{"id": "1951_10", "text": "CIVIL APPELLATE JURISDICTION Appeal (Civil Appeal No. 57 of 1950) from a judgment and decree of the High Court of Judicature at Bombay dated 1st April, 1948, in Appeal No. 365 of 1947 reversing a judgment of the Joint Civil Judge at Ahmedabad, dated 14th October, 1947, in Suit No. 174 of 1945. Somayya (Jindra Lal, with him) for the appel- lants. K. Daphtary (Sri Narain Andley, with him) for the respondents. 1951. February 23. \nThe judgment of the Court was deliv- ered by MAHAJAN J. - The appellants are owners of a property known as Bharat Bhuvan Theatre at Ahmedabad. The respond- ents are the lessees of the said theatre. The term of the lease was to expire on the 2nd December, 1945, unless the lessees gave to the land lords three months previous notice in writing of their intention of exercising their option of renewal of the lease for a further period of two years. \nOn the 13th December, 1945, the appellants filed the suit out of which this appeal arises for ejectment of the respondents and for recovery of certain amounts. This suit was decreed on the 14th October, 1947, on the following findings (1) that the respondents had not exercised the option of the renewal of the lease according to the stipulations contained in the lease, (2) that they had committed breaches of the terms of the lease, and (3) that they were not protected by the Rent Restriction Act. \nAn enquiry was directed into the amount of mesne prof- its. The respondents filed an append in the High Court against the decree of the Joint Civil Judge on the 10th November, 1947. The appeal was heard by a Bench of the High Court (Weston and Dixit JJ.) on the 26th February, 1948, and was decided on the 1st April, 1948. \nThe judgment and decree of the Joint Civil Judge were reversed and the plaintiffs suit was dismissed. The High Court affirmed the finding of the trial court on the first point and held in agreement with it that the respondents had not proved that they gave three months previous notice in writing to the appellants for renewal of the lease as required by clause 4 (2) of the lease. It reversed the finding of the trial Judge on the point that the respondents had committed breaches of the terms contained in clause 2 (20) of the lease. \nFinally, it reached the conclusion that although the decree appealed from was right on the date it was made, yet in view of the altered circumstances created by reason of coming into operation of Act LVII of 1947 the appellants were not enti- tled to recovery of possession of the suit premises. Being aggrieved by the judgment of the High Court, the appellants obtained a certificate and filed an appeal in this court on the 7th March, 1949, and it is now before us for decision. It was contended before the High Court that the appeal being in the nature of a rehearing, it should be decided in accordance with the provisions of Act LVII of 1947 which came into force on the 13th February, 1948, and not in accordance with the provisions of the Act in force at the time when the decree was passed by the trial court. \nIn other words, the contention was that there having been a change in the law after the date of the decree passed by the trial Judge and before the appeal was heard, the rights of the parties should be determined in accordance with the law as it stood on the date of the hearing of the appeal. \nThe High Court gave effect to this contention and set aside the decree made for ejectment of the respondents. Learned counsel for the appellants challenged the deci- sion of the High Court before us on three grounds (1) that assuming that the appeal had to be decided by the High Court in accordance with the provisions of Act LVII of 1947, the provisions of that Act had no application to pending ap- peals which had been excluded from its ambit (9,)that Act LVII of 1947 had been amended by Bombay Act III of 1949 and that the appeal pending in this court should be decided in accordance with the provisions of the amended Act which excluded pending appeals from the purview of Act LVII of 1947 and (3) that the High Court wrongly reversed the trial courts finding that the respondents had committed breaches of the terms contained in clause 2 (20) of the lease. \nThe learned counsel for the respondents besides controverting the contentions raised on behalf of the appellants contended that both the courts had erred in holding that the respondents had not proved that they exer- cised the option of renewal of the lease according to the stipulations contained therein. In our opinion, the decision of the appeal depends solely on the construction of sections 12 and 50 of Act LVII of 1947. The question to decide is whether the Bombay Rents, Hotel and Lodging House Rates Control Act, LVII of 1947, which was enacted on the 19th January, 1948, and which came into force on the 13th February, 1948, has applica- tion to pending appeals or whether its retrospective effect is limited to cases mentioned in section 50 of the Act. \nThe point whether the option of renewal was exercised according to the covenants of the lease is concluded by a concurrent finding of fact and nothing that Mr. Daphthary said in support of his contention in any way shakes that finding. The case must therefore be decided on the assump- tion that the respondents did not exercise the option given to them under the lease for its renewal. We are also not impressed with the argument of the learned counsel for the appellants that the High Court wrongly reversed the finding of the trial Judge on the point that the respondents commit- ted breaches of the terms of the tease. We should not howev- er be taken to concur in all the reasons given by the High Court for reversing that finding. \nWhether the High Court was right in holding that the provisions of Act LVII of 1947 have application to appeals pending at the time when that Act came into force the answer to this question depends on the construction to be placed on sections 12 and 50 of Act LVII of 1947. Section 12 of the Act is in these terms- \n A landlord shall not be entitled to the recovery of possession of any premises so long as the tenant pays, or is ready and willing to pay, the amount of the standard rent and permitted increases, if any, and observes and performs the other conditions of the tenancy, in so far as they are consistent with the provisions of this Act. \n No suit for recovery of possession shall be insti- tuted by a landlord against a tenant on the ground of non- payment of the standard rent or permitted increases due, until the expiration of one month next after notice in writing of the demand of the standard rent or permitted increases has been served upon the tenant in the manner provided in section 106 of the Transfer of Property Act, 1882. No decree for eviction shall be passed in any such suit if, at the hearing. of the suit, the tenant pays or tenders in court the standard rent or permitted increases then due together with the costs of the suit. \n Explanation--In any case where there is a dispute as to the amount of standard rent or permitted increases recovera- ble under this Act the tenant shall be deemed to be ready and willing to pay such amount if, before the expiry of the period of one month after notice referred to in sub-section (2), he makes an application to the court under sub-section (3) of section 11 and thereafter pays or tenders the amount or rent or permitted increases specified in the order made by the court. This is the substantive section giving protection to the tenant against ejectment. \n Section 50 which occurs in Part IV dealing with miscellaneous matters is the repeal section. It repeals the Act of 1939 and the Act of 1944, and while repealing these statutes it provides as follows-- Provided that all suits and proceedings (other than execution proceedings and appeals) between a landlord and a tenant relating to the recovery or fixing of rent or posses- sion of any premises to which the provisions of Part II apply and all suits and proceedings by a manager of a hotel or an owner of a lodging house against a lodger for the recovery of charges for, or possession of, the accommodation provided in a hotel or lodging house situate in an area to which Part III applies, which are pending in any Court, shall be transferred to and continued before the courts which would have jurisdiction to try such suits or proceed- ings under this Act, and thereupon all the provisions of this Act and the rules made thereunder shall apply to all such suits and proceedings. \n Provided further that-- (a) every order passed or act done by the Control- lers under Part IV of the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1944, and every order or act deemed to have been passed or done under that Part shall be deemed to have been passed or done under this Act and (b) all proceedings pending before the Controllers under Part IV of that Act shall be transferred to and continued before the Controllers appointed under this Act as if they were proceedings instituted before the Con- trollers under this Act The High Court held that section 50 merely provided for transfer of pending suits and proceedings to courts given jurisdiction under the Act to hear them and that from its ambit execution proceedings and appeals were excluded be- cause no question could arise of their being transferred from one court to another and that an appeal being a contin- uation of the suit and in the nature of a re-hearing, the provisions of section 12 should be applied to pending ap- peals. \n The opinion expressed by the Division Bench on the construction of sections 12 and 50 of the Act was questioned in Nilkanth v. Rasiklal (J), and the matter was referred to a Full Bench. The Full Bench overruled the decision reached by the Division Bench on the construction of section 50 and observed that it was clear that in terms the provi- sions of the new Act and the rules made thereunder are made to apply only to such suits and proceedings which are trans- ferred under the provisions of this section and that its retrospective effect is confined to what is expressly stated in section 50 of the Act. \n We are in respectful agreement with the view expressed by the Full Bench. On a plain reading of the language of sections 12 and 50 it seems clear to us that the Act was given retrospective operation only to a limited extent and execution proceedings and appeals were excluded from this effect and were to be governed by the provisions of the law in force at the time when the decrees were passed. The concluding words of section 50 and there- upon all the provisions of this Act and the rules made thereunder shall apply to all such suits and proceedings fully bear out this construction. Mr. Daphthary contended that the whole object of section 50 was to make provision for transfer of pending cases to courts which were given jurisdiction under the Act to hear them and the section did not concern itself with the extent of the retrospective operation of the Act, and that section 12 of the Act which gives protection to tenants should \n A. I. R. 1949 Bom. 210. be construed as having retrospective effect. In our opinion this contention is not sound. Section 50 cannot be de- scribed as a section providing merely for transfer of pend- ing cases to courts having jurisdiction to deal with them. It is on the other hand a repeal section in the new stat- ute. \n It repeals the two earlier statutes, and while repeal- ing them it provides that the repeal shall not affect executions and appeals and that the provisions of the Act shall apply to all pending suits which shall be transferred to the courts having jurisdiction to hear them under section 28 of the Act. We are also inclined to agree with the view of the Full Bench that section 12 is in terms prospective and not retrospective. Sub-section (2) clearly relates to suits which may be instituted after the Act comes into force. \n It cannot apply to suits which were already pending when the Act was put on the statute book. Sub-section (3) which gives the right to the tenant to pay or tender the rent at the hearing of the suit only applies to those suits which may be instituted after the Act comes into operation because it in terms states in such suit and not in any suit. Such suit can only be a suit referred to in subsec- tions (2) and (3) of section 12.