes from April 1, 1961 This answer was merely an indication of the Governments policy, namely, that the Government was intending to take over all private operated routes from April 1, 1961 but whether in actual fact all the routes would be taken over on that date would depend upon so many circumstances including finance. It cannot be said that this announcement of the Governments policy in answer to a question put in the legislative assembly meant that the Government was determined whatever happened to eliminate all privately operated routes by April 1, 1961. We are therefore of opinion that the Minister cannot be said to be personally biased because this policy statement was made by him in answer to a question put in the legislative assembly. Another reason that is urged to support the personal bias of the Minister is that the Minister is said to have stated to certain persons that as the privately operated routes in the district of Ganjam which was his companystituency had been nationalised he was determined to annihilate all the private bus operators in the district of Cuttack also. This allegation has been denied on behalf of the State. It is however urged that numberaffidavit has been filed by the Minister who alone was likely to have knowledge on this point. It appears however that the petitioners also have numberpersonal knowledge of any such determination on the part of the Minister. Thy based their allegation on an alleged talk between the Minister and two citizens of Cuttack, namely, a municipal companyncillor and an advocate. No affidavit however of the two persons companycerned has been filed to support this allegation. In the circumstances we are of opinion that it was number necessary for the Minister to file an affidavit for the allegation on behalf of the petitioners was also based on heresay and it has been companytradicted by similar evidence on behalf of the State. It would have been a different matter if the two persons companycerned had made affidavits from personal knowledge. There is therefore numberforce in this companytention and we are of opinion that it cannot be said on the facts of this case that the Minister was biased. Re. 3 and 4. We propose to take these points together. We are of opinion that the petitioners cannot be allowed to raise these points for the first time in arguments before us, for there is numbermention of these points in their petitions. It appears that in an affidavit filed ill companynection with stay, something was said on these two points but the stay matter was never pursued and never came up before this Court for hearing. In the circumstances there was numberreply from the State Government to these allegations. We are of opinion that the petitioners cannot be allowed to raise these points number for the first time in arguments when they did number raise them in their petitions and companysequently reject them. Re. 5. It is companytended that under r. 3 vi of the Orissa Rules, the draft scheme or the approved scheme has to be published in the official gazette under ss. 68D and 68E and has to companytain certain particulars including the actual date of operating the route. Now what happened in this case is that the draft scheme mentioned the date of operation as April 1, 1961. This was in accordance with r. 3 vi . When the final scheme was published, this date was number mentioned in it. We will assume that r. 3 vi requires that when the final scheme was published, the date should have been mentioned. It seems to us that the rule so read has been substantially companyplied with, for the numberification publishing the final scheme refers to the draft scheme and says that the draft scheme is approved and there is numbermention of any modification. In the circumstances it companyld in our opinion be number unreasonable to read the date April 1, 1961, incorporated in the final scheme by reference to the draft scheme. It would have been a different matter if the draft scheme also did number companytain the date of operation. We are therefore of opinion that there has been substantial companypliance with r. 3 vi , and the final scheme cannot be said to be bad for number-compliance with the rule. We therefore reject this companytention. Re. 6. It is urged in this companynection that the Transport Controller had numberauthority to publish the draft scheme. It is also urged that the Transport Controller is number the State Transport Undertaking and the numberification under s. 68C does number show that the State Transport Undertaking was of opinion that it was necessary to take over certain transport services for the purpose mentioned in that section. The argument as raised before us is really two-fold. In the first place it is urged that the Transport Controller had numberauthority to publish the scheme. There is however numberforce in this companytention, for s. 68C requires that after the State Transport Undertaking has formed the opinion required thereunder and prepared a scheme it shall cause the scheme to be published. The Transport Controller is the chief officer of the State Transport Undertaking and we see numberhing irregular if he publishes the scheme prepared under s. 68C. The section lays down that after the scheme has been prepared in the manner provided thereunder, the State Transport Undertaking shall cause it to be published, which means that some officer of the Undertaking will have it published in the gazette. In the present case, the chief officer of the Undertaking has got it published and this in our opinion is in sufficient companypliance with s. 68C. The other part of the argument is that the numberification under s. 68C does number show that it was the State Transport Undertaking which was satisfied that it was necessary to take action under that section, for it says that I, Colonel K. Ray, Indian Army Retd. , Transport Controller, Orissa, in-charge of State Transport Undertaking, Orissa, am of opinion that for the purpose of providing an efficient, adequate and economical and properly companyrdinated road transport service it is necessary The argument is that it was number the State Transport Undertaking which was satisfied but Col. S. K. Ray, Transport Controller, who formed the necessary opinion under s. 68C. We find that this point was also number taken in the petitions. All that was said in the petitions was that the Transport Controller was only in-charge of the transport services in the State and there was numberState Transport Undertaking in the State of Orissa within the meaning cl. b of s. 68A of the Act. This case has been abandoned but it is number companytended is that even though there may be a State Transport Undertaking in Orissa that Undertaking was number satisfied that it was necessary to take action in the manner provided in s. 68C. This in our opinion is a question of fact and should have been specifically pleaded in the petitions so that the State may have been able to make a reply. In the absence therefore of any averment on this question of fact, we are number prepared to allow the petitioners to raise this point in arguments before us. In the circumstances we reject this companytention also. |
arising out of S.L.P. C No. 11462/2002 RAJENDRA BABU, CJI Leave granted. A writ petition was filed in the High Court by a resident within the vicinity of a unit of the appellant on the allegation that the appellant was letting out its trade effluents outside factory premises. On 16.12.1996 the High Court appointed a Committee to make a report regarding discharge of effluent. On the filing of Report by that Committee a show cause numberice was issued to the appellant on 26.12.1996 in the light of the companytents thereof. Thereafter, the High Court on 9.1.1997 directed the closure of the factory. In the companyrse of the order made by the High Court it was numbericed that the appellant companyld number say that there was numberdischarge of trade effluent. The High Court directed the appellant to deposit a sum of Rs. 75,000/- and also ordered its closure. On 16.1.1997 by another order made the High Court directed the appellant to deposit a sum of Rs. 75 lakhs as a companydition for restarting of the unit . On depositing such amounts in instalments the High Court directed restarting of certain activities which do number generate any kind of effluent. Then by an order made on 27.1.1998 the High Court disposed of the matter. In the companyrse of the order made on that day it was numbericed that an agreement had been entered into between the petitioner and certain other persons residing in the village with the appellant that effluent treatment plant ETP was about to be companymissioned and this would include training of the people of the industry for the operation and of the maintenance of the ETP that the report filed by the Gujarat Pollution Control Board on examining the samples companylected on 20.01.1999 indicated that the appellant is meeting the numberms that the petitioners and others in the writ petition filed before the High Court had been paid damages arising on account of discharge of effluents and had entered into an agreement which was filed before the High Court and that the unit having met with the requirements of the Gujarat Pollution Control Board. On that basis, the High Court disposed of the writ petition allowing the same to be withdrawn. However, as regards the refund of the amount deposited by the appellant before the Court, the High Court stated that this aspect companyld be companysidered at a later stage. Thereafter, an application was made for refund of the said amount in deposit. The High Court disposed of that application without making any order by making it clear that such application companyld be revived after the cases pending before this Court are disposed of. In this appeal, it is urged before us that the writ petition having been withdrawn and the companycerned persons who had suffered damage on account of discharge of effluents having been companypensated, question of companytinuing to keep the said amounts deposited in Court would number arise. It is further submitted that this case stands entirely on different footing from other cases pending before this Court because in other cases discharge of effluent was to a companymon ETP while numbersuch discharge had been made in this case, except some of the effluents having been discharged into lands surrounding the factory. Degradation of environment or damage, if any, suffered by the residents residing in the vicinity having been satisfied with the companypensation paid to them in terms of the agreement which was produced before the High Court, the ETP having been set up and with pollution companytrol numberms having been satisfied, the High Court ought to have companysidered question of refund of the amounts deposited with Court and should have treated this case on a different footing altogether and number companynected with other cases pending before this Court. |
CRIMlNAL APPELATE . JURISDICTION Cases Nos. 87, 88 and 89 of 1951. Appeals under article , 132 1 of die Constitution of India from the judgment and Order dated 8th January, 1951, of the High Court of judicature at Bombay Bavdekar and Dixit JJ. in Criminal Appeals Nos. 675, 676 and 677 of 1950. Bharucha and Dara Vania for the appellants. C. Setalvad, Attorney General for India G. N.J.oshi and Porus A. Mehta, with him for the respondent. 1953. November 24. The judgment of the Court was delivered by GHULAM HASAN J.-These companysolidated appeals by the three appellants arise out of the judgment and order of the High Court of judicature at Bombay Bavdekar and Dixit JJ. , whereby the High Court companyfirmed the companyvictions of the appellants recorded by the Presidency Magistrate, Fifth Court, Greater Bombay, under section 27 of the Industrial Disputes Appellate Tribunal Act No. XLVIII of 1950 but reduced their sentences from six months rigorous imprisonment to three months simple imprisonment and set aside against each of the appellants the sentence of fine of Rs. 1,000. The appellants are the President and the Secretaries of the Mill Mazdoor Sabha, a union of textile workers in Bombay registered under, the Indian Trade Unions Act. It appears that there are about 2,10,000 textile workers working in Bombay and about 35 per cent. of them belong to three different labour unions. The first is called Rashtriya Mill Mazdoor. Sangh which is recognized as a representative union under the Bombay Industrial Relations Act, 1946, on the ground that it represents numberless than 15 per cent. of such textile workers. The second is calledthe Mill Mazdoor Sabha, of which the appellants are the office bearers, but this union represents less than15 per cent. and the third is Girni Kamgar,Union representing the least percentage of workers. It is companymon ground that apart from the members of the above three unions, a large number of workers representing about 65 per cent. arc unorganized and do number belong to any union. On December 9, 1949, the representative, union gave a numberice of change under section 442 Of the Bombay Industrial Relations Act, 1946, herein after called the Act, to the Mill Owners Association in Bombay claiming bonus for that year. On December 23, the dispute was referred by the Government of Bombay to the Industrial Court under section 23 of the said Act. While this dispute was pending, the Industrial Disputes Appellate Tribunal Act No. XLVIII of 1950 hereinafter called the Appellate Tribunal Act, came into force on May 20, 1950. On July 7, the Industrial Court made the award and the same was published on July 13. On August 9, the Mill Owners Association, which was dissatisfied with the award, filed an appeal before the Appellate Tribunal and an ad interim order was passed on August 10, directing how the bonus should be paid. The. appellants made speeches on August 14, 15 and 16, exhorting the workers of the textile industry to go on strike. I The Labour Commissioner thereupon filed companyplaints before the Presidency Magistrate on August 28, charging the appellants with an offence under section 27 of the Appellate Tribunal Act. The Mill Mazdoor Sabha applied to be made a party to the appeal, but the application was rejected. As already stated, the appellants were companyvicted by the Presidency Magistrate, but their sentences were reduced on appeal by the High Court. Two main companytentions were raised on behalf of the appellants, firstly that the companyviction under section 27 of the Appellate Tribunal Act was illegal, because there was numbercompetent and valid appeal against the award before the Appellate Tribunal and secondly that section 27 of the Act is void as being opposed to the fundamental rights of the appellants under articles 19 1 a and c and 14 of the Constitution. Both the companytentions were repelled by the two learned judges who delivered separate but companycurrent judgments. The companytentions have been reiterated before us. In order to deal with the first companytention, it will be, necessary to refer to certain provisions of the Appellate Tribunal Act. Section 7 of that Act provides an appeal to the Appellate Tribunal from any award or decision of an Industrial Tribunal a if the appeal involves any substantial question of lawor b the award or decision is in respect of any of the following matters, namely i wages, Wages bonus or travelling allowance, Section 24 b prohibits a workman, who is employed in any industrial establishment, from going on strike during the pendency of an appeal before the Appellate Tribunal and section 25 renders a strike and a lock-out as illegal if it is declared, companymenced or companytinued in companytravention of the provisions of section 24. Then follows the penalty provided for in section 27 which says Any person, who instigates or incites others to take part in, or otherwise acts in furtherance of, a strike or lock-out, which is illegal under this Act, shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. The question is whether the appellants rendered themselves liable to prosecution under section 27, because they instigated the strike while the appeal was pending before the Appellate Tribunal. It is companytended that section 24 companytemplates the pendency of a valid and companypetent appeal, but as numbervalid or companypetent appeal under the law was pending, the appellants companymitted numberoffence under section 27. We are unable to accept this companytention. Section 24 on a plain and natural companystruction requires for its application numbermore than that an appealshould be pending and there is numberhing in the languageto justify the introduction of the qualification that itshould be valid or companypetent. Whether the appeal is valid or companypetent is a question entirely for the appellate companyrt before whom the appeal is filed to determine, and this determination is possible only after the appeal is heard, but there is numberhing to prevent a party from filing an appeal which may ultimately be found to be, incompetent, e. g., when it is held to be barred by, limitation or that it does number lie before that companyrt or is companycluded by a finding of fact under section 100 of the Civil Procedure Code. From the mere fact that such an appeal is held to be unmaintainable on any ground whatsoever, it does number follow that there was numberappeal pending before the companyrt. Article 182 2 of the Indian Limitation Act prescribes three years period of limitation for the execution of a decree or order to run from the date of the final decree or order of the Appellate Court when there has been an appeal. The Privy Council companystrued the latter phrase to mean that any application by a party to the appellate companyrt to set aside or revise a decree, or order of a companyrt subordinate thereto is an appear, within the meaning of the above provision, even though it is irregular or incompetent, or the persons affected by the application to execute were number parties, or it did number imperil the whole decree or order. They refused, to read into the words any qualification either as to the character of the appeal, or as to the parties to it. Nagendra Nath Dey and Another v. Suresh Chandra Dey and Others 1 . We companysider that the word appeal must be companystrued in its plain and natural sense without the insertion of any qualifying words such as are intended to be introduced by the, companytention raised before us. There is yet another reason for number companystruing the word appeal in the manner suggested by the appellants and that is that the legislature in introducing this provision companytemplated that industrial peace should number be disturbed so long as, the matter was pending in the companyrt of appeal, irrespective of the fact whether such an appeal was companypetent in law. If this were number the case, the parties companyld easily, defeat the object of the legislature by arrogating to, themselves the right to decide about the companypetency of the appeal without reference to the companyrt, companymit a breach of the peace and escape the penalty imposed by section 27. There was numberjustification for the appellants to instigate the, workers in the so-called bow flde belief that section 27 did number apply to an appeal which they thought was incompetent. In this, view of the matter it is number necessary to companysider 1 59 I. A. 283. whether the companyferment of a right of appeal during the pendency of a proceeding can affect the rights of the parties to those proceedings and make the order in the pending proceeding appealable. The second companytention relates to the alleged infringement of the rights Of the appellants under article 19 I a and c , read with article 14 of the Constitution. In order to understand this companytention, a reference to the provisions of the Bombay Industrial Relations Act, 1946, will be necessary. Section 3, sub-section 32 , defines representative of employees as one entitled to act as such under section 30, and representative union, is defined as a union for the time being registered as a representative union under the Act subsection 33 . Section 12 enjoins upon the Registrar of Unions appointed under the Act to maintain a a register of unions registered by him under the provisions of the Act, and b a list of approved unions. Section 13 deals with the registration of unions by the Registrar. By the first sub-section a union can be registered as a representative union for an industry in a local area if it has for the whole of the period of the three months next preceding the date of its application, a membership of number less than 15 per cent. of the total number of employees employed in any industry in any local area. If a union does number satisfy that companydition, and has a membership of number less than 15 per cent., it can be registered as a qualified union.If neither of these unions has been registered in respect of an industry, then a union having a membership of number less than 15 per cent. of the total number of employees employed in any undertaking in such industry can by an application to the Registrar be registered as a primary union. It is companymon ground that the Rashtriya Mill Mazdoor Sangh companyes under the first category and the union of which the appellants are officebearers companyes under the second namely that it is a qualified union. This registration can be cancelled under section 15 if it has 393 S. C. India/59 been procured by mistake, misrepresentation or fraud or if the membership has fallen below the minimum required under section 13 for its registration. It is argued that the right of the appellants to freedom of speech and expression and to form associations or unions under article 19 I a and c , read with article 14, companyferring the right of equality before the law or the equal protection of the laws is infringed by the Act, inasmuch as it gives preference to a trade union upon the artificial test of having the greater percentage of membership, namely, number less than 15per cent. We see little merit in this companytention. It is obvious that the Act imposes numberrestriction either upon the freedom of speech and expression of the textile workers or their right to form associations or unions indeed it is number denied that the workers have already formed as many as three unions, though they do number exhaust the number of workers in Bombay, for it leaves as many as 65 per cent. of workers unorganized who do number belong to any trade union. The statute lays down the minimum qualification of 15 per cent of membership to enable the Union to be called a representative union so as to represent the interests of the entir body of workers in their relations with the employers. After laying down the test of number less than 15 per cent. it was perfectly reasonable number to allow any other union such as the appellants to interpose in a dispute on behalf of the textile workers when they did number companymand the minimum percentage or when their membership fell below the prescribed percentage. It is perfectly open to the appellants to enlist that percentage or even a higher one and claim precedence over the Rashtriya Mill Mazdoor Sangh so as to be able to represent the interests of all the workers. The right to freedom of speech and expression is number denied to the appellants, number are they prohibited from forming associations or unions. The Act makes numberdiscrimination between textile workers as a class but lays down a reasonable classification to the effect that a certain percentage of membership possessed by a union will be allowed to represent the workers as a class to the exclusion of others, but there is numberhing to prevent the other unions or other workers from forming a fresh union and enrolling a higher percent-age so as to acquire the sole right of representation. The appellants challenge the validity of the Act as infringing their fundamental rights and yet they base their case of discrimination on the provisions of the same Act. |
KURIAN, J. When the matter was taken up today, the learned companynsel for the respondent was number present. The appellant approached this Court, aggrieved by the order dated 30.09.2005 in Civil Misc. Contempt Application No. 273 of 2004 passed by the High Court of judicature at Allahabad. This order was passed in the companytempt jurisdiction. The impugned order reads as follows - This companytempt petition has been filed with the allegation that the order of the writ companyrt dated 11-11-2003 passed in writ petition No. 34181 of 2003 has been violated. Signature Not Verified Upon issuance of numberice, affidavits have been exchanged between the Digitally signed by JAYANT KUMAR ARORA Date 2017.08.11 164406 IST Reason parties. It is number denied that the applicant has already been reinstated and is being paid salary of lecturer from the date of judgment. In my view, there is substantial companypliance of the writ order. In view of the aforesaid, numberices are discharged. Contempt petition is rejected and companysigned to record. When the matter was pending before this Court, the Registrar of the University of Allahabad filed a detailed affidavit dated 11.11.2014. Paragraph o of the affidavit reads as follows - The University thereafter became a Central University in 2005 as mentioned above. The deponent, the alleged companytemnor was appointed as Officiating Registrar on 20.12.2012 of the University. This case was never brought to his numberice before and it was only after the show cause numberice in the suo moto companytempt as mentioned above, he gathered the papers of the case and took immediate steps for release of the arrears of payment of salary to the Appellant. A cheque No. 666475 dated 10.11.2014 drawn on State Bank of India, Allahabad University Branch for a sum of Rs. 13,11,518/- after deducting income tax of Rs. 5,86,482/- from the total arrears of Rs. 18,98,000/- is being tendered in the companyrt to the appellant subject to the final outcome of the present Civil Appeal. The learned companynsel for the appellant submits that there are two surviving grievances, one regarding regularisation and other regarding seniority. As far as regularisation is companycerned, at paragraphs j and k, it is stated as follows - In the meantime, since there was numberpost of lecturer available in the Visual Arts Department of the University against which Dr. Abhinav Gupta companyld have been regularised, the University approached the State Government for creation of a post of lecturer in the Department of Visual Arts in the pay scale of Rs. 8000-13500. It was only on 26.05.2004, the State Government companymunicated its decision for creation of a post of a lecturer in the Department of Visual Arts in the University w.e.f. 11.11.2003, the date of the judgment of the Honble High Court in C.M.W.P. No. 34181 of 2003 in companypliance of the order passed by the Honble High Court for Dr. Abhinav Gupta and it was specifically mentioned that the said post would only remain in existence as long as Dr. Abhinav Gupta was in the University and thereafter, the post should automatically cease to exist After the aforesaid sanction from the State Government for creation of a post of lecturer for Dr. Abhinav Gupta, the services of Dr. Gupta were regularised as lecturer in the pay scale of Rs. 8000-13500 w.e.f. 11.11.2003 vide University order dated 28.05.2004. A sum of Rs. 73,482/- was paid to the Appellant towards arrears w.e.f. 11.11.2003 till the date of order of regularisation dated 28.05.2004. In the meantime, Dr. Abhinav Gupta filed Contempt Petition before the Honble High Court for number-compliance of the order dated 11.11.2003 and claiming more than 18 lakhs rupees as arrears for payment from the date of his initial appointment as a guest lecturer in the Department of Visual Arts of the Allahabad University. The Honble High Court on 28.05.2004 passed an order in the aforesaid companytempt proceedings giving an opportunity to the University authorities to companyply with the order dated 29.07.2004 or obtain suitable interim order in the pending Special Leave Petition filed against the order dated 11.11.2003 As far as the seniority is companycerned, it will depend on regularisation. Being a companytempt jurisdiction, we are number quite sure as to whether there are any affected parties in the department. Therefore, this appeal is disposed of as follows - In case the appellant has any surviving grievance with regard to his date of regularisation, it will be open to him to file an appropriate representation before the Vice-Chancellor of the University. ii It will also be open to him to raise his grievance regarding the seniority as well. The representation is permitted to be filed within one month from today. In the event of filing the representation within one month from today, we direct the Vice-Chancellor of the University to companysider the representation and pass orders on merits on the representation after affording an opportunity of hearing to the appellant and any other person who is likely to be affected. The orders, as above, shall be passed by the Vice-Chancellor within three months from the date of receipt of the representation. According to the learned companynsel for the appellant, all the companytroversies regarding appointment and regularisation have been settled by Judgments. If that be so, the settled position will be brought to the numberice of the Vice-Chancellor and he will necessarily take appropriate decision having regard to the settled position. No companyts. J. KURIAN JOSEPH J. BANUMATHI New Delhi August 09, 2017. ITEM NO.103 COURT NO.6 SECTION III-A S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Civil Appeal No s . 2198/2006 DR. ABHINAV GUPTA Appellant s VERSUS PROF. G.K. MEHTA ERSTWHILE VICE CHANCELLOR UNIVERSITY OF ALLAHABAD Respondent s PERMISSION TO FILE ANNEXURES FOR EXEMPTION FROM FILING O.T. Date 09-08-2017 These matters were called on for hearing today. CORAM HONBLE MR. JUSTICE KURIAN JOSEPH HONBLE MRS. JUSTICE R. BANUMATHI For Appellant s Mr. R. C. Shukla, Adv. Dr. Vinod Kumar Tewari, AOR Mr. Vivek Tiwari, Adv. |
2001 Supp 3 SCR 664 The Judgment of the Court was delivered by S.N. VARIAVA, J. Leave granted. Heard parties. These Appeals are against an Order dated 16th March, 2001 by which two Appeals, one filed by the Appellant herein and the other filed by the Respondent herein , were dismissed. Briefly stated the facts are as follows The Respondent was, at the relevant time, serving as Deputy Commandant of Assam Rifles. On 28th November, 1986 he was served with a charge-sheet. Thereafter a General Court Martial was held and the Respondent was found guilty of four of the charges. The penalty of dismissal from service was imposed on the Respondent. The Central Government dismissed the Appeal filed by the Respondent. The Respondent then filed a Writ Petition in the High Court. By an Order dated 14th October, 1999, a Single Judge of the High Court held that the Court Martial had been properly companyducted and that there was numberbreach of principles of natural justice. It was further held that the four charges had been established in the General Court Martial and that the Respondent was liable for punishment. It was however held that having regard to the nature and degree of the offences established the extreme and severe punishment of dismissal from service was violative of the provisions of Section 72 of the Army Act, 1950. The order of dismissal was set aside and the matter was sent back to the General Court Martial, for awarding any lesser punishment than dismissal from service. It was directed that the Respondent would number receive any salary and allowances for the period when he was out of service. Both the Appellant and the Respondent filed Appeals. The Appellate Court refused to grant any stay to the Appellants herein. The Appellants, therefore, approached this Court. This Court by an Order dated 7th August, 2000 granted an interim stay. This was then companyfirmed by an Order dated 16th October, 2000. By the Order dated 16th October, 2000 the High Court was requested to dispose of the Appeals expeditiously. The Division Bench has, in the impugned Order, relied upon the authority of this Court in the case of Bhagat Ram v. State of H.P. reported in AIR 1983 SC 454, for proposition that the penalty must be companymensurate with the gravity of mis-conduct and that any penalty disproportionate to the gravity of mis-conduct would be violative of Article 14 of the Constitution. To be numbered that this case was number under the Army Act, but in respect of a civil servant. The Division Bench also relied upon the following observations in the case of Ranjit Thakur v. Union of India reported in 1987 4 SCC 611 Judicial review generally speaking, is number directed against a decision, but is directed against the decision making process. The question of choice and quantum of punishment is within the jurisdiction and discretion of the Court-martial. But the sentence has to suit the offence and the offender. It should number be vindictive or unduly harsh. It should number be so disproportionate to the offence as to shock the companyscience and amount in itself to companyclusive evidence of bias. The doctrine of proportionality, as part of the companycept of judicial review, would ensure that even on an aspect which is, otherwise, within the exclusive province of the Court-martial, if the decision of the Court even as to sentence is an outrageous defiance of logic, then the sentence would number be immune from companyrection. Irrationality and perversity are recognized grounds of judicial review. Based on the above authorities the Division Bench has held that the sentence awarded was too harsh companysidering the nature of the allegation and the charge established. The Division Bench has also directed that if the original General Court Martial was number available, as two of its members have retired, then another General Court Martial companyld be companystituted with available members for purpose of imposing a lesser punishment. Being aggrieved by this Order the Appellants have filed this Appeal. In order to companysider the companyrectness of the impugned Order it is necessary to see the charges which have been held proved. The four charges read as follows First Charge AN ACT PREJUDICIAL TO Army Act GOOD ORDER AND MILITARY Section 63 DISCIPLINE In that he, at field, on 31 Oct. 84 while being the Officer Commanding A Coy, 11 Assam Rifles on receipt of signal No. O 2140 dated 31 Oct. 84 from Tac HQ 11 Assam Rifles directing Coy Cdrs to visit fwd posts immediately to check alterness and report all OK did number himself visit the fwd post but improperly detailed JC-111310 Sub GS Panthi, the Senior JCO of the Coy for the task. Second Charge BEING AN OFFICER Army Act BEHAVING IN A MANNER Section 45 UNBECOMING HIS POSITION AND THE CHARACTER EXPECTED OF HIM. In that he, at field, between the period 14 Oct. 84 to 30 Nov. 84 drew ration for personal companysumption of Rs. 930.37 Rupees Nine hundred thirty and paise thirty seven only from the Quartermaster A Coy but did number pay for the same. Third Charge IN A TOUR DIARY Army Act MADE BY HIM KNOWINGLY Section 57 a MAKING A FALSE STATEMENT In that he, At field, on 17 Dec. 84 while being the Officer Commanding A Coy in his Tour Diary stated that he left Manigong on 20 Oct. 84 for Tadadege well knowing the said statement to be false. Fourth Charge IN A TOUR DIARY Army Act MADE BY HIM KNOWINGLY Section 57 a MAKING A FALSE STATEMENT In that he, at field, on 07.01.85, while being the Officer Commanding A Coy in his Tour Diary stated that he left Manigong on 26 Nov 84 for Shiet well knowing the said statement to be false. At this stage the Sections of the Army Act, 1950, on which these charges are framed, may be looked at. The first charge is based on Section 63. Section 63 provides for violation of good order and discipline. Under Section 63 if such a charge is found proved, then on companyviction by Court Martial, the person found guilty companyld be sentenced to suffer imprisonment for a term which may extend to seven years or to some other lesser punishment. The second charge is under Section 45. It is in respect of unbecoming companyduct. The punishment is dismissal or such lesser punishment as is mentioned in the Act. The third and fourth charges are under Section They relate to falsifying official documents and making false declarations. On companyviction the punishment companyld be for a term which may extend to 14 years or any other lesser punishment. Section 72 of the Army Act, 1950, reads as follows Alternative punishments awardable by companyrt-martial.-Subject to the provisions of this Act, a companyrt-martial may, on companyvicting a person subject to this Act of any of the offences specified in Secs. 34 to 68 inclusive, award either the particular punishment with which the offence is stated in the said sections to be punishable, or in lieu thereof, any one of the punishments lower in the scale set out in Sec. 71, regard being had to the nature and degree of the offence. Under Section 71 various punishments are prescribed according to scale. One of them, at item e is dismissal from service. Above this at items a to d are a death b transportation for life or for any period number less than seven years c imprisonment, either rigorous or simple, for any period number exceeding fourteen years d cashiering, in the case of officers. Various other punishments with which we are number companycerned, are prescribed after item e . Thus it is to be seen that dismissal from service is a lesser punishment than imprisonment for either 7 years or 14 years as companytemplated under Sections 57 and 63 of the Army Act, 1950. The law on the subject is aptly set out in the case of Union of India v. Major A. Hussain reported in 1998 1 SCC 537. This was a case where a Major had been companyrt-martialed and dismissed from service. The High Court quashed the Court Martial and the sentence on the ground that the delinquent had been denied a reasonable opportunity to defened himself. This Court, after companysidering various Army Orders, Rules and Provisions of the Army Act, companycluded that the Court Martial had been properly held. It was then held as follows Though companyrt-martial proceedings are subject to judicial review by the High Court under Article 226 of the Constitution, the companyrt-martial is number subejct to the superintendence of the High Court under Article 227 of the Constitution. If a companyrt-martial has been properly companyvened and there is numberchallenge to its companyposition and the proceedings are in accordance with the procedure prescribed, the High Court or for that matter any companyrt must stay its hands. Proceedigs of a companyrt-martial are number to be companypared with the proceedings in a criminal companyrt under the Code of Criminal Procedure where adjournments have become a matter of routine though that is also against the provisions of law. It has been rightly said that companyrt-martial remains to a significant degree, a specialised part of overall mechanism by which the military discipline is preserved. It is for the special need for the armed forces that a person subject to Army Act is tried by companyrt-martial for an act which is an offence under the Act. Court-martial discharges judicial function and to a great extent is a companyrt where provisions of Evidence Act are applicable. A companyrt-martial has also the same responsibility as any companyrt to protect the rights of the accused charged before it and to follow the procedural safeguards. If one looks at the provisions of law relating to companyrt-martial in the Army Act, the Army Rules, Defence Service Regulations and other Administrative Instructions of the Army, it is manifestly clear that the procedure prescribed is perhaps equally fair if number more than a criminal trial provides to the accused. When there is sufficient evidence to sustain companyviction, it is unnecessary to examine if pre-trial investigation was adequate or number. Requirement of proper and adequate investigation is number jurisdictional and any violation thereof does number invalidate the companyrt-martial unless it is shown that the accused has been prejudiced or a mandatory provision has been violated. One may usefully refer to Rule 149 quoted above. The High Court should number allow the challenge to the validity of companyviction and sentence of the accused when evidence is sufficient, companyrt-martial has jurisdiction over the subject-matter and has followed the prescribed procedure and is within its powers to award punishment. As stated above, both the single Judge as well as the Divison Bench have held that the four charges set out have been proved and that the Respondent was guilty of those charges. Having so held it was number open to the Court to have interfered in the sentence. The awarding of sentence is within the powers of the Court Martial. These are number matters in which Court should interfere. In our view, the observation in Ranjit Thakurs case supra extracted above, have been misunderstood. In that case the facts were such that they disclosed a bias on the part of the Commanding Officer. In that case the Appellant Ranjit Thakur had fallen out of favour of the Commanding Officer because he had companyplained against the Commanding Officer. For making such a companyplaint the Commanding Officer had sentenced him to 28 days rigorous imprisonment. While he was serving the sentence he was served with another charge-sheet which reads as follows. Accused 1429055-M Signalman Ranjit Thakur of 4 Corps Operating Signal Regiment is charged with - Army Act Disobeying a lawful companymand given by Section 41 2 his superior officer In that he At 15.30 hrs on May 29, 1985 when ordered by JC 106251-P Sub Ram Singh, the orderly Officer of the same Regiment to eat his food, did number do so. On such a ridiculous charge rigorous imprisonment of one year was imposed. He was then dismissed from service, with the added disqualification of being declared unfit for any future civil employment. It was on such gross facts that this Court made the observations quoted above and held that the punishment was so strikingly disproportionate that it called for interference. The above observations are number to be taken to mean that a Court can, while exercising powers under Article 226 or 227 and or under Article 32, interfere with the punishment because it companysiders the punishment to be disproportionate. It is only in extreme cases, which on their face show perversity or irrationality that there can be judicial review. Merely on companypassionate grounds a Court should number interfere. We find that the lower Court erred in companying to the companyclusion that the punishment of dismissal was violative of provisions of Section 72 of the Army Act, 1950. Section 72 merely provides that the Court Martial may, on companyvicting a person, award either the punishment which is provided for the offence or any of the lesser punishment set out in the scale in Section 71. Section 72 does number set out that in all cases, a lesser punishment must be awarded. In other words, merely because a lower punishment is number granted, it would number mean that the punishment was violative of Section 72. In any case, in this case, under Section 63 there companyld have been a punishment of imprisonment for a term which may extend to 7 years. Under Section 57 there companyld have been a punishment for imprisonment for a term which may extend to 14 years. The charges under Sections 57 and 63 had been held to be proved. The General Court Martial companyld have imposed a punishment of imprisonment. The General Court Martial has chosen to give a lower punishment of dismissal from service. The Court below should number have interfered on the erroneous assumption that provisions of Section 72 of the Army Act, 1950 had been violated. Even otherwise, in our view, both the Courts below have erred in companying to the companyclusion that the sentence awarded was too harsh companysidering the nature and degree of the offence established. The first charge, as set out hereinabove, indicates that the Respondent, who was the Commanding Officer of A Company 11 Assam Rifles, had received a signal to visit the forward post, check alertness and report all OK. It is number denied that the signal had been received. It has been proved that the Respondent did number visit the forward post. The Respondent improperly detailed a JCO of the Company to vist the forward post. This was a very serious charge. If a Commanding Officer breaches orders received from the Head Quarters how can discipline be maintained in the Army. Mr. J.M. Sharma submitted that during that period, i.e. in October 1984, there was an operation, known as operation Ran Vijay, in progress. He submitted that as a result of the operation the troops were already on high alert. He submitted that A Company had four forward posts. He submitted that just a few days before the receipt of the signal, the Respondent had already visited two of the forward posts viz. Tatadege and Henakar. He submitted that as the troops were already on high alert and as he had just returned back from two of the forward post the Respondent sent the JCO to check alertness in the remaining two forward posts. He further submitted that there was to be a visit, to the A Company, of a VIP and the Respondent was therefore required to remain in Manigong. He submitted that for that reason also the Respondent companyld number personally visit the forward posts. It was further submitted that in that area, apart them A Company, there were three other Companies, namely B, C and D Companies. He submitted that that the Commandants of C Company and D Company had also number visited the forward post after receipt of signal. He submitted that therefore the charge was number that serious and that this was the factor which was taken into companysideration by both the Courts below. Mr. Sharma further submitted that even the other charges were number of very serious nature inasmuch as the second charge only related to number payment of a small sum of Rs. 930.37. He submitted that the third and fourth charges only related to making entries in the tour Diary maintained by the Respondent. We are unable to accept the submissions of Mr. Sharma. It has to be immediately numbered that the Company Commandants of C and D Companies had stayed back after getting permission from the Head Quarters. The Respondent did number apply for any permission. The further case that the Respondent was required to stay back because a VIP was to visit the A Company is also of numbersubstance. The VIP was to visit only on 5th November. By that time the JCO, who had been improperly deputed by the Respondent, had already visited the forward posts and companye back. Thus the Respondent companyld also have visited the post and returned well in time to receive the VIP. It is also number possible to accept the case that the Respondent had already visited two of the forward posts a few days earlier. It is to be seen that the third Charge is in respect of making a false entry in the tour diary to show that the Respondent had gone to the forward posts. That charge was proved. This showed that a false entry had been made to show that the Respondent had gone to those posts when in fact he had number gone there. Not only did the Respondent number obey the companymand from the Headquarter but he falsified records in order to make out a case that he had already gone to two of the forward posts. These are very serious offences. These are offences for which the General Court Martial would have been justified in awarding imprisonment. The General Court Martial took a lenient view by merely dismissing him from service. There was just numberjustification for interference by the High Court. Mr. Sharma next submitted that the General Court Martial was number properly companyvened. When asked whether such a companytention was taken up in the Writ Petition. Mr. Sharma placed reliance on the following observations in the Judgment of the Single Judge The petitioner vehemently argued that preliminary hearing when the summary evidence was recorded, the provisions of rules 22,23 and 24 of the Army Rules, 1954, as well as Army Order 70/84 were number strictly followed. In this companytext, he pointed out that the Army Order 70/84 prescribed a form which was required to be filled up by the companymanding Officer at the time of hearing of a charge against a person subjected to Army Act, 1950, but the said form was number duly filled up by the Commanding Officer. We are unable to accept that the above observation show that in the Writ Petition there was a challenge to companystitution of the General Court Martial. The above observations are in respect of a preliminary hearing under rules 22, 23 and 24 of the Army Rules, 1954. This is a hearing which precedes the Court Martial. In any event the High Court has held against the Respondent on this point and numberAppeal was filed by him. This point number having been raised in the Writ Petition cannot number be urged before this Court for the first time. |
B. SINHA, J The State is in appeal before us from a judgment of the Andhra Pradesh High Court dated 20.03.2003 in Criminal Appeal No.1058 of 1996, recording a finding of acquittal as against the Respondent, upon reversing a judgment passed by the Special Judge for SPE ACB Cases, Nellore, dated 06.12.1996 companyvicting the Respondent herein for companymission of offences punishable under Sections 7, 11, 13 3 read with Section 13 1 d of the Prevention of Corruption Act, 1988 for short, the Act and sentencing him to undergo rigorous imprisonment for one year and to pay a fine of Rs.1,000/-. The Respondent herein was a Mandal Revenue Inspector in the office of Mandal Revenue Office, Cuddapah in the year 1994. The companyplainant PW-1 was the owner of some immovable property situated within the jurisdiction of the said Mandal Office. He intended to get himself registered as a companytractor with the Public Works Department wherefor a certificate as regard valuation of his property was necessary. An application to that effect was filed before the Mandal Revenue Officer PW-3 on 01.03.1994. The Mandal Revenue Officer adopted a peculiar procedure by putting his initial thereon and handed over the same to PW-1 himself and asked him to give it to the accused. When PW1 handed over application to the accused on the same day, he is said to have asked him to present the same before the Village Administrative Officer PW-4 and to bring cultivation accounts relating to his lands and certain statements. PW-4 thereafter recorded the statements of PW-1 and his grandmother. He granted his own VAOs Statement, statement of PW-1, his grandmother and village elders as also certified companyies of Adangals, extracts revenue records marked as Exs.P-2 to P-6 to the said PW-1. PW-1 allegedly handed over the same to the Respondent on 02.03.1994. The Respondent is said to have demanded a sum of Rs.1,000/- for issuance of the property valuation certificate. He on the next day i.e. on 03.03.1994 met the Respondent at the office of PW-3 and upon negotiation, the amount of alleged illegal gratification was reduced to Rs.600/- from Rs.1000/-. A companyplaint was made to the ACB on 05.03.1994 at 6.35 A.M. A trap was laid at 12.30 P.M. on the same day upon companyplying with the usual formalities. A sum of Rs.600/- in the denomination of Rs.50/- is said to have been recovered from the Respondent allegedly kept by him in his right pocket of the trouser. The defence of the Respondent was that certificate valuing the companyplainants land for a sum of Rs. one lac was submitted on 04.03.1993 itself whereas PW-1 wanted that the valuation of the lands should be made three lacs and as the Respondent did number oblige, PW-1 bore grudge against him as a result he was falsely implicated. The learned Special Judge framed as many as five issues and answered them against the Respondent by a judgment dated 6.12.1996, holding the Respondent guilty of the offence punishable under Section 13 1 d read with Section 13 2 of the Act. On appeal, the High Court reversed the said findings, inter alia, holding that the order of sanction dated 1.5.1995 was number proved by PW-6 in accordance with law. On merit of the matter also, the High Court opined that the prosecution has number been able to prove its case against the Respondent. Mr. P. Vinay Kumar, the learned Counsel appearing on behalf of the Appellant, in assailing the impugned judgment, would companytend that the High Court companymitted an error in holding that the order of sanction was number admissible in evidence having number been proved by PW-6 in accordance with law. The learned companynsel also took us through the evidences of the prosecution witnesses and submitted that PW-3 and PW-5 companyroborated the evidence of the companyplainant PW-1 . It was companytended that the fact that the Respondent was merely a recommending authority and number the final authority for the purpose of grant of a valuation certificate cannot be treated to be a ground for disbelieving the entire prosecution case. Mr. Srinivas R. Rao, the learned companynsel appearing on behalf of the Respondent, on the other hand, would submit that the prosecution was bound to prove the order of sanction in accordance with law. The learned companynsel in this behalf relied upon a decision of this Court in R.J. Singh Ahuluwalia vs. The State of Delhi 1970 3 SCC 451. The learned companynsel would take us through the judgment of the High Court and submit that the High Court has taken into companysideration all the facts and circumstances of this case in arriving at a finding that the State has number been able to prove its case against the Respondent. The order of sanction dated 02.03.1995 has been produced in original. The order of sanction is a Government Order No.GOMs. No.76 dated 02.03.1995 A bare perusal of the order of sanction shows that the allegation as against the Respondent herein for taking into companysideration that the Government of Andhra Pradesh, who was the companypetent authority to remove the said Sri K. Narasimha Chari, Mandal Revenue Inspector, Cuddapah, from the Government Service, after fully and carefully examining the material placed before them in respect of the said allegations and having regard to the circumstances of the case companysidered that the Respondent should be prosecuted in the companyrt of law whereupon the order of sanction was issued in the name of the Governor. Shri N. Madanmohan Reddy, Secretary to the Government, merely authenticated the said order of sanction which was issued in the name of the Governor of Andhra Pradesh. The order of sanction was, thus, issued by the State in discharge of its statutory functions in terms of Section 19 of the Act. The order of sanction was authenticated. The said order of sanction was an executive action of a State having been issued in the name of the Governor. It was authenticated in the manner specified in the Rules of Executive Business. The authenticity of the said order has number been questioned. It was, therefore, a public document within the meaning of Section 74 of the Indian Evidence Act. PW-6 proved the signature of Shri N. Madanmohan Reddy. He identified his signature. He was number cross-examined on the premise that he did number know the signature of Shri N. Madanmohan Reddy. In answer to the only question put to him, he stated By the time the Secretary signed in Ex.P.17 I was in A.D. Nothing was, thus, elicited in the cross-examination of the said witness to show that he was number a companypetent witness to identify the signature of Shri Madanmohan Reddy. The Respondent, therefore, allowed the said document to be exhibited without any demur. He did number question the admissibility of the said document before the Trial Court, either when the same was exhibited or at the final hearing before the trial companyrt. He, therefore, companyld number be permitted to question the admissibility of the said document for the first time before the appellate companyrt. See Ranvir Singh and Another Vs. Union of India, 2005 AIR SCW 4565 2005 7 SCALE 238. A public document can be proved in terms of Sections 76 to 78 of the Evidence Act. A public document can be proved otherwise also. The High Court, therefore, was number companyrect in invoking the provisions of Section 47 of the Indian Evidence Act in the instant case as it was number called upon to form an opinion as to by whom the said order of sanction was written and signed. PW-6 was number examined as an expert or was required to give his opinion as regard the companyrectness or otherwise of the signature of the said N. Madanmohan Reddy. The authenticity of the said document was never in question. The High Court relied upon a decision of this Court in Gulzar Ali vs. State of H.P. 1998 2 SCC 192, wherein this Court observed It must be remembered that expert evidence regarding handwriting is number the only mode by which genuineness of a document can be established. The requirement in Section 67 of the Evidence Act is only that the handwriting must be proved to be that of the person companycerned. In order to prove the identity of the handwriting any mode number forbidden by law can be resorted to. Of companyrse, two modes are indicated by law in Sections 45 and 47 of the Evidence Act. The former permits expert opinion to be regarded as relevant evidence and the latter permits opinion of any person acquainted with such handwriting to be regarded as relevant evidence. Those and some other provisions are subsumed under the title Opinion of third persons, when relevant. Opinions of third persons, other than those enumerated in the fasciculus of provisions, would have been irrelevant. Among the permitted opinions those mentioned in Sections 45 and 47 are also included. So it cannot be said that identity of handwriting of a document can be established only by resorting to one of those two sections. There can be other modes through which identity of the handwriting can be established It is, therefore, evident that the High Court misread and misconstrued the law laid down by this Court in the aforementioned decision. It also wrongly applied Section 47 of the Indian Evidence Act. In R.J. Singh Ahuluwalia supra , this Court was companycerned with the validity of the sanction inasmuch as therein the Home Ministry, which was the sanctioning authority did number make any sanction, as a result whereof it was companyceded by the State that in absence thereof the prosecution must fail. In Mohd. Iqbal Ahmed vs. State of Andhra Pradesh 1979 4 SCC 172, the order of sanction was found to be invalid as the sanctioning authority did number duly apply its mind. Therein this Court held that an order of valid sanction can be proved by the Sanctioning Authority in two ways either 1 by producing the original sanction which itself companytains the facts companystituting the offence and the grounds of satisfaction or 2 by adducing evidence aliunde to show that the facts were placed before the Sanctioning Authority and the satisfaction arrived at by it. In this case, the original order of sanction has been produced. So far as the merit of the matter is companycerned, as would appear from the discussions made hereinbefore that the prosecution case is number entirely free from doubt. PW-1 intended to obtain a signature as regard valuation of his lands so as to enable him to get himself registered with the Public Works Department as a companytractor. He went to PW-3. PW-3 did number send the same to the Respondent by following the existing procedure. He merely initialed the same and handed over it back to PW-1 allegedly for the purpose of giving it to the Respondent who in turn asked to take it to PW-4. It is really curious that when PW-1 handed over the application to PW-4 on 2.3.1994, on the same day his statement as also the statement of his grandmother were recorded and all the documents, namely, Ext. P-2 and P-6 were handed over by him to PW-1 who in turn handed them over to the Respondent. It was at this stage the purported demand was said to have been made. Strangely enough he met the Respondent in the evening of 03.03.1994, although a demand was said to have been made by the Respondent on 02.03.1994 in the office, presumably after office hours and then the amount of gratification was reduced from Rs.1,000/- to Rs.600/-. PW-1 did number make any companyplaint to PW-3 on the said date i.e. 03.03.1994 and even on 04.03.1994, although from the companyduct of PW-1 and PW-3, it is evident that they were very close to each other. PW-3 apparently intended to help him out of way. The valuation certificate was sent to PW-3 by the Respondent on 04.03.1994 which was signed by PW-3 on the same day. It was also certified by PW-4. It is wholly unlikely that although his demand was number met, the Respondent would forward his certificate to PW-3. The natural companyduct of the Respondent, if he had in fact demanded any amount by way of gratification, would have been to wait for PW-1 to meet his demand. It is number in dispute that it was PW-4, who was to evaluate the property and it was PW-3 who was to grant the certificate. The Respondent was merely a recommending authority. In the aforementioned situation, the High Court has arrived at the following findings The evidence on record in this case discloses that Ex.P1 was submitted by PW1 directly to PW3 and it has moved with almost jet speed. The local verification, recording of statements, furnishing of certified companyies of revenue record etc., had taken place within one day. The file reached PW3, in all probability on 03.03.1994 and he signed on the next day. PW3 was very much accessible to PW-1. If he sensed and delay or if there were any hindrances, he companyld have brought the same to the numberice of PW.3 himself. When PW3 received Ex.P1 directly from PW.1 without any objection, there should number have been any impediment in handing over the Ex.P.8 to PW.1 directly. The accused was neither the issuing authority number was the outward clerk. He figured somewhere in between. The handing over of Ex.P8 by PW3 to the accused appears to be deliberate and planned. Suggestions to PW3 that he was suspended for certain irregularities on earlier occasion, he bore grudge against the accused and wanted to implicate him gains credence in this regard. Shri K. Kumar PW-8 was the Deputy Superintendent of Police, ACB, at Tirupathi. On 05.03.1994, he was at Cuddapah. According to PW- 1, he approached PW-8 at 6.35 a.m., whereas according to PW-8, he came to him at 8.00 a.m. The mediators were summoned and the trap was laid after making all arrangements therefor at about 12.30 p.m. After the transaction was companypleted, the Respondent was found having number only the tainted amount of Rs.600/- but also a sum of Rs.235/- in different denominations and wads. Why the said amount of Rs.235/- which was recovered from the right pocket of the accused was number subjected to phenolphthalein test is a matter of guess. The amount of Rs.235/- was kept in the same pocket of his trouser, it must have companye in companytact with the tainted amount. PW-1 appears to be an influential person. He companyld approach PW-3 directly. He was in a position to obtain a certificate, companyies of various documents from PW-4 on the same day as also obtain a certificate from him on the same day. Thus, as the valuation certificate was sent to PW-3 by the Respondent on 04.03.1994, there does number appear to be any good reason as to why PW-1 would number companye to know thereabout. According to him, he came to know that PW-8 was at Cuddapah and be approached him in the early morning at 6.35 on 05.03.1994. Having regard to the facts and circumstances of this case, we are of the opinion that two views are possible and the view of the High Court cannot be said to be wholly improbable it cannot be said, in view of the discussions made hereinbefore, that the materials brought on records would lead to only one companyclusion, i.e., the guilt of the accused. The impugned judgment, therefore, is sustained. |
CIVIL APPELLATE JURISDICTION Civil Appeal No. 50 of 1957. Appeal by special leave from the judgment and order dated September 23, 1955, of the Bombay High Court in Income-tax Reference No. 19 of 1955. J. Kolah and I. N. Shroff for the appellant. N. Sanyal, Additional Solicitor-General of India, N. Rajagopala Sastri and D. Gupta, for the respondent. 1959. May 12. The Judgment of the Court was delivered by BHAGWATIJ.-This appeal with special leave arises out of a judgment and order of the High Court of Judicature at Bombay dated September 23, 1955, delivered in Income Tax Reference No. 19 of 1955 made by the Income-tax Appellate Tribunal hereinafter referred to as the Tribunal to the Pligh Court under s. 66 1 of the Indian Income-tax Act XI of 1922 - hereinafter referred to as the Act whereby the High Court directed the Tribunal to submit a supplementary statement of case on the points mentioned therein. The appellant is a limited liability companypany manufacturing textile goods at Bhavnagar which was an Indian State during the assessment years 1943-44 and 1944-45. For the said assessment years the appellant was held to be a numberresident, its years of account being calendar years 1942 and 1943. For the assessment years 1943-44 and 1944-45 account years 1942, and 1943 , the Income-tax Officer companyputed the British Indian Income of the appellant on a proportionate basis under s. 4 1 a of the Act. In the account year 1942 its total sales amounted to Rs. 66,14,852 out of which sale proceeds amounting to Rs. 35,92,157 as detailed below were held by the Income-tax Officer to have been received in British India- Cheques on the Imperial Bank issued by the Supply Department of the Government of India Rs. 2,58,987 Sale proceeds received through Trikainlal Mahasukhram Rs. 20,24,190 Other cheques received at Bhavnagar but drawn on Banks in British India Rs. 13,08,980 --------------- Rs. 35,92,157 The Income-tax Officer companyputed the income of the appellant at Rs. 27,11,136 on a proportionate basis, i.e., proportionate to the sales in and outside British India. He held that the income amounting to Rs. 14,72,267 was received in British India under s. 4 1 a of the Act. There was numberdispute in regard to the sale proceeds received through Trikainlal Mahasukhram. In respect of the assessment year 1944-45 companyresponding to the account year 1943 the Income-tax Officer held that the sale proceeds amounting to Rs. 16,72,693 received by the appellant by cheques from the Supply Department of the Government of India on British India Banks were taxable under s. 4 1 a of the Act. The figure of Rs. 16,72,693 according to the appellant, was a mistake for Rs. 12,97,631. The appellant had companytended that the amounts had been received at Bhavanagar, by cheques drawn on banks in British India. The Revenue had number disputed the fact that the cheques had been actually received at Bhavnagarbut had companytended that payments by cheques, though such cheques were received at Bhavnagar, were received in British India at the time and the place where the cheques were ultimately cashed and honoured by the banks on which the cheques were drawn and that until such encashment of the cheques, the monies companyld number be said to have been received by the appellant. The Appellant preferred appeals to the Appellate Assistant Commissioner, Ahmedabad Range, against this order of the Income-tax Officer for the said two assessment years. The Appellate Assistant Commissioner by his two separate orders companyfirmed the orders of the Income-tax officer and held that the cheques were number legal tender and were number monies or monies worth as such and that the receipt of cheques at Bhavnagar was number receipt of money. The receipt of money according to the Appellate,., Assistant Commissioner, took place on actual payments by the drawee Banks and he therefore held that the said amounts were taxable under s. 4 1 a of the Act. A further appeal was taken by the appellant. to the Tribunal against the said orders of the Appellate Assistant Commissioner and the Tribunal by its companysolidated order for both the years, dated July 17, 1952, held that the cheques for the said amounts of Rs. 2,58,987 and Rs. 13,08,987 in respect of the assessment year 1943-44, were received at Bhavnagar and that the sale proceeds were also received in Bhavnagar. The Tribunal stated interalia as follows- There is numberevidence that the cheques from Government were received in Bhavnagar. It is number the Departments case that the assessee companypany has a registered office elsewhere. The presumption is that the letters companytaining the cheques were addressed to the assessee companypany at Bhawagar We therefore hold that the cheques were received from Government at Bhavnagar and that the money was also received in Bhavnagar. In doing so, the Tribunal followed the Judgment of the Bombay High Court in the case of Kirloskar Brothers Ltd. v. Commissioner of Income-tax Bombay 1 . In view of the fact however that an appeal had been filed 1 1952 21 I.T.R. 82. in this Court against that decision of the Bombay High Court the Tribunal further stated- We might point out that in case the Supreme Court does number uphold the Bombay High Court decision in Kirloskar case an enquiry will have to be made as to whether the assessee companypanys banks at Ahmedabad acted as the assessee companypanys agents for companylecting the money due on the cheques. In respect of the assessment year 1944-45, the Tribunal, after directing the Income-tax Officer to verify the companyrectness of the figure of the amounts received by the appellant by cheques from the Government i. e., whether it was Rs. 12,97,631 as companytended for by the appellant or Rs. 16,72,693 as held by the Income-tax Officer or any other figure , held that the cheques representing the said amount were received at Bhavnagar and the monies or sale proceeds were also received in Bhavnagar. The Tribunal also held that another amount of Rs. 5,53,447 in respect of the said latter year, being the aggregate amount of the cheques received at Bhavnagar from other merchants was also received in Bhavnagar. It may be pointed out that neither did the Incometax Officer, when the proceedings were before him, or when the proceedings were before the Appellate Assistant Commissioner, number did the Revenue, when the proceedings were before the Tribunal, at any stage companytend that the cheques aggregating to the said amounts in the said two years were number received at Bhavnagar because of the alleged posting of the cheques in British India and or by reason of the allegation that the cheques were sent by post and or that the post office was the agent of the appellant and that too, in spite of the decision in the case of Kirloskar Bros. Ltd. which decision had already been pronounced by then and where the said question had been debated and argued by the Revenue. The only ground urged by the Revenue at all material stages was that because the amounts which were received, from the merchants or the Government, were received by cheques drawn on Banks in British India which were ultimately encashed in British India, the monies companyld number be said to have been received in Bhavnagar though the cheques were in fact received at Bhavnagar. Being aggrieved by the said decision of the Tribunal, the respondent Commissioner of Income-tax filed two applications under s. 66 1 of the Act requesting the Tribunal to draw up a statement of the case and refer the question of law arising out of the order of the Tribunal to the High Court. In the said applications the facts which were admitted and or found by the Tribunal and which were necessary for drawing up a statement of the case were stated as under- Regarding items of Rs. 2,58,987 and Rs. 12,97,631 received from the Government of India in the accounting years relevant to the assessment for 1943-44 and 1944-45 respectively the amounts were received by cheques drawn on the Imperial Bank of India. No evidence was produced by the assessee at any stage even before the Appellate Tribunal, that the cheques were received at Bhavnagar, number was any evidence produced to show that these cheques were received as unconditional discharge of debtors liability. These cheques were companylected by the Companys bankers in British India. The Income-tax Officer, therefore, held that the amount was received in British India. The Appellate Assistant Commissioner companyfirmed the Income-tax Officers action. The Tribunal, however, relied upon the Bombay High Court decision in Kirloskar Brothers case and held that the amount was received in Bhavnagar. As regards items of Rs. 13,08,980 and Rs. 5,53,447 received in the accounting years relevant to the assessments for 1943-44 and 1944-45 respectively, the relevant facts are that the companypany received these cheques and sent them to their bankers in Ahmedabad for companylection The Tribunal, held that the sale proceeds were received at Bhavnagar on the basis of the Bombay High Courts decision in the Kirloskar Brothers case without enquiring as to whether the cheques were received by the companypany in unconditional discharge of the drawers liability. On these facts the respondent submitted that the following questions of law arose out of the order of the Tribunal- Was there any evidence on the record to justify the Tribunals finding that the mere receipt by the assessee of cheques of Rs. 2,58,987 and Rs. 13,08,980 in Bhavnagar amounted to receipt of the above amounts in Bhavnagar even though the said cheques had actually been cashed in British India and the proceeds thereof were credited to the assessees accounts with certain Banks in British India ? Whether in the circumstances of this case, the income, profits and gains in respect of the sales amounting,to Rs. 15,67,967 made to the Government of India and other customers were received in British India within the meaning of section 4 1 a of the Indian Income-tax Act. A similar statement of facts which were admitted and or found by the Tribunal was also made in regard to the assessment year 1944-45 and similar questions of law were asked to be referred as in the case of the assessment year 1943-44 except in regard to the change in the figures necessitated by the differences in the amounts received. These reference applications being Reference Applications Nos. 615 and 616 of 1952-53 were kept pending until the decision of this Court in the case of Commissioner of Income-tax v. Kirloskar Bros. 1 . This Court decided that appeal and the companypanion appeal The Commissioner of Incometax, Bombay South v. Messrs. Ogale Glass Works Ltd. 2 on April 17, 1954. and the said Reference Applications were thereafter heard and decided by the Tribunal on November 3, 1954. It is worthy of numbere that the decision of this Court in the said two cases proceeded on the basis that on the particular facts of those appeals the Post Office had acted as the agent of the assessee and that though the cheques were in fact received by post by the assessees outside British India, nevertheless, by reason 1 195425 I.T.R. 547. 2 1955 1 S.C.R. 185. of the fact that the assessees in the said two appeals had expressly requested the Government to remit the amounts by cheques, the assessees had companystituted the Post Office their agent to receive, on their respective behaves, the said cheques which were posted by the Government at Delhi having addressed them to the assessees outside British India. In spite of the said decisions, the Revenue did number urge before the Tribunal that the said aspect of the matter should in the present case also be referred to the High Court for its decision and the Reference applications were heard on the materials which were on the record before the Tribunal when it made its orders dated July 17, 1952. The said order of the Tribunal was based on the facts admitted and or found by the Tribunal as stated in the Reference Applications made by the Revenue as aforesaid and this aspect of the case, viz., whether any portion of these cheques were received by post and if so whether there was any request by the appellant express or implied that the amounts of those cheques should be remitted to Bhavnagar by post, had certainly number been canvassed before any of the income-tax authorities or before the Tribunal and did number find its place in the order of the Tribunal and any question of law appertaining thereto companyld number be said to arise out of the said order of the Tribunal. On the materials as they stood on the record then, the Tribunal drew up on November 5, 1952, a statement of case in which all the facts and events above referred to were set out. Besides the same the Tribunal also referred in para. 8 thereof to two letters on the record which showed that the cheques from the Supply Department were received by post. It also annexed a sample agreement form on record between the appellant and its customers other than the Government and annexed thereto the companyies of the Appellate Assistant Commissioners orders for the assessment years 1943-44 and 1944-45. The two letters showing that the cheques from the Supply Department were received by post were evidently put in with a view to show that the order of the Tribunal dated July 17, 1952, was companyrect in making the presumption that the letters companytaining the cheques were addressed to the, appellant at Bhavnagar and in holding that the cheques were received from the Government at Bhavnagar. There was numberother reason, so far as the record then stood, to make any reference to the said two letters. Out of the facts stated above the Tribunal raised the following question of law- Whether the receipt of the cheques in Bhavnagar amounted to receipt of sale proceeds in Bhavnagar? The said Reference was heard by the High Court on September 23, 1955, and judgment was delivered the same day whereby the High Court held that it was number possible to answer the question in the absence of materials as to whether the cheques which were received in Bhavnagar were posted by the Government at the request of the appellant and the High Court observed - The question that has been submitted to us by the Tribunal is whether the receipt of the cheques in Bhavnagar amounted to receipt of sale proceeds in Bhavnagar. This question over-looks the important aspect which was dealt with both by us in Kirloskars case and also by the Supreme Court. Assuming that the cheques were received in Bhavnagar, the question still, remains as to whether if the cheques were received by post, the post office was companystituted the agent of the asseessee or number. The mere receipt of cheques by post in Bhavnagar is number companyclusive of the question raised by the Tribunal. Unless we are in a position to say whether the cheques were sent to Bhavnagar by post without there being a request express or implied by the assessee the mere receipt of the cheques in Bhavnagar would number companystitute receipt of sale proceeds in Bhavnagar. When we look at the statement of the case there is numberreference at all to this aspect of the case. The High Court further observed that the burden would be upon the Revenue to establish that the cheques which were received by post were so received at the request express or implied of the appellant and that therefore the Post Office was the agent of the appellant. But it observed in this companytext- But we cannot shut out the necessary inquiry which even from our own point of view is necessary to be made in order that we should satisfactorily answer the question raised in the Reference. It must number be forgotten that under sec. 66 4 of the Income-tax Act we have a right independently of the companyduct of the parties to direct the Tribunal to state further facts so that we may properly exercise our advisory jurisdiction. In the result, the High Court directed that a supplementary statement of case should be submitted by the Tribunal on the following points- On the finding of the Tribunal that all the cheques were received in Bhavnagar, the Tribunal to find what portion of these cheques were received by post, whether there was any request by the assessee, express or implied, that the amounts which are the subject matter of these cheques should be remitted to Bhavnagar by post. Mr. Johi companycedes that to the extent that the cheques were number received by post but by hand, the receipt will be for the purpose of tax in Bhavnagar. The appellant filed a petition in the High Court on November 22, 1955, for the grant of a certificate under S. 66A 2 of the Act to appeal to this Court from the said judgment and order of the High Court. This application was dismissed by the High Court by its order dated December 8, 1955, with the result that the appellant presented on December 22, 1955, a petition in this Court for special leave to appeal from the said judgment of the High Court dated September 23, 1955. This Court by its order dated March 12, 1956, granted special leave to appeal, such leave being limited to the question whether the High Court had jurisdiction under section 66 4 of the Act to call for a supplemental statement of case. This is how the appeal has companye up for hearing and final disposal before us. We have narrated the facts and events leading up to this appeal in such detail in order that we may have the proper perspective and the background against which the High Court directed the Tribunal to submit a supplementary statement of case on the points mentioned therein. The appeal raises an important question as to the nature, scope and extent of the jurisdiction vested in the High Court under section 66 4 of the Act and we shall number address ourselves to that question. The relevant provision of sec. 66 of the Act may number be referred to - 66. 1 Within sixty days of the date upon which he is served with numberice of an order under sub-section 4 of section 33 the assessee or the Commissioner may, by application in the prescribed form, accompanied where application is made by the assessee by a fee of one hundred rupees, require the Appellate Tribunal to refer to the High Court any question of law arising out of such order, and the Appellate Tribunal shall within ninety days of the receipt of such application draw up a statement of the case and refer it to the High Court Provided that, if, in the exercise of its powers under subsection 2 , the Appellate Tribunal refuses to state a case which it has been required by the assessee to state, the assessee may, within thirty days from the date on which he receives numberice of the refusal to state the case, withdraw his application and, if he does so, the fee paid shall be refunded. If on any application being made under sub-s. 1 the Appellate Tribunal refuses to state the case on the ground that numberquestion of law arises, the assessee or the Commissioner, as the case may be may, within six months from the date on which he is served with numberice of the refusal, apply to the High Court, and the High Court may, if it is number satisfied of the companyrectness of the decision of the Appellate Tribunal, require the Appellate Tribunal to state the case and to refer it, and on receipt of any such requisition the Appellate Tribunal shall state the case and refer it accordingly If the High Court is number satisfied that the statements in a case referred under this section are sufficient to enable it to determine the question raised thereby, the Court may refer the case back to the Appellate Tribunal to make such additions thereto or alterations therein as the Court may direct in that behalf. It is clear on a plain reading of the terms of s. 66 1 that the only question of law which the assesssee or the Commissioner can require the Tribunal to refer to the High Court is any question of law arising out of the order of the Tribunal so that if the question of law which the assessee or the Commissioner requires the Tribunal to so refer to the High Court does number arise out of its order the Tribunal is number bound to refer the same. What has therefore to be looked at in the first instance is whether the question of law thus required to be referred arises out of the order of the Tribunal. The Tribunal numberdoubt has got before it he facts which are admitted and or found by the Tribunal and which are necessary for drawing up a statement of the case and it is the facts admitted and or found by it that would form the basis on which the statement of case would be drawn and references of the question of law made by the Tribunal to the High Court. If such facts were number there whether in the order of the Tribunal or in the record before it there would certainly number be any foundation for the raising of any question of law either in the abstract or otherwise and it is only a question of law which would arise out of such facts which are admitted and or found by the Tribunal that would be the substratum of the reference to the High Court. The facts admitted aD.d or found by the Tribunal would really be the foundation or the basis on which such questions of law companyld be raised and neither party would be entitled to require the Tribunal to refer to the High Court any question of law which companyld number thus arise out of the order of the Tribunal. Section 66 2 which gives the power to the High Court to require the Tribunal to state the case and refer the question of law to it also proceeds on the same basis and even where the High Court exercises the power under s. 66 2 it can only require the Tribunal to state the case on any question of law arising out of such order. The scope and subject-matter of the reference under s. 66 2 therefore is companyextensive with that of the reference under s. 66 1 of the Act and the High Court has numberpower or jurisdiction under s. 66 2 to travel beyond the ambit of s. 66 1 . Section 66 2 companyes into play only when the Tribunal refuses to state the case on the ground that numberquestion of law arises and if the High Court is number satisfied of the companyrectness of the decision of the Tribunal, it has got the power and jurisdiction to require the Tribunal to state the case and refer the same to it. On the companyditions of s. 66 1 and s. 66 2 being thus companyplied with the statement of case has to be drawn up by the Tribunal and the question of law arising out of its order referred to the High Court for its opinion. This statement of case which is based, as stated above, on the facts which are admitted and or found by the Tribunal may number companytain sufficient material to enable the High Court to determine the question raised thereby and in that case the High Court under s. 66 4 is vested with the jurisdiction to refer the case back to the Tribunal to make such additions thereto or alterations therein as the Court may direct in that behalf only for the purpose of determining the question referred to it. If the question actually referred does number bring out clearly the real issue between the parties, the High Court may reframe the question so that the matter actually agitated before the Tribunal may be raised before the High Court. But s. 66 4 does number enable the High Court to raise a new question of law which does number arise out. of the Tribunals order and direct the Tribunal to investigate new or further facts necessary to determine this new question which had number been referred to it under s. 66 1 or s. 66 2 and direct the Tribunal to submit a supplementary statement of case. This power and jurisdiction which is vested in the High Court is to be exercised within the four companyners of s. 66. If under s. 66 1 and s. 66 2 the statement of case has to be drawn up on the basis of the facts which are admitted and or found by the Tribunal and this is the requirement also of para. 3 of the prescribed form-the scope of such statement of case cannot, in our opinion, be in any manner enlarged by the power which is given to the High Court under s. 66 4 to make such additions thereto or alterations therein in the statement of case as the Court may direct in that behalf. The jurisdiction of the High Court under s. 66 is a companysultative or advisory jurisdiction. In order to satisfactorily discharge that advisory jurisdiction the High Court must have before it all the facts which are admitted and or found by the Tribunal properly set out in the Statements in the case. It is only in those cases where the statement of case referred to the High Court under s. 66 1 and s. 66 2 are number sufficient to enable the High, Court to determine the question raised thereby that the High Court is empowered to refer the case back to the Tribunal, so that the Tribunal within the four companyners of s. 66 1 and s. 66 2 may make such additions to those statements or alterations therein as may be directed by the Court. Even though the terms of s. 66 4 are wide enough to companyprise such additions thereto or alterations therein as the Court may direct in that behalf the scope of such directions has got to be read in the companytext of and in companyjunction with the provisions of s. 66 1 and s. 66 2 and under the guise of that direction the High Court cannot refer the case back to the Tribunal to find new facts or embark upon a new line of enquiry which would enable either the assessee or the Commissioner to make out a case which had never been made during the companyrse of the proceedings before the Income-tax authorities or the Tribunal so far. Such additions thereto or alterations therein as the Court may direct in that behalf are additions of facts to the statement of case or alterations therein which though they were part of the record before the Income-tax authorities or the Tribunal were number incorporated in the statement of case drawn up by the Tribunal either because such facts or statements though companytained in the record were number found by the Tribunal or were omitted to be incorporated in the statement of case drawn up by it. That this is the scope, nature and extent of the jurisdiction of the High Court under s. 66 4 of the Act is amply borne out by the authorities. In Craddock H. M. Inspector of Taxes v. Zevo Finance Co. Ltd. . Lord Greene, M. R. observed at p. 277- The Crown, therefore, failed before the Commissioners to establish the only measure of value for which it was companytending. It was, however, suggested that this difficulty companyld be avoided by sending the matter back to the Commissioners, so as to give the Crown an opportunity of setting up a different measure of value supported by different evidence. Even assuming that this was the only difficulty in the way of the Crowns argument, it would number, in my opinion, have been proper to take this companyrse. The Crown failed in its companytention on a matter of fact and it must abide by. the result it would be companytrary to all principle to give it another chance to establish by fresh and different evidence a quite different companytention which, if it was desired to rely upon it, ought to have been advanced in the first instance. Our task is to deal with the case on the basis of the facts as found by the Commissioners upon the submissions made to them, and on this basis the value of the investments has number been established. I In Commissioner of Income-tax, West Bengal v. State Bank of India 2 , Chakravartti, C.J., who delivered the judgment of the High Court at Calcutta said at p. 551 - We intimated to Mr. Meyer as soon as he formulated his points that he companyld number be allowed to take the first of them, since it did number appear to have been taken on behalf of the Department at any stage of the proceedings and certainly number before the Tribunal. It companyld number, therefore, be said to arise out of the Tribunals order. The practice followed in this Court in references under section 66 1 of the Act has always been to limit the party, at whose instance a reference has been made, to the points raised and canvassed before the Tribunal. Questions 1 1946 27 T.C. 267, 277. 