\n DECISION ??", "expert_1": {"rank1": ["Mr. Daphthary contended that the whole object of section 50 was to make provision for transfer of pending cases to courts which were given jurisdiction under the Act to hear them and the section did not concern itself with the extent of the retrospective operation of the Act, and that section 12 of the Act which gives protection to tenants should \n A. I. R. 1949 Bom. 210. be construed as having retrospective effect. In our opinion this contention is not sound.", "We are also inclined to agree with the view of the Full Bench that section 12 is in terms prospective and not retrospective.", "Sub-section (2) clearly relates to suits which may be instituted after the Act comes into force. \n It cannot apply to suits which were already pending when the Act was put on the statute book."], "rank2": ["On a plain reading of the language of sections 12 and 50 it seems clear to us that the Act was given retrospective operation only to a limited extent and execution proceedings and appeals were excluded from this effect and were to be governed by the provisions of the law in force at the time when the decrees were passed. The concluding words of section 50 and there- upon all the provisions of this Act and the rules made thereunder shall apply to all such suits and proceedings fully bear out this construction.", "Sub-section (3) which gives the right to the tenant to pay or tender the rent at the hearing of the suit only applies to those suits which may be instituted after the Act comes into operation because it in terms states in such suit and not in any suit. Such suit can only be a suit referred to in subsec- tions (2) and (3) of section 12."], "rank3": ["In our opinion, the decision of the appeal depends solely on the construction of sections 12 and 50 of Act LVII of 1947. The question to decide is whether the Bombay Rents, Hotel and Lodging House Rates Control Act, LVII of 1947, which was enacted on the 19th January, 1948, and which came into force on the 13th February, 1948, has applica- tion to pending appeals or whether its retrospective effect is limited to cases mentioned in section 50 of the Act. \nThe point whether the option of renewal was exercised according to the covenants of the lease is concluded by a concurrent finding of fact and nothing that Mr. Daphthary said in support of his contention in any way shakes that finding. The case must therefore be decided on the assump- tion that the respondents did not exercise the option given to them under the lease for its renewal. We are also not impressed with the argument of the learned counsel for the appellants that the High Court wrongly reversed the finding of the trial Judge on the point that the respondents commit- ted breaches of the terms of the tease. We should not howev- er be taken to concur in all the reasons given by the High Court for reversing that finding. \nWhether the High Court was right in holding that the provisions of Act LVII of 1947 have application to appeals pending at the time when that Act came into force the answer to this question depends on the construction to be placed on sections 12 and 50 of Act LVII of 1947.", "The High Court held that section 50 merely provided for transfer of pending suits and proceedings to courts given jurisdiction under the Act to hear them and that from its ambit execution proceedings and appeals were excluded be- cause no question could arise of their being transferred from one court to another and that an appeal being a contin- uation of the suit and in the nature of a re-hearing, the provisions of section 12 should be applied to pending ap- peals.", "The opinion expressed by the Division Bench on the construction of sections 12 and 50 of the Act was questioned in Nilkanth v. Rasiklal (J), and the matter was referred to a Full Bench.", "The Full Bench overruled the decision reached by the Division Bench on the construction of section 50 and observed that it was clear that in terms the provi- sions of the new Act and the rules made thereunder are made to apply only to such suits and proceedings which are trans- ferred under the provisions of this section and that its retrospective effect is confined to what is expressly stated in section 50 of the Act. \n We are in respectful agreement with the view expressed by the Full Bench.", "Section 50 cannot be de- scribed as a section providing merely for transfer of pend- ing cases to courts having jurisdiction to deal with them. It is on the other hand a repeal section in the new stat- ute. \n It repeals the two earlier statutes, and while repeal- ing them it provides that the repeal shall not affect executions and appeals and that the provisions of the Act shall apply to all pending suits which shall be transferred to the courts having jurisdiction to hear them under section 28 of the Act."], "rank4": ["It was contended before the High Court that the appeal being in the nature of a rehearing, it should be decided in accordance with the provisions of Act LVII of 1947 which came into force on the 13th February, 1948, and not in accordance with the provisions of the Act in force at the time when the decree was passed by the trial court. \nIn other words, the contention was that there having been a change in the law after the date of the decree passed by the trial Judge and before the appeal was heard, the rights of the parties should be determined in accordance with the law as it stood on the date of the hearing of the appeal. \nThe High Court gave effect to this contention and set aside the decree made for ejectment of the respondents. Learned counsel for the appellants challenged the deci- sion of the High Court before us on three grounds (1) that assuming that the appeal had to be decided by the High Court in accordance with the provisions of Act LVII of 1947, the provisions of that Act had no application to pending ap- peals which had been excluded from its ambit (9,)that Act LVII of 1947 had been amended by Bombay Act III of 1949 and that the appeal pending in this court should be decided in accordance with the provisions of the amended Act which excluded pending appeals from the purview of Act LVII of 1947 and (3) that the High Court wrongly reversed the trial courts finding that the respondents had committed breaches of the terms contained in clause 2 (20) of the lease."], "rank5": ["The appellants are owners of a property known as Bharat Bhuvan Theatre at Ahmedabad. The respond- ents are the lessees of the said theatre. The term of the lease was to expire on the 2nd December, 1945, unless the lessees gave to the land lords three months previous notice in writing of their intention of exercising their option of renewal of the lease for a further period of two years. \nOn the 13th December, 1945, the appellants filed the suit out of which this appeal arises for ejectment of the respondents and for recovery of certain amounts. This suit was decreed on the 14th October, 1947, on the following findings (1) that the respondents had not exercised the option of the renewal of the lease according to the stipulations contained in the lease, (2) that they had committed breaches of the terms of the lease, and (3) that they were not protected by the Rent Restriction Act. \nAn enquiry was directed into the amount of mesne prof- its. The respondents filed an append in the High Court against the decree of the Joint Civil Judge on the 10th November, 1947. The appeal was heard by a Bench of the High Court (Weston and Dixit JJ.) on the 26th February, 1948, and was decided on the 1st April, 1948. \nThe judgment and decree of the Joint Civil Judge were reversed and the plaintiffs suit was dismissed. The High Court affirmed the finding of the trial court on the first point and held in agreement with it that the respondents had not proved that they gave three months previous notice in writing to the appellants for renewal of the lease as required by clause 4 (2) of the lease. It reversed the finding of the trial Judge on the point that the respondents had committed breaches of the terms contained in clause 2 (20) of the lease."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["Section 50 cannot be de- scribed as a section providing merely for transfer of pend- ing cases to courts having jurisdiction to deal with them. It is on the other hand a repeal section in the new stat- ute. \n It repeals the two earlier statutes, and while repeal- ing them it provides that the repeal shall not affect executions and appeals and that the provisions of the Act shall apply to all pending suits which shall be transferred to the courts having jurisdiction to hear them under section 28 of the Act.", "section 12 is in terms prospective and not retrospective"], "rank2": ["the appellants filed the suit out of which this appeal arises for ejectment of the respondents and for recovery of certain amounts.", "On a plain reading of the language of sections 12 and 50 it seems clear to us that the Act was given retrospective operation only to a limited extent and execution proceedings and appeals were excluded from this effect and were to be governed by the provisions of the law in force at the time when the decrees were passed."], "rank3": ["it reached the conclusion that although the decree appealed from was right on the date it was made, yet in view of the altered circumstances created by reason of coming into operation of Act LVII of 1947 the appellants were not enti- tled to recovery of possession of the suit premises.", "the contention was that there having been a change in the law after the date of the decree passed by the trial Judge and before the appeal was heard, the rights of the parties should be determined in accordance with the law as it stood on the date of the hearing of the appeal."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["The question to decide is whether the Bombay Rents, Hotel and Lodging House Rates Control Act, LVII of 1947, which was enacted on the 19th January, 1948, and which came into force on the 13th February, 1948, has applica- tion to pending appeals or whether its retrospective effect is limited to cases mentioned in section 50 of the Act.", "The case must therefore be decided on the assump- tion that the respondents did not exercise the option given to them under the lease for its renewal", "Whether the High Court was right in holding that the provisions of Act LVII of 1947 have application to appeals pending at the time when that Act came into force the answer to this question depends on the construction to be placed on sections 12 and 50 of Act LVII of 1947", "The Full Bench overruled the decision reached by the Division Bench on the construction of section 50 and observed that it was clear that in terms the provi- sions of the new Act and the rules made thereunder are made to apply only to such suits and proceedings which are trans- ferred under the provisions of this section and that its retrospective effect is confined to what is expressly stated in section 50 of the Act. \n We are in respectful agreement with the view expressed by the Full Bench.", "On a plain reading of the language of sections 12 and 50 it seems clear to us that the Act was given retrospective operation only to a limited extent and execution proceedings and appeals were excluded from this effect and were to be governed by the provisions of the law in force at the time when the decrees were passed", "The concluding words of section 50 and there- upon all the provisions of this Act and the rules made thereunder shall apply to all such suits and proceedings fully bear out this construction", "Section 50 cannot be de- scribed as a section providing merely for transfer of pend- ing cases to courts having jurisdiction to deal with them. It is on the other hand a repeal section in the new stat- ute. \n It repeals the two earlier statutes, and while repeal- ing them it provides that the repeal shall not affect executions and appeals and that the provisions of the Act shall apply to all pending suits which shall be transferred to the courts having jurisdiction to hear them under section 28 of the Act. We are also inclined to agree with the view of the Full Bench that section 12 is in terms prospective and not retrospective.", "Sub-section (2) clearly relates to suits which may be instituted after the Act comes into force. \n It cannot apply to suits which were already pending when the Act was put on the statute book.", "Sub-section (3) which gives the right to the tenant to pay or tender the rent at the hearing of the suit only applies to those suits which may be instituted after the Act comes into operation because it in terms states in such suit and not in any suit."], "rank2": ["The term of the lease was to expire on the 2nd December, 1945, unless the lessees gave to the land lords three months previous notice in writing of their intention of exercising their option of renewal of the lease for a further period of two years", "This suit was decreed on the 14th October, 1947, on the following findings (1) that the respondents had not exercised the option of the renewal of the lease according to the stipulations contained in the lease, (2) that they had committed breaches of the terms of the lease, and (3) that they were not protected by the Rent Restriction Act.", "the contention was that there having been a change in the law after the date of the decree passed by the trial Judge and before the appeal was heard, the rights of the parties should be determined in accordance with the law as it stood on the date of the hearing of the appeal. \nThe High Court gave effect to this contention and set aside the decree made for ejectment of the respondents", "In our opinion, the decision of the appeal depends solely on the construction of sections 12 and 50 of Act LVII of 1947.", "Section 12 of the Act is in these terms- \n A landlord shall not be entitled to the recovery of possession of any premises so long as the tenant pays, or is ready and willing to pay, the amount of the standard rent and permitted increases, if any, and observes and performs the other conditions of the tenancy, in so far as they are consistent with the provisions of this Act. \n No suit for recovery of possession shall be insti- tuted by a landlord against a tenant on the ground of non- payment of the standard rent or permitted increases due, until the expiration of one month next after notice in writing of the demand of the standard rent or permitted increases has been served upon the tenant in the manner provided in section 106 of the Transfer of Property Act, 1882.", "No decree for eviction shall be passed in any such suit if, at the hearing. of the suit, the tenant pays or tenders in court the standard rent or permitted increases then due together with the costs of the suit.", "Section 50 which occurs in Part IV dealing with miscellaneous matters is the repeal section. It repeals the Act of 1939 and the Act of 1944, and while repealing these statutes it provides as follows-- Provided that all suits and proceedings (other than execution proceedings and appeals) between a landlord and a tenant relating to the recovery or fixing of rent or posses- sion of any premises to which the provisions of Part II apply and all suits and proceedings by a manager of a hotel or an owner of a lodging house against a lodger for the recovery of charges for, or possession of, the accommodation provided in a hotel or lodging house situate in an area to which Part III applies, which are pending in any Court, shall be transferred to and continued before the courts which would have jurisdiction to try such suits or proceed- ings under this Act, and thereupon all the provisions of this Act and the rules made thereunder shall apply to all such suits and proceedings. \n Provided further that-- (a) every order passed or act done by the Control- lers under Part IV of the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1944, and every order or act deemed to have been passed or done under that Part shall be deemed to have been passed or done under this Act and (b) all proceedings pending before the Controllers under Part IV of that Act shall be transferred to and continued before the Controllers appointed under this Act as if they were proceedings instituted before the Con- trollers under this Act The High Court held that section 50 merely provided for transfer of pending suits and proceedings to courts given jurisdiction under the Act to hear them and that from its ambit execution proceedings and appeals were excluded be- cause no question could arise of their being transferred from one court to another and that an appeal being a contin- uation of the suit and in the nature of a re-hearing, the provisions of section 12 should be applied to pending ap- peals.", "Such suit can only be a suit referred to in subsec- tions (2) and (3) of section 12"], "rank3": ["The appellants are owners of a property known as Bharat Bhuvan Theatre at Ahmedabad. The respond- ents are the lessees of the said theatre", "On the 13th December, 1945, the appellants filed the suit out of which this appeal arises for ejectment of the respondents and for recovery of certain amounts", "The High Court affirmed the finding of the trial court on the first point and held in agreement with it that the respondents had not proved that they gave three months previous notice in writing to the appellants for renewal of the lease as required by clause 4 (2) of the lease. It reversed the finding of the trial Judge on the point that the respondents had committed breaches of the terms contained in clause 2 (20) of the lease. \nFinally, it reached the conclusion that although the decree appealed from was right on the date it was made, yet in view of the altered circumstances created by reason of coming into operation of Act LVII of 1947 the appellants were not enti- tled to recovery of possession of the suit premises."], "rank4": ["The respondents filed an append in the High Court against the decree of the Joint Civil Judge on the 10th November, 1947", "The judgment and decree of the Joint Civil Judge were reversed and the plaintiffs suit was dismissed.", "Being aggrieved by the judgment of the High Court, the appellants obtained a certificate and filed an appeal in this court on the 7th March, 1949"], "label": "ACCEPTED"}, "expert_4": {"rank1": ["This suit was decreed on the 14th October, 1947, on the following findings (1) that the respondents had not exercised the option of the renewal of the lease according to the stipulations contained in the lease, (2) that they had committed breaches of the terms of the lease, and (3) that they were not protected by the Rent Restriction Act.", "Learned counsel for the appellants challenged the deci- sion of the High Court before us on three grounds (1) that assuming that the appeal had to be decided by the High Court in accordance with the provisions of Act LVII of 1947, the provisions of that Act had no application to pending ap- peals which had been excluded from its ambit (9,)that Act LVII of 1947 had been amended by Bombay Act III of 1949 and that the appeal pending in this court should be decided in accordance with the provisions of the amended Act which excluded pending appeals from the purview of Act LVII of 1947 and (3) that the High Court wrongly reversed the trial courts finding that the respondents had committed breaches of the terms contained in clause 2 (20) of the lease.", "The learned counsel for the respondents besides controverting the contentions raised on behalf of the appellants contended that both the courts had erred in holding that the respondents had not proved that they exer- cised the option of renewal of the lease according to the stipulations contained therein.", "The case must therefore be decided on the assump- tion that the respondents did not exercise the option given to them under the lease for its renewal.", "Sub-section (3) which gives the right to the tenant to pay or tender the rent at the hearing of the suit only applies to those suits which may be instituted after the Act comes into operation because it in terms states in such suit and not in any suit. Such suit can only be a suit referred to in subsec- tions (2) and (3) of section 12."], "rank2": ["The appellants are owners of a property known as Bharat Bhuvan Theatre at Ahmedabad. The respond- ents are the lessees of the said theatre.", "The term of the lease was to expire on the 2nd December, 1945, unless the lessees gave to the land lords three months previous notice in writing of their intention of exercising their option of renewal of the lease for a further period of two years.", "On the 13th December, 1945, the appellants filed the suit out of which this appeal arises for ejectment of the respondents and for recovery of certain amounts.", "The point whether the option of renewal was exercised according to the covenants of the lease is concluded by a concurrent finding of fact and nothing that Mr. Daphthary said in support of his contention in any way shakes that finding.", "On a plain reading of the language of sections 12 and 50 it seems clear to us that the Act was given retrospective operation only to a limited extent and execution proceedings and appeals were excluded from this effect and were to be governed by the provisions of the law in force at the time when the decrees were passed.", "Section 50 cannot be de- scribed as a section providing merely for transfer of pend- ing cases to courts having jurisdiction to deal with them.", "It is on the other hand a repeal section in the new stat- ute. \n It repeals the two earlier statutes, and while repeal- ing them it provides that the repeal shall not affect executions and appeals and that the provisions of the Act shall apply to all pending suits which shall be transferred to the courts having jurisdiction to hear them under section 28 of the Act. We are also inclined to agree with the view of the Full Bench that section 12 is in terms prospective and not retrospective. Sub-section (2) clearly relates to suits which may be instituted after the Act comes into force. \n It cannot apply to suits which were already pending when the Act was put on the statute book."], "rank3": ["The High Court affirmed the finding of the trial court on the first point and held in agreement with it that the respondents had not proved that they gave three months previous notice in writing to the appellants for renewal of the lease as required by clause 4 (2) of the lease.", "It reversed the finding of the trial Judge on the point that the respondents had committed breaches of the terms contained in clause 2 (20) of the lease.", "Finally, it reached the conclusion that although the decree appealed from was right on the date it was made, yet in view of the altered circumstances created by reason of coming into operation of Act LVII of 1947 the appellants were not enti- tled to recovery of possession of the suit premises.", "It was contended before the High Court that the appeal being in the nature of a rehearing, it should be decided in accordance with the provisions of Act LVII of 1947 which came into force on the 13th February, 1948, and not in accordance with the provisions of the Act in force at the time when the decree was passed by the trial court.", "In other words, the contention was that there having been a change in the law after the date of the decree passed by the trial Judge and before the appeal was heard, the rights of the parties should be determined in accordance with the law as it stood on the date of the hearing of the appeal.", "In our opinion, the decision of the appeal depends solely on the construction of sections 12 and 50 of Act LVII of 1947.", "We are also not impressed with the argument of the learned counsel for the appellants that the High Court wrongly reversed the finding of the trial Judge on the point that the respondents commit- ted breaches of the terms of the tease.", "Section 12 of the Act is in these terms- \n A landlord shall not be entitled to the recovery of possession of any premises so long as the tenant pays, or is ready and willing to pay, the amount of the standard rent and permitted increases, if any, and observes and performs the other conditions of the tenancy, in so far as they are consistent with the provisions of this Act.", "No suit for recovery of possession shall be insti- tuted by a landlord against a tenant on the ground of non- payment of the standard rent or permitted increases due, until the expiration of one month next after notice in writing of the demand of the standard rent or permitted increases has been served upon the tenant in the manner provided in section 106 of the Transfer of Property Act, 1882", "No decree for eviction shall be passed in any such suit if, at the hearing. of the suit, the tenant pays or tenders in court the standard rent or permitted increases then due together with the costs of the suit.", "Explanation--In any case where there is a dispute as to the amount of standard rent or permitted increases recovera- ble under this Act the tenant shall be deemed to be ready and willing to pay such amount if, before the expiry of the period of one month after notice referred to in sub-section (2), he makes an application to the court under sub-section (3) of section 11 and thereafter pays or tenders the amount or rent or permitted increases specified