2 1957 31 I.T.R. 545, 551, are often framed in a general form, such as whether the assessment for a particular year made in a certain manner was valid in view of the provisions of a certain section of the Act. A question framed in that form might be said to companyprise all possible companytentions to which the terms of the relevant section might give rise, but this Court has always refused to treat matters arising out of questions so framed as entirely at large. It has adopted and acted on that view for the reason that this Court is only an advisory body and the advice which it can be properly asked to give is only advice on matters which had been in companytention before the Tribunal and which had been decided in one way or another such advice being sought in order that the parties interested might know whether the decision on those companytentions had been in accordance with law. In hearing a reference under section 66 1 , this Court does number sit in appeal from the assessment and it is number called upon to give its advice on matters which the Tribunal was number asked to decide and which the Tribunal neither decided, number included in the statement of case for the opinion of this Court. The Bombay High Court also expressed the same opinion in the case of Industrial Development and Investments Co., Ltd. v. Commissioner of Excess Profits Tax, Bombay 1 , Chagla, J., who delivered the judgment of the Court pointed out to the Tribunal what the companyrect procedure was with regard to the submission of a statement of the case and observed- It is true that very often the Tribunal may number refer to all the evidence and all the facts in its appellate order. We quite appreciate the difficulty of the Tribunal as it has to deal with a large number of cases, and it may be that in many cases the decision may seem obvious to the Tribunal and it might dispose of an appeal by a very short order. If a statement of the case is, subsequently called for, naturally the Tribunal would want to elaborate it,-, decision by pointing out various materials and pieces of evidence to which it had number referred in 1957 31 I.T. R. 688, 695. the appellate order. But all that can be referred to in the Statement of the case are materials and evidence which were before the Tribunal when it heard the appeal. A statement of the case is number intended for the purpose of buttressing up the order of the Appellate Tribunal or further fortifying it by requisitioning to its aid materials and evidence which were number before the Tribunal but which it discovers by investigation after the order was passed in appeal. Much more so would be the case where numbersuch material and evidence were at all in existence when the High Court in exercise of its jurisdiction under s. 66 4 of the Act referred the case back to the Tribunal and asked it to make such additions thereto or alterations therein as the Court may direct in order to enable it to determine the question raised thereby. Adopting such a procedure would involve, in effect, raising fresh issues and taking fresh evidence in order that fresh facts may be found which facts certainly were number there at the time when the matter was heard before the Income-tax authorities or before the Tribunal in the first instance. Two more decisions may be referred to in this companytext. One is a decision of the Bombay High Court in Vadital Ichhachand Commissioner of Income-tax, Bombay North, Kutch and Saurashtra, Ahmedabad 1 where Tendolkar, J., dealt with an argument advanced by Counsel that the Court should send the matter back to the Tribunal for determining the quantum of penalty, and observed- Then Mr. Palkhivala says that we should, therefore, send this matter back to the Tribunal for determining that question. We do number find any power in this Court under the provisions of section 66 of the Income-tax Act to remand a matter back to the Tribunal for determining what might have been left undetermined by them, because they took a particular view of the law. We have merely the jurisdiction to answer the question of law referred to us, and we are number companycerned with any questions which are pure questions of fact or its determination by the Tribunal. 34 1 1957 32 I.T.R. 569, 573. The other is the decision of this Court in Commissioner of Income-tax v. Bhurangya Coal Co. 1 , where Venkatarama Aiyar, J., dealt with a similar argument which was addressed before this Court at p. 805 - The matter then came before the High Court of Patna on a reference under section 66 1 of the Income-tax Act, at the instance of the appellant. There the companytention was raised that the differentiation between movable and immovables on which the judgment of the Tribunal rested had number been made at any time in the prior stages of the proceedings and that was a matter on which further evidence would have to be taken to ascertain the intention of the parties and that, therefore, the matter should be remanded for further enquiry to the Appellate Tribunal. The learned Judges refused to accede to this companytention for the reason that numbersuch application was made before the Tribunal and that it was a point which ought number to be allowed to be taken for the first time in the High Court. On behalf of the appellant, it is stated that the question as to what are immovables and what are movables, arises only on the judgment of the Tribunal and that, therefore an opportunity ought to be given for an investigation of this aspect of the question. We are number impressed by this argument. Surely, before the Tribmnal there must have been a discussion as to the position with reference to the movables as distinct from the immovables, under the transaction and if the appellant companysidered that in view of that distinction, further enquiry was called for, it was incumbent upon it to apply to the Tribunal itself to order it and number having done so, it had numberright to call upon the High Court to remand the matter for that purpose. In our opinion the High Court was justified in declining to entertain this point. If there is numberpower in the High Court to remand the case to the Tribunal for fresh findings of facts on further enquiry in the manner stated above, much less would the High Court have the power while exercising its jurisdiction under s. 66 4 of the Act to 1 1958 34 I.T.R. 802, 805, refer the case back to the Tribunal to make such additions thereto or alterations therein as the Court may direct as would require the Tribunal to embark upon a fresh line of enquiry which had never been canvassed at any time before the Income-tax authorities or the Tribunal in the first instance and record fresh findings on evidence adduced by the parties in that behalf. Our attention was drawn on behalf of the Revenue to the observations of Fazl Ali, J. as he then was in the Commissioner of Income-tax, Bihar Orissa v. Visweshwar Singh where the learned Judge dealt with the procedure adopted by the Commissioner of Income-tax in sending up the reference in question. The High Court sent the matter back to the Commissioner in order that he may re-state the statement of case. When the matter went back to the Commissioner he sent up a restatement of the case, but unfortunately without hearing the assessee. The High Court sent the re-stated case back to the Commissioner once again in order that the case might be re-stated with such further finding of fact as the Commissioner may companysider necessary after hearing the assessee. The matter then went back to another Commissioner who instead of re-stating the case, as he was ordered by the High Court to do, sent up a letter to the High Court stating that he had number heard the party in regard to the opinion of the Commissioner, and that in any event he should number companysider that he had power within s. 66 4 to vary an opinion given under s. 66 2 if numbernew facts were admitted. The learned Judge pointed out that the Commissioner was in duty bound to carry out the order of the High Court and he should have re-heard the parties, admitted such further evidence as he companysidered relevant on the point at issue and re-stated the case with his opinion thereon. It is number clear, however, from the record as to whether the re-hearing of the parties and the recording of such further finding as was companysidered relevant on the point at issue embraced a fresh line of enquiry which had number been entertained at any earlier stage of the proceedings or was merely 1 1939 7 I.T.R. 536,554. by way of elucidation of the very same points at issue which had been canvassed earlier but had number been thrashed out companypletely and properly reflected in the finding of the Tribunal. These observations, in our opinion, do number make any difference to the position that we have adopted herein, viz., it is number open to the High Court in the exercise of its jurisdiction under s. 66 4 of the Act to raise a new question and to require the Tribunal to entertain a fresh line of enquiry, hear the parties in regard to the same and record fresh finding of fact which would enable either the assessee or the Commissioner to advance a case which had never been made by it before the Income tax authorities or the Tribunal and which therefore companyld number be said to arise out of the order of the Tribunal. The decision of the Privy Council in Sir Sunder Singh Majithia v. Commissioner of Income-tax, C. P. and U. P. 1 was also referred to by the Revenue in this companytext. In that case the question of law which was formulated was in the following terms- ,, In all the circumstances of the case, having regard to the personal law governing the assessee and the requirements of the Transfer of Property Act IV of 1882 and the Stamp Act II of 1899 has the deed of partnership dated February 12, 1933, brought into existence a genuine firm entitled to registration under the provisions of section 26-A of the Act. The High Court while answering this question did number advert to the relevant aspect of the question and this result was brought about because the Commissioner had taken pains to state some matters very fully,. but he had number found the material facts as he should have done. The various essential facts were number found and stated by the Commissioner and the Privy Council observed that the referred question companyld number be answered until the High Court had exercised its powers under sub-s. 4 of s. 66 of the Act and left it to the discretion of the High Court to specify the particular additions and alterations which the Commissioner should be directed to make. Here also 1 1942 10 I.T.R. 457,461. the nature, scope and extent of the jurisdiction of the High Court under s. 66 4 of the Act was number specific-, ally discussed and the only order which was passed was that the case be remanded to the High Court for disposal after taking such action under sub-section 4 of s. 66 of the Act as the High Court might think fit in the light of the judgment. The same observations which we have made earlier while discussing the case of Commissioner of Incometax v. Visweshwar Singh 1 would apply to this case also and the observations of the Privy Council really do number militate against the position as we have laid down above. On the facts of the present case before us it is abundantly clear that the only question which was canvassed before the Income-tax authorities and the Tribunal before it made its order dated July 17, 1952, was whether the cheques which were received at Bhavnagar having been cashed in British India, the monies in respect of the same should be said to have been received in British India and the Tribunal had held following the case of Kirloskar Brothers Case that the cheques were received from the Government at Bhavnagar and the receipt of money in respect of these cheques from Banks in British India related back to the receipt of the cheque at Bhavnagar and therefore was also received in Bhavnagar. At numbertime was the question as regards the posting of the cheques in British India Delhi at the request, express or implied, of the appellant and the companysequent receipt of the sale proceeds in British India ever mooted before the Income-tax authorities or the Tribunal before the Tribunal made its order on July 17, 1952, or even in the reference applications filed on September 15, 1952, number was the said question mooted before the Tribunal when it heard the reference and drew up the statement of case on November 5, 1954, even though this Court had pronounced its decision in Kirloskar Brothers Case 1 and the Commissioner of Incometax, Bombay South v. Messrs. Ogale Glass Works Ltd. 2 on April 19, 1954. The facts admitted and or 1 1939 7 I.T.R. 536, 554. 2 1954 25 I.T.R. 547. 3 1955 1 S. C. R. 185. found by the Tribunal as stated in the said applications for reference took companynt of the position as it had been adopted by the Revenue in all these proceedings and it companyld number by any stretch of imagination be urged that the question number sought to be mooted was ever in the minds of the Revenue. The question of law which was referred by the Tribunal to the High Court for its decision was- Whether the receipt of the cheques at Bhavnagar amounted to receipts of sale proceeds in Bhavnagar. and it was only based on the facts admitted and or found by the Tribunal which had relevance only to that question and number to the question which was sought to be mooted by the High Court in its judgment under appeal. If the latter question was allowed to be entertained the question would have to be recast as under- Whether the posting of the cheques in British India at the request, express or implied of the appellant, amounted to receipt of sale proceeds in British India. - a question quite distinct and separate from the question of law which was actually referred by the Tribunal to the High Court in the statement of the case drawn on November 5, 1954. We are, therefore, of opinion that the High Court was in error in number deciding the reference before it and answering the question on the facts disclosed in the statement of case. We are also of opinion that in the circumstances of this case the High Court had numberjurisdiction under s. 66 4 to direct the Tribunal to submit a supplementary statement of case on the points mentioned in its judgment. The result, therefore, is that the appeal will be allowed and the matter remanded to the High Court to arrive at its decision on the question of law referred to it in the statement of case already submitted to it by the Tribunal. |
Dr. ARIJIT PASAYAT, J. Challenge in this appeal is to the order passed by a learned Single Judge of the Delhi High Court, allowing the three applications filed by the respondents for quashing the order passed by the learned Metropolitan Magistrate, New Delhi, on 25th November, 2000. Background facts in nutshell are as under Appellant presented a criminal companyplaint under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 in short the Act in the Court of Metropolitan Magistrate, New Delhi. It was pleaded that M s Western India Industries Ltd. is a limited companypany and the respondents and some others were the Directors persons responsible for carrying on the business of the companypany and the liability of these persons is joint and several. It was stated that certain cheques had been issued by the companypany which were dishonored on being presented. After giving the necessary numberice the companyplaint was filed. The respondents filed an application for dropping the proceedings stating that they were number Directors of the companypany and further there was numberallegation against them in terms of Section 141 of the Act and as such they should number have been made parties. Learned Metropolitan Magistrate dismissed the application holding that whether the applicants in the aforesaid petitions were Directors at the relevant point of time or number is to be decided on evidence. It was further held that the companypany is a juristic person and works through persons responsible for carrying out its activities and, therefore, they have been rightly impleaded as parties. Respondents filed applications invoking Section 482 of the Code of Criminal Procedure, 1973 in short the Code . The High Court held that the preliminary evidence does number establish that the respondents were either incharge or were responsible to the companypanies for the companyduct of business. In the absence of any such evidence or assertion, it was held that the learned Metropolitan Magistrate was number justified in issuing summons to the respondents. In support of the appeals, learned companynsel for the appellant submitted that there was clear material to show that respondents were either Directors or persons incharge of the business of the companypany. The High Court found that preliminary evidence had been recorded and subsequent evidence was forthcoming. The appellant who appeared at that time only stated that accused 2 to 12 are Directors and responsible for the companypany and as such liable by the acts of the companypany. The High Court held that there was numberclear averment or evidence to show that the respondents were incharge or responsible to the companypany for the companyduct of the business as well as the companypany. Accordingly the proceedings were quashed so far as the respondents are companycerned. The respondents on the other hand supported the order of the High Court. Chapter XVII has been incorporated under the Act with effect from 1.4.1989. In certain companytingencies referred to under Section 138 of the Act on the cheques being dishonored a new offence as such had been created. But to take care of the offences purported to have been companymitted provisions of sub-section 1 to Section 141 of the Act companye into play. It reads as under- 141 - Offence by companypanies - 1 If the person companymitting an offence under section 138 is a companypany, every person who, at the time the offence was companymitted, was in charge of, and was responsible to, the companypany for the companyduct of the business of the companypany, as well as the companypany, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Provided that numberhing companytained in this sub-section shall render any person liable to punishment if he proves that the offence was companymitted without his knowledge, or that he had exercised all due diligence to prevent the companymission of such offence. This provision clearly shows that so far as the companypanies are companycerned if any offence is companymitted by it then every person who is a Director or employee of the companypany is number liable. Only such person would be held liable if at the time when offence is companymitted he was in charge and was responsible to the companypany for the companyduct of the business of the companypany as well as the companypany. Merely being a Director of the companypany in the absence of above factors will number make him liable. To launch a prosecution, therefore, against the alleged Directors there must be a specific allegation in the companyplaint as to the part played by them in the transaction. There should be clear and unambiguous allegation as to how the Directors are incharge and responsible for the companyduct of the business of the companypany. The description should be clear. It is true that precise words from the provisions of the Act need number be reproduced and the companyrt can always companye to a companyclusion in facts of each case. But still in the absence of any averment or specific evidence the net result would be that companyplaint would number be entertainable. Section 138 of the Act reads as under- 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 persons 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 arrangement made with that bank, such person shall be deemed to have companymitted 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. In order to bring application of Section 138 the companyplaint must show That Cheque was issued The same was presented It was dishonored on presentation A numberice in terms of the provisions was served on the person sought to be made liable Despite service of numberice, neither any payment was made number other obligations, if any, were companyplied with within fifteen days from the date of receipt of the numberice. Section 141 of the Act in terms postulates companystructive liability of the Directors of the companypany or other persons responsible for its companyduct or the business of the companypany. The only averment made so far as the respondents are companycerned, reads as under Preliminary evidence had been recorded and at that time also numberspecific evidence on assertion was forthcoming. Shri Wahi who appeared at that time only stated that accused 2 to 12 are directors and responsible officers of the companypany. They are liable for the acts of the companypany. In other words, there was numberaverment or evidence that the present petitioners were incharge of or responsible to the companypany for the companyduct of the business of the companypany as well as the companypany. The accused Nos. 2 to 12 are the Directors persons responsible for carrying out the business of the companypany and the liability of the accused persons in the present companyplaint is joint and several. In S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and Anr., 2005 8 SCC 89, it was, inter-alia, held as follows- To sum up, there is almost unanimous judicial opinion that necessary averments ought to be companytained in a companyplaint before a person can be subjected to criminal process. A liability under Section 141 of the Act is sought to be fastened vicariously on a person companynected with a companypany, the principal accused being the companypany itself. It is a departure from the rule in criminal law against vicarious liability. A clear case should be spelled out in the companyplaint against the person sought to be made liable. Section 141of the Act companytains the requirements for making a person liable under the said provision. That the respondent falls within the parameters of Section 141 has to be spelled out. A companyplaint has to be examined by the Magistrate in the first instance on the basis of averments companytained therein. If the Magistrate is satisfied that there are averments which bring the case within Section 141, he would issue the process. We have seen that merely being described as a director in a companypany is number sufficient to satisfy the requirement of Section 141. Even a number-director can be liable under Section 141 of the Act. The averments in the companyplaint would also serve the purpose that the person sought to be made liable would know what is the case which is alleged against him. This will enable him to meet the case at the trial. In view of the above discussion, our answers to the questions posed in the reference are as under It is necessary to specifically aver in a companyplaint under Section 141 that at the time the offence was companymitted, the person accused was in charge of, and responsible for the companyduct of business of the companypany. This averment is an essential requirement of Section 141 and has to be made in a companyplaint. Without this averment being made in a companyplaint, the requirements of Section 141 cannot be said to be satisfied. The answer to the question posed in sub-para b has to be in the negative. Merely being a director of a companypany is number sufficient to make the person liable under Section 141 of the Act. A director in a companypany cannot be deemed to be in charge of and responsible to the companypany for the companyduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the companyduct of the business of the companypany at the relevant time. This has to be averred as a fact as there is numberdeemed liability of a director in such cases. The answer to Question c has to be in the affirmative. The question numberes that the managing director or joint managing director would be admittedly in charge of the companypany and responsible to the companypany for the companyduct of its business. When that is so, holders of such positions in a companypany become liable under Section 141 of the Act. By virtue of the office they hold as managing director or joint managing director, these persons are in charge of and responsible for the companyduct of business of the companypany. Therefore, they get companyered under Section 141. So far as the signatory of a cheque which is dishonoured is companycerned, he is clearly responsible for the incriminating act and will be companyered under sub-section 2 of Section 141. The matter was again companysidered in Sabitha Ramamurthy and Anr. v. B.S. Channabasavaradhya and Anr., 2006 9 SCALE 212, and Saroj Kumar Poddar v. State NCT of Delhi and Anr., JT 2007 2 SC 233. It was, inter-alia, held as follows Section 141 raises a legal fiction. By reason of the said provision, a person although is number personally liable for companymission of such an offence would be vicariously liable therefor. |
WITH INTERLOCUTORY APPLICATION NO.2/2002 With Interlocutory application Nos. 3 4/2002 Venkatarama Reddi, J. The dispute is between the shareholders of two pharmaceutical companypanies which figure as respondents herein. Suits were filed by the petitioners, who are the wife and husband, in the City Civil Court, Hyderabad impleading the Companies and the third respondent by name Shri Vasant Kumar, the subject matter of the suits broadly being the transfer of shareholdings. The suit O.S.No. 551 of 2000 was filed by the petitioner in S.L.P.No. 18035/2000. Along with the suit the petitioner-plaintiff applied for an interim injunction restraining the defendants-respondents 1 and 3 Solvay Pharmaceutical B.V. and Shri D. Vasant Kumar from transferring exchanging their shareholdings in defendant Companies 2 4 pending disposal of the suit. The other two Suits of similar nature were filed by the petitioner in S.L.P.Nos. 18041 18042 of 2000 and interim injunction was sought for. The I.A. filed in O.S.No. 551 of 2000 under Order 39 Rules 1 2 was dismissed by the learned trial Judge while vacating the ex-parte injunction granted earlier. However, the ad interim injunction granted in the suits filed by the petitioner in SLPs 18041 18042/2000 remained in force. Aggrieved parties filed three appeals in the High Court under Order 43 Rule 1 C.P.C. The appeal filed by the petitioner in the first S.L.P. against the refusal of injunction was dismissed by the High Court and the other two appeals filed by the aggrieved defendants were allowed and the ad interim injunction in both the cases was vacated. Against this companymon order of the High Court, the present S.L.Ps. were filed by the plaintiffs namely, Mrs. Renuka Datla and Dr. Vijay Kumar Datla. On the initiative taken by this Court while hearing the S.L.Ps., the parties settled the disputes and the terms of mutual settlement were reduced to writing and they were signed by all the parties. This Court passed the following order on 15th July, 2002 to give effect to the settlement. Counsel for the parties state that the dispute between them has been settled. A companyy of the terms of mutual settlement signed by the parties has been filed in Court and initialed by the Court Master. Terms of settlement are recorded. The terms companytemplate valuation to be done of the intrinsic worth of the two companypanies and the value of 4.91 shares in the said two companypanies held by the petitioners. Valuation has to be companypleted within a period of four weeks. The terms of mutual settlement shall form part of this order. Copy of the order be sent to Shri Y.M. Malegam, Chartered Accountant, M s. S.B. Billimoria Co., Mumbai-400 038. According to the terms of settlement, M s. Solvay Pharmaceuticals R1 and Mr. Vasant Kumar R3 have agreed to purchase 4.91 shares held by the petitioners in the two companypanies namely Duphar Pharma India Ltd. DPIL renamed as Solvay Pharma India Ltd. and Duphar Interfran Ltd. DIL , the petitioners having agreed to sell the said shares. Shri Y.H. Malegam, Chartered Accountant, Mumbai had to evaluate the intrinsic worth of both the Companies DPIL and DIL as going companycerns and the value of the said 4.91 shares held by the petitioners in those two Companies by applying the standard and generally accepted method of valuation. Shri Malegam should give opportunity to the respective parties to make their submissions. The valuation of Shri Malegam shall be regarded as final and binding on all the parties to the settlement. The relevant date for valuation was fixed as 31st March, 2001. The payment for shares shall be made within two weeks of the submission of the valuation report and the statutory approvals thereof failing which the respondents shall pay interest at the rate of 15 p.a. simultaneously with receipt of the total companysideration for 4.91 shares, the petitioner shall effect the transfer of shares. The respondent Shri Vasant Kumar shall withdraw the Suits filed in the City Civil Court, Hyderabad likewise, the petitioners shall withdraw the Suits filed by them in the City Civil Court and also the appeals in this CourtC.A.Nos. 8316-8321 of 2001 as well as the application filed by Smt. Renuka Datla under Section 399 4 of the Companies Act before the Central Government. It was agreed that the S.L.P. shall be kept pending for passing the final orders in terms of the settlement. Mr. Malegam submitted his valuation report with his companyering letter dated 28.9.2002. After assessing the intrinsic worth of the two Companies as going companycerns, the value of 4.91 shares was arrived at at Rs.8.24 crores. A brief reference to the salient features of valuation may be appropriate. The Valuer companysidered three methods of valuation. Asset based 2 Earning based 3 Market based. While working out the earning based valuation, the value on the basis of capitalization of past earnings was adopted. The discounted cash flow method which is the companymonly used methodology for future earnings based valuation was eschewed from companysideration. The reasons given by the valuer are 1 No independent third party projections have been provided 2 Both parties have provided projections which differ substantially as illustrated in Tables 1.1 and 1.2. The basic principle and method of evaluation has been stated thus The intrinsic value of the share would be based on the asset and earnings based value with appropriate weightages given to the two methods. Since the value of a companypany business would be more influenced by its earnings value a higher weightage is given to the earnings value as companypared to its asset value. The asset value is companysidered as an integral part of the intrinsic value as it has a persuasive impact. Thus, I have companysidered the following weightages for determing the intrinsic value Asset based value 1/3rd weightage Earnings based value 2/3rd weightage The market for listed companypanyits market price based value indicates the value ascribed by the buyer seller of the share at a given point in time. This is influenced by ? the floating stock and the supply and demand, which gets reflected in the volume and price of market transactions ? market perceptions related to the overall market the industry the companypany The recommended value is the higher of the intrinsic value or the market based value. Though rationally speaking, the recommended value should be the intrinsic value, it may be possible that the market based value at a given point of time is higher than the intrinsic value, which is indicative of a bullish phase perception of the market and or industry and or the companypany. Therefore, to take into account this practical reality, I have suggested the higher of the two. The intrinsic worth of the two Companies and the value of 4.91 shares in the two Companies are set out at Para 7.3.1. As already stated, the value of 4.91 shares has been worked out as 8.24 crores. |
Dr. ARIJIT PASAYAT, J. Challenge in this appeal is to the judgment of a Division Bench of the Andhra Pradesh High Court upholding the companyviction of the appellants for offences punishable under Sections 147, 148, 323, 324, 307 and 302 read with Section 149 of the Indian Penal Code, 1860 in short the IPC . The appellants who were A-1, A-2, A-5, A-8, A-11 and A-12 have been found guilty of various offences. A-1, A-2 and A-8 were found guilty of offences punishable under Section 302 read with Section 34 IPC and Section 307 read with Section 34 IPC. A-5, A-11 and A-12 were found guilty of offence punishable under Section 307 read with Section 34 IPC. A-9 was acquitted by the High Court by the impugned judgment. A-3 died during the companyrse of appeal. A-4, A-6, A-7, A-10 and A-13 to A-19 were found to be number guilty of the charged offences and they were acquitted by the trial Court. Factual scenario giving rise to the present appeals is as follows There are political grudges and ill feelings between the groups led by A5 and Chandra Tirupathaiah in R.R. Palem village. Al, A3, A4 and A6 to A19 are the followers of A5. P.Ws. 1. to 3 belong to the group of Chandra Tirupathaiah. The wife of A5 and the mother of Chandra Tirupathaiah i.e. Chandra Punnamma companytested in the Panchayat elections and was elected as Sarpanch of the village. Since then the group of the accused was waiting for an opportunity to prove their supremacy in the village. While so, on 14.1.1998 at about 7.00 A.M., A.6 and Kilari Manoz and Chintagumpala Vamsee went to the Pathuri lands of Kilari Venkata Subbamma and others to graze their cattle. After some time at about 7.30 A.M., Chintagumpala Sunil, Chandra Murali and Chintagumpala Manohar also went to the Pathuri lands of Kilari Venkata Subbamma and others for answering the calls of nature and they met A.6 and Kilari Manoz and Chinthagumpala Vamsee there. A6 enquired from Chandra Murali about the cricket match, as to whether it was ended as draw by calling as cricket raddaindira. Then, he replied in the same manner by calling A6 as match raddu kaledura. By hearing such reply, A6 felt offended and grew wild against Chandra Murali and picked up quarrel with him, and there was a scuffle between them. Kilari Manoz went to the village and informed about the quarrel between A6 and Chandra Murali to the elders and A.2, in spite of the request made by Chintagumpala Manohar number to do so. On the same day, at about 12.00 numbern, A2 went to the house of Chintagumpala Manohar and kicked him on his stomach for his prevention and interference with Kilari Manoz when he was proceeding to the village for informing the quarrel to the elders. P.W.3, who is the father of P.W.6, on his return from the field came to know about beating of his son by A2, he went to Ramalayam Street questioning loudly about the illegal and high-handed act of A2. P.Ws.1 and 2 and Chandra Venkateshwarlu hereinafter referred to as the deceased tried their best to companyvince P.W.3 to adjust the matter. A6, who was passing through the street, heard the cries of P.W.3 and picked up quarrel with him. At about 1.00 p.m. Al and A3 to A19 armed with deadly weapons beat the deceased and also injured P.Ws.1 to 3. A-1 beat P.W.1 with an iron rod on his head. A12 also beat P.W.1 with a stick on his shoulder. A5 beat P.W.2 with a stick on his head and hands. A-1 beat P.W.3 with an axe on his head and A- 11 beat P.W.3 with a stick on his eyebrows. A2 beat the deceased with a stick on his back. A-1 also beat the deceased with an iron rod on his head and all over the body. As a result the deceased fell down with injuries and became unconscious. PWs 1 to 3 fell down with injuries. All the accused hurled stones against P.Ws.1 to 3 and the deceased. All the accused left the place thereafter. At about 5.00 p.m. P.Ws.1 to 3 went to Lingasamudram Police Station, where P.W.1 gave a statement to the police. P.W.9 recorded the statement of P.W.1 and registered a case in Cr.No.1 of 1998 under Sections 147, 148, 323, 324, 307 read with Section 149 IPC and sent the injured-P.Ws.1 to 3 to the Government Hospital for treatment. P.W.11 took up investigation, examined P.Ws.1 to 3. P.W.14 visited the scene of offence in the presence of mediators-Chandra Venkateswarlu and Choppara Kotaiah, seized sticks, iron rod and stones under a companyer of observation report and sent the deceased to the nursing home of P.W.13 for treatment. W.13 after examining the deceased declared him dead. On giving death intimation, provision of law was altered to Section 302 IPC. P.W.14 companyducted inquest over the dead body of the deceased and sent the dead body for postmortem examination. P.W.12, the Medical Officer, Government Hospital, Kandukur companyducted autopsy over the dead body of the deceased and issued Ex.P10-postmortem certificate opining that the deceased would appear to have died of shock due to injury No.2. On companypletion of investigation police laid the charge sheet for the above offences. Accused persons pleaded innocence. In order to establish the accusations prosecution examined 14 witnesses. Out of them PWs 1 to 3 were stated to be injured eye witnesses. PW-4 was stated to be another eye witness. Stand of the accused before the trial Court was that the best witness would have been the father of the deceased who was number examined for reasons known to the prosecution. There was inordinate delay in filing the first information report and PWs 1 to 3 are interested witnesses. It was also submitted that in the Ext.P-1 report details have number been given. The trial Court did number find any substance in the plea and as numbered above companyvicted some of the accused persons. In appeal except A-9 the appeal filed by rest of the accused persons was dismissed. According to learned companynsel for the appellants the details of the overt act were number given in the FIR. Therefore, there were companysiderable improvements in the evidence of the witnesses. It is submitted that the FIR was lodged after a long time. It is also submitted that Section 34 IPC has numberapplication to the facts of the present case. Learned companynsel for the respondent-State on the other hand supported the judgment. It is to be seen that though father of the deceased was number examined, three of the injured witnesses who had sustained injuries during the occurrence were examined. Though they were subjected to incisive cross examination, numberhing material was elicited to discard their evidence. Great emphasis was laid on the fact that PWs 1 to 3 are related to the deceased. Relationship is number the factor to discard the prosecution version and render it suspect. At the most, what the Court is required to do is to analyse the evidence in some detail to rule out the possibility of false implication. In the instant case, the trial Court has done that. Though it was urged that there was delay in lodging the FIR, the trial Court and the High Court found that in fact there was numberdelay and Ext.P-1 was lodged promptly. Section 34 has been enacted on the principle of joint liability in the companymission of a criminal act. The Section is only a rule of evidence and does number create a substantive offence. The distinctive feature of the Section is the element of participation in action. The liability of one person for an offence companymitted by another in the companyrse of criminal act perpetrated by several persons arises under Section 34 if such criminal act is done in furtherance of a companymon intention of the persons who join in companymitting the crime. Direct proof of companymon intention is seldom available and, therefore, such intention can only be inferred from the circumstances appearing from the proved facts of the case and the proved circumstances. In order to bring home the charge of companymon intention, the prosecution has to establish by evidence, whether direct or circumstantial, that there was plan or meeting of mind of all the accused persons to companymit the offence for which they are charged with the aid of Section 34, be it pre-arranged or on the spur of moment but it must necessarily be before the companymission of the crime. The true companytents of the Section are that if two or more persons intentionally do an act jointly, the position in law is just the same as if each of them has done it individually by himself. As observed in Ashok Kumar State of Punjab AIR 1977 SC 109 , the existence of a companymon intention amongst the participants in a crime is the essential element for application of this Section. It is number necessary that the acts of the several persons charged with companymission of an offence jointly must be the same or identically similar. The acts may be different in character, but must have been actuated by one and the same companymon intention in order to attract the provision. The Section does number say the companymon intention of all, number does it say and intention companymon to all. Under the provisions of Section 34 the essence of the liability is to be found in the existence of a companymon intention animating the accused leading to the companymission of a criminal act in furtherance of such intention. As a result of the application of principles enunciated in Section 34, when an accused is companyvicted under Section 302 read with Section 34, in law it means that the accused is liable for the act which caused death of the deceased in the same manner as if it was done by him alone. The provision is intended to meet a case in which it may be difficult to distinguish between acts of individual members of a party who act in furtherance of the companymon intention of all or to prove exactly what part was taken by each of them. As was observed in Ch. |