in the order made by the court.", "This is the substantive section giving protection to the tenant against ejectment.", "Section 50 which occurs in Part IV dealing with miscellaneous matters is the repeal section.", "The Full Bench overruled the decision reached by the Division Bench on the construction of section 50 and observed that it was clear that in terms the provi- sions of the new Act and the rules made thereunder are made to apply only to such suits and proceedings which are trans- ferred under the provisions of this section and that its retrospective effect is confined to what is expressly stated in section 50 of the Act.", "We are in respectful agreement with the view expressed by the Full Bench", "The concluding words of section 50 and there- upon all the provisions of this Act and the rules made thereunder shall apply to all such suits and proceedings fully bear out this construction", "In our opinion this contention is not sound."], "rank4": ["An enquiry was directed into the amount of mesne prof- its.", "The respondents filed an append in the High Court against the decree of the Joint Civil Judge on the 10th November, 1947.", "The judgment and decree of the Joint Civil Judge were reversed and the plaintiffs suit was dismissed.", "The High Court gave effect to this contention and set aside the decree made for ejectment of the respondents.", "The question to decide is whether the Bombay Rents, Hotel and Lodging House Rates Control Act, LVII of 1947, which was enacted on the 19th January, 1948, and which came into force on the 13th February, 1948, has applica- tion to pending appeals or whether its retrospective effect is limited to cases mentioned in section 50 of the Act.", "We should not howev- er be taken to concur in all the reasons given by the High Court for reversing that finding.", "Whether the High Court was right in holding that the provisions of Act LVII of 1947 have application to appeals pending at the time when that Act came into force the answer to this question depends on the construction to be placed on sections 12 and 50 of Act LVII of 1947.", "It repeals the Act of 1939 and the Act of 1944, and while repealing these statutes it provides as follows-- Provided that all suits and proceedings (other than execution proceedings and appeals) between a landlord and a tenant relating to the recovery or fixing of rent or posses- sion of any premises to which the provisions of Part II apply and all suits and proceedings by a manager of a hotel or an owner of a lodging house against a lodger for the recovery of charges for, or possession of, the accommodation provided in a hotel or lodging house situate in an area to which Part III applies, which are pending in any Court, shall be transferred to and continued before the courts which would have jurisdiction to try such suits or proceed- ings under this Act, and thereupon all the provisions of this Act and the rules made thereunder shall apply to all such suits and proceedings.", "Provided further that-- (a) every order passed or act done by the Control- lers under Part IV of the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1944, and every order or act deemed to have been passed or done under that Part shall be deemed to have been passed or done under this Act and (b) all proceedings pending before the Controllers under Part IV of that Act shall be transferred to and continued before the Controllers appointed under this Act as if they were proceedings instituted before the Con- trollers under this Act The High Court held that section 50 merely provided for transfer of pending suits and proceedings to courts given jurisdiction under the Act to hear them and that from its ambit execution proceedings and appeals were excluded be- cause no question could arise of their being transferred from one court to another and that an appeal being a contin- uation of the suit and in the nature of a re-hearing, the provisions of section 12 should be applied to pending ap- peals.", "Mr. Daphthary contended that the whole object of section 50 was to make provision for transfer of pending cases to courts which were given jurisdiction under the Act to hear them and the section did not concern itself with the extent of the retrospective operation of the Act, and that section 12 of the Act which gives protection to tenants should \n A. I. R. 1949 Bom. 210. be construed as having retrospective effect."], "rank5": ["The opinion expressed by the Division Bench on the construction of sections 12 and 50 of the Act was questioned in Nilkanth v. Rasiklal (J), and the matter was referred to a Full Bench."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["We are in respectful agreement with the view expressed by the Full Bench.", "On a plain reading of the language of sections 12 and 50 it seems clear to us that the Act was given retrospective operation only to a limited extent and execution proceedings and appeals were excluded from this effect and were to be governed by the provisions of the law in force at the time when the decrees were passed.", "It repeals the two earlier statutes, and while repeal- ing them it provides that the repeal shall not affect executions and appeals and that the provisions of the Act shall apply to all pending suits which shall be transferred to the courts having jurisdiction to hear them under section 28 of the Act."], "rank2": ["other than execution proceedings and appeals", "The Full Bench overruled the decision reached by the Division Bench on the construction of section 50 and observed that it was clear that in terms the provi- sions of the new Act and the rules made thereunder are made to apply only to such suits and proceedings which are trans- ferred under the provisions of this section and that its retrospective effect is confined to what is expressly stated in section 50 of the Act."], "rank3": ["that assuming that the appeal had to be decided by the High Court in accordance with the provisions of Act LVII of 1947, the provisions of that Act had no application to pending ap- peals which had been excluded from its ambit", "that Act LVII of 1947 had been amended by Bombay Act III of 1949 and that the appeal pending in this court should be decided in accordance with the provisions of the amended Act which excluded pending appeals from the purview of Act LVII of 1947", "Provided that all suits and proceedings (other than execution proceedings and appeals) between a landlord and a tenant relating to the recovery or fixing of rent or posses- sion of any premises to which the provisions of Part II apply and all suits and proceedings by a manager of a hotel or an owner of a lodging house against a lodger for the recovery of charges for, or possession of, the accommodation provided in a hotel or lodging house situate in an area to which Part III applies, which are pending in any Court, shall be transferred to and continued before the courts which would have jurisdiction to try such suits or proceed- ings under this Act, and thereupon all the provisions of this Act and the rules made thereunder shall apply to all such suits and proceedings.", "Sub-section (2) clearly relates to suits which may be instituted after the Act comes into force. \n It cannot apply to suits which were already pending when the Act was put on the statute book. Sub-section (3) which gives the right to the tenant to pay or tender the rent at the hearing of the suit only applies to those suits which may be instituted after the Act comes into operation because it in terms states in such suit and not in any suit."], "rank4": ["A landlord shall not be entitled to the recovery of possession of any premises so long as the tenant pays, or is ready and willing to pay, the amount of the standard rent and permitted increases, if any, and observes and performs the other conditions of the tenancy, in so far as they are consistent with the provisions of this Act. \n No suit for recovery of possession shall be insti- tuted by a landlord against a tenant on the ground of non- payment of the standard rent or permitted increases due, until the expiration of one month next after notice in writing of the demand of the standard rent or permitted increases has been served upon the tenant in the manner provided in section 106 of the Transfer of Property Act, 1882. No decree for eviction shall be passed in any such suit if, at the hearing. of the suit, the tenant pays or tenders in court the standard rent or permitted increases then due together with the costs of the suit. \n Explanation--In any case where there is a dispute as to the amount of standard rent or permitted increases recovera- ble under this Act the tenant shall be deemed to be ready and willing to pay such amount if, before the expiry of the period of one month after notice referred to in sub-section (2), he makes an application to the court under sub-section (3) of section 11 and thereafter pays or tenders the amount or rent or permitted increases specified in the order made by the court.", "Provided further that-- (a) every order passed or act done by the Control- lers under Part IV of the Bombay Rents, Hotel Rates and Lodging House Rates (Control) Act, 1944, and every order or act deemed to have been passed or done under that Part shall be deemed to have been passed or done under this Act and (b) all proceedings pending before the Controllers under Part IV of that Act shall be transferred to and continued before the Controllers appointed under this Act as if they were proceedings instituted before the Con- trollers under this Act The High Court held that section 50 merely provided for transfer of pending suits and proceedings to courts given jurisdiction under the Act to hear them and that from its ambit execution proceedings and appeals were excluded be- cause no question could arise of their being transferred from one court to another and that an appeal being a contin- uation of the suit and in the nature of a re-hearing, the provisions of section 12 should be applied to pending ap- peals."], "rank5": ["that the High Court wrongly reversed the trial courts finding that the respondents had committed breaches of the terms contained in clause 2 (20) of the lease", "The point whether the option of renewal was exercised according to the covenants of the lease is concluded by a concurrent finding of fact and nothing that Mr. Daphthary said in support of his contention in any way shakes that finding.", "We are also not impressed with the argument of the learned counsel for the appellants that the High Court wrongly reversed the finding of the trial Judge on the point that the respondents commit- ted breaches of the terms of the tease."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1951_30", "text": "CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 17 of 1951. Appeal against a Judgment and. Order dated 22nd January, 1951, of the High Court of Judicature at Patna (Imam J.) in Criminal Revision No. 1533 of 1950 \n P. Sinha (P.S. Safeer and K.N. Aggarwal, with him) for the appellants. The respondent did not appear. 1951. May 24. The Judgment of the Court was delivered by PATANJALI SASTRI J.--This is an appeal by special leave from an order of the High Court of Judicature at Patna setting aside an order of acquittal of the appellants by the Sessions Judge, Purnea, and directing their retrial. \n The appellants were prosecuted for alleged offences under sections 147, 148, 323, 324, 326, 302 and 302/149 of the Indian Penal Code at the instance of one Polai Lal Biswas who lodged a complaint against them before the po- lice. \n The prosecution case was that, while the complainant was harvesting the paddy crop on his field at about 10 a.m. on 29th November, 1949, a mob of about fifty persons came on to the field armed with ballams, lathis and other weapons and that the first appellant Logendranath Jha, who was leading the mob, demanded a settlement of all outstanding disputes with the complainant and ,said he would not allow the paddy to be removed unless the disputes were settled. An altercation followed as a result of which Logendra or- dered an assault by his men. Then Logendra and one of his men, Harihar, gave ballam blows to one of the labourers, Kangali, who fell down and died on the spot. \n Information was given to the police who investigated the case and submitted the charge-sheet. The committing Magistrate found that a prima facie case was made out and committed the appellants to the Court of Sessions for trial. The appellants pleaded not guilty alleging inter alia, that Mohender and Debender, the brothers of Logendra (appel- lants 2 and 3) were not present in the village of Dandkhora with which they had no concern, as all the lands in that village had been allotted to Logendra at a previous parti- tion, that Logendra himself was not in the village at the time of the occurrence but arrived soon after and was dragged to the place at the instance of his enemies in the village and was placed under arrest by the Assistant Sub-Inspector of Police who had arrived there previously. \n It was also alleged that there were two factions in the village, one of which was led by one Harimohan, a relation of the complainant, and the other by Logendra and there had been numerous revenue and criminal proceedings and long-standing enmity between the families of these leaders as a result of which this false case was foisted upon the appellants. \n The learned Sessions Judge examined the evidence in great detail and found that the existence of factions as alleged by the appellants was true. He found, however, that the appellants plea of alibi was not satisfactorily made out, but the truth of the prosecution, he proceeded to observe, cannot be judged by the falsehood of the defence nor can the prosecution derive its strength from the weak- ness of the defence. Prosecution must stand on its own legs and must prove the story told by it at the very first stage. The manner of occurrence alleged by the prosecution must be established beyond doubt before the accused persons can be convicted. \n Approaching the case in this manner and seeing that the basis of the prosecution case was that Polai had batai settlement of the disputed land and had raised the paddy crop which he was harvesting when the occurrence took place, the learned Sessions Judge examined the evidence of the prosecution witnesses who belonged to the opposite faction critically and found that the story of the prosecu- tion was not acceptable. Polai, who was alleged to have taken the land on batai settlement from his own maternal grandmother Parasmani who brought him up from his childhood, was only 19 years old and unmarried and was still living with his grandmother. \n He did not claim to be a bataidar of any other person. In these circumstances, said the learned Judge, it does not appear to me to be probable that Polai would have been allowed to maintain himself by running adhi cultivation of his mamus land in the lifetime of his nani who has brought him up from his infancy like her own child. Nor does it appeal to me that the unmarried boy Polai would have undertaken upon himself the task of run- ning batai cultivation of the lands of his mamu where he has been living since his childhood without any trouble, more particularly in view of the heavy expenses of cultivation brought out by the evidence of Tirthanand (P.W. 14). \n He, therefore, disbelieved the whole story that Polai had taken the lands of his grandmother or his uncles as bataidar for cultivation and that he was engaged in harvesting the paddy crop on the lands at the time of the occurrence. \n This false story, in his opinion, vitally affected the prosecution case regarding the alleged manner of the occurrence. He also found a number of discrepancies and contradictions in the evidence of the prosecution witnesses, which, in his view, tended to show that the prosecution was guilty of concealment of the real facts.\nIn view of such conceal- ment of real facts, the learned Judge concluded, it does not appear to me to be possible to apportion liability and to decide which of the two parties commenced the fight and which acted in self-defence. Such being the position, it is not possible at all to hold either party responsible for what took place. In such a view of the matter coupled with the fact that the manner of occurrence alleged by the prose- cution has not been established to be true beyond doubt, I think that the accused persons cannot be safely convicted of any of the offences for which they have been charged. \nThe learned Judge accordingly acquitted the appellants of all the charges framed against them. Against that order the complainant Polai preferred a revision petition to the High Court under section 439 of the Criminal Procedure Code., The learned Judge who heard the petition reviewed the evidence at some length and came to the conclusion that the judgment of the learned Sessions Judge could not be allowed to stand as the acquittal of the appellants was perverse . \nIn his opinion, the entire judgment displays a lack of true perspective in a case of this kind. The Sessions Judge had completely misdirected himself in looking to the minor discrepancies in the case and ignoring the essential matters so far as the case is concerned, and there was no justifiable ground for rejecting the prosecution evidence regarding the cultivation and harvesting by Polai. And he concluded with the warning I would, however, make it per- fectly clear that when the case is re-tried, which I am now going to order, the Judge proceeding with the trial will not be in the least influenced by any expression of opinion which I may have given in this judgment. \nOn behalf of the appellants Mr. Sinha raised two conten- tions. In the first place, he submitted that having regard to section 417 of the Criminal Procedure Code which provides for an appeal to the High Court from an order of acquittal only at the instance of the Government, a revision petition under section 439 at the instance of a private party was incompetent, and, secondly, that sub-section (4) of section 439 clearly showed that the High Court exceeded its powers of revision in the present case in upsetting the findings of fact of the trial Judge. \nWe think it is unnecessary to express any opinion on the first contention of Mr. Sinha especially as the respondent is unrepresented, as we are of opinion that his second and alternative contention must prevail. It will be seen from the judgment summarised above that the learned Judge in the High Court re-appraised the evi- dence in the case and disagreed with the Sessions Judges findings of fact on the ground that they were perverse and displayed a lack of true perspective. \nHe went further and, by way of expressing in very clear terms as to how perverse the judgment of the court below is, he indicated that the discrepancies in the prosecution evidence and the circum- stances of the case which led the Sessions Judge to discred- it the prosecution story afforded no justifiable ground for the conclusion that the prosecution failed to establish their case.\nWe are of opinion that the learned Judge in the High Court did not properly appreciate the scope of inquiry in revision against an order of acquittal. Though sub-section(1) of section 439 authorises the High Court to exercise, in its discretion, any of the powers conferred on a court of appeal by section 423, sub-section (4) specifically excludes the power to convert a finding of acquittal into one. of conviction. \nThis does not mean that in dealing with a revision petition by a private party against an order of acquittal, the High Court could in the absence of any error on a point of law re-appraise the evidence and reverse the findings of facts on which the acquittal was based, provided only it stopped short of finding the accused guilty and passing sentence on him. \nBy merely characterising the judgment of the trial Court as perverse and lacking in perspective, the High Court cannot reverse pure findings of fact based on the trial Courts appreciation of the evidence in the case.\nDECISION ??", "expert_1": {"rank1": ["as we are of opinion that his second and alternative contention must prevail.", "We are of opinion that the learned Judge in the High Court did not properly appreciate the scope of inquiry in revision against an order of acquittal.", "By merely characterising the judgment of the trial Court as perverse and lacking in perspective, the High Court cannot reverse pure findings of fact based on the trial Courts appreciation of the evidence in the case."], "rank2": ["Though sub-section(1) of section 439 authorises the High Court to exercise, in its discretion, any of the powers conferred on a court of appeal by section 423, sub-section (4) specifically excludes the power to convert a finding of acquittal into one. of conviction. \nThis does not mean that in dealing with a revision petition by a private party against an order of acquittal, the High Court could in the absence of any error on a point of law re-appraise the evidence and reverse the findings of facts on which the acquittal was based, provided only it stopped short of finding the accused guilty and passing sentence on him."], "rank3": ["On behalf of the appellants Mr. Sinha raised two conten- tions. In the first place, he submitted that having regard to section 417 of the Criminal Procedure Code which provides for an appeal to the High Court from an order of acquittal only at the instance of the Government, a revision petition under section 439 at the instance of a private party was incompetent, and, secondly, that sub-section (4) of section 439 clearly showed that the High Court exceeded its powers of revision in the present case in upsetting the findings of fact of the trial Judge.", "It will be seen from the judgment summarised above that the learned Judge in the High Court re-appraised the evi- dence in the case and disagreed with the Sessions Judges findings of fact on the ground that they were perverse and displayed a lack of true perspective. \nHe went further and, by way of expressing in very clear terms as to how perverse the judgment of the court below is, he indicated that the discrepancies in the prosecution evidence and the circum- stances of the case which led the Sessions Judge to discred- it the prosecution story afforded no justifiable ground for the conclusion that the prosecution failed to establish their case."], "rank4": ["The learned Sessions Judge examined the evidence in great detail and found that the existence of factions as alleged by the appellants was true. He found, however, that the appellants plea of alibi was not satisfactorily made out, but the truth of the prosecution, he proceeded to observe, cannot be judged by the falsehood of the defence nor can the prosecution derive its strength from the weak- ness of the defence. Prosecution must stand on its own legs and must prove the story told by it at the very first stage. The manner of occurrence alleged by the prosecution must be established beyond doubt before the accused persons can be convicted. \n Approaching the case in this manner and seeing that the basis of the prosecution case was that Polai had batai settlement of the disputed land and had raised the paddy crop which he was harvesting when the occurrence took place, the learned Sessions Judge examined the evidence of the prosecution witnesses who belonged to the opposite faction critically and found that the story of the prosecu- tion was not acceptable.", "This false story, in his opinion, vitally affected the prosecution case regarding the alleged manner of the occurrence. He also found a number of discrepancies and contradictions in the evidence of the prosecution witnesses, which, in his view, tended to show that the prosecution was guilty of concealment of the real facts.