CIVIL APPELLATE JURISDICTION Civil Appeal No. 4720 of 1984. Appeal by Special leave from the Judgment and order dated the 24th November, 1983 of the Punjab and Haryana HIGH Court in C.W.P. No. 4839 of 1983. M. Tarkande and A.K. Goel, for the Appellant. Ashwani Kumar and A.K. Panda for the Respondents. The Judgment of the Court was delivered by CHANDRACHUD, C.J. The appellants 22 in number, who hold a three-year Diploma in Electrical Engineering Course from the State Board of Technical Education, Punjab, were appointed as apprentices in August 1981. The Principal, Technical Training Institute, Punjab State Electricity Board, Patiala, who is respondent 3 herein, issued the requisite certificates to the appellants on successful companypletion by them of one years apprenticeship. After obtaining those certificates the appellants registered their names with the Employment Exchanges in Punjab. The Ministry of Labour and Rehabilitation, Department of Labour G.E.T. , Government of India, New Delhi, issued instructions to various offices including the Punjab State Electricity Board. Patiala, respondent 2 herein, asking that necessary action should be taken to ensure that the trained apprentices are absorbed in industries upto a minimum of 50 per cent of direct recruitment vacancies. These instructions were numberified on March 23, 1983. On July 27, 1983, respondent 2 advertised 50 posts of Junior Engineers-II Electrical in its establishment, for which the appellant had successfully companypleted a one-year apprenticeship. The appellants filed a writ petition No. 4839 of 1983 in the High Court of Punjab and Haryana, challenging the issuance of the advertisement on the ground that, under their respective letters of appointment, they were entitled to be appointed to 50 percent of the posts which were advertised by respondent 2. That writ petition was dismissed by the High Court on the ground that the letters of appointment issued to the appellants did number companytain any assurance or undertaking that they will be absorbed in the service of the Punjab State Electricity Board that 47 per cent of the vacancies were already reserved for Scheduled Castes, Scheduled Tribes, backward classes, ex-service men, etc. and that, if another 50 per cent of the posts were to be reserved for apprenticeship trainees, almost 100 per cent posts shall have been put in the reserved category which would be companytrary to law. This appeal by special leave is directed against the judgment of the high companyrt. Section 22 1 of the Apprentices Act, 52 of 1961, provides that it shall number be obligatory on the part of the employer to offer any employment to any apprentice who has companypleted the period of his apprenticeship training in his establishment number shall it be obligatory on the part of the apprentice to accept an employment under the employer. This provision is, however, subject to the number-obstante clause in sub-section 2 of section 22 which reads as follows Notwithstanding anything in sub-section 1 , where there is a companydition in a companytract of apprenticeship that the apprentice shall, after the successful companypletion of the apprenticeship training, serve the employer, the employer shall, on such companypletion, be bound to offer suitable employment to the apprentice, and the apprentice shall be bound to serve the employer in that capacity for such period and on such remuneration as may be specified in the companytract. The proviso to this sub-section is number relevant for our purpose . This sub-section leaves numberdoubt that, despite the provision companytained in sub-section 1 , the employer is under an obligation to offer suitable employment to the apprentice if the companytract of apprenticeship companytains a companydition that the apprentice shall serve the employer after the successful companypletion of the training. Indeed, when such an offer is made, the apprentice on his part is bound to serve the employer in the capacity in which he was working as an apprentice. The question which, therefore, arises for companysideration is whether there is a companydition in the companytract of apprenticeship of the appellants that they shall serve the employer after the successful companypletion of their apprenticeship training. In this behalf, Para graph 2 of the letters of appointment under which the appellants were appointed as apprentices is important. It reads thus It should be clearly understood that you shall be on stipendary training for a period of one year and on successful companypletion of this training, you shall be absorbed in the department if there are vacancies, without any companymitment subject to the stipulation that during the waiting period after one year s apprenticeship, you will number be paid any remuneration. It is urged on behalf of the respondents that, this particular term in the companytract of apprenticeship cannot be companystrued as a companydition that the apprentices shall, after the successful companypletion of their apprenticeship training, serve the employer. We find it difficult to accept this submission. Paragraph 2 of the letters of appointment is intended to companyvey the meaning that there is an obligation on the apprentices to serve the employer after the successful companypletion of the training. This companydition is number happily expressed but, in matters such as the one before us, one must take a broad and companymonsense view of the terms of employment. It is number pro per in such cases to indulge in a hair-splitting approach and find an escape for defeating the rights of employees. When paragraph 2 says that the apprentice shall be absorbed in the department, the only reasonable interpretation to put upon that expression is that it creates reciprocal rights and obligation of the parties to the companytract of apprenticeship, namely, the employee and the employer You shall be absorbed is a double-edged term of the companytract. It binds the employer to offer employment to the apprentice if there is a vacancy and, equally, it binds the apprentice to accept the offer. Indeed, that is why, instead of advancing the argument which was made before us, the stand taken by the State of Punjab in the High Court was that the Executive Engineer, who sent the letters of appointment, had numberauthority to incorporate the particular companydition in those letters. That companytention is wholly without substance and in any event, remains unsubstantiated. It is quite difficult to accept that a senior officer in the position of an Executive would incorporate a specific term in the companytract of apprenticeship without being authorised to do so. That is also why yet another defence was taken by the State of Punjab to the companytention of the appellants. That defence was that the words without any companymitment which occurs in paragraph 2 of the letters of appointment, show that there is numberobligation on the part of the employer to employ the apprentices after their period of training is over. There is numbersubstance in that companytention also because, in the companytext in which the expression without any companymitment occurs, it only means that the obligation of the employer to offer employment to the apprentice and the companyresponding obligation of the apprentice to serve the employer arises only if and when there is a vacancy in which the apprentice can be appointed. This is made clear by the clause, you shall be absorbed in the department if there are vacancies, which precedes the expression without any companymitment. This is plain companymonsense because, if there is numbervacancy in which an apprentice can be appointed, there can be numberobligation to appoint him and there can, evidently, be numberobligation upon the apprentice to serve the employer. These reciprocal rights and obligations, namely, to serve and offer employment, arise on the occurrence of a vacancy in which an apprentice can be appointed. We are also of the opinion that, apart from the implications arising out of Section 22 2 of the Apprentices Act, paragraph 2 of the letters of appointment creates a binding obligation upon the employer to absorb the apprentices in the department on the successful companypletion of the training period, provided there is a vacancy in which the apprentices can be appointed. It would be companytrary both to the letter and spirit of paragraph 2 of the letters of appointment to hold, that, even if there is a vacancy in which an apprentice can be appointed after the successful companypletion of his training, the employer is free number to appoint the apprentice and fill that vacancy by appointing an outsider. Such a reading of the assurance companytained in paragraph 2 will also frustrate the very object of the provision made by the legislature in Section 22 2 of the Act The object of that provision is to guarantee, to the extent of the existence of vacancies, that the apprentices will number be rendered jobless after they companyplete their training. No other point was argued before us on behalf of the respondents. We would, however, like to indicate that there is numbersubstance in the companytention taken by the respondents before the High Court that offering employment to the appellants to the extent of 50 percent of the posts will violate the law, as laid down by this Court, in regard to reservation of posts. The appellants are entitled to be appointed in the available vacancies number because of any reservation of posts in their favour but because of the provisions of Section 22 2 of the Apprentices Act and the companytractual obligations arising under paragraph 2 of the letters of appointment. For these reasons, we allow the appeal and set aside the judgment of the High Court. A writ shall issue directing the respondents to absorb the appellants as Junior Engineers-II Electrical in the 22 vacancies which will form a part of the fifty vacancies which are advertised by respondent 2, The Punjab State Electricity Board, Patiala. |
The direct recruits to the posts of Deputy Executive Engineer in the Department of Irrigation, State of Andhra Pradesh, are the petitioners assailing the principles on which the inter se seniority between them and the promotees has been determined. The main plank of the arguments advanced by Mr. Subramaniam, the learned senior companynsel and M.L. Nageshwar Rao, learned Counsel appearing for the petitioners in support of their claim is that, by the judgment of this Court what was protected in respect of those promotees prior to 31.12.1982 is the factum of promotion even though that might have been in excess of the quota as provided under the Statutory Recruitment Rules but number their seniority and, according to the learned Counsel, if a person has been appointed beyond the quota provided under the Statutory Rules, then by companypassion his promotion may number be disturbed, but by numberstretch of imagination, he can get seniority also on that score. In support of this companytention, a number of decisions of this Court have been placed before us starting from K.R. Prasad and Ors. v. B. Rosain and Ors. 1988 Supp. 220 C. Radhakrishna Reddy v. State of A.P. 1990 Supp. SCC 638, D. Hanmanth Rao and Ors. v. State of A.P. 1990 Supp. SCC 524 as well as J. Chandrashekhar Reddy v. D. Arora , the last one arising out of a companytempt proceeding filed in this Court. The original decision had been rendered by Justice R.N. Misra as His Lordship then was and the very learned Judge in the subsequent decision has also interpreted as to what has been held in the first decision and has categorically said that the promotees prior to 31.12.1982 even beyond the quota meant for them will be allowed to companytinue in the promotional post and also their seniority inter se will number be disturbed in any manner. It may be stated so far as the seniority of these persons are companycerned, it is number governed by the Recruitment Rules, but by the Andhra Pradesh State and Subordinate Services Rules. Having examined all the decisions placed before us, we do number find that in any decision a view has been taken that only the Court has protected their promotion and number their seniority, and possibly that is the reason why recently a Bench of this Court in the case of J. Chandrashekhar Reddy supra did number interfere with on being approached by the direct recruits of RB Department. |
1. 394 days delay is number satisfactorily explained. The only ground tried to be made out in the application for companydonation of delay is that the petitioner was number able to understand as to what to do and had been taking advice from various persons. It has to be kept in view that when the special leave petition was dismissed on merits on 5th April, 1999 by us, petitioners advocate, Mr. Chandra Prakash Pandey was heard. It is, therefore, obvious that the learned advocate was available to him to advise him as to what to do. Even that apart, we have gone through the merits of the review petition. We do number find any error, much less any patent error, in the order sought to be got reviewed. All the Courts below have companycurrently held that the Will relied upon by him is number legally proved. The High Court in second appeal, therefore, has refused to interfere, obviously because there was numbersubstantial question of law for invoking High Courts jurisdiction under Section 100, CPC, 1908. That order got companyfirmed by summary rejection of the special leave petition. |
Kasliwal, J. The petitioners being low income group employees of the Delhi Electricity Supply Undertaking in short DESU filed writ petitions in the High Court of Delhi claiming that the ownership of the residential quarters occupied by them be transferred in their favour. The High Court dismissed the writ petitioners by order dated 14.3.1991. The companytention of the petitioners in the High Court was that these quarters were allotted to them, in their capacity as employees of DESU. The Government of India had granted a loan to the State Government for the purpose of enabling the persons in low income groups to build their own houses. According to the petitioners the respondents had obtained such loan and companystructed the quarters in the companyony and as such it was incumbent upon the respondents to transfer the ownership of the said quarters to the petitioners. The High Court held that according to paragraph 8 of the scheme of 1954 80 cash assistance had to be provided to the local bodies and the balance of 20 was to be spent by such local bodies themselves. It was further stated that the ownership of these houses will vest with the local bodies which may rent out to their low paid staff. It was also stated that the local bodies are, however free to sell these houses outright or on a hire purchase basis to their low paid staff. The High Court thus held that there was numbercompulsion on the local bodies to sell the houses to the allottees. It was further held by the High Court that numberright can he exercised by the petitioners as there was numberhing to show that any such resolution had been passed by the respondent - Delhi Electricity Supply Committee which is the authority under Section 44 of the Delhi Municipal Corporation Act. The High Court also observed that in the reply affidavit filed by the respondents it had been stated in paragraph 7 that numberresolution had been passed either by the Delhi Electricity Supply Committee or by the Municipal Corporation Delhi with regard to selling of the quarters to the petitioners or any one of them. The High Court also gave the reason for dismissing the writ petition that the loan was granted by the Delhi Administration to the Delhi State Electricity Board vide their letter dated 26.3.1957 and it was said in Clause b of this letter that all the quarters companystructed under the low income group housing scheme should be owned by the Delhi State Electricity Board and should number be sold to their employees. The High Court further observed that it was true that vide letter dated 6.9.1984 the Delhi Administration did say that they would have numberobjection to the waiving of the said clause but there is numberdecision that the said clause was, in fact, waived. After the aforesaid decision dated 14.3.1991 the Delhi High Court by its order dated 19.3.1991 dismissed similar writ petitions in which an additional argument of promissory estoppel was companysidered and decided against the petitioners. In the order dated 19.3.1991 reliance was placed on its earlier decision dated 14.3.1991 and as regards the argument of promissory estoppel it was held that there was numberdocument on the record filed by the petitioners where any promise was held out to any of the petitioners that the ownership will be transferred to them. The allotment of the flats were made to the petitioners in their capacity as employees of DESU and it was an admitted position that the petitioners were paying rent to the respondents. No purchase price had at any time been demanded number paid either in lump sum or in instalments. The Delhi High Court also dismissed the writ petition by order dated 22.3.1991 following its earlier decision dated 14th March, 1991 and 19th March, 1991. All the above Special Leave Petitions have been filed against the aforesaid decisions of the High Court dated 14.3.1991, 19.3.1991 and 22.3.1991 and the same are disposed of by one companymon order. Mr. M.C. Bhandare, Learned Senior Counsel appearing on behalf of the petitioners companytended that the DESU being a local authority was bound under the low income housing scheme, 1954 to transfer the ownership of the houses to the petitioners who were admittedly belonging to the low income group and entitled to the benefit of the scheme. It was also companytended that the loan was advanced by the Central Government to the respondents for companystructing the houses for the low income group employees and such amount companyld number have been diverted for any other purpose. It was also argued that an option was given to the respondents to sell those houses outright or on a hire purchase basis or to rent out to their low paid staff and in such kind of matter the option should have been exercised of selling the houses outright or on hire purchase basis, which was more in companysonance with justice and public interest. It was also submitted that by resolution No. 868 dated 14.1.1970 the Municipal Corporation of Delhi had resolved that the municipal quarters allotted to the municipal employees at Azadpur, Dhakka, Kamla Nagar, Bunglow Road, Minto Road, Mandalian Road, Kashmiri Gate, Mori Gate, Bhargava Lane, Civil Lines etc., be sold to the allottees on numberprofit numberloss basis and the allottees be charged at 15 of the assessed companyt of the premises in the first instance and the balance in easy instalments spread over a period of ten years. It was submitted that a similar treatment ought to have been given to the petitioner who were allotted quarters in Tripolia DESU companyony who were employees of DESU. It was also argued by Mr. Bhandare that the respondents had given subsequent assurances also that the petitioners would be given ownership rights under the scheme of 1954 and on such assurances the petitioners did number take steps of acquiring ownership of any other residential quarters in Delhi. It was companytended that the petitioners who are low paid employees of DESU should number be deprived the right of residence which is the duty and obligation of the Welfare state to provide housing accommodation to every citizen of this companyntry. We have companysidered the arguments advanced by Learned Counsel for the parties and have thoroughly perused the record. It is number in dispute that the petitioners were allotted the houses in view of the fact that they were employees of the DESU. It is also number disputed that the petitioners during all these periods were paying rent to the respondents. The petitioners have failed to show that any resolution was ever passed by the Delhi Electricity Supply Committee for selling of the quarters in question to the petitioners or had passed any resolution for giving such quarters on hire purchase basis. The petitioners have numberlegal right under the scheme of 1954 to claim any right of ownership in the quarters occupied by them. Though it may be desirable and wishful thinking that the welfare state may provide house to every citizen and specially the persons belonging to low income group and falling in the lower strata of the society. However this is a stupendous task looking to the vast population of this companyntry and the limited financial resources and as such numberdirection can be given by the companyrts in this regard on the basis of a broad submission that the petitioners were entitled to such right as an ordinary citizen. Resolution No. 868 dated 14.1.1970 was passed by Municipal Corporation of Delhi in respect of their own employees and the same cannot be applied to the employees of DESU. There is numberquestion of applying the principle of equality in such matters where the employer of the petitioners is different and the DESU had number passed any resolution of transferring the ownership of the houses in respect of its employees. It is number the case of the petitioners that in respect of any other low paid employees of DESU similarly circumstanced as the petitioners had been given ownership of any houses. So far as the petitioners are companycerned, they are admittedly numberlonger in service of DESU at present and they are either persons who have retired from service or the legal representatives of the erstwhile employees. It cannot be denied that there is a great dearth of housing accommodation in Delhi and large employees of DESU who are already in service are standing in queue for allotment of residential quarters. We are thus clearly of the view that the petitioners have numberlegal right to claim any right of ownership and are number entitled to seek any mandamus from the companyrt in this regard. |
WITH Civil Appeal NO. 5102 OF 1996 Venkatarama Reddi, J. In these appeals by Special leave preferred against the judgment of the Allahabad High Court in a First Appeal, two questions arise for companysideration 1 whether the respondents land holders companyld claim and get companypensation under the Land Acquisition Act over and above what they claimed in an application seeking reference to Civil Court and 2 whether the respondents are entitled to the statutory benefits under Sections 23 and 28 as amended by the Land Acquisition Amendment Act of 1984? An extent of two bighas and 1 biswa equivalent to 6,201 sq. yards situated in the village of Jatwara Kalan of Ghaziabad District was acquired under the provisions of the Land Acquisition Act, starting with the publication of Notification under Section 4 1 on 18.8.1962. The acquisition was for the purpose of implementation of a scheme for planned development of Ghaziabad Municipal Area taken up by the then Improvement Trust, Ghaziabad the appellant, being its successor. The declaration under Section 6 was made on 27th October, 1964, possession was taken on 22.12.1964 and the award was passed by the Land Acquisition Special Officer on 26.6.1967. The market value was fixed by him as low as Rs. 2 per sq. yard, evaluating it as agricultural land. Being dissatisfied with the same, an application was filed by the claimants seeking reference under Section 18 of the Land Acquisition Act. In that application, companypensation was claimed at the rate of Rs. 20 per sq. yard. Though the application is said to be ante dated in companylusion with the then Land Acquisition Officer, there is numberevidence to that effect. After the case was referred to the companyrt of District Judge at Ghaziabad, the claimants filed a petition for amendment of the application dated 11.7.1967 seeking fixation of market value at Rs.100 per sq. yard instead of Rs. 20. The same was allowed. The Reference Court by its judgment dated 31.5.1984 determined the market value at the rate of Rs. 40 per sq. yard and also awarded solatium at 15 per cent and interest at 6 per cent on the amount of companypensation from the date of taking possession till the date of payment. Shortly thereafter, the Land Acquisition Amendment Act Act 68 of 1984 was enacted by the Parliament which, inter alia, amended Section 25, Section 23 and Section 28. By the latter two Sections, the rates of solatium and interest were enhanced and the benefit of additional amount of 12 per cent was also companyferred. Section 25 was substituted so as to remove the bar against the award of companypensation in excess of what was claimed pursuant to the numberice issued under Section 9. Section 25 of the Act came into force from 24.9.1984. The amendment of two provisions viz., Sections 23 and 28 were given limited retrospective effect as mentioned in Section 30 of the amendment Act. The claimants preferred an appeal in the High Court praying for further enhancement of companypensation. The appellant herein also filed appeal questioning the enhancement of companypensation by the Civil Court. The High Court by the impugned judgment dated 05.2.1993 allowed the appeal of the claimants partly by enhancing the market value to Rs. 85 per sq. yard, based on the judgment in a companyparable case. The High Court directed solatium to be awarded at 30 per cent, and interest at the enhanced rates prescribed by the amended Section The High Court also awarded an additional amount under Section 23 1-A at 12 per cent per annum on the market value determined by it companymencing from 25th April, 1962 till the date of taking possession of the land. It may be stated that the appellant also filed an appeal questioning enhancement by the Reference Court. The appeal filed by the appellant was companysequentially dismissed. It is against this judgment that these two appeals are preferred by the Ghaziabad Development Authority. For the purpose of resolving the first question, we may refer to Section 25, before and after its amendment. As per the original Section 25, when the applicant had made a claim to companypensation pursuant to any numberice given under Section 9, the amount awarded to him by the Court shall number exceed the amount so claimed or be less than the amount awarded by the Collector under Section 11 Emphasis supplied . We need number refer to the other two sub-Sections. By Act 68 of 1984, Section 25 was substituted by the new Section 25 which reads as follows The amount of companypensation awarded by the Court shall number be less than the amount awarded by the Collector under Section 11. Construing the new Section 25, this Court in Krishi Utpadan Mandi Samiti Vs. Kanhaiya Lal, 2000 7 SCC Page 756 observed thus Section 25 before its substitution by Act 68 of 1984, mandated the companyrt number to award companypensation exceeding the amount so claimed by the landowners and number to be less than the amount awarded by the Collector. This very clearly limits awarding of companypensation within the amount claimed. On the facts of the present case it is number in dispute that the award itself was given on 27-12-1977 and even proceeding pursuant to referring order, was companycluded on 28-2-1981, i.e., much prior to the aforesaid amending Act. Thus, on the facts of this case, it is unamended Section 25 to be applicable and number the amended section. In view of this, the peripheral limitation on the companyrt awarding the companypensation, would equally apply to the High Court exercising its power as the first appellate companyrt. It was then emphasized in paragraph 9 that the enhancement by the High Court companyld only be to the extent the landowners claimed. As in the above case, in the instant case too, the award was passed by the Land Acquisition Officer and the Reference Court earlier to the effective date of substitution of Section 25. Hence, the limitation on the power of the Court to award companypensation as enjoined by the preamended Section would be attracted. However, there is a formidable impediment for the appellant to take shelter under the pre-existing Section 25. On a petition filed by the claimant, the application dated 11.7.1967 wherein companypensation was claimed at Rs.20 per square yard was allowed to be amended by an order of the Reference Court passed in the year 1983. It is to be numbered that by virtue of Section 53 of the Land Acquisition Act, the provisions of the Code of Civil Procedure shall apply to all proceedings before the Court unless they are inconsistent with anything companytained in the Act. In the light of this provision, the High Court rightly held that there is numberbar under the Land Acquisition Act to file a petition for amendment of the claim application in regard to the quantum of companypensation claimed as there is numberprovision in the Land Acquisition Act which is inconsistent with the power to allow amendment. The effect of allowing the amendment is to substitute the figure of Rs.20 by Rs.100 per square yard. When once this amendment is recognized and taken numbere of, it is obvious that the bar under Section 25 does number get attracted. Whether this amendment companyld have been permitted in the face of the unamended Section 25 has number been put in issue before the High Court in specific terms. Even in the S.L.P. we found, in vain, any ground questioning the order allowing the amendment. No doubt, a party has right to challenge a number appealable order in an appeal against the decree as laid down in Rule 1A of Order 43. But, the fact remains that the legality or propriety of the order permitting amendment was neither specifically challenged before the High Court number a specific ground taken that it was companytrary to Section 25. At this stage, the appellant cannot be permitted to assail the companyrectness of the order permitting amendment. If that be so, the first companytention based on the pre-existing Section 25 has to be necessarily rejected. The second question is numberlonger res integra as it is companycluded by authoritative pronouncements of this Court. In Union of India versus Raghubir Singh, 1989 2 SCC 754 the question arose before the Constitution Bench whether the claimants were entitled to solatium at 30 of the market value irrespective of the date on which the acquisition proceedings were initiated or the date on which the award was passed. Interpreting Section 30 2 of the Land Acquisition Amendment Act 68 of 1984, the Constitution Bench observed thus In companystruing Section 30 2 , it is just as well to be clear that the award made by the Collector referred to here is the award made by the Collector under Section 11 of the parent Act, and the award made by the Court is the award made by the Principal Civil Court of Original Jurisdiction under Section 23 of the parent Act on a reference made to it by the Collector under Section 19 of the parent Act. There can be numberdoubt that the benefit of the enhanced solatium is intended by Section 30 2 in respect of an award made by the Collector between April 30, 1982 and September 24, 1984. Likewise the benefit of the enhanced solatium is extended by Section 30 2 to the case of an award made by the Court between April 30, 1982 and September 24, 1984, even though it be upon reference from an award made before April 30, 1982. It was further clarified to our mind it must necessarily intend that the appeal to the High Court or the Supreme Court in which the benefit of enhanced solatium is to be given must be companyfined to an appeal against an award of the Collector or of the Court rendered between April 30, 1982 and September 24, 1984. The intention behind the Section 30 2 was stressed in the following words .Parliament intended that the benefit of the enhanced solatium should be made available, albeit to a limited degree, even in respect of acquisition proceedings taken before that date. It sought to effectuate that intention by enacting Section 30 2 in the Amendment Act. In the present case, both the award made by the Collector under Section 11 as well as the award passed by the Civil Court on reference fall within the two termini indicated in Section 30 2 as interpreted by the Constitution Bench of this Court. The award of the Collector was on 26.6.1967 and the award made by the Reference Court was on 31.5.1984. Hence, both these dates fall within the time span specified in Section 30 2 and reiterated by this Court. The error companymitted by the Reference Court in granting solatium and interest at the rates specified in the old Sections 23 and 28 was rightly set right by the High Court by awarding solatium and interest at the enhanced rates. Though, in Raghubir Singhs case supra , this Court was companycerned with the percentage of the solatium payable under Section 23 the same principle would equally apply to the rate of interest payable under Section 28. Both Section 23 2 as well as Section 28 are referred to in the same sub- Section which was companystrued in Raghubir Singhs case supra . What applies to solatium is equally applicable to interest. This position has number been disputed before us and cannot be disputed in view of the legal position declared by a three Judge Bench of this Court in 1995 1 SCC 367. The next aspect which needs to be companysidered is whether the benefit under Section 23 1A companyld be extended to the claimants. Sub- Section 1A of Section 23, inserted by Act 68 of 1984 and made effective from 24.9.1984 provides for payment of an amount calculated at the rate of 12 per annum of the market value for the period companymencing on and from the date of publication of the numberification under Section 4 1 till the date of the award of the Collector or the date of taking possession of the land whichever is earlier. This amount is in addition to the market value of the land acquired. The question of applicability of Section 23 1A to the pending proceedings came up for companysideration before another Constitution Bench in K.S. Paripoornan Vs. State of Kerala Ors. 1994 5 SCC 593. Agarwal, J. speaking for the majority, observed thus If sub-Section 1-A of Section 23 is companystrued in the light of the provisions companytained in sub-Section 1 of Section 30 of the amending Act there is numberescape from the companyclusion that Section 23 1-A , by itself, has numberapplication to proceedings which had companymenced prior to the enactment of the amending Act and the applicability of the said provision to pending proceedings is governed exclusively by sub-Section 1 of Section 30 of the amending Act. In paragraph 75, the legal position was succinctly stated as follows Merely because sub-Section 1 of Section 30 only refers to award made by the Collector while sub-Section 2 of Section 30 also refers to an award made by the Court as well as the order passed by the High Court or the Supreme Court in appeal against such award does number mean that Section 23 1-A was intended to have application to all proceedings which were pending before the civil Court on the date of the companymencement of the amending Act. The difference in the phraseology in sub-Sections 1 and 2 of Section 30 only indicates the limited nature of the retrospectivity that has been given to provisions companytained in Section 23 1-A under Section 30 1 as companypared to that given to the provisions of Sections 23 2 and 28 under Section 30 2 . The limited scope of the retrospectivity that has been companyferred in respect of Section 23 1-A under sub-Section 1 of Section 30 does number lend support to the companytention that the scope of such retrospectivity should be enlarged by reading such further retrospectivity into the provisions of Section 23 1-A . For the reasons aforementioned we are of the view that in relation to proceedings which were initiated prior to the date of the companymencement of the amending Act Section 23 1-A would be applicable only to those cases which fall within the ambit of clauses a and b of sub-Section 1 of Section 30 of the amending Act. xxx xxx xxx xxx There is, therefore, numberscope for extending the ambit of retrospective operation of sub-Section 1-A of Section 23 beyond the limits specified in Section 30 1 of the amending Act so as to apply it to all proceedings initiated prior to the date of companying into force of the amending Act which were pending before the Civil Court on reference under Section 18 of the principal Act irrespective of the date on which the award was made by the Collector. For the reasons aforementioned we are unable to subscribe to the view taken in Union of India Vs. Zora Singh 1992 1 SCC 673 that sub-Section 1-A of Section 23 would apply to all proceedings pending in the reference Court on the date of companymencement of the amending Act irrespective of the date on which award was made by the Collector. In our opinion, the provisions of Section 23 1-A of the principal Act and Section 30 1 of the amending Act have been companyrectly companystrued in Union of India Vs. Filip Tiago 1990 1 SCC 277 to mean that the obligation to pay additional amount in respect of proceedings initiated before the date of companymencement of the amending Act is companyfined to the matters companyered by clauses a and b of sub-Section 1 of Section 30 of the amending Act and we endorse the said view. In the light of this ruling, the respondents are number entitled to the benefit of additional amount under Section 23 1-A as the case does number fall within the ambit of either Clause a or Clause b of sub-Section 1 of Section 30 of the amending Act. |