\nIn view of such conceal- ment of real facts, the learned Judge concluded, it does not appear to me to be possible to apportion liability and to decide which of the two parties commenced the fight and which acted in self-defence. Such being the position, it is not possible at all to hold either party responsible for what took place. In such a view of the matter coupled with the fact that the manner of occurrence alleged by the prose- cution has not been established to be true beyond doubt, I think that the accused persons cannot be safely convicted of any of the offences for which they have been charged. \nThe learned Judge accordingly acquitted the appellants of all the charges framed against them.", "Against that order the complainant Polai preferred a revision petition to the High Court under section 439 of the Criminal Procedure Code., The learned Judge who heard the petition reviewed the evidence at some length and came to the conclusion that the judgment of the learned Sessions Judge could not be allowed to stand as the acquittal of the appellants was perverse . \nIn his opinion, the entire judgment displays a lack of true perspective in a case of this kind. The Sessions Judge had completely misdirected himself in looking to the minor discrepancies in the case and ignoring the essential matters so far as the case is concerned, and there was no justifiable ground for rejecting the prosecution evidence regarding the cultivation and harvesting by Polai."], "rank5": ["This is an appeal by special leave from an order of the High Court of Judicature at Patna setting aside an order of acquittal of the appellants by the Sessions Judge, Purnea, and directing their retrial. \n The appellants were prosecuted for alleged offences under sections 147, 148, 323, 324, 326, 302 and 302/149 of the Indian Penal Code at the instance of one Polai Lal Biswas who lodged a complaint against them before the po- lice. \n The prosecution case was that, while the complainant was harvesting the paddy crop on his field at about 10 a.m. on 29th November, 1949, a mob of about fifty persons came on to the field armed with ballams, lathis and other weapons and that the first appellant Logendranath Jha, who was leading the mob, demanded a settlement of all outstanding disputes with the complainant and ,said he would not allow the paddy to be removed unless the disputes were settled. An altercation followed as a result of which Logendra or- dered an assault by his men. Then Logendra and one of his men, Harihar, gave ballam blows to one of the labourers, Kangali, who fell down and died on the spot. \n Information was given to the police who investigated the case and submitted the charge-sheet. The committing Magistrate found that a prima facie case was made out and committed the appellants to the Court of Sessions for trial. The appellants pleaded not guilty alleging inter alia, that Mohender and Debender, the brothers of Logendra (appel- lants 2 and 3) were not present in the village of Dandkhora with which they had no concern, as all the lands in that village had been allotted to Logendra at a previous parti- tion, that Logendra himself was not in the village at the time of the occurrence but arrived soon after and was dragged to the place at the instance of his enemies in the village and was placed under arrest by the Assistant Sub-Inspector of Police who had arrived there previously."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["We are of opinion that the learned Judge in the High Court did not properly appreciate the scope of inquiry in revision against an order of acquittal.", "section 423, sub-section (4) specifically excludes the power to convert a finding of acquittal into one. of conviction.", "characterising the judgment of the trial Court as perverse and lacking in perspective, the High Court cannot reverse pure findings of fact based on the trial Courts appreciation of the evidence in the case."], "rank2": ["The Sessions Judge had completely misdirected himself in looking to the minor discrepancies in the case and ignoring the essential matters so far as the case is concerned, and there was no justifiable ground for rejecting the prosecution evidence regarding the cultivation and harvesting by Polai.", "that sub-section (4) of section 439 clearly showed that the High Court exceeded its powers of revision in the present case in upsetting the findings of fact of the trial Judge."], "rank3": ["judgment summarised above that the learned Judge in the High Court re-appraised the evi- dence in the case and disagreed with the Sessions Judges findings of fact on the ground that they were perverse and displayed a lack of true perspective", "dealing with a revision petition by a private party against an order of acquittal, the High Court could in the absence of any error on a point of law re-appraise the evidence and reverse the findings of facts on which the acquittal was based, provided only it stopped short of finding the accused guilty and passing sentence on him."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["On behalf of the appellants Mr. Sinha raised two conten- tions", "secondly, that sub-section (4) of section 439 clearly showed that the High Court exceeded its powers of revision in the present case in upsetting the findings of fact of the trial Judge", "we are of opinion that his second and alternative contention must prevail.", "learned Judge in the High Court re-appraised the evi- dence in the case and disagreed with the Sessions Judges findings of fact on the ground that they were perverse and displayed a lack of true perspective. \nHe went further and, by way of expressing in very clear terms as to how perverse the judgment of the court below is, he indicated that the discrepancies in the prosecution evidence and the circum- stances of the case which led the Sessions Judge to discred- it the prosecution story afforded no justifiable ground for the conclusion that the prosecution failed to establish their case.\nWe are of opinion that the learned Judge in the High Court did not properly appreciate the scope of inquiry in revision against an order of acquittal.", "Though sub-section(1) of section 439 authorises the High Court to exercise, in its discretion, any of the powers conferred on a court of appeal by section 423, sub-section (4) specifically excludes the power to convert a finding of acquittal into one. of conviction.", "By merely characterising the judgment of the trial Court as perverse and lacking in perspective, the High Court cannot reverse pure findings of fact based on the trial Courts appreciation of the evidence in the case."], "rank2": ["It was also alleged that there were two factions in the village, one of which was led by one Harimohan, a relation of the complainant, and the other by Logendra and there had been numerous revenue and criminal proceedings and long-standing enmity between the families of these leaders as a result of which this false case was foisted upon the appellants. \n The learned Sessions Judge examined the evidence in great detail and found that the existence of factions as alleged by the appellants was true.", "He found, however, that the appellants plea of alibi was not satisfactorily made out, but the truth of the prosecution, he proceeded to observe, cannot be judged by the falsehood of the defence nor can the prosecution derive its strength from the weak- ness of the defence.", "This false story, in his opinion, vitally affected the prosecution case regarding the alleged manner of the occurrence. He also found a number of discrepancies and contradictions in the evidence of the prosecution witnesses, which, in his view, tended to show that the prosecution was guilty of concealment of the real facts", "In view of such conceal- ment of real facts, the learned Judge concluded, it does not appear to me to be possible to apportion liability and to decide which of the two parties commenced the fight and which acted in self-defence. Such being the position, it is not possible at all to hold either party responsible for what took place. In such a view of the matter coupled with the fact that the manner of occurrence alleged by the prose- cution has not been established to be true beyond doubt, I think that the accused persons cannot be safely convicted of any of the offences for which they have been charged. \nThe learned Judge accordingly acquitted the appellants of all the charges framed against them", "Against that order the complainant Polai preferred a revision petition to the High Court under section 439 of the Criminal Procedure Code., The learned Judge who heard the petition reviewed the evidence at some length and came to the conclusion that the judgment of the learned Sessions Judge could not be allowed to stand as the acquittal of the appellants was perverse", "In his opinion, the entire judgment displays a lack of true perspective in a case of this kind. The Sessions Judge had completely misdirected himself in looking to the minor discrepancies in the case and ignoring the essential matters so far as the case is concerned, and there was no justifiable ground for rejecting the prosecution evidence regarding the cultivation and harvesting by Polai"], "rank3": ["This is an appeal by special leave from an order of the High Court of Judicature at Patna setting aside an order of acquittal of the appellants by the Sessions Judge, Purnea, and directing their retrial.", "The prosecution case was that, while the complainant was harvesting the paddy crop on his field at about 10 a.m. on 29th November, 1949, a mob of about fifty persons came on to the field armed with ballams, lathis and other weapons and that the first appellant Logendranath Jha, who was leading the mob, demanded a settlement of all outstanding disputes with the complainant and ,said he would not allow the paddy to be removed unless the disputes were settled. An altercation followed as a result of which Logendra or- dered an assault by his men", "Then Logendra and one of his men, Harihar, gave ballam blows to one of the labourers, Kangali, who fell down and died on the spot.", "Information was given to the police who investigated the case and submitted the charge-sheet. The committing Magistrate found that a prima facie case was made out and committed the appellants to the Court of Sessions for trial", "The appellants pleaded not guilty alleging inter alia, that Mohender and Debender, the brothers of Logendra (appel- lants 2 and 3) were not present in the village of Dandkhora with which they had no concern, as all the lands in that village had been allotted to Logendra at a previous parti- tion, that Logendra himself was not in the village at the time of the occurrence but arrived soon after and was dragged to the place at the instance of his enemies in the village and was placed under arrest by the Assistant Sub-Inspector of Police who had arrived there previously", "Prosecution must stand on its own legs and must prove the story told by it at the very first stage. The manner of occurrence alleged by the prosecution must be established beyond doubt before the accused persons can be convicted", "Approaching the case in this manner and seeing that the basis of the prosecution case was that Polai had batai settlement of the disputed land and had raised the paddy crop which he was harvesting when the occurrence took place, the learned Sessions Judge examined the evidence of the prosecution witnesses who belonged to the opposite faction critically and found that the story of the prosecu- tion was not acceptable", "said the learned Judge, it does not appear to me to be probable that Polai would have been allowed to maintain himself by running adhi cultivation of his mamus land in the lifetime of his nani who has brought him up from his infancy like her own child. Nor does it appeal to me that the unmarried boy Polai would have undertaken upon himself the task of run- ning batai cultivation of the lands of his mamu where he has been living since his childhood without any trouble, more particularly in view of the heavy expenses of cultivation brought out by the evidence of Tirthanand"], "rank4": ["The appellants were prosecuted for alleged offences under sections 147, 148, 323, 324, 326, 302 and 302/149 of the Indian Penal Code at the instance of one Polai Lal Biswas who lodged a complaint against them before the po- lice."], "label": "ACCEPTED"}, "expert_4": {"rank1": ["This is an appeal by special leave from an order of the High Court of Judicature at Patna setting aside an order of acquittal of the appellants by the Sessions Judge, Purnea, and directing their retrial.", "The appellants were prosecuted for alleged offences under sections 147, 148, 323, 324, 326, 302 and 302/149 of the Indian Penal Code at the instance of one Polai Lal Biswas who lodged a complaint against them before the po- lice.", "The learned Judge accordingly acquitted the appellants of all the charges framed against them.", "We think it is unnecessary to express any opinion on the first contention of Mr. Sinha especially as the respondent is unrepresented, as we are of opinion that his second and alternative contention must prevail.", "By merely characterising the judgment of the trial Court as perverse and lacking in perspective, the High Court cannot reverse pure findings of fact based on the trial Courts appreciation of the evidence in the case."], "rank2": ["The prosecution case was that, while the complainant was harvesting the paddy crop on his field at about 10 a.m. on 29th November, 1949, a mob of about fifty persons came on to the field armed with ballams, lathis and other weapons and that the first appellant Logendranath Jha, who was leading the mob, demanded a settlement of all outstanding disputes with the complainant and ,said he would not allow the paddy to be removed unless the disputes were settled.", "An altercation followed as a result of which Logendra or- dered an assault by his men.", "Then Logendra and one of his men, Harihar, gave ballam blows to one of the labourers, Kangali, who fell down and died on the spot.", "The appellants pleaded not guilty alleging inter alia, that Mohender and Debender, the brothers of Logendra (appel- lants 2 and 3) were not present in the village of Dandkhora with which they had no concern, as all the lands in that village had been allotted to Logendra at a previous parti- tion, that Logendra himself was not in the village at the time of the occurrence but arrived soon after and was dragged to the place at the instance of his enemies in the village and was placed under arrest by the Assistant Sub-Inspector of Police who had arrived there previously.", "The learned Sessions Judge examined the evidence in great detail and found that the existence of factions as alleged by the appellants was true.", "He found, however, that the appellants plea of alibi was not satisfactorily made out, but the truth of the prosecution, he proceeded to observe, cannot be judged by the falsehood of the defence nor can the prosecution derive its strength from the weak- ness of the defence.", "Prosecution must stand on its own legs and must prove the story told by it at the very first stage.", "Approaching the case in this manner and seeing that the basis of the prosecution case was that Polai had batai settlement of the disputed land and had raised the paddy crop which he was harvesting when the occurrence took place, the learned Sessions Judge examined the evidence of the prosecution witnesses who belonged to the opposite faction critically and found that the story of the prosecu- tion was not acceptable.", "In view of such conceal- ment of real facts, the learned Judge concluded, it does not appear to me to be possible to apportion liability and to decide which of the two parties commenced the fight and which acted in self-defence.", "Such being the position, it is not possible at all to hold either party responsible for what took place.", "In the first place, he submitted that having regard to section 417 of the Criminal Procedure Code which provides for an appeal to the High Court from an order of acquittal only at the instance of the Government, a revision petition under section 439 at the instance of a private party was incompetent, and, secondly, that sub-section (4) of section 439 clearly showed that the High Court exceeded its powers of revision in the present case in upsetting the findings of fact of the trial Judge.", "We are of opinion that the learned Judge in the High Court did not properly appreciate the scope of inquiry in revision against an order of acquittal.", "Though sub-section(1) of section 439 authorises the High Court to exercise, in its discretion, any of the powers conferred on a court of appeal by section 423, sub-section (4) specifically excludes the power to convert a finding of acquittal into one. of conviction.", "This does not mean that in dealing with a revision petition by a private party against an order of acquittal, the High Court could in the absence of any error on a point of law re-appraise the evidence and reverse the findings of facts on which the acquittal was based, provided only it stopped short of finding the accused guilty and passing sentence on him."], "rank3": ["Information was given to the police who investigated the case and submitted the charge-sheet.", "The committing Magistrate found that a prima facie case was made out and committed the appellants to the Court of Sessions for trial.", "It was also alleged that there were two factions in the village, one of which was led by one Harimohan, a relation of the complainant, and the other by Logendra and there had been numerous revenue and criminal proceedings and long-standing enmity between the families of these leaders as a result of which this false case was foisted upon the appellants.", "The manner of occurrence alleged by the prosecution must be established beyond doubt before the accused persons can be convicted.", "Polai, who was alleged to have taken the land on batai settlement from his own maternal grandmother Parasmani who brought him up from his childhood, was only 19 years old and unmarried and was still living with his grandmother.", "He did not claim to be a bataidar of any other person.", "In these circumstances, said the learned Judge, it does not appear to me to be probable that Polai would have been allowed to maintain himself by running adhi cultivation of his mamus land in the lifetime of his nani who has brought him up from his infancy like her own child.", "Nor does it appeal to me that the unmarried boy Polai would have undertaken upon himself the task of run- ning batai cultivation of the lands of his mamu where he has been living since his childhood without any trouble, more particularly in view of the heavy expenses of cultivation brought out by the evidence of Tirthanand (P.W. 14).", "He, therefore, disbelieved the whole story that Polai had taken the lands of his grandmother or his uncles as bataidar for cultivation and that he was engaged in harvesting the paddy crop on the lands at the time of the occurrence.", "This false story, in his opinion, vitally affected the prosecution case regarding the alleged manner of the occurrence.", "He also found a number of discrepancies and contradictions in the evidence of the prosecution witnesses, which, in his view, tended to show that the prosecution was guilty of concealment of the real facts.", "In such a view of the matter coupled with the fact that the manner of occurrence alleged by the prose- cution has not been established to be true beyond doubt, I think that the accused persons cannot be safely convicted of any of the offences for which they have been charged.", "Against that order the complainant Polai preferred a revision petition to the High Court under section 439 of the Criminal Procedure Code., The learned Judge who heard the petition reviewed the evidence at some length and came to the conclusion that the judgment of the learned Sessions Judge could not be allowed to stand as the acquittal of the appellants was perverse .", "The Sessions Judge had completely misdirected himself in looking to the minor discrepancies in the case and ignoring the essential matters so far as the case is concerned, and there was no justifiable ground for rejecting the prosecution evidence regarding the cultivation and harvesting by Polai.", "And he concluded with the warning I would, however, make it per- fectly clear that when the case is re-tried, which I am now going to order, the Judge proceeding with the trial will not be in the least influenced by any expression of opinion which I may have given in this judgment.", "It will be seen from the judgment summarised above that the learned Judge in the High Court re-appraised the evi- dence in the case and disagreed with the Sessions Judges findings of fact on the ground that they were perverse and displayed a lack of true perspective.", "He went further and, by way of expressing in very clear terms as to how perverse the judgment of the court below is, he indicated that the discrepancies in the prosecution evidence and the circum- stances of the case which led the Sessions Judge to discred- it the prosecution story afforded no justifiable ground for the conclusion that the prosecution failed to establish their case."], "rank4": ["In his opinion, the entire judgment displays a lack of true perspective in a case of this kind.", "On behalf of the appellants Mr. Sinha raised two conten- tions."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["We are of opinion that the learned Judge in the High Court did not properly appreciate the scope of inquiry in revision against an order of acquittal.", "Though sub-section(1) of section 439 authorises the High Court to exercise, in its discretion, any of the powers conferred on a court of appeal by section 423, sub-section (4) specifically excludes the power to convert a finding of acquittal into one. of conviction."], "rank2": ["that sub-section (4) of section 439 clearly showed that the High Court exceeded its powers of revision in the present case in upsetting the findings of fact of the trial Judge.", "By merely characterising the judgment of the trial Court as perverse and lacking in perspective, the High Court cannot reverse pure findings of fact based on the trial Courts appreciation of the evidence in the case."], "rank3": ["Against that order the complainant Polai preferred a revision petition to the High Court under section 439 of the Criminal Procedure Code."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1951_33", "text": "Fazl Ali, J. The principal question for determination in this appeal is whether a certain lease had validly terminated by efflux of time or whether there was holding over by the lessee of the leasehold property as contemplated in section 116 of the Transfer of Property Act. The circumstances under which this question and several subsidiary questions to which reference will be made later have arisen may be briefly stated as follows \n The Province of Bengal, (hereinafter referred to as the respondent No. 1 or plaintiff) is admittedly the owner of an area of 1125 bighas and odd of land in village Akra. On the 17th February, 1928, the respondent No. 1 executed a lease (exhibit 3) in respect of the said land for 10 years for manufacture of bricks in favour of the appellant, at a rental of Rs. 6,000 a year. The lease was to commence from the 24th February, 1928, and a years rent was payable in advance. By the terms of the said lease, the lessee was prohibited from assigning or subletting the premises or any part thereof without the consent of the lessor except to a limited company and the lease also contained a general provision that the lessee would at the expiration of the lease restore to the lessor the demised premises in as good condition as it was at the date of the lease, reasonable wear and tear excepted. Two further clauses in the lease, which are material for the decision of this appeal, may be reproduced verbatim - \n Clause 11 of Part I of the Schedule. The Secretary of State reserves the right to terminate the lease at any time subject to six months notice in the event of the lessees failing to observe and duly perform the conditions hereinbefore and after mentioned and it is hereby agreed that the lessee shall before the expiration or prior termination of the lease hereby granted remove his boilers engines trucks kilns railway and tram lines bricks tools and plant and all other materials whatsoever and yield up the said demised premises unto the Secretary of State and that those bricks tools and plant and other materials that shall not be removed before such expiration or prior termination shall become the property of the Secretary of State. Clause 1 of Part III of the Schedule. The lessee shall be at liberty to keep on the said premises hereby demised for three months after the expiration or prior termination of the term of this lease any bricks boilers engines trucks kilns railway and tram lines and all other materials whatsoever as may have been manufactured by him in the premises in accordance with the conditions of these presents but any bricks and other materials left in contravention to this condition shall become the absolute property of the Secretary of State without payment. It may be stated here that at the time of the execution of the lease, the lessee had purchased from the lessor for Rs. 50,000 all the boilers, engines, trucks, kilns, railway and tramway lines and all other movable property, plant and machinery on the demised premises. The case of the respondent No. 1, who is the plaintiff in the present litigation, is that the appellant (defendant No. 1) had, in contravention of the terms of the lease, sublet the brickfield to defendants-respondents 2 to 18 without the consent of respondent No. 1, and they had caused serious damage to the brickfield in general and failed to maintain the embankments, sluices, etc. in proper repair resulting in a total loss of Rs. 16,840. It was further alleged that the defendants had refused to deliver possession though the lease had terminated, and they had not removed the bricks, pugmills and other materials within 3 months from the termination of the lease. On these allegations, the respondent No. 1 prayed for the following reliefs - \n (a) a decree for ejectment and khas possession over the brickfield \n (b) damages amounting to Rs. 4,000 for the period between the