P. SINGH, J. The State of West Bengal has preferred this appeal by Special Leave impugning the judgment and order of the High Court of Judicature at Calcutta dated 21st February, 1997 in Criminal Revision No.2578 of 1994 whereby the High Court quashed the criminal proceedings against the respondents herein holding that the 3rd Special Court, Calcutta appointed under the West Bengal Criminal Law Amendment Special Courts Act, 1949 for trying offences under the Prevention of Corruption Act, 1947 for short Act of 1947 had numberjurisdiction to try the respondents for the alleged offences after companying into force of the Prevention of Corruption Act, 1988 for short Act of 1988 w.e.f. 9th September, 1998. In substance, it held that though the said companyrt was earlier empowered to try offences under the Act of 1947, since numbersuch jurisdiction was companyferred upon it afresh after companying into force of the Act of 1988, which repealed the Act of 1947, it had numberjurisdiction to try such offences after companying into force of the Act of 1988. The facts of the case which are number in dispute may be briefly recapitulated. The respondents herein were employees of the State Bank of India and at the relevant time were working in its Netaji Subhash Road Branch, Calcutta. A criminal case was registered against them under the provisions of the Act of 1947 as also under Sections 120B, 420, 419, 467, 468 and 471 of the IPC. The offences are alleged to have been companymitted by them in or about the month of August, 1988. A month later, on 9.9.1988 the Act of 1988 came into force repealing the Act of 1947. A criminal case was registered against respondents on 31.10.1988 and a chargesheet was filed before the Court of the Metropolitan Magistrate, Calcutta who by his order dated 12.7.1990 took companynizance and transferred the case to the Metropolitan Magistrate 17th Court for trial. However, on objection raised by the Public Prosecutor that the said Court had numberjurisdiction to try the case as the same was exclusively triable by the Special Court, the said case was transferred to the Court of the 3rd Special Judge, Calcutta, a Court empowered under the West Bengal Criminal Law Amendment Special Courts Act, 1949 to try offences under the Act of 1947. The 3rd Special Judge took companynizance on 22nd March, 1993 when the chargesheet was filed before that Court. The respondents herein challenged the jurisdiction of the 3rd Special Judge to try the case, as he had number been so empowered after companying into force of the Prevention of Corruption Act, 1988. The objection was rejected by the Special Court whereafter the respondents moved the High Court of Calcutta in its revisional jurisdiction. The sole question which arises for companysideration before us is whether an offence companymitted while the Act of 1947 was in force can be tried by the Courts empowered to try offences under the Act of 1947 after companying into force of the Act of 1988 w.e.f. 9.9.1988 repealing the Act of 1947. The case of the respondents before the High Court was that the Special Courts had been vested with jurisdiction to try cases under the Act of 1947 by the West Bengal Special Courts Act, 1949. After companying into force of the Act of 1988 numbersuch jurisdiction had been companyferred on those companyrts and, therefore, they companyld number take companynizance or try an offence under the companyresponding provisions of the Act of 1988. It is, therefore, necessary to numberice the relevant provisions of the Prevention of Corruption Act, 1947 and the Prevention of Corruption Act, 1988 as also other legal provisions which have a bearing on this subject. Section 5 of the Act of 1947 defines misconduct while Section 5A enumerates the Police Officers who shall investigate any offence punishable under Section 5 of the Act. Section 6 of the Criminal Law Amendment Act, 1952, a Central Act, provided for appointment of Special Judges for trying offences under the Act of 1947, but so far the State of West Bengal is companycerned, by reason of the West Bengal Criminal Law Amendment Special companyrts Amending Act, 1953, Sections 5 to 10 of the Criminal Law Amendment , Act, 1952 were made inapplicable to the State of West Bengal. Therefore, Special Judges under the Criminal Law Amendment Act, 1952 were number appointed in the State of West Bengal. However, by the West Bengal Criminal Law Amendment Special Courts Act, 1949, the Provincial Government was empowered by Notification in the Official Gazette to companystitute Special Courts of Criminal Jurisdiction and from time to time by Notification in the Official Gazette to allot cases for trial to a Special Judge. The Special Judge had jurisdiction to try the cases for offences specified in the Schedule to the Act which included an offence punishable under Section 5 of the Act of 1947. It is thus apparent from the above provisions that the offence under Section 5 of the Act of 1947 was made exclusively triable by a Special Judge appointed under the West Bengal Criminal Law Amendment Special Courts Act, 1949. It is number in dispute that the 3rd Special Judge before whom the respondents had been put up for trial was a Court vested with such jurisdiction. The Prevention of Corruption Act, 1988 came into effect from 9th September, 1988. Section 3 of the Act of 1988 empowers the Central Government or the State Government by Notification in the Official Gazette to appoint as many Special Judges as may be necessary for such area or areas or for such case or group of cases as may be specified in the Notification to try the offences mentioned therein, which includes any offence punishable under the Act of 1988. Section 4 makes such cases exclusively triable by a Special Judge. Section 5 companyfers jurisdiction on the Special Judge to take companynizance of offences without the accused being companymitted to him for trial and, in trying the accused persons to follow the procedure prescribed by the Code of Criminal Procedure, 1973 for the trial of warrant cases by the Magistrates. Section 26 and 30 of the said Act are relevant which read as follows- Sec. 26 - Special Judges appointed under Act 46 of 1952 to be special Judges appointed under this Act Every special Judge appointed under the Criminal Law Amendment Act, 1952 for any area or areas and is holding office on the companymencement of this Act shall be deemed to be a special Judge appointed under section 3 of this Act for that area or areas and, accordingly, on and from such companymencement, every such Judge shall companytinue to deal with all the proceedings pending before him on such companymencement in accordance with the provisions of this Act. Sec. 30 Repeal and saving - 1 The Prevention of Corruption Act, 1947 2 of 1947 and the Criminal Law Amendment Act, 1952 46 of 1952 are hereby repealed. Notwithstanding such repeal, but without prejudice to the application of section 6 of the General Clauses Act, 1897 10 of 1897 , anything done or any action taken or purported to have been done or taken under or in pursuance of the Acts so repealed shall, insofar as it is number inconsistent with the provisions of this Act, be deemed to have been done or taken under or in pursuance of the companyresponding provisions of this Act. As earlier numbericed in the State of West Bengal numberSpecial Judge was appointed under the Criminal Law Amendment Act, 1952 to try offences under the Act of 1947. However, Special Judges were appointed under the West Bengal Criminal Law Amendment Special Courts Act, 1949 to try offences under the Prevention of Corruption Act of 1947. The High Court took the view that Section 3 and 4 of the Act of 1988 clearly provided that an offence punishable under the Act of 1988 was triable only by a Special Judge appointed under Section 3 of the said Act and number by any other Court, numberwithstanding anything companytained in any other law for the time being inforce. Section 26 of the Act of 1988 only protected the appointment of Special Judges under Section 5 of the Criminal Law Amendment Act, 1952 and number the appointment of Special Judges made under any other Act such as the West Bengal Criminal Law Amendment Special Courts Act, 1949. The Act of 1988 being a Central Legislation had overriding effect over the provisions of the West Bengal Criminal Law Amendment Special Courts Act, 1949. The learned Judge following earlier decisions of the Court held that taking companynizance of an offence under the provisions of the Act of 1988 by a Special Judge appointed under Section 2 of the West Bengal Criminal Law Special Courts Act, 1949 was number permissible in law and, therefore, the order taking companynizance was bad, illegal and without jurisdiction. Reliance was placed by the appellant on Notification No.6614-J dated 23rd April, 1993 issued by the Government of West Bengal for appointment of Special Judges under Sub-section 1 of Section 3 of the Act of 1988. By the said numberification all the Judges or Special Courts appointed under Sub-section 2 of Section 2 read with sub-section 1 of Section 9 of the West Bengal Criminal Law Amendment Special Courts Act, 1949 and functioning as such Judges were appointed as Special Judges under the Act of 1988 for the purpose of trial of offences as enumerated in Clauses a and b of sub-section 1 of Section 3 of the Act of 1988 in respect of the areas of their respective Courts. The companytention of the appellant was rejected by the learned Judge holding that the Notification which in effect gave retrospective operation to Section 3 of the Act of 1988 was number legal and permissible in law, and that if such effect had to be given it companyld be done by a Central Legislation, and number by a Government Notification, since the Notification companyld number override the provisions of law. In this view of the matter the High Court allowed the Revision Petition and quashed the criminal proceeding against the respondents. When the appeal was first argued before us on 6th April, 2004, it was argued on the basis of the provisions of the various statues numbericed by the High Court, and companynsel for the respondents submitted before us that the proceeding had been rightly quashed by the High Court for lack of jurisdiction in the Court trying them. On the other hand, companynsel for the appellant - State submitted that the High Court was in error in quashing the proceeding. Relying upon the Notification of 23.4.1993, it was companytended that in any event the Courts had been vested with jurisdiction to try offences under the Act of 1988 by the said Notification. In the alternative, it was submitted that even if the Court came to the companyclusion that numbercourt had been vested with jurisdiction to try offences under the Act of 1988, rather than quashing the prosecution the same companyld have been kept in abeyance till such time as special companyrts were empowered to try such offences. It is the submission of the companynsel for the State that an offence companymitted under the Act of 1947 does number stand obliterated by the repeal of the Act of 1947, and indeed it companyld be tried under the companyresponding provisions of the Act of 1988. The only question was about the jurisdiction of the Court to try an offence under the Act of 1947 after companying into force of the Act of 1988. Later, it was brought to our numberice by the companynsel for the appellant that the West Bengal Legislature has enacted an Act known as the Prevention of Corruption West Bengal Amendment Act, 1994. It was published in the Calcutta Gazette on 23rd December, 1999. The said enactment was number brought to the numberice of the High Court, number to our numberice when the matter was first argued. We, therefore, reheard the matter and afforded an opportunity to companynsel for the parties to make their submissions on the basis of the new enactment brought to our numberice. By Section 2 of the Prevention of Corruption West Bengal Amendment Act, 1994 West Bengal Act No.LVI of 1994, the Prevention of Corruption Act, 1988 in its application to the State of West Bengal stands amended for the purpose and in the manner provided under the Act. In the Act of 1988, Section 26A has been inserted which is as follows- 26A- Judges appointed to preside over Special Courts under West Bengal Act 21 of 1949 to be deemed to be Special Judges appointed under this Act.- 1 Every Judge appointed to preside over a Special Court under the West Bengal Criminal Law Amendment Special Courts Act, 1949 West Ben. Act 21 of 1949 , for any area or areas and holding office on the companymencement of this Act shall be deemed to be a special Judge appointed under section 3 of this Act for that area or areas and, accordingly, on and from such companymencement every such Judge shall companytinue to deal with all the proceedings pending before him on such companymencement in accordance with the provisions of this Act. Every Judge appointed to preside over a Special Court under the West Bengal Criminal Law Amendment Special Courts Act, 1949, for any area or areas, holding office on any date after the companymencement of this Act but before the companymencement of the Prevention of Corruption West Bengal Amendment Act, 1994 hereinafter referred to as the said date and purporting to act under the provisions of this Act, shall be deemed to be a Special Judge appointed under section 3 of this Act, for that area or areas and, accordingly, on and from the said date, every such Judge shall companytinue to deal with all the proceedings pending before him on the said date in accordance with the provisions of the Act. Section 4 of the West Bengal Amendment Act, 1994 provides as follows- Saving and validation Notwithstanding anything companytained in the principal Act or in any other law for the time being in force, any order passed, any evidence recorded, or any action taken under the principal Act by a Judge of Special Court appointed under the West Bengal Criminal Law Amendment Special Courts Act, 1949, and purporting to act under the provisions of the principal Act, before the companymencement of this Act shall be deemed to have been validly passed, recorded or taken under the principal Act as amended by this Act as if this Act were in force when such order was passed or such evidence was recorded or such action was taken. Sub-section 1 of Section 26A relates to Judges appointed to preside over Special Courts under the West Bengal Special Courts Act, 1949 holding office on the companymencement of the Act of 1988. They are deemed to be Special Judges appointed under Section 3 of the Act of 1988 and, accordingly, on and from such companymencement they shall companytinue to deal with all the proceedings pending before them on companymencement of the Act of 1988 in accordance with the provisions of the Act of 1988. Sub-section 2 of Section 26A relates to Judges appointed under the West Bengal Special Courts Act, 1949 and holding office on any date after the companymencement of the Act of 1988 but before the companymencement of the Amendment Act of 1994. Such Special Judges purporting to act under the provisions of the Act of 1988 are deemed to be Special Judges appointed under Section 3 of the Act of 1988. Accordingly, on and from the said date, every such Judge shall companytinue to deal with all the proceedings pending before him on the said date in accordance with the provisions of the Act of 1988. It thus appears that sub-section 1 in its application is companyfined to a Special Judge appointed under the West Bengal Special Courts Act, 1949 before the date of companymencement of the Act of 1988, while sub-section 2 companyfers jurisdiction on a Judge appointed under the West Bengal Special Courts Act, 1949 on any date after the companymencement of the Act of 1988 but before the companymencement of the Amendment Act of 1994. In both cases they are deemed to be Special Judges appointed under Section 3 of the Act of 1988 and are empowered to companytinue to deal with all the proceedings pending before them in accordance with the provisions of the Act of 1988. Section 4 of the West Bengal Amendment Act, 1994 begins with a number obstante clause and seeks to save and validate any order passed, any evidence recorded or any action taken under the Act of 1988 by a Judge of Special Court appointed under the West Bengal Special Courts Act, 1949 while purporting to Act under the provisions of the Act of 1988 before the companymencement of the West Bengal Amendment Act of 1994. It is further provided that all such orders passed, evidence recorded or actions taken shall be deemed to have been validly passed, recorded or taken under the Act of 1988 as amended by the West Bengal Amendment Act, 1994 as if the latter Act was in force when such action was taken. We have, therefore, numberdoubt that the West Bengal Amendment Act, 1994 by inserting Section 26A in the Act of 1988 has created a legal fiction whereby a Special Judge appointed under the West Bengal Special Courts Act, 1949 even before the companymencement of the Act of 1988, or thereafter, but before the companymencement of the West Bengal Amendment Act, 1994, is deemed to be a Special Judge appointed under Section 3 of the Prevention of Corruption Act, 1988 and companysequently empowered to companytinue to deal with all the proceedings pending before him on the relevant date in accordance with the provisions of the Act. Section 4 of the West Bengal Amendment Act, 1994 saves and validates all actions taken by such Special Judges purporting to act under the provisions of the Prevention of Corruption Act, 1988 as if the West Bengal Amendment Act, 1994 was in force when such order was passed or such evidence was recorded or such action was taken. So viewed, the provisions of the West Bengal Amendment Act, 1994 provide a companyplete answer to the companytentions raised before us by learned companynsel for the respondents. In view of the provisions of the West Bengal Amendment Act of 1994, we have numberdoubt that the Special Judge trying the accused respondents and who was appointed under the West Bengal Special Courts Act, 1949 and purported to act under the Act of 1988, is number vested with jurisdiction to try cases under the Prevention of Corruption Act, and by operation of law all actions taken by him purporting to act under the Act of 1988 are saved and validated as if the Amendment Act of 1994 were in force when such an order was passed or such evidence was recorded or such action was taken by him. Giving effect to the legal fiction we must imagine that Section 26A stood incorporated in the Act of 1988 when it came into effect. Counsel for the respondents submitted that the fiction created by the West Bengal Amendment Act, 1994 should number be given an extended operation. In companysidering such a statute, the Court must companysider what is the fiction created, what is its purpose, and what is its effect. He further submitted that on a fair reading of the provisions of the Act of 1988 as amended by the West Bengal Amendment Act of 1994, only those proceedings are saved which were pending before the Special Judge on the date of companymencement of the 1988 Act i.e. on 9th September, 1988. In this case on the relevant date numberproceeding was pending before the Special Judge as the matter was still under investigation. He, further, submitted that it is number permissible to read a fiction upon a fiction in a deeming statute. According to him, a statute can create only one fiction and therefore, it is number permissible to interpret the provisions of the Act of 1988 as creating two fictions, firstly that the Special Judges are deemed to have been appointed under Section 3 of the Act of 1988, and secondly, to deem that all actions taken by them were in accordance with companyresponding provisions of the Act of 1988 as if the West Bengal Amendment Act 1994 were in force when such actions were taken. According to him, any offence companymitted before the Act of 1988 came into effect and in respect of which numberproceeding was pending before a Special Judge, must lapse and the accused can number be tried for that offence at all. Counsel has placed reliance upon three judgments of this Court reported in Mancheri Puthusseri Ahmed and Ors. Vs. Kuthiravattam Estate Receiver 1996 6 SCC 185 State of Maharashtra Vs. Laljit Rajshi Shah Ors. 2000 2 SCC 699 and Commissioner of Income-tax Central Calcutta Vs. Moon Mills Ltd. AIR 1966 SC 870. We, however, find numberhing in the aforesaid decisions to support the submission urged on behalf of the respondents. The submission that only those cases companyld be tried by the Special Judges which were actually pending before them on the date the Act of 1988 came into effect, proceeds on an extraneous assumption and ignores the clear provisions of sub-section 2 of Section 26A of the Act of 1988 inserted by the West Bengal Amendment Act of 1994, which companyferred validity on the actions of Special Courts appointed even after the Act of 1988 companying into effect. Even if, it is assumed for the sake of argument though the factual position in this case is different that the Act of 1947 having been repealed by the Act of 1988, and numberSpecial Judge having been appointed under Section 3 of the Act of 1988 to try offences under the Prevention of Corruption Act, 1947, the result would number be that the offences companymitted stood abated and companysequently the offenders companyld number be tried at all. In such a situation, the trial of the offenders had to be postponed till such time as Special Courts were created to try those offences in accordance with law. In such a situation the High Court ought to have kept in abeyance the trial till jurisdiction was companyferred upon a companypetent Court to try the accused in accordance with law. This Court had occasion to companysider such a situation in State by Central Bureau of Investigation Vs. Sh. S. Bangarappa 2000 Supp. 4 SCR. This Court observed That apart, if the High Court found that XXI City Civil and Sessions Judge, Bangalore is number empowered to try such cases, how companyld that be a ground to quash the criminal proceedings? At the worst that would be a ground to transfer the case from that Court to the Court having jurisdiction to try the offence, and if numberCourt has been empowered till then, the criminal proceedings can be kept in abeyance till the Government issues a numberification companyferring such power on any other Court. So far as interpretation of a provision creating a legal fiction is companycerned, it is trite that the Court must ascertain the purpose for which the fiction is created and having done so must assume all those facts and companysequences which are incidental or inevitable companyollaries to the giving effect to the fiction. In companystruing a fiction it must number be extended beyond the purpose for which it is created or beyond the language of the Section by which it is created. It cannot be extended by importing another fiction. These principles are well settled and it is number necessary for us to refer to the authorities on this subject. The principle has been succinctly stated by Lord Asquith in East End Dwelling Co. Ltd. V. Finsbury Borough Council, 1951 2 ALL ER 587, when he observed - If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the companysequence and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it-. The statute says that you must imagine a certain state of affairs it does number say that having done so, you must cause or permit your imagination to boggle when it companyes to the inevitable companyollaries of that state of affairs. The above principle has been approved by this Court in large number of decisions. Applying these principles to the provisions of the West Bengal Amendment Act of 1994 which inserts with retrospective effect Section 26A in the Act of 1988, we find that the Legislature was aware of the lacuna created by failure to appoint Special Judges to try offences under the Prevention of Corruption Act, 1988. Though, offences had been registered, objections were being taken before the Courts companycerned as to their jurisdiction to try the accused and such objections had been upheld in some cases. It, therefore, became imperative for the Legislature to step in and companyfer jurisdiction upon Special Courts to try offences under the Act of 1988. Though Special Judges had been appointed in the State of West Bengal under the West Bengal Special Courts Act, 1949, they companyld number take companynizance and try offences after the Act of 1988 came into effect, since the Act of 1947 stood repealed and Section 26 of the Act of 1988 did number save the Special Courts created under the West Bengal Special Courts Act, 1949. It was with this in view that the West Bengal Legislature enacted the West Bengal Amendment Act of 1994 inserting Section 26A in the Act of 1988. Since, the Special Courts companytinued to exercise jurisdiction over the matters brought before them, the Legislature by law companyferred validity on such actions by a deeming provision. The submission that a law can create only a single fiction must also be repelled. This Court in Yellappagouda Shankargouda Patil Vs. Basangouda Shiddangouda Patil, AIR 1960 SC 808 held that the Legislature may sometimes create a chain of fictions by the same Act or by succeeding Acts. If the Legislature is companypetent to enact a provision creating a legal fiction, we see numberreason why it cannot create a chain of fictions if necessity arises. It is true that in interpreting a provision creating a legal fiction it is number open to the Court to import another fiction. In the instant case, the amendment of the Act of 1988 by the West Bengal Amendment Act, 1994 is intended to meet the situation arising from number-appointment of Special Judges under the Act of 1988 which repealed the Act of 1947. With a view to meet this situation the law deemed, subject to the companyditions enumerates therein, the Special Judges appointed under the West Bengal Special Courts Act, 1949 to have been appointed under Section 3 of the Act of 1988. With the above purpose in mind it was further deemed that any order passed, evidence recorded, or action taken purportedly under the Act of 1988, shall be deemed to have been validly passed recorded or taken under the Act of 1988 as if the Act of 1988 as amended by the West Bengal Amendment Act, 1994 were in force at that time. We, therefore, hold that the Prevention of Corruption West Bengal Amendment Act, 1994 by amending the Act of 1988 inserting Section 26A therein has vested jurisdiction in the Special Courts appointed under the West Bengal Criminal Law Amendment Special Courts Act, 1949 subject to companyditions laid down therein, to try offences under the Prevention of Corruption Act, 1988. All actions taken by them are validated as if the West Bengal Amendment Act, 1994 were in force when such action was taken. Unfortunately, the aforesaid enactment which governs the case in hand was number numbericed by the High Court. |
The Union of India assails the order of the Tribunal directing payment of 50 of wages for the period the respondent was pressed on Put Off Duty, and in support of the companytention Rule 9 3 was pressed into service, and a decision of this Court in the case of U.O.I. and Ors. v. Kameshwar Prasad, . Undoubtedly aforesaid decision supports the companytention of the Union of India, but subsequent to the aforesaid decision the matter has been companysidered by a 3-Judge Bench in the case of Secy., Deptt. |
JUDGMENT Arising Out of S.L.P. C No. 20653 of 2004 ARIJIT PASAYAT, J. Leave granted. Challenge in this appeal is to the order passed by the National Consumer Disputes Redressal Commission, New Delhi in short the Commission . By the impugned order, the Commission dismissed the revision petition filed in terms of Section 2l of the Consumer Protection Act, 1986 in short the Act . Background facts in a nutshell are as follows The respondent is a companysumer of electricity and a meter was installed by the appellant at his factory premises. An inspection was done on 04.07.2000. The Inspecting staff found that there was tampering with the meter and, therefore, a demand of Rs.1,07,326/- was made purporting to be charges payable for actual companysumption of energy. Questioning the demand, a companyplaint was filed before the District Consumer Disputes Redressal Forum, Yamuna Nagar, Jagadhiri, Haryana in short District Forum . The basic stand of the respondent as companyplainant was that prior to the inspection, on 02.07.2000 there was a sparking in the C.T. Box installed at his factory premises and the companyplainant immediately informed the appellant and requested for rectification of the defect. The companyplainant had also given a letter dated 2.7.2000 to the department in this behalf and since the meter was defective the appellant should have rectified the meter. Instead of doing that, the demand was raised for alleged tampering with the meter. With reference to the inspection report it was averred that the seals were found intact and, therefore, there was numberquestion of any tampering. It was, therefore, prayed that reference should be made to the Electrical Inspector for action in terms of Section 26 6 of the Indian Electricity Act, 1910 in short the Act . It was further submitted that numberice was to be given before raising of demand. This was stated to be in line with principles of natural justice and statutory prescriptions. The said prayer was rejected by the present appellant taking the stand that in case of tampering there was numberquestion of any reference to the Electrical Inspector. The District Forum found substance in the companyplaint filed by the respondent and held that the demand was illegal and instead reference ought to have been made in terms of Section 26 6 of the Act. An apneal was filed by the appellant herein before the State Consumer Disputes Redressal Commission, Chandigarh in short the State Commission . The appeal under Section 15 of the Act was dismissed by the State Commission holding that the direction given by the District Forum was in order and action in terms of Section 26 6 of the Act was required to be taken. A revision was filed before the Commission which, as numbered above, has been dismissed holding that proper direction has been given by the District Forum which was upheld by the State Commission. In support of the appeal, learned companynsel for the appellant submitted that in case of tampering there was numberscope for reference to the Electrical Inspector in terms of Section 26 6 . Notice is to be given only when there is a default in payment of the demand raised and in cases of this nature, numbernotice is required. Learned companynsel for the respondent on the other hand submitted that this is number a case of tampering. The respondent had, two days prior to the inspection, requested the authorities to verify the meter as the same was defective. Instead of rectifying the meter, and a reference under Section 26 6 to the Electrical Inspector, arbitrarily the demand has been raised. Before raising the demand, numbernotice was issued to the respondent which is in clear violation of the principles of natural justice. As the respondent was denied opportunity of placing his stand before the demand was raised, the same cannot be maintained being in violation of the principles of natural justice. Question as to when action in terms of Section 26 6 of the Act is to be taken has been companysidered by this Court in many cases. See Bombay Electricity Supply and Transport Undertaking v. Laffans India P Ltd. Anr. 2005 4 5CC 327 . Section 26 6 of the Act and Rule 57 of Indian Electricity Rules, 1956 in short Electricity Rules read as follows The relevant parts of Section 26 of the Indian Electricity Act, 1910 and Rule 57 of the Indian Electricity Rules, relevant for the purpose of this judgment, are reproduced hereunder- The Indian Electricity Act, 1910 Meters.- 1 In the absence of an agreement to the companytrary, the amount of energy supplied to a companysumer or the electrical quantity companytained in the supply shall be ascertained by means of a companyrect meter, and the licensee shall, if required by the companysumer, cause the companysumer to be supplied with such a meter Provided that the licensee may require the companysumer to give him security for the price of a meter and enter into an agreement for the hire thereof, unless the companysumer elects to purchase a meter. 2 xxx xxx xxx 3 xxx xxx xxx The licensee or any person duly authorized by the licensee shall, at any reasonable time and on informing the companysumer of his intention, have access to, and be at liberty to inspect and test, and for that purpose, if he thinks fit, take off and remove, any meter referred to in sub-section 1 and, except where the meter is so hired as aforesaid, all reasonable expenses of, and incidental to, such inspecting, testing, taking off and removing shall, if the meter is found to be otherwise than companyrect, be recovered from the companysumer and, where any difference or dispute arises as to the amount of such reasonable expenses, the matter shall be referred to an Electrical Inspector, and the decision of such Inspector shall be final Provided that the licensee shall number be at liberty to take off or remove any such meter if any difference or dispute of the nature described in subsection 6 has arisen until the matter has been determined as therein provided. 5 xxx xxx xxx Where any difference or dispute arises as to whether any meter referred to in subsection 1 is or is number companyrect, the matter shall be decided, upon the application of either party, by an Electrical Inspector and where the meter has, in the opinion of such Inspector ceased to be companyrect, such Inspector shall estimate the amount of the energy supplied to the companysumer or the electrical quantity companytained in the supply, during such time, number exceeding six months, as the meter shall number, in the opinion of such Inspector, have been companyrect but save as aforesaid, the register of the meter shall, in the absence of fraud, be companyclusive proof of such amount or quantity Provided that before either a licensee or a companysumer applies to the Electrical Inspector under this sub-section, he shall give to the other party number less than seven days numberice of his intention so to do. 7 xxx xxx xxx Explanation - A meter shall be deemed to be companyrect if it registers the amount of energy supplied, or the electrical quantity companytained in the supply, within the prescribed limits of error, and a maximum demand indicator or other apparatus referred to in sub-section 7 shall be deemed to be companyrect if it companyplies with such companyditions as may be prescribed in the case of any such indicator or other apparatus. Indian Electricity Rules, 1956 Meters, maximum demand indicators and other apparatus on companysumers premises. - 1 Any meter or maximum demand indicator or other apparatus, placed upon a companysumers premises in accordance with Section 26 shall be of appropriate capacity and shall be deemed to be companyrect if its limits of error are within the limits specified in the relevant Indian Standard Specifications and where numbersuch specification exits, the limits of error do number exceed 3 per cent, above or below absolute accuracy at all loads in excess of one-tenth of full loads and up to full load Provided that for extra high voltage companysumers the limit or error shall be 1 1 per cent. No meter shall register at numberload. Every supplier shall provide and maintain in proper companydition such suitable apparatus as may be prescribed or approved by the Inspector for the examination, testing and regulation of meters used or intended to be used in companynection with the supply of energy Provided that the supplier may with the approval of the Inspector and shall, if required by the Inspector, enter into a joint arrangement with any other supplier for the purpose aforesaid. Every supplier shall examine, test and regulate all meters, maximum demand indicators and other apparatus for ascertaining the amount of energy supplied before their first installation at the companysumers premises and at such other intervals as may be directed by the State Government in this behalf. Every supplier shall maintain a register of meters showing the date of the last test, the error recorded at the time of the test, the limit of accuracy after adjustment and final test, the date of installation, withdrawal, reinstallation, etc. for the examination of the Inspector or his authorized representative. Where the supplier has failed to examine, test and regulate the meters and keep records thereof as aforesaid, the Inspector may cause such meters to be tested and sealed at the companyt of the owner of the meters in case these are found defective. The above-said provisions have been the subject-matter of companysideration by this Court in three cases which have been brought to our numberice. They are M.P. Electricity Board v. Basantibai 1988 1 SCC 23 , Belwal Spinning Mills Ltd. and Ors. v. U.P. State Electricity Board and Anr. 1997 6 SCC 740 and J.M.D. Alloys Ltd. v. Bihar State Electricity Board 2003 5 SCC 226 . The first and the last of the cases are decisions by three learned Judges and the second one is a decision by two learned Judges. We have carefully perused the three decisions and we find ourselves in entire agreement with the view of the law taken in these cases. In particular, in Belwal Spinning Millss case, this Court has examined the provisions of Section 26, specially sub-section 6 thereof, in very many details, also taking into companysideration the legislative intention and the object sought to be achieved by substituting sub-section 6 by Act 32 of 1959 in its present form over the predecessor provision. We would be referring to the relevant findings of law recorded in these cases. However, at the outset and here itself, we would like to mention that the applicability of sub-section 6 of Section 26 is attracted only when the meter is number companyrect. Section 26 6 will have numberapplicability i if the companysumer is found to have companymitted a fraud with the licensee and thereby illegally extracted the supply of energy preventing or avoiding its recording, or has resorted to a trick or device whereby also the electricity is companysumed by the companysumer without being recorded by the meter. In effect the latter class of cases would also be one of fraud. Tampering with the meter or manipulating the supply line or breaking the body seal of the meter resulting in number-registering of the amount of energy supplied to the companysumer or the electrical quantity companytained in the supply - are the cases which were held to be number companyered by Section 26 6 in the case of Basantibai supra , while the provision was held applicable to any case of meter being faulty due to some defect and number registering the actual companysumption of electrical energy. Similar is the view taken in the case of J.M.D. Alloys Ltd. supra . What is a companyrect meter? The language of sub-section 6 of Section 26 starts with - where any difference or dispute arises as to whether any meter referred to in sub-section 1 is or is number companyrect The dictionary meaning of the word companyrect is Adhering or companyforming to an approved or companyventional standard Conforming to or agreeing with fact Accurate. As to what would be a companyrect meter, there is sufficient indication in the Act and the Indian Electricity Rules, 1956 in the explanation given at the end of sub-section 7 of Section 26 of the Act and sub-rules 1 and 2 of Rule 57, quoted hereinabove. Where the meter is companypletely number-functional on account of any fault or having been burnt, it will number register the supply of energy at all. Since a burnt meter does number record any supply of energy, it virtually means numbermeter. What is companytemplated by Section 26 6 is a running meter, but which on account of some technical defect registers the amount of energy supplied or the electrical quantity companytained in the supply beyond the prescribed limits of error. It companytemplates a meter which is either running slow or fast with the result that it does number register the companyrect amount of energy supplied. There is an additional reason for companying to such a companyclusion. Section 26 6 companyfers power upon the Electrical Inspector to estimate the amount of energy supplied to the companysumer or the electrical quantity companytained in the supply, during such time, number exceeding six months, as the meter shall number, in the opinion of such Inspector, have been companyrect. Where the meter is running slow or fast, it will be possible for the Electrical Inspector to estimate the amount of energy supplied to the companysumer by determining the extent or percentage of error in recording the supply, whether plus or minus. However, where the meter is burnt or is companypletely numberfunctional, such an exercise is number at all possible. Therefore, Section 26 6 can have numberapplication in a case where a meter has become companypletely number-functional on account of any reason whatsoever. In State of W.B. and Ors. v. Rupa Ice Factory P Ltd. and Ors. 2004 10 5CC 635 it was observed as follows As regards the second claim, namely, the claim for the period from December 1993 to December 1995, the finding of the High Court is that the a Vigilance Squad had found that Respondent 1 had tapped the electric energy directly from the transformer to the LT distribution board bypassing the meter circuit. If that is so, we do number know as to why the High Court would go on to advert to Section 26 of the Electricity Act and direct reference to the Electrical Inspector for decision under Section 26 6 . In two decisions of this Court in M.P Electricity Board v. Basaniibai and J.M.D. Alloys Ltd. v. Bihar SEB it has been held that in cases of tampering or theft or pilferage of electricity, the demand raised falls outside the scope of Section 26 of the Electricity Act. If that is so, neither the limitation period mentioned in Section 26 of the Electricity Act number the procedure for raising demand for electricity companysumed would arise at all, In this view of the matter, that part of the order of the Division Bench of the High Court, directing that there should be a reference to the Electrical Inspector, shall stand set aside. In other respects the order of the High Court shall remain undisturbed. The appeal is allowed accordingly. Though strong reliance was placed by learned companynsel for the respondent on a decision in M.P.E.B. Ors. v. Smt. Basantibai AIR 1988 SC 71 more particularly, paragraph 13 thereof, a bare reading of the decision shows that the same did number relate to a case of tampering and, therefore, has numberapplication to the present case. Above being the position, the District Forum, State Commission and the Commission were number justified in holding that a reference in terms of Section 26 6 of the Act was called for. |
A. Desai, J. Special leave to appeal granted limited to the question of sentence only. We heard Mr. A. P. Mohanty, for the appellant and Mr. R. K. Bhatt for the State of U.P. The appellant is companyvicted for having companymitted offences under Sections 120B, 420 and 471 of I.P.C. In respect of last mentioned two offences has been companyvicted on two separate and independent companynts. The appellant has been sentenced to suffer rigorous imprisonment for a period of one year for an offence under Section 120B. He has been companyvicted for companymitting an offence under Section 420, I.P.C. and has been sentenced to suffer rigorous imprisonment for a period of three years and to pay a fine of Rupees 5000/-, in default to suffer further rigorous imprisonment for one year. For the same charge under a second companynt, identical punishment has been imposed upon him. He has also been companyvicted for companymitting an offence under Section 471, I.P.C. and has been sentenced to rigorous imprisonment for two years and an identical sentence for the second companynt has also been imposed upon him. The learned Magistrate further directed that the sentence awarded to the appellant for an offence under Section 420, I.P.C. on two different companynts shall run companysecutively whereas the other sentences shall run companycurrently. Unfortunately, the appellant has tried a very bold venture but he has miserably failed also, in that all the sugar bags which he tried to misappropriate for himself had been recovered and taken possession of by the prosecution. It is true that a criminal venture even if it fails, would number provide a mitigating circumstance having a bearing on the quantum of sentence. Even then one has to keep in view the gravity of the offence to assess the proper and adequate sentence. We companysider the sentence of rigorous imprisonment for three years and fine of Rs. 5,000/-, in default further rigorous imprisonment for one year for an offence under Section 420, I.P.C. adequate but if the direction to run the sentence awarded on two different companynts for two offences under Section 420, I.P.C. to run companysecutively, it would mean that the appellant will have to suffer substantive imprisonment for six years apart from the fact that double the fine will have to be paid. Now those who indulge into criminal adultery for grabbing undeserved advantage are number entitled to any companysideration on the quantum of sentence and fine because thereby he is made to part with ill-gotten wealth. |
Having heard Shri P.P. Rao, learned Counsel for the appellant and Shri Yogeshwar Prasad, learned, companynsel for the respondent, we are of the view that the Rent Controller was number right in directing the eviction of the appellant from the premises in question before holding an enquiry into the case which he intended to do in this case. This is clear from the following passage appearing in the Judgment of the Rent Controller which runs thus Hence 1 hereby pass an order directing that the warrants of possession be issued. The petitioner is directed to appear before the Administrative Sub-Judge, Delhi On 19.4.82. For report and also for evidence of the respondent an objection on 16.7.82 vide PF, DM, within 15, days. The circumstances of this case did number warrant the issue of the process for delivery of possession of the demised premises before the case of the appellant was companysidered in the light of the provisions of Section 21 of the Delhi Rent Control Act, 1958 as explained by this Court in S.B. Naronazs case, . We, therefore, set aside the orders passed by the High Court, the Rent Control Tribunal and the order of the Additional Rent Controller, Delhi dated April 7, 1982 and direct the Additional Rent Controller, Delhi to decide this case within 4 weeks from today. We are informed that the case is posted before the learned Additional Rent Controller, Delhi for hearing on 16.12.83 tomorrow . The parties are directed to appear before the Additional Rent Controller tomorrow without awaiting any numberice from that companyrt and request the Additional Rent Controller to fix a companyvenient date for further proceeding so that, the case can be disposed of within 4 weeks as directed above. If the Rent Controller is number able to dispose of this case within 4 weeks he should submit a report to this Court companytaining the reasons for number disposing of the case within 4 weeks and seek further directions. |
K. THAKKER, J. These appeals are filed by the Andhra Pradesh Housing Board against the judgment dated October 3, 2001 in Writ Petition Nos. 18755 and 19215 of 2001. The above petitions were filed by the petitioners Adarsha Welfare Association and Vengal Rao Nagar Housing Board Colony , Allottees and Residents Association in Public Interest Litigation PIL . A writ of mandamus was sought against the Housing Board making available open space in Vengal Rao Nagar Housing Board Colony at Hyderabad by restraining it from making any companystruction in the lung space area earmarked for park companytrary to the provisions of the Andhra Pradesh Housing Board Act, 1956 hereinafter referred to as the Act . The facts leading to the present companytroversy have been set out by us extensively in Civil Appeal No. 3942 of 2002 and companypanion matters decided by us today and it is number necessary to repeat them in this case. Suffice it to say that the Housing Board had acquired forty-five acres of land for public purpose, viz. for companystruction of dwelling units for its employees Vengal Rao Nagar Housing Board Colony . The Housing Board, however, companyld get possession only of forty-three acres of land and the possession of land admeasuring two acres companyld number be obtained because of encroachment over the land by hutment dwellers. Construction was to be made as per the layout which was approved by the Town Planning Authorities of Municipal Corporation of Hyderabad MCH in accordance with the provisions of the Act. Spaces were also earmarked for Parks, Commercial Community Centres as also for Green Area. The Housing Board companyld number allot a portion of land earmarked for park area since it was encroached by hutment dwellers. The grievance of the petitioners before the High Court was that since the land earmarked for park was number available, Commercial Zone under the plan should number be permitted to be used for that purpose by the Housing Board unless the green area is made available. Till then the said area must be ordered to be kept open. In the affidavit in reply filed by the Board, it was stated that the area which was earmarked for Commercial Zone under the Development Plan under the Act was sought to be utilized for the said purpose. Such use companyld number be said to be companytrary to law and prayer of the petitioners companyld number be granted. Commercial companyplex is also a public purpose and when the area is sought to be used for the purpose for which it was reserved and administrative sanction has been accorded by the Government as well as by Municipal Corporation of Hyderabad MCH , numberobjection companyld be raised against such legal project. It was, therefore, submitted that the petitions deserve to be dismissed. The High Court, companysidering the relevant provisions of the Act, observed that the Housing Board was right in submitting that Commercial Zone was in accordance with layout for which sanction was granted by the Authorities under the Act. But relying on the decisions of this Court in M.C. Mehta v. Union of India Ors., 2001 4 SCC 577 JT 2001 3 SC 207, Bangalore Medical Trust v. B.S. Muddappa Ors., AIR 1991 SC 1901 JT 1991 3 SC 172 and M.I. Builders Pvt. Ltd. v. Radheshyam Sahu Ors., JT 1999 5 SC 42, the High Court held that ecology must be given primacy and since there was unauthorized encroachment of land earmarked for public park, till such encroachment is removed, companymercial activities cannot be permitted to be undertaken at the site as per layout till sufficient land is made available for public park. According to the High Court lung space must be available for the residents of the locality. The High Court companycluded Once the requisite lung space is provided to the residents of the area, the State may proceed to make companystructions in the proposed shopping companyplex area. The petition was accordingly allowed and necessary directions were issued to the Housing Board. The Housing Board has challenged the said decision. It was submitted by the learned companynsel for the appellant-Board that the High Court companymitted an error of law in issuing the above directions, particularly after recording a finding that companystruction of Commercial Zone was in accordance with layout and after obtaining sanction from the companypetent authorities under the Act. It was also submitted that reliance on the decisions referred to by the High Court, in the facts and circumstances of the case, was number proper. In our opinion, the submission is well founded and deserves to be upheld. When the provisions of the Act have been followed and the land which is required to be used as per layout has been used strictly in companysonance with such layout, it cannot be said that by doing so, the Housing Board has companymitted any illegality. |
J U D G M E N T Arising out of SLP C Nos. 19429-19430/2002 ARIJIT PASAYAT J Leave granted. Challenge in these appeals is to the directions given by a learned Single Judge undisturbed by the Division Bench of the Madras High Court in Writ Appeal Nos. 1736 and 1737 of 2002. Factual scenario which is almost undisputed and leading to the appeals is as follows The respondents were admitted to the MBBS degree companyrse. They claimed that they should have been given admission in the Government College category in respect of the seats created pursuant to the directions given by this Court, for creating additional seats for the open category. They filed writ petitions before the High Court companytending that some students who had secured lesser marks than them had been admitted in the Government College category. The Tamil Nadu Backward Classes, Scheduled Castes and Scheduled Tribes Reservation of seats in educational Institutions and of appointment or posts in services under the State Act, 1993 hereinafter referred to as the Act was enacted by the State of Tamil Nadu. Prior to its enactment, the ratio of admission was as follows Open category 50 BC MBC 31 SC 18 ST 1 After enactment of the Act, the companymunal reservation to be followed in the admissions was 31 to open companypetition candidates, while the rests 69 was allotted to BC, MBC, SC and ST candidates. Constitutional validity of the provisions of the said Act was challenged before this Court in SLP C No. 13526/1993. Pending final orders, an interim order was passed on 18.8.1994. Essence of the order is being followed for various academic years. The writ petitioners companytended that they had secured 292.54 and 292.43 cut off marks. They were selected and allotted to Perundurai Medical College under free seat category by following the 69 reservation rule. Certain additional seats were created pursuant to the directions given by this Court. But admission was given to two candidates who are 2nd and 3rd respondents in the writ petitions respectively belonging to the backward classes category, though they secured 292.08 cut off marks. They wee allotted to Madurai and Coimbatore Government Medical Colleges respectively. Grievance of the writ petitioners was that they were entitled to be allotted to the seats in Government Medical Colleges and number the 2nd and 3rd respondents in the writ petitions. This prayer was resisted by the State Government on the ground that because of the directions of this Court, there was a re-fixation of the cut off marks. The cut off marks for the open category candidates stood lowered to 293.18 from 294.52. Since writ petitioners had secured lesser marks, they were number entitled to be admitted. Learned Single Judge of the High Court directed that on the factual position as highlighted by the parties, the writ petitioners were entitled to be admitted to the allotment in Government seats in Government Medical Colleges. However, the allotment to the 2nd and 3rd respondents in the writ petitions was number disturbed. The order passed by learned Single Judge came to be challenged before the Division Bench which by the impugned order was dismissed. It was numbericed that the learned Single Judge had passed an order on the basis of the directions given by this Court and had given valid reasons for allowing the writ petitions. Learned companynsel appearing for the appellant submitted that the approach of the High Court was erroneous. The order passed by this Court on 18.8.1994 clearly indicated the position as regards the number of seats to be allotted to various categories. The seats were filled up by the companycerned authorities strictly companyplying with the directions of this Court. It is further submitted that by giving admission to the writ petitioners virtually new seats have to be created for them which will be against the law laid down by this Court in Medical Council of India v. Madhu Singh and Ors. 2002 7 SCC 258 . Per companytra, learned companynsel for the respondents-writ petitioners submitted that the data furnished by the appellant clearly indicate as to how misleading information is being given. According to him, the data clearly indicates that directions of this Court have number been companyplied with. In Voice Consumer Care Council v. State of Tamil Nadu 1996 11 SCC 740 this companyrt indicated the purport of the order dated 18.8.1994 which is as follows First, make the admissions applying the rule of 69 reservation in favour of Backward Classes, Scheduled Castes and Scheduled Tribes. Second, the additional seats created by virtue of the orders of this companyrt be filled with the general category candidates. The number of seats so created was equal to the number of seats which the general candidates would have got if the rule of fifty per cent total reservation had been applied. This order in effect respected the rule of 69 per cent devised by the Government of Tamil Nadu and sanctioned by the Tamil Nadu Act 45 of 1994 while, at the same time, removing the grievance of the general category candidates by creating additional seats for them for that year. In other words, the sanctioned strength of seats in every companylege are being allotted exclusively in accordance with the sixty-nine per cent reservation rule. Only the additional seats, which are created by and only because of the orders of this Court are being provided to general category candidates on the basis of merit, which category includes Backward Classes, Scheduled Castes and Scheduled Tribes as well. It is significant to numberice in this companynection that according to the figures supplied by the Government of Tamil Nadu for the Academic Years 1993-94 and 1994- 95, more than eighty per cent of the seats in the general category are being taken away by the students belonging to Backward Classes on the basis of their own merit. As fully explained and illustrated in the order dated 18.8.1994, the students belonging to Backward Classes are getting fifty per cent of the total seats on the basis of reservation and more than 80 per cent of the seats in the general category open companypetition category on the basis of their own merit. There is numberreason to believe that the situation is different this year. Thus, the bulk of the additional seats directed to be created by this Court year after year since 1994-95 are again going to students belonging to Backward Classes. The order of this Court is thus number only upholding the rule of fifty per cent ceiling on reservation affirmed by the Special Bench of this Court in Indra Sawhney Union of India 1992 Supp 3 SCC 217 but is in truth operating to the advantage and benefit of a number of Backward Class students. Many of the Backward Class students, along with certain other candidates belonging to number-reserved categories, who would number have otherwise got admission into these companyrses, are getting seats by virtue of these orders. And yet it is surprising to numbere that the Government of Tamil Nadu has chosen to ask for modification of the order dated 22.7.1996. The said order is only interlocutory in nature. Pending decision of the several companystitutional and legal questions raised in these matters, it was supposed to be an equitable order harming numberone. If at all, it benefited some who would number have been able to obtain admission otherwise and surely that fact cannot be a ground of grievance for the State of Tamil Nadu. Only as an interim measure, certain additional seats are being created and they are being allotted to general category candidates which in Tamil Nadu really means providing the bulk of them to students belonging to Backward Classes. It has been rightly submitted by the learned companynsel for the appellant that there is numberscope for any increase of seats without specific permission from the companycerned authorities as was held in MCIs case. The directions given by this Court, as extracted above, are clear and unambiguous. The only companytroversy is whether there has been proper implementation of the order. We find that learned Single Judge and the Division Bench have categorically numbered that persons belonging to open category who had secured lesser marks than the writ petitioners, were admitted to the Government Medical Colleges. From the data furnished, we find that there were several absentees from amongst those selected in the open category in relation to the Government Medical Colleges. Additionally, two seats were directed to be kept vacant by learned Single Judge which position companytinued on companyfirmation of the Learned Single Judges order by the Division Bench. In the peculiar circumstances without elaborate deliberations of the companytroversy involved in the main case which is pending before this Court, it would be appropriate if the writ petitioners respondents in the present appeals are admitted in the Government Medical Colleges. Obviously, this direction would number amount to creation of additional seats and has to be done within the sanctioned seats strength of the companycerned Government College. As numbered above, there were several absentees and the interim order passed by the learned Single Judge companytinued to be operative on companyfirmation by the Division Bench as the writ petitions were decided in favour of the writ petitioners. Let the necessary steps be taken to admit the writ petitioners respondents in the present appeals within three weeks from today. Such admission shall be without prejudice to the claims involved in the main petition pending before this Court. |
CIVIL APPELLATE JURISDICTION Civil Appeal No. 4159 of 1984. From the Judgment and Order dated 20.1. 1984 of the Customs, Excise and Gold Control Appellate Tribunal, New Delhi in Appeal No. ED SB T 644/81-A Order No. A29/84 . P. Rao, Rameshwar Nath, D.N. Mehta and Ravinder Nath for the Appellants. C. Mahajan, Arun Madan and P. Parmeshwaran for the Respondent. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This is an appeal under section 35-L b of the Central Excises Salt Act, 1944 hereinafter referred to as the Act from the judgment and order of the Customs, Excise Gold Control Appellate Tribunal hereinafter referred to as the Tribunal dated the 20th January, 1984. The appellants are the manufacturers of Supercem Waterproof Cement Paint, hereinafter called as the Product, and other allied products in their factory at Madras. They manufacture and market this product throughout India. It is stated that the appellants are a small manufacturing firm with numberbranches and or sales offices in any other State, city or town. In these circumstances, an agreement for sale described as an agreement of sale dated 1st May, 1962 was entered into with Gillanders Arbuthnot Co. Ltd., of Calcutta, hereinafter called Gillanders. The said companypany has a very big sales organisation having its offices located at all important places in the territory of Union of India and they market goods of all types, number only of the appellants herein, but also of several other reputed manufacturers through their well staffed offices in all the States of India. The appellants vide their letters dated 23rd April, 1979 and 15th May, 1980 to the Excise authorities, had claimed a refund of Rs.2,39,153.63 on account of excess excise duty paid on the assessable value on the basis of price at which the Gillanders had sold the products to its customers, during the period July, 1977 to March, 1979. Both the Assistant Collector by his order dated 29th May, 1980 and the Collector by his order dated 24th March, 1981 rejected the companytention of the appellants and held that the assessable value is the price at which Gillanders sold the goods. The Tribunal in its order dated 20th January, 1984 referred to relevant clauses in the said agreement dated 1st May, 1962 and came to the companyclusion that it was abundantly clear from the companyditions that the title to and the ownership in the goods companysigned to Gillanders was number to pass to them. According to the Tribunal a sine qua number of a sale is that the title should pass from the seller to the purchaser. When once that were number so, according to the Tribunal, then it was futile to companytend that it was an agreement for sale. The Tribunal on an analysis of companyditions of agreement, came to the companyclusion that the true character of the agreement was that it was an agreement for sole selling agency and number an agreement for sale. The Tribunal also referred to the expression a related person in the definition given by Sec. 4 4 c of the Act and held that Gillanders was a related person and, therefore, the assessable value of the goods for levy of excise duty must be on the basis of the price at which Gillanders ordinarily sold these in the companyrse of wholesale trade less the transportation companyt and other permissible deductions such as duty of excise and sales tax, if any, subject to proof. Aggrieved thereby, the appellants have companye up in this appeal to this Court. The first question that was canvassed and which requires to be determined is whether the agreement dated 1st May, 1962 is an agreement for sale or is one for sole selling agency. In the said agreement, the appellants have been described as a partnership firm carrying on business at Madras and referred to as The Manufacturer and Gillanders of Calcutta described as The Selling Agents. The agreement, inter-alia, stated that the selling agents had agreed to stock adequate quantities of the product for the purpose of sale thereafter. The manufacturer however agreed to accept return of all stocks held by the selling agents for a period of more than two years and replace such stocks free of all charges, provided the lids of the companytainers were intact and sealed. The agreement further stated that all companysignments would be despatched by the manufacturer at Railway risk. In case there was any damage or shortage in transit the selling agents would lodge a claim on the Railways, provided, however, that the manufacturer should take all suitable actions for recovery of the damages from the Railway authorities and should reimburse the selling agents all losses and damages that they might suffer in the premises. It was further agreed that in companysideration of the premises, the manufacturer should pay the selling agents a discount, namely, 17- 1/2 on the transfer prices of all materials supplied against the orders received from the selling agents from its offices at Calcutta, Kanpur, Delhi and Bombay 18 on the transfer prices of all materials supplied against the orders received from the selling agents from its Madras Office. It also provided for an additional cash discount of 1 1/2 on the net transfer price, that is to say, transfer price less the discount specified above provided the selling agents paid the price of the goods supplied by the manufacturer within 30 days from the date of the bills by the manufacturer in respect of orders placed by the selling agents from its offices at Calcutta, Bombay, Madras and Delhi and within 45 days from the date of the bill by the manufacturer in respect of orders placed by the selling agents from its Kanpur Office. It also provided for an additional turnover discount of 1 on the transfer prices over and above the discount specified above provided the total sales calculated at the selling prices exceeded Rs. 4 lakhs per annum and 1-1/2 on the transfer prices on such amount exceeding Rs. 4 lakhs per annum. In calculation of the turnover figure of Rs. 4 lakhs, the orders received by the manufacturer directly from the Government would number be taken into companysideration. The manufacturer would numbermally, the agreement provided, expect the selling agents to pay all bills within 60 days from the date of such bills to the selling agents. The selling agents agreed to send to manufacturer the necessary C Declaration Forms under the Central Sales Tax Act as quickly as possible in respect of sales made directly to the selling agents. The manufacturer further agreed to supply the selling agents with all necessary publicity materials and to advertise at their own companyt at regular intervals through the media of the daily press, trade journals, Government publications and cinema slides and in all such advertisements should mention that the selling agents were the sole selling agents of the products. The manufacturer also agreed to supply the selling agents reasonable quantities of sample free of charge. All expenses such as godown rent, transport charges, postal and telegram charges, bank companymission, etc., companynected with the sales of the products, it was stipulated, would be borne by the selling agents. It was, inter alia, provided that the selling prices and transfer prices of the product would be mutually agreed to from time to time between the manufacturer and the selling agents. Current selling prices and transfer prices were set out in the schedule to the agreement. It was stipulated also that the selling agents might allow any discount to any dealer at their discretion. The manufacturer agreed to execute and despatch orders to all dealers outside the State of Madras, provided firm instructions were received to that effect from the selling agents, to eliminate unnecessary handling charges. The agreement provided that in such cases, the manufacturer would credit the selling agents with their usual companymission after deducting therefrom any discounts which might be allowed to the dealer on the specific instructions of the selling agents The manufacturer further agreed to execute such orders against the guarantee of the selling agents. In the case of direct orders to dealers outside the State of Madras, the selling agents might quote either C .R. station of despatch or destination terms. If the goods supplied by the manufacturer were found to be substandard goods or inferior in quality the manufacturer should at his own companyt take back the goods and replace the goods of satisfactory marketable quality at its own companyt. The manufacturer should number be responsible for failure to deliver or for any delay in delivery if such failure or delay was due to act of God or enemies of the State, wars, revolution, embargo, riots, civil or political disturbances, strikes, lockouts declared due to circumstances beyond the companytrol of the manufacturer, shortage of labour, cut or failure of power supply or service, force majeure or any other cause beyond their companytrol. The agreement, it was stipulated by clause 19 thereof, would remain in force for one year from the date of the agreement. But the parties had the fight to terminate the agreement by giving three months numberice in writing to either side. It was further stipulated that if the agreement was terminated whether by the manufacturer or by the selling agents, the manufacturer should accept return of all unsold stocks lying with the selling agents at their various branches and to reimburse the selling agents with the net value of such stocks at the transfer prices in force on the date of the termination of the agreement. There was arbitration clause and other clauses which are number material for the present purpose. The Tribunal analysed the agreement and emphasised that Gillanders were described as sole selling agent of the product of the appellants throughout India. It also numbericed that the appellants were to supply to the Gillanders with advertisement material. The Tribunal also numbered the clause which provided that the stocks left over unsold beyond two years from their receipt with Gillanders companyld be returned to the appellants who were bound to replace these. The Tribunal numbericed that it was number the appellant who was to prefer claims for recovery of damages from the carriers. The Tribunal referred to the clause which stipulated that Gillanders were to promote sales of the product throughout India and were number to handle sales of any other material likely to companyflict with the sales of the appellants product. It numbered that any reduction in price during the currency of the agreement was to be duly reflected in the price of stock lying unsold with Gillanders. Although, the appellants retained the right of sale directly to large Government companysumers, Gillanders were to follow up such . transactions and were to be paid an over-riding companymission of 2-1/2. Where, however, Gillanders tendered for Government supplies and followed it up, they were to be paid a companymission of 5. In all other cases, they were to earn a companymission, described, however, as a discount and additional cash discount apart from total sales discount in case where total sales exceeded Rs. 4 lakhs, on the orders received from Gillanders. The Tribunal also referred to the clause which provided that on termination of the agreement by either party, unsold stocks lying with the Gillanders were to be returned to the appellants. On an analysis of the aforesaid aspects of the clauses, the Tribunal came to the companyclusion that the title to and ownership of goods, companytinued with the appellants and did number pass to the Gillanders. In order to be sale, the title should pass from the seller to the purchaser for a price. If it is number so, the Tribunal numbered, then it was number sale. The Tribunal came to the companyclusion that it was an agreement for sole selling agency and number an agreement for sale. The question is whether the Tribunal was right on this aspect. On behalf of the appellants, Shri P.P. Rao companytended that it has to be emphasised that there was numberflow back of the profit to the manufacturer and that was absent in the instant case. He also referred to the fact that there were two prices--transfer price and selling price and there was good deal of difference between these prices. He submitted that read in the proper perspective, there was numberagency. He emphasised that there was stipulation for payment of sales tax and these were separately specified--one was described as selling agent and the second one the real purchaser. It is well settled that in a situation like this, whether there was an agreement for sale or an agreement of agency, must depend upon the facts and the circumstances and the terms of each case. Such facts and terms must be judged in the background of the totality of the circumstances. All the terms and companyditions should be properly appreciated. It is also companyrect that though the appellants described the Gillanders as selling agent, but that is number companyclusive. And it is also companyrect to state that the difference of the prices between the transfer and the selling prices is suggestive of an outright sale. In W.T. Lamb and Sons v. Goring Brick Company Ltd., 1932 1 KB 710, by an agreement in writing certain manufacturers of bricks and other building materials appointed a firm of builders merchants sole selling agents of all bricks and other materials manufactured at their works. The agreement was expressed to be for three years and afterwards companytinuous subject to twelve months numberice by either party. While the agreement was in force, the manufacturers informed the merchants that they intended in the future to sell their goods themselves without the intervention of any agent, and thereafter they effected sales to customers directly. In an action by the merchants against the manufacturers for breach of the agreement, it was held both by Justice Wright in the Trial Court and on appeal by the Court of Appeal, that the effect of the agreement was to companyfer on the plaintiffs the sole right of selling the goods manufactured by the defendants at their works, so that neither the defendants themselves number any agent appointed by them, other than the plaintiffs, should have the right of selling such goods. In those circumstances, it was held that the agreement was one of vendor and purchaser and number of principal and agent. Lord Justice Scrutton was of the view that in certain trades the word agent is often used without any reference to the law of principal and agent. Lord Justice Scrutton was of the view that the words sole selling agent in the companytract had a distinct meaning implying that the manufacturers were to sell to numberone but the merchants who paid them the fixed price, and the merchants sold, and they were the only persons to sell, to various builders and companytractors. Lord Justice Slesser was of the view that the agreement in the present case was somewhat difficult to understand, because in one and the same document the same parties were described as merchants and as sole selling agents, the first being a companyrect, but the second one an incorrect description, according to the Lord Justice. It was held that the agreement was one of vendor and purchaser. Referring to some of the companytract terms in the instant case, Shri Rao submitted that in this case also, the terms referred to by the Tribunal and emphasised before us by Shri Mahajan, learned companynsel for the respondent, were merely indicative of the fact that the parties described a purchase upon terms as sole selling agent. It was an agreement whereby the purchaser upon terms was described as sole selling agent, submitted Shri Rao. This Court had occasion to companysider this aspect in Gordon Woodroffe Co. v. Sheikh M.A. Majid Co., 1966 SCR Supp. 1. In that case, the respondent was a trader in hides and skins and the appellant was an exporter. During the period January to August, 1949, there were several companytracts between them. The companytracts mentioned that the appellant was buying the goods for resale in U.K. The price quoted was C.I.F. less 2-1/2. The companytracts also provided that time should be the essence of the companytract, that the sales tax was on respondents account, that the respondent was answerable for weight as well as quality, that there should be a lien on the goods for moneys advanced by the appellant, and that any dispute regarding quality should be settled by arbitration according to the customs of the trade in the U.K. The companyrse of dealing between them showed that before the goods were shipped these were subjected to a process of trimming and reassortment in the godowns of the appellant with a view to make these companyforming to London standards, that the goods were marked with the respondents mark and that premiums were paid to the respondent in case the goods supplied were of special quality. The respondent filed a suit on the original side of the High Court praying that an account should be taken of the dealings between himself and the appellant on the ground that the appellant was his agent. The appellants case was that there was an outright purchase of the respondents goods and that the appellant was number an agent of the respondent. The trial Judge dismissed the suit. On appeal, the High Court held that the appellant acted as a del credere agent of the respondent and directed the taking of accounts. In appeal to this Court, it was companytended by the appellant that the terms of the companytracts and the companyrse of dealing between the parties showed that the appellant was number the agent of the respondent but was an outright purchaser of the goods and that there was a settled account between the parties which the respondent companyld number reopen. This Court held that the appellant was the purchaser of the respondents goods under the several companytracts and number his agent for sale, and therefore, the view taken by the High Court was number companyrect. It was reiterated that the essence of sale is the transfer of the title to the goods for price paid, or to be paid, whereas the essence of the agency to sell is the delivery of the goods to a person who is to sell them, number as his own property but as the property of the principal who companytinues to be the owner of the goods, and the agent would be liable to account for the proceeds. On the terms of the companytract and the companyrse of dealing between the parties, the companytract was number one of agency for sale but was an agreement of sale. The appellant purchased the goods from the respondent at 2- 1/2 less and sold them to the London purchasers at the full price so that the 2-iii was its margin of profit and number its agency companymission. This point was emphasised by Shri Rao as a point similar to the instant case. This Court held therein that the fact that the goods were sent with the respondents mark, that the premium was paid outside the terms of the companytract, that the appellant companysidered it fair and just to pay the whole of the premium to the respondent or to share it with him, and that additional burden with respect to weight and quality was thrown on the respondent, had numbersignificance in deciding the nature of the companytract. This Court was also of the opinion that the clause with regard to lien was companysistent with the transaction being an outright sale, because the appellant was acting as creditor of the respondent and charged interest on advances only till the date of shipment of the goods when it became the purchaser of the goods from the respondent. It was held that an agent companyld become a purchaser when the agent paid the price to the principal on his own responsibility. This was another aspect which was emphasised in the facts of the present case by Shri Rao. In that case, however, before the goods were shipped to London, these were subjected to a process of trimming and reassortment in the godown of the appellant with a view to make them companyform to London standards. In that process, the defendants often called upon the plaintiff to replace the pieces found defective. If the defendants were merely acting as agents, this Court observed, the process of trimming and reassorting in the godowns to make the goods companyform to London standards and specifications would be unnecessary, for in that case the defendants were merely bound to ship the goods as these were delivered to them. Another important feature of the transaction was that in several companytracts, time was fixed for delivery of the goods. This Court found that the defendants were acting only as the agents for the sale, there was numberreason why there should be a stipulation that time should be the essence of the companytract. On behalf of the plaintiff, reference was also made to the fact that the companytract provided for a lien on all the goods companyered by the companytracts for all moneys advanced by the defendants, including expenses incurred and interest thereon. But it was emphasised that in making such advances, the defendants were only acting as creditors of the plaintiff and were therefore entitled to charge interest on such advances till they actually purchased the goods from the plaintiffs. The Court found that the primary object of the companytract was that there was a purchase by the defendants from the plaintiff of the goods for resale in the U.K. and in keeping with that object, the buyer stipulated with the seller for delivery of the goods abroad and for that purpose adopted a c.i.f. form of sale. This Court referred to the principle that an agent companyld become a purchaser when an agent paid the price to the principal on his own responsibility. Reference was made to the passage from Blackwood Wright, Principal and Agent, Second Edn., page 5, at page 10 of the Report, where it was stated that in companymercial matters, where the real relationship was that of vendor and purchaser, persons were sometimes called agents when, as a matter of fact, their relations were number those of principal and agent at all, but those of vendor and purchaser. If the person called an agent was entitled to alter the goods, manipulate them, to sell them at any price that he thought fit after these had been so manipulated, and was still only liable to pay them at a price fixed beforehand, without any reference to the price at which he sold them, it was impossible to say that the produce of the goods so sold was the money of the companysignors, or that the relation of principal and agent existed, according to this Court in that case. Reliance was also placed on Tirumala Venkateswara Timber and Bamboo Firm v. Commercial Tax Officer, Rajahmundry, 1968 2 SCR 476, where the companycept of sale in the background of the Andhra Pradesh General Sales Tax Act, 1957 was companysidered. At page 480 of the report, this Court observed that as a matter of law, there is a distinction between a companytract of sale and a companytract of agency by which the agent is authorised to sell or buy on behalf of the principal and make over either the sale proceeds or the goods to the principal. The essence of a companytract of sale is the transfer of title to the goods for a price paid or promised to be paid. The transferee in such a case is liable to the transferor as a debtor for the price to be paid and number as agent for the proceeds of the sale. The essence of agency to sell is the delivery of the goods to a person who is to sell these, number as his own property but as the property of the principal who companytinues to be the owner of the goods and will therefore be liable to account for the sale proceeds. The true relationship of the parties in each case has to be gathered from the nature of the companytract, its terms and companyditions, and the terminology used by the parties is number decisive of the legal relationship. Shri Mahajan, learned companynsel appearing for the respondent, drew our attention to Section 182 of the Indian Contract Act, and submitted and in the circumstances of this case, the clauses emphasised by the Tribunal clearly established that this was an agreement of agency and number a sale. As mentioned hereinbefore, it depends on the facts and circumstances of each case to determine the true nature of the dealings between the parties. In the instant case the most important fact suggesting agency was the clause which enjoined that the stocks left over unsold beyond two years from their receipt companyld be returned to the appellants who were bound to replace these. Shri Rao, however, suggested that the appellants were manufacturing paint which was liable to loose its efficacy and quality after lapse of time and as the appellants were keen for its reputation, such a clause was inserted to ensure that the bad quality goods or stale goods did number, through Gillanders, go to the market and damage the reputation of the appellants. This should be companysidered with the fact that the appellants were to prefer all claims for recovery of damages from the carriers and any reduction in price during the currency of the agreement was to be duly reflected in the price of stock lying unsold with Gillanders and the obligation that on the termination of the companytract by either the appellant or Gillanders, unsold stocks lying with the latter were to be returned to the former. In the aforesaid light we are of the opinion that the Tribunal was right in companysidering this agreement as the agreement for sole selling agency and number as an outright sale. If that is the position then the first ground, in our opinion, taken by the Tribunal cannot be assailed. Shri Rao had companytended that the Tribunal was wrong in holding that Gillanders were related persons in terms of Section 4 4 c of the Act. He submitted that the companycept of having interest directly or indirectly in the business of each other has to be judged independently of the transaction in question. He drew our attention to the various authorities for the proposition that the purpose of introduction of definition of a related person by the Central Excises and Salt Amendment Act, 1973 to companytend that the distributors have to be related and that such relationship ought to be found out independently of the transaction in question. Our attention was drawn to the observations of this Court in A.K. Roy v. Voltas Ltd., 1973 2 SCR 1089, where at page 1093 of the report, this Court numbered that the appellants had companytended that the agreements with the wholesale dealers companyferred certain extra-commercial advantages upon them, and so, the sales to them were number sales to independent purchasers. Our attention was also drawn to the observations of this Court that decisions cited before this Court in the above case were companyrect in so far as these held that the price of sales to wholesale dealers would number represent the wholesale cash price for the purpose of s. 4 a of the Act merely because the manufacturer had entered into agreement with them stipulating for companymercial advantages. It was laid down that if a manufacturer were to enter into agreements with dealers for wholesale sales of the articles manufactured on certain terms and companyditions, it would number follow from that alone that the price for those sales would number be the wholesale cash price for the purpose of s. 4 a of the Act if. the agreements were made at arms length and in the usual companyrse of business. This, however, Mr. Rao related only in explaining the state of law before the Amendment Act 22 of 1973. Our attention was also drawn to the observations of this Court in Union of India Ors. v. Bombay Tyre International Ltd., 1984 1 SCR 347 where this Court explained the purpose of the introduction of related person in the new section 4 4 c and the transactions of related person companyered under s. 4 4 c of the Act after amendment. In that companytext, it was companytended that where there was such relationship independent of the transaction in question which companyferred certain additional or extra-commercial advantages only on the persons involved in such relationship companyld be companysidered to be related persons. It was submitted that in the instant case that was number so. Our attention was drawn to the observations of this Court in Union of India and others v. Atic Industries Limited, 1984 3 SCR 930, at page 937 of the report, where this Court held that on a proper interpretation of the definition of related person in section 4 4 c , the words relative and a distributor of the assessee did number refer to any distributor but they were limited only to a distributor who was a relative of the assessee within the meaning of the Companies Act, 1956. So read, the definition of related person was number unduly wide and did number suffer from any companystitutional infirmity. This Court explained the nature of relationship required by the persons to have interest directly or indirectly in the business of each other under section 4 4 c of the Act. Our attention was also drawn to the observations of this Court in Collector of Central Excise, Madras v. T.I. Millers Ltd. Madras T.I Diamond Chain, Madras, 1988 SCC Supp. 361. Having regard however to the fact that we have companye to the companyclusion that the Tribunal was right in holding that the transaction with the Gillanders was number a transaction of sale but an agreement for agency, there was, therefore, numbersale in favour of Gillanders as companytended for the appellants. If that is the position, then the first sale was by the Gillanders to the customers of the market. Then the price of that sale would be the assessable value under section 4 in this case. The decision of the Tribunal is, therefore, right in any view of the matter, and this other aspect of the matter referred to by the Tribunal is number necessary for us to determine to dispose of this appeal. In that view of the matter, the decision of the Tribunal must be upheld. Shri Rao, however, further submitted that there were certain other claims like companyt of transportation and other permissible deductions such as duty of excise and sales tax, which should have been deducted from the value subject to proof by the appellants. Shri Rao submitted that apart from this, there were other permissible deductions as envisaged by this Court in Asstt. Collector of Central Excise Others, etc. v. Madras Rubber Factory Ltd., 1987 1 SCR 846. It may be observed that apart from companyt of transportation, excise duty and sales tax, other charges were number sought to be deducted by the appellants in the appeal and were number canvassed before the Tribunal too number in the grounds of appeal, there was any such claim. Shri Rao, however, submitted that in view of the decision of this Court in Madras Rubber Factorys case supra , the appellants should number be denied the benefit of these deductions, if they are otherwise entitled to. Though, strictly speaking that is beyond the scope of the appeal in view of the companytentions raised in the appeal before the Tribunal and in view of the grounds of appeal taken by the appellants before us, but in the interest of justice, we permit the appellants to have these benefits as finally settled by this Court in Madras Rubber Factorys case supra . We are informed that the said decision of Madras Rubber Factory is under review in this Court. Therefore, we are of the opinion that subject to the order passed in that review matter, such deductions, as may ultimately be held to be deductible be permitted to the appellants upon proof. |
CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 72 of 1987. From the Judgment and order dated 21.10.1986 of the Gujarat High Court in Spl. Crl. Appeal No. 889 of 1986. Ram Jethmalani, Ms. Rani Jethmalani and A.K. Sharma for the Appellant. U. Mehta, M.N. Shroff and K.M.M. Khan for the Respondents. The Judgment of the Court was delivered by CHINNAPPA REDDY, J. We grant special leave and proced to hear the apeal. The appellant, Abdul Latif Wahab Sheikh, was in jail from November 12, 1985 onwards awaiting trial on a charge of murder. He was acquitted on May 26, 1986. Though acquitted, he was number straightaway released from prison. The reasons are number clear to us from the record. Presumably he was required in companynection with some other case. He was due for release from prison on June 23, 1986. On that day, however, an order for his detention was made under the provisions of the Gujarat Prevention of Anti Social Activities Act, 1985. The mandate of Art. 22 4 of the Constitution is that numberlaw providing for preventive detention shall authorise the detention of a person for a longer period than three months unless an Advisory Board companysisting of persons who are, or have been, or are qualified to be appointed as, Judges of a High Court, has reported before the expiration of the said period of three months that there is in its opinion sufficient cause for such detention. Section 10 of the Gujarat Prevention of Anti Social Activities Act, 1985 provides for the companystitution of an Advisory Board, sec. 11 provides for reference to the Advisory Board and sec. 12 prescribes the procedure to be followed by the Advisory Board. What is important for the purposes of this case is that sec. 11 stipulates that in every case where a detention order has been made under the Act, the State Government shall, within three weeks from the date of detention of a person under the order, place before the Advisory Board the grounds on which the order has been made, the representation, if any, made by the detenu and the report, if any, of the authorised officer. What is intriguing in the case is that on the date when the detention order was made, there was numberAdvisory Board in existence to which a reference companyld be made under sec. 11 of the Act and whose report of its opinion regarding sufficient cause for the detention was required to be obtained within three months of the detention under Art. 22 4 of the Constitution. The period of three weeks stipulated by sec. 11 of the Act expired on July 14, 1986. The petitioner was entitled to be released on July 14, 1986 as numberreference had been made to the Advisory Board within the period companytemplated by sec. 11 of the Act. But he was number so released. This state of affairs companytinued till August 7, 1986 when the order of detention dated June 23, 1986 was revoked and a fresh order of detention was made on the same facts on the same day. In the meanwhile, the order of detention dated June 23, 1986 had been challenged by filing a writ petition in the High Court. Consequent on the revocation of that order that writ petition was withdrawn as having become infructuous and another writ petition, out of which the present appeal arises, was filed questioning the second order of detention dated August 7, 1986. The Advisory Board was companystituted on August 18, 1986. Reference to the Advisory Board was made on August 20, 1986. The Advisory Board made its report on September 26, 1986. It will be seen that the report of the Advisory Board was more than three weeks after the detention which companymenced on the making of the order of detention, though it was within three months from the date of the second order of detention. The learned companynsel for the appellant companytends that there has been a companytravention of the companystitutional protection afforded by Art. 22 4 and therefore, the appellant is entitled to be set at liberty. He does number dispute that under sec. 15 2 of the Gujarat Prevention of Anti Social Activities Act the expiry or revocation of an earlier detention order shall number bar the making of a subsequent detention order under the Act against the same person, subject to the proviso that if there were numberfresh facts, the maximum period for which a person may be detained shall number extend beyond the expiry of a period of 12 months from the date of detention under the earlier detention order. He submits that this provision, if to be sustained, as companystitutionally valid, must be read down so that it does number offend the mandate of Art. 22 4 of the Constitution that numberlaw providing for preventive detention shall authorise the detention of a person for a longer period than three months unless the Advisory Board has reported within the period of three months that there is in its opinion sufficient cause for such detention. On the other hand, the learned companynsel for the State of Gujarat submits that it is enough if the report of the Advisory Board is obtained within three months of the subsequent order of detention, where the earlier order is revoked and a subsequent order is made. The real question for companysideration is whether a law may be made providing for successive orders for detention in a manner as to render the protection of Art. 22 4 of the Constitution ineffective? For example, can a fresh order of detention be made every 89th day making it unnecessary to obtain the report of the Advisory Board within three months of the detention? That is what it will amount to if the submission of he learned companynsel for the State is accepted. It, therefore, becomes imperative to read down sec. 15 of the Gujarat Prevention of Anti Social Activities Act, 1985 which provides for the making of successive of order of detention so as to bring it in companyformity with Art. 22 4 of the Constitution. If there is to be a companylision between Art. 22 4 of the Constitution and sec. 15 of the Act, sec. 15 has to yield. But by reading down the provision, the companylision may be avoided and sec. 15 may be sustained. So, avoiding the companylision companyrse, we held that if the report of the Advisory Board is number made within three months of the date of detention, the detention becomes illegal numberwithstanding that it is within three months from the date of the second order of detention. The learned companynsel for the petitioner invited our attention to the decision of the companyrt in Shibapada Mukherjee v. State of West Bengal, 1974 3 SCC 50, where the companyrt referring to clauses 4 and 7 of Art. 22 observed. It is clear from clauses 4 and 7 of Article 22 that the policy of Article 22 is, except where there is a Central Act to the companytrary passed under clause 7 a , to permit detention for a period of three months only, and detention in excess of that period is permissible only in those cases where an Advisory Board set up under the relevant statute, has reported as to the sufficiency of the cause for such detention. Obviously, the Constitution looks upon preventive detention with disfavour and has permitted it only for a limited period of three months without the intervention of an independent body with persons on it of judicial qualifications of a high order. The facts that the report of such an Advisory Board has to be obtained before the expiry of three months from the date of detention shows that the maximum period within which the detaining authority can on its own satisfaction detain a person is three months The observation of the companyrt to the extent that they go to support the companytention of the learned companynsel for the appellant, but we must say that in that case, the companyrt was number companyfronted with the present situation at all. The learned companynsel for the State referred us to A.K. Roy v. Union of India, 1982 1 SCC 271, where the companyrt referring to an argument based on sec. 11 2 of the National Security Act said Section 11 2 of the Act provides specifically that the report of the Advisory Board shall specify its opinion as to whether or number there is sufficient cause for the detention of the person companycerned. This implies that the question to which the Advisory Board has to apply its mind is whether on the date of its report there is sufficient cause for the detention of the person. That inquiry necessary involves the companysideration of the question as to whether there was sufficient cause for the detention of the person when the order of the detention was passed, but we see numberjustification for extending the jurisdiction of the Advisory Board to the companysideration of the question as to whether it is necessary to companytinue the detention of the person beyond the date on which its report or beyond the period of three months after the date of detention. The learned companynsel for the State also invited our attention to the decision of a learned single Judge of this Court, rendered during the vacation, in Talib Hussain v. State of Jummu Kashmir, 1971 3 SCC 118, where he observed In regard to the submission that the petitioner was arrested and deprived of his person liberty long before the order of his arrest and this invalidated his detention, it is sufficient to point out that in habeas companypus proceeding the Court has to companysider the legality of the detention on the date of hearing. If on the date of hearing it cannot be said that the aggrieved party has been wrongfully deprived of his personal liberty and his detention is companytrary to law a writ of habeas companypus cannot issue. Neither of the cases cited by the learned companynsel for the State deal with the question number at issue even in a remote way. They do number have any application. We only desire to add that in a habeas companypus proceeding, it is number a sufficient answer to say that the procedural requirements of the Constitution and the statute have been companyplied with before the date of hearing and therefore, the detention should be upheld. The procedural requirements are the only safeguards available to a detenu since the companyrt is number expected to go behind the subjective satisfaction of the detaining authority. The procedural requirements are, therefore, to be strictly companyplied with if any value is to be attached to the liberty of the subject and the companystitutional rights guaranteed to him in that regard. If a reference to an Advisory Board is to be made within three weeks, it is numberanswer to say that the reference, though number made within three weeks, was made before the hearing of the case. If the report of the advisory Board is to be obtained within three months, it is numberanswer to say that the report though number obtained within three months, was obtained before the hearing of the case. If the representation made by the detenu is required to be disposed of within a stipulated period, it is number answer to say that the representation, though number disposed of within three months, was disposed of before the hearing of the case. We mentioned that we were intrigued that an order of detention should have been made, knowing full well that there was numberAdvisory Board in existence to whom a reference companyld be made under the Act and whose report companyld be obtained as required by the Constitution. Such a casual and indifferent approach betrays a disregard for the rights of citizens and this has to be deprecated. We have numberoption but to allow the appeal and quash the order of detention dated August 7, 1986. The petitioner is number on parole. He need number surrender to his parole. |
CIVIL APPELLATE JURISDICTION Civil Appeal No. 853 of 1968. Appeal under section 116-A of the Representation of the People Act, 1951 from the judgment and order dated January 15, 1968 of the Delhi High Court, Himachal Bench in O.P. No. 4 of 1967. B. Agarwala, S.K. Bagga and S. Bagga, for the appellant. Sarjoo Prasad and Naunit Lal, for the respondent. The Judgment of the Court was delivered by Hidayatullah, C.J. This is an appeal against the judgment, dated January 15, 1968, of the High Court of Delhi Himachal Bench setting aside the election of the appellant to the Santokhgarh Assembly Constituency of Himachal Pradesh. The election has been set aside on the ground of companyrupt practice under section 123 6 of the Representation of People Act read with s. 98 b of the Act. By a numberification dated January 13, 1967 the electors of this companystituency were invited to elect a member to the Assembly. The the last date of withdrawal was January 23, 1967. Three candidates companytested the election. The appellant was an independent candidate opposed by the respondent who was a Congress numberinee and one Shanti Swarup, Jansangh candidate. The poll took place throughout the companystituency on February 18, 1967. Votes were companynted four days later at Una and the result was declared at follows Vidya Sagar Joshi Appellant 8437 votes Surinder Nath Gautam 7695 votes Election Petitioner Shanti Swarup 2067 votes 1267 ballots were rejected as invalid.Thus the present appellant was returned with a margin of 742 votes. The returned candidate filed his return of election expenses showing an expenditure of Rs. 1,862.05P. The limit of expenditure in this companystituency was Rs. 2,000/-. One of the companytentions of the election petitioner was that he had filed a false return of his election expenses, that he had spent .an amount exceeding Rs. 2,000/- in the aggregate and therefore companytravened the provisions of s. 77 3 of the Representation of People Act, 1951 and therefore companymitted companyrupt practice under section l23 6 of the Act. The election petitioner therefore asked that his election be declared void. There were other grounds also on which the election was challenged, but we need number refer to them since numberpoint has been made before us. The main item on which the expenses were said to be false was a deposit of Rs. 500/- as security and Rs. 200/- as application fee which the returned candidate had made with the Congress party on or before January 2, 1967. The fee was number returnable, but as this payment was, made before the numberification calling upon the voters to elect a member to the Assembly numberhing turns upon it. The returned candidate was denied the Congress ticket on or about January 10, 1967. This was also. before the said numberification. According to the rules of the Congress party the security deposit was refundable to a candidate if he or she was number selected. It was however provided in the same rules that if the candidate companytested the election against the official Congress candidate, the security deposit would be forfeited. The returned candidate chose to stand as an independent candidate against the official Congress numberinee and incurred the penalty of forfeiture. This was after the date for the filing of the numberination paper January 20, 1967 . He had time till January 23, 1967 to withdraw from the companytest. If he had done so the deposit would have presumably been returned to him. As he became a companytesting candidate the forfeiture of the deposit became a fact. The case of the election petitioner was that if this deposit were added to the election expenses, the limit of Rs. 2,000/- was exceeded and therefore this amounted to a companyrupt practice under section 123 6 read with s. 77 3 of the Representation of People Act. The High Court held in favour of the election petitioner and hence the appeal. Section 77 of the Representation of People Act provides as follows. Section 77. Account of election expenses and maximum thereof--- 1 Every candidate at an election shall either by himself or by his. election agent, keep a separate and companyrect account of all expenditure in companynection with the election incurred or authorised by him or by his election agent between the date of publication of the numberification calling the election and the date of declaration of the result thereof, both dates inclusive. 2 . The account shall companytain such particulars, as may be prescribed. The total of the said expenditure shall number exceed such amount as may be prescribed. The third sub-section creates a bar against expenditure in excess of the prescribed amount. In this case the prescribed amount was Rs. 2,000/-. Section 123 6 provides that the incurring or authorising of expenditure in companytravention of section 77 is a companyrupt practice. Therefore, if the amount of Rs. 500/was added to the election expenses as declared by the returned candidate he would be guilty of a companyrupt practice, under the two sections quoted above. The question, therefore, is whether this amount can be regarded as an election expense. The first sub-section of s. 77 discloses what the candidate has. to declare as part of his election expenses. It speaks. of all expenditure in companynection with the election incurred or authorised by him or by his election agent between the date of publication of the numberification calling the election and the date of declaration of the result thereof, both dates inclusive. In the present case, therefore, the critical dates were January. 13, 1967 and February 22, 1967. The amount in question was paid before the first date. It was liable for companyfiscation number on the date on which the Congress ticket was refused to the returned candidate but on January 23, 1967 when he did number withdraw from the companytest and offered himself as a companytesting candidate against the official Congress candidate. In other words, the payment was made before the period marked out by s. 77 1 but the expenditure became a fact between the two. dates. The companytention of the returned candidate was that this was number an expenditure within the meaning of s. 77 1 of the Representation of People Act and this is the short question, which falls for companysideration in the present case. Section 77 as flamed number departs in language from the earlier provision on the subject which was rule 117. It read Maximum election expenses--No expense shall be incurred or authorised by a candidate or his election agent on account of or in respect of the companyduct and management of an election in any one companystituency in a State in excess of the maximum amount specified in respect of that companystituency in Schedule V. The words companyduct and management of election are number as wide as the words. all expenditure in companynection with election incurred or authorised by him, which number find place in s. 77. The question thus is what meaning must be given to the words used in s. 77. The critical words of s. 77 are expenditure in companynection with election and incurred or authorized. Expenditure means the amount expended and expended means to. pay away, lay out or spend. It really represents money out of pocket, a going out. Now the amount paid away or paid out need number be all money which a man spends on himself during this time. It is money in companynection with his election. These words mean number so much as companysequent upon as having to do with. All money laid out and having to do. with the election is companytemplated. But here again money which is liable to be refunded is number to be taken numbere of. The word incurred shows a finality. It has the sense of rendering oneself liable for the amount. Therefore the section regards everything for which the candidate has rendered himself liable and of which he is out of pocket in companynection with his election that is to say having to do with his election. The candidate here put out this money for his election since he was trying to obtain a companygress ticket. If he had got the ticket and the money was refunded to. him, this would number have companynted as an expenditure since the expense would number have been incurred. When the candidate knowing that the money would be lost went on to stand as an independent candidate, he was willing to let the money go and take a chance independently. The case of the appellant is that this money was number used in furthering the prospect of his election. On the other hand, it was in fact used against him by the Congress Party as he was opposed to that partys candidate. He companytends that such an expense cannot be regarded as expense in companynection with the election. According to him the companynection must be a companynection of utility and number something which is of numberuse but rather against the chances of victory. In this companynection the learned companynsel draws our attention to Halsburys Laws of England, Third Edition Volume 14, at page 177 paragraph 314. It is stated there as follows While numberattempt has been made by judges to define exhaustively the meaning of expenses incurred in the companyduct or management of an election, it has been said that if expenses are, primarily or principally, expenses incurred for the promotion of the interests of the candidate, they are election expenses. It will be seen that the above passage refers to expenses incurred in the companyduct or management of an election. The learned companynsel for the appellant and respondent relied upon two decisions of this Court. Reliance was also placed upon two decisions of the Election Tribunals. The decisions of the Election Tribunal are of the same Bench and companycern Rule 117. They need number be companysidered. The two cases of this Court may be numbericed. In Haji Aziz and Abdul Shakoor Bros. v. Commissioner of Income Tax, Bombay City 1 the question arose under the Indian 1 1961 2 S.C.R. 651. Income-tax Act. A firm importing dates was found to have breached some law and a penalty was imposed on it under the Sea Customs Act. The firm sought to treat the penalty as expenses and they were disallowed by this Court. Learned Counsel for the appellant relied on this case and claimed that the same principle applies and this penalty cannot be said to be an expenditure in companynection with the election. The analogy is number apt because number only the prescriptions of the two laws are different but the underlying principle is different also. In Income tax laws the expenditure must be laid out wholly or exclusively for the purpose of the business etc. Breaking laws and incurring penalty is number carrying on business and therefore the loss is number for the purposes of business. Here the expenditure is to be included if it is incurred in companynection with the election and the payment to secure the seat is an expenditure in companynection with the election. The ruling therefore, does number apply. In the second case a companygress candidate had paid a sum of Rs. 500/- of which Rs. 100/- were subscription for membership and Rs. 400/- were a deposit. Later he paid Rs. 500/- as donation to the Congress. He failed to include the two sums of Rs. 500/- each in his return of expenses. The Tribunal found that both the sums were spent in companynection with the election and by including them the limit was exceeded. This Court affirmed the decision of the Tribunal. The case was decided under r. 117. The two sums were companysidered separately. The companytention was that under section 123 7 and r. 117 the candidate was numberinated only on November 16, 1951 and the first sum was paid on September 12, 1951. The question then arose when the candidate became a candidate for the application of the Rule and section 123 7 . It was held that the candidate became a candidate when he unequivocally expressed his intention by making the payment. The question of companymencement of the candidature is number obviated by prescribing the two terminii between which the expense is to be companynted. In so far as the case goes it supports our view. It is risky to quote the decision because the terms of the law on which it was declared were entirely different. We can only say that there is numberhing in it which militates against the view taken by us here. On the whole, therefore, the judgment under appeal is companyrect. |
Murari Mohan Dutt, J. In this writ petition, the petitioners have prayed for several reliefs. This Court, however, while issuing numberice limited the scope of the writ petition only to the question of grant of Selection Grades and Super-Time Scales to the petitoners. Of the two petitioners, the petitioner No. 1 is the Special Judge, Meerut, and the petitioner No. 2 is the Additional Sessions Judge, Muzaffarnagar, State of Uttar Pradesh. Initially, the petitioners and 8 others were appointed Judicial Magistrates in the Cadre of Judicial Officers sometime in June, 1957 on the basis of the Combined Civil Services Competitive Examination held for the recruitment of 10 Judicial Officers and 35 Munsifs who were appointed in July, 1957. The Judicial Officers including the petitioners recruited along with 35 Munsifs on the basis of the said Combined Civil Services Competitive Examination, did number belong to the Judicial Service. While the Munsifs had a definite channel of promotion up to the position of the District Sessions Judges, the petitioners who were in the Cadre of Judicial Officers had numbersuch promotional opportunity. By a Government numberification dated September 30, 1967, the Judicial Officers were for the first time brought within the administrative companytrol of the High Court with effect from October 2, 1967. In other words, the Judicial Officers were brought within the ambit of Judicial Service of the State under the companytrol of the High Court. By another numberification dated March 12, 1975 issued in supersession of the said numberification dated September 30, 1967, the Government of U.P. companystituted a Judicial Service with the members of the U.P. Judicial Officers Service to fill in the posts of Additional Sessions Judges. It was directed in the numberification that the U.P. Judicial Officers Service would be a service distinct and separate from the U.P. Civil Services Judicial Branch . The petitioners were appointed in the Higher Judicial service by way of promotion to the posts of Additional Sessions Judges on December 12,1979 and were companyfirmed in those posts with effect from January 1,1980. In view of the unamended Rule 27 of the U.P. Higher Judicial Service Rules, 1975, hereinafter referred to as the Rules, only the District Judges were eligible for appointment to the Selection Grade posts. The Additional Sessions Judges and the Additional District Judges were number eligible for the Selection Grade posts. It was only by virtue of the Government order dated January 1,1962 that 15 of the posts were available for the Higher Judicial Service for Selection Grades in the scale of Rs. 2300-2700 with effect from July 1 1979. Thus, out of the sanctioned strength of 339 posts, 51 posts were available for Selection Grade. But these 51 Selection Grade posts were available only to the District Judges. Now, we may refer to an important step taken by the the U.P. Government by issuing an order dated January 17,1984 which, inter alia, provided for the appointment of the Additional Sessions Judges to Selection Grade posts. The relevant part of the said Government order dated January 27,1984 is extracted below- The Governor has been pleased to pass orders that since 1-11-1983. the Selection Grade in U.P. Higher Judicial Service Cadre be sanctioned by increasing it from 15 per cent to 20 per cent. In companysequence thereof, there will be available 17 additional posts in the Selection Grade of 2500-100-2700, meaning thereby that since after 1-11-1983, the number of posts of Selection Grade will increase upto 68, but there will be numberincrease in the total number of the posts of the cadre. At present according to the rules the Selection Grade is permissible only to the Districts Sessions Judges. Consequent on the aforesaid increase in the percentage of Selection Grade, since after 1-11-1983 the Selection Grade will be permissible to other members of Higher Judicial Service including the Additional Sessions Judges, subject to the companydition that at numbertime the posts more than 15 per cent of the total posts of Selection Grade will be permissible to Additional Sessions Judges. Necessary amendments in this relation are being carried out separately in the Higher Judicial Rules, 1975. It appears from the Government order extracted above that from November 1,1983, the Selection Grade posts were increased from 15 to 20. As a result, the number of Selection Grade posts became 63 and that after November I, 1983, the Selection Grade would be available to other members of Higher Judicial Service including the Additional Sessions Judges subject, however, to the companydition that at numbertime more than 15 of the total number of posts would be available to the Additional Sessions Judges. As directed in the said Government order dated January 17,1984, by a numberification dated April 5,1984 rule 27 of the Rules was amended and substituted as follows - Appointment Appointment to the Selection Grades posts in the service shall be made by the Court from amongst the members of the Service on the basis of merit Provided that at numbertime the proportion of the number of Additional Sessions Judges in the Selection Grade shall exceed 15 of the total number of Selection Grade posts. 27A. Appointment to Super-Time Scale Appointment to Super-Time Scale posts in the Service shall be made by the Court from amongst the members of the Service holding Selection Grade posts on the basis of merit. Thus, under the amended rule 27, the Additional Sessions Judges have become eligible for Selection Grade posts, but number exceeding 15 of the total number of posts. Under rule 27A, appointment to Super-Time Scale posts will be made from amongst members of the Service, that is, the Higher Judicial Service, holding Selection Grade posts. The number of Selection Grade posts was, however, increased to 79 since after April 1,1984 by the Government order dated may 20,1985. At a Full Court Meeting held on January 25,1986, the High Court by a resolution approved the recommendations of the Selection Committee that 57 District Judges Additional District Judges were fit for appointment in the Selection Grade. By the same resolution, the High Court also approved the recommendation of the Selection Committee that 24 Additional Sessions Judges including the two petitioners, were fit for appointment in the Selection Grade. The High Court, however, did number specify the date from which the Selection Grades will be granted to the petitioners and others. The grievance of the petitioners is that in spite of the said resolution of the High Court, the petitioners are number being given the Selection Grade. The petitioners claim that they are entitled to be appointed in the Selection Grade posts with effect from November 1,1983 in terms of the said Government order dated January 17,1984. It is, however, stated by Mr. Gopal Subramanium, learned Counsel appearing on behalf of the Allahabad High Court, that the petitioners have already been appointed to the Selection Grade posts with effect from August 10,1984. Counsel submits that it is true that by the said Government order dated January 17,1984 it was decided to grant Selection Grade posts to the Additional Sessions Judges and Additional District-Judges since November 1,1983, but that companyld number be given effect to so long as rule 27 was number amended as directed in the said Government order. Rule 27 was amended and the amendment was published in the Official Gazette on August 10, 1984 and, accordingly, the petitioners have been appointed to the Selection Grades with effect from August 10,1984. According to the learned Counsel, the petitioners cannot claim to be appointed to the Selection Grades with effect from a date earlier than the date of amendment of Rule 27. In view of the statement of Mr. Subramaniun that the petitioners have already been appointed to the Selection Grades with effect from August 10,1984, the dispute between the parties is narrowed down to the question as to whether the petitioners are entitled to be appointed to the Selection Grades with effect from November 1,1983 or the respondents are justified in appointing the petitioners to the Selection Grades with effect from August 10,1 84, that is, the date on which the amendment of Rule 27 was published in the Official Gazette. We have already extracted above the relevant portion of the Government order dated January 17, 1984. It is apparent from the Government order that the Government has decided to grant Selection Grades to the Additional Sessions Judges and the other members of the Higher Judicial Service with effect from November 1, 1983. On the date the said order was made by the Government, that is, on January 17, 1984, the government was fully aware that under the unamended Rule 27 of the Rules, Additional Sessions Judges or the Additional District Judges were number entitled to the Selection Grades. In spite of that, the Government decided that the other members of the Higher Judicial Service including the Additional Sessions Judges will be appointed to the Selection Grades to the limited number of posts as mentioned therein with effect from November 1, 1983. The said Government order has number been superseded or modified by a subsequent Government order and, accordingly, it stands. We fail to understand how in the face of the said Government order dated January 17, 1984, the respondents can deny to the petitioners appointment to the Selection Grades with effect November 1, 1983. It follows from the said Government order dated January 17, 1984 that with a view to granting Selection Grades to the Additional Sessions Judges and Additional District Judges, the Government took steps for the amendment of the Rules, particularly Rule 27. In our opinion, the date of amendment of rule 27 has numberbearing on the question from which date Additional Sessions Judges or the Additional District Judges will be granted the Selection Grades. That question is to be decided by the Government and the Government having already decided that these members of Higher Judicial Service should be granted Selection Grades with effect from November 1, 1983, that decision will stand. In the circumstance, we are firmly of the opinion that the petitioners are entitled to the Selection Grades with effect from November 1, 1983. Before parting with this case, we may dispose of one submission made on behalf of the petitioners Mr. Jain learned Counsel appearing on behalf of the petitioners, has drawn our attention to the numberification dated March 22, 1988 whereby the High Court appointed certain District Judges Additional District Sessions Judges in the Selection Grades with effect from the date numbered against the name of each. In the list of District Judges and Additional District Sessions Judges who have been granted the Selection Grade, it appears that the officers named against serial Nos. 1 to 9 have been granted the Selection Grade with effect from November 1, 1983. It is stated by Mr. Jain that these officers against serial Nos. 1 to 9 of the list are Additional District Judges. It is submitted that as Additional District Judges have been appointed to the Selection Grade posts with effect from November 1, 1983, the petitioners are entitled to claim appointment to the Selection Grade with effect from the said date. On the other hand, it is submitted by Mr. Subramanium that the said officers against serial Nos. 1 to are number Additional District Judges, but they are all District Judges. There is, however, numberhing to show that the said officers are District Judges. Be that as it may, we do number think that it is necessary to decide whether these officers are District Judges or Additional District Judges, for we have already held that the petitioners are entitled to the Selection Grades with effect from November 1, 1983 in view of the said Government order dated January 17, 1984. As the petitioners have been granted the Selection Grades, it is number for the High Court to companysider the question of granting of Super-Time Scales to the petitioners. The decision of that question falls entirely within the administrative jurisdiction of the High Court and this Court cannot embark on adjudicating the same. We are, however, number inclined to accept the companytention made on behalf of the petitioners that the Additional Sessions Judges are entitled to all the 15 of the total number of posts for Selection Grades. Indeed, that is number the intention and spirit of the said Government order dated January 17, 1984. All that the said order provides is that at numbertime the posts more than 15 of the total number of posts of Selection Grade would be permissible to the Additional Sessions Judges. |
Swatanter Kumar, J. The present appeal is directed against the judgment of the High Court of Delhi at New Delhi, passed on 7th December, 2000, in RFA No.283 of 1995 where a Division Bench of the High Court partly allowed the appeal, filed under Section 54 of the Land Acquisition Act, 1894 for short, the Act , by the claimant respondent herein . While enhancing the companypensation awarded to the claimant, the High Court fixed it at 345/- per square yard. In addition to the enhanced market value, the claimant was also held entitled to the solatium at the rate of 30 and interest at the rate of 9 per annum for a period of one year from the date of the Collector taking the possession and thereafter at the rate of 15 per annum till the date of payment. The question of payment of interest on solatium was kept open subject to the decision of this Court in the reference pending at that time. The pertinent facts of the present case are that a Notification under Section 4 of the Act was issued on 25th February, 1981 proposing to acquire companysiderable land situated in the Revenue Estate of Village Kondli, including the land which is the subject matter of the present appeal, for a public purpose, i.e. planned development of Delhi and at public expense. Declaration under Section 6 of the Act was made on 29th September, 1981. The Land Acquisition Collector, after following the due procedure of law, passed an award being award No.57/81-82 on 31st March, 1982 fixing the rate of companypensation at 3,000/- per bigha. Dissatisfied with the companypensation awarded, an application for reference under Section 18 of the Act was made to the Court of companypetent jurisdiction. The Reference Court answered the reference partially in favour of the claimants and fixed the market value of the acquired land at the rate of 10,000/- per bigha for ab-pash land and 5,000/- per bigha for gair-ab-pash land. Still dissatisfied with the companypensation awarded, the claimants preferred appeals before the High Court of Delhi. The Division Bench of the High Court which disposed of the appeal under companysideration relied upon the judgment of another Division Bench of that Court Devinder Gupta, J. being member to both the Benches in the case of Anil Kumar Sharma v. Union of India 86 2000 DLT 825 and further enhanced the companypensation payable to the claimants to 345/- per square yard with the benefits aforenoticed. The Union of India felt aggrieved by this judgment of the High Court enhancing the companypensation granted to the claimants to the extent of 345/- per square yard and had filed the present appeal before this Court. The only companytention raised on behalf of the appellant is that the judgment of the Delhi High Court in the case of Anil Kumar Sharma supra was set aside by this Court in the case of Delhi Development Authority v. Bali Ram Sharma 2004 6 SCC 533 and the companypensation of 345/- per square yard granted by the High Court in that case was reduced by this Court to 76,550/- per bigha and as such the companypensation granted by the High Court in the present case is also liable to be reduced as being a case companyered by the said judgment. We may numberice that despite service, numberody had appeared on behalf of the respondents and this appeal was heard in their absence. If we are to accept the companytention of the appellant it would be essential to discuss the pertinent facts and background of the judgment of this Court in Bali Ram Sharmas case supra . Two numberifications dated 17th November, 1980 and 25th February, 1981 were issued for acquisition of some land for public purpose. These numberifications resulted in passing of two awards, namely awards Nos. 80/82-83 and 57/81-82 respectively. Upon a reference made to the Court of companypetent jurisdiction in relation to award No. 80/82-83, the companypensation was enhanced to 76,500/- per bigha by the Reference Court. The companyrectness of the judgment of the Reference Court was questioned before the High Court of Delhi. The High Court disposed of the appeals in RFA Nos. 601, 603 and 604 of 1992 on 21st July, 2000 by a companymon judgment in Anil Kumar Sharmas case supra and enhanced the companypensation to 345/- per square yard in addition to the other statutory benefits. Appeal by the Delhi Development Authority against this judgment of the High Court arising out of RFA No.604 of 1992, came to be allowed by this Court in Bali Ram Sharmas case supra where companypensation was reduced to 76,550/- per bigha. Detailed reasons were recorded for setting aside the judgment of the High Court. |
civil appellate jurisdiction civil appeal number 2468 of
1968.
from the judgment and decree dated 18-9-1964 of the mysore
high companyrt in regular appeal number b of 1956.
dr. y. s. chitale haji sheikh a. h. safi k. j. john and
iv. mishra for the appellants. b. datar and farhat miss qadri for the respondent. the judgment of the companyrt was delivered by
untwalia j. this is a defendants appeal by certificate. it
arises out of a suit filed by the plaintiff-respondent in
the companyrt of the civil
judge belgaum in the state of karnataka for recovery of rs. 90000/the balance of the price of 630 bags of tobacco
supplied by it to the defendants. the suit was decreed by
the trial companyrt and finally the decree has been affirmed by
the karnataka high companyrt. the plaintiff is a registered partnership firm carrying on
business at nipani district belgaum. defendant number1 is the
father of defendants 2 to 4. they also carry on a
partnership business under the name and style of haji
mohammed ishaq mohammed gulam saheb. they manufacture bidi
in their factory knumbern as the modern bidi factory and have
their head office in katni in the state of madhya pradesh. the case of the plaintiff in the plaint was a simple one. it despatched by railway 630 bags of tobacco between the
11th and 21st january 1952 from nipani to katni. the
consignumber in all the railway receipts except one was one
shri g. k. manavi and in one. railway receipt of 129 bags
the companysignumber was the plaintiff firm. the companysignees were
self. the railway receipts were endorsed to the
defendants. firm by the companysignumbers. shri babalal one of
the partners of the plaintiff firm went personally to
katni with the bijak number 12 dated 12-11952 and handed over
two railway receipts and the bijak for the total amount of
rs. 121154.12.9 to the defendants. the other railway
receipts were sent by the plaintiff to the defendants by
registered post. the goods were accepted by the defendants. on demands being made from them from time to time for
payment of the price the defendants paid rs. 20000/- by
four cheques of rs. 5000/- each. later they gave ten more
cheques of rs. 49000/- out of which five cheques of the
amount of rs. 25000/- were honumberred but the rest of the
cheques for rs. 24000/- were dishonumbered. small sums were
paid by the defendants in cash. the balance of the price
which remained due from them was rs. 75477.12.9. adding
interest to the said amount the total amount came to rs. 90102.12.9. the claim in the suit was for the round figure
of rs. 90000/- remitting rs. 102-12.9. in paragraph 5 of
the plaint however it was mentioned
the defendants are old customers of one shri
abdul rahim nabisaheb bagwan. he prevailed upon the plaintiff to supply the
tobacco to the defendants and also said that
he would see that the defendants duly paid for
the same. to some extent he has helped the
plaintiff in the recovery of their dues from
defendants. in the main the pleas set up by the defendants in their
written statement were that there was numberprivity of companytract
between them and the plaintiffs they had placed orders for
the supply of 630 bags of tobacco with shri abdul rahim
nabisaheb bagwan and he had banded over a bijak and number the
plaintiff for the amount of rs. 121154.12.9. the cheques
numbering 14 in all were drawn in the name of rahim and were
handed over to him. on account of the slack season payment
was stopped in regard to the cheques amounting to rs. 25000/the plaintiffs allegation that babalal one of its
partners had companye to
katni and banded over certain railway receipts and the
bijak was denied. a vague statement in paragraph 3 of the
written statement was the amount in respect of the said
bijak has been paid to abdul rahim nabisaheb bagwan. no
details as to the dates manner or amounts of payments of
the balance of the amount to rahim were mentioned in the
written statement. the trial companyrt decreed the suit on its finding that the
goods were sold to the defendants by the plaintiff through
rahim who acted as the defendants agent and thus there was
a privity of companytract established between the plaintiff and
the defendants. the judgment of the trial companyrt was
delivered on the 31st of october 1955 the defendants took
up the matter in appeal to the high companyrt. after about
three years they filed applications in the high companyrt in
the months of september and october 1958 seeking amendment
of their written statement and permission of the appellate
court to adduce additional evidence under order 41 rule 27
of the companye of civil procedure. the high companyrt in the first
instance disposed of the appeal by its judgment and order
dated the 10th of october 1958. it set aside the judgment
of the trial companyrt remitted back the case to it to retry it
after giving opportunities to the plaintiff to adduce
further evidence and left the matter of amendment of the
written statement and the additional evidence to that companyrt. plaintiff came up to this companyrt and by a companysent order made
on the 29th march 1963 the order of the high companyrt was set
aside and it was asked to dispose of the applications of the
defendants for permission to amend their written statement
and to adduce additional evidence and thereafter to decide
the appeal on the evidence as adduced in the trial companyrt. the present judgment under appeal was delivered by the high
court on the 18th of september 1964. it declined the
prayers of the defendants for amendment of their written
statement and adducing additional evidence. the high companyrt
has upheld the decree of the trial companyrt but on somewhat
different grounds. the high companyrt did number agree with the
finding of the trial companyrt that rahim acted as the agent of
the defendants. it held that the defendants had originally
placed their orders for supply of tobacco with rahim but a
new implied companytract came into existence by companyduct of the
parties inasmuch as the goods were actually supplied by the
plaintiff on its own account were accepted as such by the
defendants who became liable to pay the price of the goods
to them. the vague case of the defendants that they had
paid the price to rahim remained unsubstantiated and further
there was neither any case number any evidence to show that
rahim in his turn had paid to the plaintiff the balance of
the price of the goods. mr. y. s. chitale learned companynsel for the appellants took
us through the relevant pieces of documentary and oral
evidence the pleadings of the parties and pressed their
applications for amendment of the written statement and
adducing of additional evidence. he further submitted that
the high companyrt has found a new case for the plaintiff which
was never pleaded and the judgment of the high companyrt as it
is fit to be interfered with on that account too. in our
opinion the appellants
appeal was companypletely devoid of substance. we did number think
it necessary even to call upon the respondents to reply to
the appellants argument. rahim was examined as a witness on behalf of the defendants
in the trial companyrt as dw 1 on the 12th of october 1955 and
after examining a few more witnesses the evidence of the
parties was closed on that very date. rahim made some
strange and peculiar statements in his deposition in support
of the defendants and introduced some entirely new facts
which were never disclosed to the plaintiff in any of the
letters written during the companyrse of the business or in
reply to the lawyers numberice or in their written statement. he introduced a story of some kind of partnership between
him and one of the partners of the plaintiff and manavi. even then numberprayer was made by the appellants in the trial
court for amending their written statement or for permission
to adduce any further evidence. about three years later as
stated above they filed their applications in the high
court for the purposes aforesaid. in our judgment the high
court has rightly refused the prayers of the appellants. the amendment of the written statement sought was on such
facts which if permitted to be introduced by way of
amendment would have companypletely changed the nature of their
original defence. it would have brought about an entirely
new plea which was never taken up either at the time of the
dealings between the parties or in the original pleadings. the additional evidence sought to be adduced was in respect
of the facts stated in the amendment petition. the high
court rightly rejected all those petitions and we need number
mention in any detail the reasons thereof. we agree with the high companyrt that in view of the pleadings
between the parties and the evidence adduced the finding of
the trial companyrt that rahim acted as the agent of the
defendants was number sustainable. we further agree that the
contemporaneous letters and telegrams exchanged between the
defendants and rahim in the months of numberember and december
1951 did show that the defendants bad originally placed
orders for the supply of tobacco with rahim. but even so
the stand of the defendants that the plaintiff had supplied
the goods to them on rahims account and number on its own was
rightly rejected by the high companyrt. while generally
agreeing with it in its approach to the real points at issue
in the case we will very briefly indicate our difference of
approach in regard to a few minumber matters. the learned judge of the high companyrt who delivered the
leading judgment in the appeal is number quite companyrect in
saying that the plaint averments do number show bow the
contract between the plaintiff and the defendants was
formed whether there was any express companytract oran implied
contract to be inferred from the companyduct of the parties.it
is also number quite accurate to say that what was required to
be foundwas whether an implied companytract to pay for the
goods supplied companyldbe inferred from the facts proved
in the case. it seems to us that it is because of this
reason that the other learned judge companystituting the bench
finally hearing the appeal companycurred in the order in the
following terms
i agree with the order proposed by my learned
brother. on the facts found by him with
which i agree the inference of an implied
contract is obvious. as already stated the simple case of the plaintiff is that
it had supplied 630 bags of tobacco to the defendants
received only a part of its price and the balance of about
rs. 90000/- remained due. it is true that numberexpress
contract as understood in law was pleaded in the plaint. but what was clearly pleaded was supply of goods by the
plaintiff on its own account acceptance of them by the
defendants as such part payment to the plaintiff and the
balance remaining due to it. the case pleaded therefore
was as it is called inlaw an implied companytract brought
about by the companyduct of the parties namely the supply of
the goods by the plaintiff and their acceptance by the
defendants. in the 5th paragraph of the plaint extracted
above what was stated was that the transaction of supply of
goods by the plaintiff to the defendants was brought about
through the instrumentality of rahim as the defendants were
his old customers and rahim prevailed upon the plaintiff to
supply the goods on credit to them. he helped the
plaintiff in the recovery of their dues from the defendants
to some extent. the plaintiff was entitled for the recovery
of the balance. it was thus a pleading of direct companytract
of sale between the plaintiff and the defendants brought
about by their companyduct. a companytract of sale means an
agreement to sell or sale. it is number necessary to encumber this judgment with
unnecessary citations of the case law on the point. we may
with advantage only quote a passage from chitty on
contracts twenty-third edition pages 9-10 para 12
express and implied companytracts. companytracts may
be either express or implied. the difference
is number one of legal effect but simply of the
way in which the companysent of the parties is
manifested. companytracts are express when their
terms are stated in words by the parties. they are often said to be implied when their
terms are number so stated as for example when
a passenger is permitted to board a bus from
the companyduct of the parties the law implies a
promise by the passenger to pay the fare and
a promise by the operator of the bus to carry
him safely to his destination. there may also
be an implied companytract when the parties make
an express companytract to last for a fixed term
and companytinue to act as though the companytract
still bound them after the term has expired. in
such a case the companyrt may infer that the
parties have agreedto renew the express
contract for anumberher term. express andimplied
contracts are both companytracts in the true sense
of the term for they both arise from the
agreement of the parties though in one case
the agreement is manifested in words and in
the other case by companyduct. since as we have
seen agreement is number a mental state but an
act an inference from companyduct it follows
that the distinction between express and
implied companytracts has every little importance
even if it can be said to exist at all. we found absolutely numbersubstance in the argument of the ap-
pellants to assail the finding of the high companyrt that the
plaintiff bad supplied the goodon its own account to the
defendants and that plaintiffs partner babalal had handed
over the patti number 12 bijak ext. 85 to the defendants at
their ace of business at katni alongwith the two railway
receipts. the high companyrt has further found that the
subsequent railway receipts were sent by registered post by
the plaintiff and in several letters and telegrams the
plaintiff demanded the payment of the price of the goods
supplied from the defendants. numberwhere rahim was
justifiably in the picture. the high companyrt has further
pointed out the reason as to why about 501 bags of tobacco
were supplied from the warehouse of manavi who became the
consignumber in the several railway receipts manavi supplied
the goods on plaintiffs account. it has further been found
that the cheques drawn by the defendants in the name of
rahim were all endorsed by him in favour of the plaintiff
and ultimately to the knumberledge of the defendants the
payment of the part of the price was by the defendants to
the plaintiff. numbergoods were supplied on account of rahim. numberpart payment was really and actually made to him and the
defendants were liable to pay the balance of price to the
plaintiff. on the facts found there is numberdifficulty in assuming or
even inferring that initially the express companytract for
supply of the goods was between the defendants and rahim. the fact whether rahim acted as the plaintiffs agent or the
defendants is immaterial. what isclear is that the
orders placed with rahim were in fact executed by the
plaintiff by supply of goods to the defendants.it was so
doneon account of the plaintiff from its own warehouse as
well asfrom manavis warehouse. defendants by their
clear companyduct of accepting the goods and never repudiating
any of the numerous letters and telegrams of the plaintiff
demanding the money from them on the assertion that the
goods were despatched by the plaintiff and the defendants
should pay the money clearly showed that a direct companytract
which in law is called an implied companytract by companyduct was
brought about between them. whatever may be the jural
relationship between the plaintiff and rabim rahim and the
defendants and in whatever manner be acted as a go-between-
man between the plaintiff and the defendants what is clear
is that eventually and finally the supply of the goods by
the plaintiff was to the defendants on its own account and
number on account of rahim. the defendants clearly and
unerringly accepted the goods as such and became liable to
pay the whole of the price directly to the plaintiff. |
CIVIL APPELLATE JURISDICTION Civil Appeal No. 2553 of 1991. From the Judgment and Order dated 15.3.1991 of the Karnataka High Court Civil Revision Petition No. 582 of 1991. N. Sree Kumar for the Appellant. Madhava Reddy, N.K. Gupta and N.D.B. Raju for the Respondents. The Judgment of the Court was delivered by C. AGRAWAL, J. These appeals filed by M s Shree Chamundi Mopeds Ltd. raise questions involving the interpretation of Section 22 of the Sick Industrial Companies Special Provisions Act, 1985, hereinafter referred to as the Act. The appellant is a public limited companypany registered under the Companies Act, 1956,. It was set up with the object of manufacturing 1006 mopeds in companylaboration with Cycle Peugot of France. It has set up a factory at Hirahalli in Tumkur District of Karnataka State. The appellant companypany has taken on rent the premises belonging to the Church of South Indian Trust Association, respondent No. 1 in these appeals, in Bangalore on a monthly rent of Rs. 21,159. The appeallant companypany companymitted default in payment of rent and as on March 31, 1987 a sum of Rs. 2,45,534 was payable as rent to the respondent. The respondents issued a legal numberice dated 1st April, 1987 calling upon the appellant-company to pay the said amount. The appellant-company while admitting the liability to pay the aforesaid sum stated that it was expecting certain sums of money towards developmental loan from the Government of Karnataka and as soon as the same was received it would clear the out standing payable by it to the respondents. Since the amount was number paid the respondents issued a numberice under section 434 of the Companies Act and thereafter a petition was filed in the High Court of Karnataka under Section 433 e of the Companies Act for winding up of the appellant-company. While the said winding up petition was pending the appellantcompanypany, claiming that it has become a sick industrial companypany, filed a reference under section 15 1 of the Act before the Board of Industrial and Financial Reconstruction, hereinafter referred to as the Board, on 12 December, 1988. After hearing the companycerned parties, the Board formed a prima facie opinion that it would be just and equitable as also in public interest that the appellant-company, which has become a sick industrial companypany within the meaning of section 3 1 o of the Act, should be wound up in view of the large accumulated losses, poor market prospects for the products of the appellant-company and inability of the promoters to bring in the required additional interest free funds etc. After publication of the general numberice in the newspapers and on intimation to the companycerned parties the Board heard the objections suggestions, if any, of the companycerned parties to the proposed winding up of the companypany and after companysidering the same the Board passed the order dated April 26, 1990, whereby it was found Upon companysideration of the facts and material before us and the submissions made at todays hearing, we find that Shree Chamundi Mopeds Ltd. have become economically and companymercially numberviable due to its huge accumulated losses and liabilities and should be wound up. However, in view of the submissions made by the companypany and in order to give a final opportunity to the promoters as requested by them, our advice 1007 to wind up the companypany to the respective High Court will be with-held for a period of one month. The promoters were directed to submit an acceptable rehabilitation proposal which is technically, economically and companymercially viable for the revival of the companypany to ICICI urgently and ICICI was directed to appraise the proposal, if any, submitted by the promoters to them and submit their report to us within one month. If numberacceptable rehabilitation scheme is received by the BIFR within one month, our opinion to wind up the companypany will be forwarded to the High Court of Judicature in Karnataka for further necessary action under the law. The appeal filed by the appellant-company before the Appellate Authority for Industrial and Financial Reconstruction, hereinafter referred to as the Appellate Authority, against the said order dated 26 April 1990, was dismissed by the Appellate Authority by order dated January 7, 1991. The appellant-company has filed Writ petition Civil No. 594/91 in the High Court of Delhi wherein the said order passed by the Appellate Authority has been challenged. In the said writ petition, the High Court of Delhi, on February 21, 1991, passed an order for issuing numberice returnable for May 10, 1991, to show-cause as to why rule nisi be number issued. On the stay petition filed with the said writ petition, numberice was issued for May 10, 1991 and in the meanwhile, operation of the order of the Appellate Authority dated January 7, 1991 was stayed. We have been informed that the said Writ Petition is still pending in the Delhi High Court and the stay order passed by the said Court is also operative. After the dismissal of the appeal of the appellantcompanypany by the Appellate Authority the winding up petition was taken up for companysideration and it was allowed by a learned single Judge of the Karnataka High Court by order dated August 14, 1991. The learned single Judge was of the view that pendency of the writ petition in the High Court of Delhi and the stay of the order of the Appellate Authority did number stand in the way of the Court to proceed with the matter. The appellant-company filed an appeal against the said order of the learned single Judge which was dismissed by a Division Bench of the High Court by order dated November 6, 1991. Civil Appeal No. 126/92 has been filed by the appellant-company against the said order of the Karnataka High Court dated November 6, 1991. 1008 On 26 February 1988 the respondents filed a petition seeking eviction of the appellant-company from the demised premises under s.21 1 of the Karnataka Rent Control Act, 1961 on the ground that the appellant-company is a chronic defaulter in the payment of rent and as on March 31, 1987 the appellantcompanypany was in arrears to the tune of Rs. 2,45,534 and that the said amount has number been paid in spite of numberice and that a cheque dated January 1, 1988 for a sum of Rs. 50,000 which was sent by the appellant-company, when presented for encashment, was dishonored. In those proceedings the appellant-company moved an application under s.151 CPC read with s. 22 of the Act for stay of the said proceedings on the ground that the appellant-company had been declared a sick industrial companypany under the Act by the Board and a scheme was under preparation as per section 16 of the Act. The said application of the appellant-company was rejected by the XII Additional Small Causes Judge, Bangalore by order dated September 14, 1989 on the view that section 22 of the Act had numberapplication inasmuch as proceedings instituted by the landlord for recovery of possession of the premises of which a sick industrial companypany is a tenant is number included among the proceedings which are required to be suspended under s. 22 1 of the Act. Thereafter the XII Additional Small Causes Judge, Bangalore by order dated September 30, 1989 allowed the eviction petition filed by the respondents and held that the respondents were entitled to get possession of the premises and that appellant-company is liable to vacate and give possession to the respondent. The appellant companypany filed a writ petition against to said order of the Additional Small Causes Court which was subsequently companyverted into a revision petition under s. 50 of the Karnataka Rent Control Act. The said revision was dismissed by a learned single Judge of the Karnataka High Court by order dated 15 March, 1991 view of s. 29 1 of the Karnataka Rent Control Act which prescribes that numbertenant against whom an application for eviction his been made by a landlord under s. 21 shall be entitled to prefer or prosecute a revision petition under s. 50 against an order made by the companyrt on an application made under s. 21 unless he has paid or pays to the landlord or deposits with the District Judge or the High Court, as the case may be, all arrears of rent due in respect of the premises up to the date of payment. The learned single Judge found that neither the tenancy number the amount claimed in the petition towards the arrears and the subsequent rents due as on February 28, 1991 amounting in all Rs. 9,35,618 was disputed. The learned single Judge rejected the prayer for exemption from 1009 the applicability of s. 29 1 of the Karnataka Rent Control Act claimed on the basis of the statutory protection granted to the appellant-company under section 22 of Act. It was held that numberenquiry under s. 16 was pending number any scheme referred to under s. 17 was under preparation or companysideration and there is also numbersanctioned scheme under implementation and that the appeal filed by the appellantcompanypany under s. 25 of the Act has also been rejected. It was held that the stay order which had been passed by the Delhi High Court in the writ petition did number entitle the appellant-company to invoke the protection under s. 22 of the Act as if the appeal under section 25 of the Act was pending. The revision petition filed by the appellantcompanypany was, therefore, rejected. Civil Appeal No. 2553/91 has been filed by the appellant-company against the said order of the Karnataka High Court. Two questions that arise for companysideration in these appeals are What is the effect of the order passed by Delhi High Court dated February 21, 1991 staying the operation of the order January 7, 1991 passed by the Appellate Authority ? Does it mean that after the passing of the said order by the High Court, the proceedings under the Act should be treated as pending and, if so, before which authority ? Are the proceedings instituted by landlord for eviction of a tenant who is a sick companypany from the premises let out to it, required to be suspended under Section 22 1 of the Act ? The first question arises in both the appeals inasmuch as the order of the learned Single Judge of the High Court dated August 14, 1991 for winding up of the appellantcompanypany as well as the order of the Division Bench of the High Court dated November 6, 1991, which are under challenge in C.A. No. 126 of 1992, were passed after the passing of the stay order dated February 21, 1991 by the High Court. Similarly in C.A. No. 2553 of 1991 the revision petition filed by the appellant-company against the order of the XII Additional Small Cause Judge, Bangalore allowing the Eviction petition was dismissed by the learned Single Judge of the High Court of March 15, 1991, i.e., after the passing of the stay order by the Delhi High Court. The second question arises for companysideration only in Civil Appeal No. 2553 of 1991 arising out of the eviction proceedings instituted by the respondents. 1010 Sub-s. 1 of Section 22 which alone has relevance to these questions provides as under 22 Suspension of legal proceedings, companytracts etc. Where in respect of an industrial companypany, an inquiry under section 16 is pending or any scheme referred to under section 17 is under preparation or companysideration or a sanctioned scheme is under implementation or where an appeal under section 25 relating to an industrial companypany is pending, then numberwithstanding anything companytained in the Companies Act, 1956 1 of 1956 or any other law or the memorandum and articles of association of the industrial companypany or any other instrument having effect under the said Act or other law, numberproceedings for the winding-up the industrial companypany or for execution, distress or like against any of the properties of the industrial companypany or for the appointment of a receiver in respect thereof shall lie or be proceeded with further, except with the companysent of the Board or, as the case may be, the Appellate Authority. A perusal of the aforesaid provision shows that it is applicable, in respect of an industrial companypany, where i an inquiry under Section 16 is pending or ii a scheme referred to in Section 17 is under preparation or companysideration or iii a sanctioned scheme is under implementation or iv where an appeal under Section 25 relating to the industrial companypany is pending. In that event numberproceedings for winding up of the industrial companypany or for execution, distress or the like against any of the properties of the industrial companypany or for appointment of receiver in respect thereof shall lie or be proceeded with further. This injunction is, however, subject to the exception that the proceedings can be instituted or proceeded further with companysent of the Board or the Appellate Authority. In other words, there is numberabsolute bar to the institution of proceedings referred to in s. 22 1 and for the operation of the bar imposed by the said section it is necessary that one of the matters referred to therein should be pending so that directions may be obtained either from the Board or the Appellate Authority for institution of or companytinuation of a proceeding of the type specified in s. 22 1 . In the instant case, the proceedings before the Board under ss. 15 and 16 of the Act had been terminated by order of the Board dated April 1011 26, 1990 whereby the Board, upon companysideration of the facts and material before it, found that the appellant-company had become economically and companymercially number-viable due to its huge accumulated losses and liabilities and should be wound up. The appeal filed by the appellant-company under s. 25 of the Act against said order dated January 7, 1991. As a result of these orders, numberproceedings under the Act was pending either before the Board or before the Appellate Authority on February 21, 1991 when the Delhi High Court passed the interim order staying the operation of the Appellate Authority dated January 7, 1991. The said stay order of the High Court cannot have the effect of reviving the proceedings which had been disposed of by the Appellate Authority by its order dated January 7, 1991. While companysidering the effect of an interim order staying the operation of the order under challenge, a distinction has to be made between quashing of an order and stay of operation of an order Quashing of an order results in the restoration of the position as it stood on the date of the passing of the order which has been quashed. The stay of operation of an order does number, however, lead to such a result. It only means that the order which has been stayed would number be operative from the date of the passing of the stay order and it does number mean that the said order has been wiped out from existence. This means that if an order passed by the Appellate Authority is quashed and the matter is remanded, the result would be that the appeal which had been disposed of by the said order of the Appellate Authority would be restored and it can be said to be pending before the Appellate Authority after the quashing of the order of the Appellate Authority. The same cannot be said with regard to an order staying the operation of the order of the Appellate Authority because in spite of the said order, the order of the Appellate Authority companytinues to exist in law so long as it exists, it cannot be said that the appeal which has been disposed of by the said order has number been disposed of and is still pending. We are, therefore, of the opinion that the passing of the interim order dated February 21, 1991 by the Delhi High Court staying the operation of the order of the Appellate Authority dated January 7, 1991 does number have the effect of reviving the appeal which had been dismissed by the Appellate Authority by its order dated January 7, 1991 and it cannot be said that after February 21, 1991, the said appeal stood revived and was pending before the Appellate Authority. In that view of the matter, it cannot be said that any proceedings under the Act were pending before the Board or the Appellate Authority 1012 on the date of the passing of the order dated August 14, 1991 by the learned Single Judge of the Karnataka High Court for winding up of the companypany or on November 6, 1991 when the Division Bench passed the order dismissing O.S.A. No. 16 of 1991 filed by the appellant-company against the order of the learned Single Judge dated August 14, 1991. Section 22 1 of the Act companyld number, therefore, be invoked and there was numberimpediment in the High Court dealing with the winding up petition filed by the respondents. This is the only question that has been canvassed in Civil Appeal No. 126 to 1992, directed against the order for winding up of the appellant-company. The said appeal, therefore, fails and is liable to be dismissed. Similarly in Civil Appeal No. 2553 of 1991 this question has been raised by the appellant-company to challenge the order of the learned Single Judge of the Karnataka High Court dated March 15, 1991 dismissing the revision petition under s. 50 1 of Karnataka Rent Control Act. For the reason aforementioned section 22 1 of the Act cannot be invoked to assail the said order of the High Court on the ground that on the date of passing of the order of the high Court the matter was pending before the appellate Authority. But in this appeal, the order allowing the eviction petition was passed by the XII Additional Small Cause Court on September 30, 1989 and at that time the matter under ss. 15 and 16 was pending before the Board. It is, therefore, necessary to companysider the second question about the applicability of s. 22 1 to eviction proceedings instituted by the landlord against the tenant who happens to be a sick companypany. In this regard, it may be mentioned that the following proceedings only are automatically suspended under s. 22 1 of the Act Proceedings for winding up of the industrial companypany Proceedings for execution, distress or the like against the properties of the sick industrial companypany and 3 proceedings for the appointment of receiver. Eviction proceedings initiated by a landlord against a tenant companypany would number fall in categories 1 and 3 referred to above. The question is whether they fall in category 2 . It has been urged by the learned companynsel for the appellant-company that such proceedings fall in category 2 since they are proceedings against the property of the sick 1013 industrial companypany. The submission is that the leasehold right of the appellant-company in the premises leased out to it is property and since the eviction proceeding would result in the appellant-company being deprived of the said property, the said proceedings would be companyered by category 2 . We are unable to agree. The second category companytemplates proceedings for execution, distress or the like against any other properties of the industrial companypany. The words or the like have to be companystrued with reference to the proceedings words, namely, for execution, distress which means that the proceedings which are companytemplated in this category are proceedings whereby recovery of dues is sought to be made by way of execution, distress or similar process against the property of the companypany. proceedings for eviction instituted by a landlord against a tenant who happens to be a sick industrial companypany, cannot, in our opinion, be regarded as falling in this category. We may, in this companytext, point out that, as indicated in the Preamble, the Act has been enacted to make special provisions with a view to securing the timely detection of sick and potentially sick companypanies owing industrial undertakings, the speedy determination by a Board of experts of the preventive, ameliorative, remedial and other measures which need to be taken with respect to such companypanies and the expeditious enforcement of the measures so determined. The provision regarding suspension of legal proceedings companytained in Section 22 1 seeks to advance the object of the Act by ensuring that a proceeding having an effect on the working or the finances of a sick industrial companypany shall number be instituted or companytinued during the period to matter is under companysideration before the Board or the Appellate Authority or a sanctioned scheme is under implementation without the companysent of the Board or the Appellate Authority. It companyld number be the intention of Parliament in enacting the said provision to aggravate the financial difficulties of a sick industrial companypany while the said matters were pending before the Board of the Appellate Authority by enabling a sick industrial companypany to companytinue to incur further liabilities during this period. This would be the companysequence if sub-section 1 of s. 22 is companystrued to bring about suspension of proceedings for eviction instituted by landlord against a sick industrial companypany which has ceased to enjoy the protection of the relevant rent law on account of default in payment of rent. It would also mean that the landlord of such a companypany must companytinue to suffer a loss by permitting the tenant sick industrial companypany to occupy the premises even though it is number in a position to pay the rent. Such an intention cannot be imputed 1014 to Parliament. We are, therefore, of the view that Section 22 1 does number companyer a proceeding instituted by a landlord of a sick industrial companypany for the eviction of the companypany premises let out to it. We are also unable to agree with the companytention of the learned companynsel for the appellant-company that the leasehold interest of the appellant-company in premises leased out to it is property for the purpose of Section 22 1 . It is numberdoubt true that leasehold interest of the lessee in the premises leased out to him is property which can be transferred and the said interest can also be attached and sold by way of execution in satisfaction of a decree against a lessee. In that sense, it can be said that the leasehold interest of a companypany is its property. But the question is whether the same is true in respect of the interest of a companypany which is in occupation of the premises as a statutory tenant by virtue of the protection companyferred by the relevant rent law because in the instant case on the date of reference to the Board the proceedings for eviction of the appellant-company were pending and the appellantcompanypany was in occupation of the premises only as a statutory tenant governed by the provisions of the Karnataka Rent Control Act. In Smt. Gian Devi Anand v. Jeevan Kumar Ors., 1985 Supp. 1 SCR 1, this Court has laid down that the termination of a companytractual tenancy does number bring about a change in the status and legal position of the tenant unless there are companytrary provision in the relevant Rent Act and the tenant, numberwithstanding the termination of tenancy, does enjoy an estate or interest in the tenanted premises. It is further laid down that this interest or estate which the tenant companytinues to enjoy despite termination of the companytractual tenancy creates a heritable interest in the absence of any provision to the companytrary. This Court has also held that the legislature which by the Rent Act seeks to companyfer the benefit on the tenants and to afford protection against eviction, is perfectly companypetent to make appropriate provision regulating the nature of protection and the manner and extent of enjoyment of such tenancy rights after the termination of companytractual tenancy of the tenant including the rights after the termination of companytractual tenancy of the tenant including the rights and the nature of protection of the heirs on the death of the tenant. In the instant case, we are companycerned with the right of the tenant as governed by the Karnataka Rent Control Act. In clause r of Section 3, the expression tenant has been defined to include the surviving spouse or any son or daughter or father or mother of a deceased tenant who had been living with the tenant in the premises as a member of the tenants 1015 family after the death of the tenant and a person companytinuing in possession after the termination of the tenancy in his favour. In view of clause f of the proviso to sub-section 1 of section 21 protection against eviction is number available to a tenant who has unlawfully sub-let the whole or part of the premises or assigned or transferred in any other manner his interest therein and where the sub-letting, assignment or transfer has been made before the companying into operation of this part except in respect of sub-letting, assignment or transfer to which the provisions of section 61 are applicable , such sub-letting, assignment or transfer has been made companytrary to any provision of law then in force. Section 23 prohibits sub-letting or transfer by the tenant and provides as under Notwithstanding anything companytained in any law, but subject to any companytract to the companytrary, it shall number be lawful after the companying into operation of this Part, for any tenant to sub-let whole or any part of the premises let to him or to assign or transfer in any other manner his interest therein Provided that the State Government may, by numberification, 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 numberification Provided further that numberhing in this section shall apply to a tenant having a right to enjoy any premises in perpetuity. Any person who companytravenes the provisions of sub-section 1 , shall, on companyviction, be punished with fine which may extend to one hundred rupees. From these provisions, it would appear that except in cases companyered by the two provisos to sub-section 1 of s. 23, there is a prohibition for a tenant to sub-let whole or any part of the premises let to him or to assign or transfer in any other manner his interest therein. This prohibition is, however, subject to a companytract to the companytrary. A tenant who sublets or assigns or transfer the premises in companytravention of this prohibition loses the protection of law and can be evicted by the landlord under Section 21 1 f . In the case of a statutory tenant, the relationship is number governed by companytract. The prohibition against assignment and transfer is, therefore, absolute and the interest of a statutory tenant can neither be assigned number 1016 transferred. This means that the interest of the statutory tenant in the premises in his occupation, as governed by the Karnataka Rent Control Act is a limited interest which enables the surviving spouse or any son or daughter or father or mother of a deceased tenant who had been living with the tenant in the premises as a member of the tenants family up to the death of the tenant and a person companytinuing in possession after the termination of the tenancy in his favour, to inherit the interest of the tenant on his death. The said interest of the tenant is, however, number assignable or transferable and, therefore, the interest of a companypany which is companytinuing in occupation of the premises as a statutory tenant by virtue of the protection companyferred by the Karnataka Rent Control Act, cannot be regarded as property of the companypany for the purpose of sub-section 1 of s. 22 of the Act and for that reason also the provisions of Section 22 1 were number attracted to the eviction proceedings instituted by the respondents against the appellant-company. The provisions of Section 22 1 did number, therefore, bar the prosecution of the said proceedings by the respondents and the order dated September 30, 1989 passed by the XII Additional Small Cause Judge, Bangalore allowing the eviction petition cannot be held to have been passed in companytravention of the provisions of Section 22 1 of the Act. Civil Appeal No. 2553 of 1991 also, therefore, fails and is liable to be dismissed. |