termination of the lease and institution of the suit and mesne profits for the subsequent period \n (c) a decree for Rs. 16,840 for damages caused to the field and \n (d) a decree for permanent injunction restraining the defendants from removing or otherwise disposing of the bricks, pugmils, etc. which were claimed to have become the property of the plaintiff. The suit was contested by the appellants, and the other defendants, and their defence was that the appellants had held over with the implied consent of respondent No. 1, and hence the lease had not validly terminated, that no damage or injury had been caused to the land, that the respondent No. 1 was not entitled to forfeit the properties of the appellants lying in the brickfield inasmuch as the term in the lease to that effect was by way of penalty and as such unenforceable, and that the respondent No. 1 was not entitled to the relief of injunction. The trial Judge by his judgment dated the 24th November, 1941, held that there was no holding over with the assent of the plaintiff and both parties were under a mistaken belief that the lease had expired on the 23rd February, 1938. He however held that the evidence did not show that there was any damage or injury caused to the property. \n On these findings, the suit was decreed in part, and the respondent No. 1 was directed to be put in possession of the brickfield and was also granted a decree for Rs. 4,000 as mesne profits up to the date on which the respondent No. 1 was put in possession. The prayer for damages for injury alleged to have been caused to the field and the prayer for injunction were however disallowed. The trial Judge allowed the appellants 3 months time to remove their belongings from the Akra brickfield including kilns, pugmills, bricks, coals and any other brick-making material that may be lying there after this period these properties, if any, left in the field. Were to become the absolute properties of the plaintiff. The appellants thereafter preferred an appeal to the High Court at Calcutta, and the respondent No. 1 also preferred a cross-objection claiming that the prayer for injunction should have been allowed and the claim for damages should have been decreed in full. The learned Judges of the High Court who heard the appeal, by their judgment dated the 13th February, 1948, dismissed the appellants appeal and allowed the cross-objection of the respondent No. 1 in part. They held that on the facts established in the case there was no holding over, and that the clause in the lease stating that if the appellants did not remove the bricks etc. from the field within 3 months after the termination of the lease they would become the property of respondent No. 1, was not a clause by way of penalty and should be given effect to. They further held that the claim of respondent No. 1 for damages for injury caused to the demised premises was not established. The present appeal is directed against the judgment of the High Court. The admitted facts of the case are briefly these. The appellants duly paid Rs. 6,000 as rent to respondent No. 1 in February, 1928. In February, 1929, a sum of Rs. 6,714 and odd was paid by the appellants as rent for the period 17th February, 1929, to the 31st March, 1930, and thereafter they continued to pay Rs. 6,000 as rent for the yearly period, 1st April to 31st March of the succeeding year, and the last payment was made in April, 1937, by means of a cheque sent with a covering letter, the material portion of which runs as follows - We beg to enclose herewith a cheque for Rs. 6,000 in payment of rent Akra brickfield for the year 1937-38 ending 31st March, 1938, and shall thank you to please favour us with your formal receipt for the above. The cheque was duly cashed and the amount was entered in the cash book of the plaintiff in the following terms - 5-4-37 (date of receipt). Received without prejudice from Karnani Industrial Bank Ltd. on account of yearly rent for Akra brickfield for the year ending 31st March, 1938. On the 27th August, 1937, the appellants applied to the Secretary to the Government of Bengal, Public Works Department, for renewing the lease for a further period of 10 years, but no reply was received to that letter. After addressing several other letters, the appellants received a letter dated the 23rd February, 1938, with which was enclosed a copy of an extract from a letter addressed by the Executive Engineer, Suburban Division to the Assistant Engineer, No. III Sub-division, which was as under - He is requested to make arrangements with Messrs. \n Karnani Industrial Bank Limited for vacant possession of the Akra brickfield on the 24th instant as the lease with the Bank will expire on the 23rd instant according to the terms of the agreement. Ultimately, on the 17th March, 1938, the appellants received the following communication from the Excecutive Engineer, Suburban Division - I would inform you that it is not the intention of Government in this Department to lease out the brickfields and arrangement is being accordingly made to make over the lands to the Government in the Revenue Department for disposal. In a subsequent letter dated the 14th September, 1938, the Executive Engineer wrote to the appellants as follows - I am instructed to state that Government have decided that you cannot be allowed to continue in occupation of the premises any further However, as a matter of grace Government will allow you time till the 30th day of September next, to dismantle the kilns and to remove all your bricks, boiler etc. from the site, on which date Government will take over possession of the property from you. The correspondence to which reference has been made does not show that at any point of time the plaintiff had assented to the appellants continuance of possession. On the other hand, some of the letters written by the appellants show that, notwithstanding their having paid rent up to the 31st March, 1938, they had proceeded all along on the footing that the lease was to expire in February, 1938. For instance, in the appellants letter of the 23rd August, 1937, it is stated we are desirous of renewing the lease of the brickfield for a further period of 10 years from the date of the expiration of the period of the lease dated 17-2-1928. Again, in the letter dated the 23rd October, 1937, reference is made to the appellants application for renewal of the lease for a further period of 10 years on its expiry. Even in the letter which was written on behalf of the appellants on the 3rd March, 1938, after the expiry of the date on which the lease was to terminate, the statement made in the earlier letters was repeated, and it was further stated we applied for renewal of the lease on the 23rd August, 1937, six months prior to the date of expiration of the lease. In this letter, it is nowhere suggested that the appellants were holding over by reason of the acceptance of rent up to the 31st March, 1938. On the other hand, at the end of this letter, we find the following statement - We therefore pray that if the Government is not at all inclined to renew the lease, time may be granted to us for dismantling and removing till the end of December, 1938, and we shall pay the proportional rent to the Government for seven months time in pursuance of the terms of the lease. The reference to the period of 7 months shows that it was assumed that the lease had expired in February, 1938. The letters written on behalf of the Government point to the same conclusion, namely, that both the parties were acting on the assumption that the lease was to expire on the 23rd February, 1938. For instance in a letter written on behalf of the Government on the 25th February, 1938, the following statement is made - I have the honour to inform you that none of your agents was present at the Akra brickfield today as previously arranged to make over the possession of the brickfields. You are therefore requested to please inform me about as to what arrangements are being made by you to make over the possession of the said brickfield to this department. The term of lease expires on the afternoon of the 23rd February, 1938. Apart from the fact that the appellants did not set up in any of their letters a case of holding over, we have to see whether the plea can be said to have been successfully made out by them. There is no doubt that the appellants have established that the rent was paid on their behalf up to the 31st March, 1938, and it was accepted by the respondent No. 1. It has also been established that this payment was made by a cheque and that cheque has been cashed by the Government. Section 116 of the Transfer of Property Act, on which reliance was placed on behalf of the appellants, runs as follows - If a lessee or underlessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased \n This section was construed by the Federal Court in K. B. Capadia v. Bai Jerbai Warden and Another 1959 F.C.R. 262, and it was held that where rent was accepted by the landlord after the expiration of the tenancy by efflux of time, section 116 applied even though the landlord accepted the amount remitted to him as part deposit towards his claim for compensation for illegal use and occupation, and without prejudice to his rights. It is to be noted that in that case rent had been accepted after the expiry of the tenancy. In our judgment, the present case cannot be governed by that decision, because of the fact, which in our opinion is important that here the payment of rent up to the 31st March, 1938, was made not after the date of expiry of the lease, but on the 5th April, 1937, nearly a year before the expiry of the lease. A reference to section 116 of the Transfer of Property Act will show that for the application of that section, two things are necessary - (1) the lessee should be in possession after the termination of the lease and (2) the lessor or his representative should accept rent or otherwise assent to his continuing in possession. The use of the word otherwise suggests that acceptance of rent by the landlords has been treated as a form of his giving assent to the tenants continuance of possession. There can be no question of the lessee continuing in possession until the lease has expired, and the context in which the provision for acceptance of rent finds a place clearly shows that what is contemplated is that the payment of rent and its acceptance should be made at such a time and in such a manner as to be equivalent to the landlord assenting to the lessee continuing in possession. Both the courts below, after dealing with the matter elaborately, have concurrently held that in the circumstances of the case the consent of respondent No. 1 to the appellants continuing in possession cannot be inferred, and we agree with this finding. \n It was pointed out to us on behalf of the respondent that the entry relating to this payment in the books of the plaintiff contains the words received without prejudice from Karnani Industrial Bank The same words however occur in several earlier entries, and we are not inclined to attach any special significance to them. But it seems to us that the very fact, that the payment was made at a time when there was no question of the lessor assenting to the lessees continuing in possession and neither party treated the payment as importing such assent, is sufficient to take the case out of the mischief of section 116 of the Transfer of Property Act. There is also another view which we think is possible to take upon the facts of the case. As we have seen the rent for the first year was paid in advance near about the time of the execution of the lease, and nothing turns upon it. When however the second payment was made, the sum paid was Rs. 6,714 and odd, and the payment was made in respect of rent up to the 31st March, 1930. After this, all the subsequent payments were made up to the 31st March of the succeeding year, evidently because the financial year, which the parties considered themselves to be governed by, ran from the 1st April to the 31st March of the succeeding year. It was presumably in view of this fact that the plaintiff filed an application on the 6th November, 1941, for amending the plaint so as to include the following statement - The plaintiff submits that even assuming that the registered lease terminated on the 23rd February, 1938, by an agreement between the plaintiff and the defendant No. 1, the latter was allowed to hold over up to the 31st March, 1938. \n This application however was rejected, because it was made at a very late stage, that is to say, after the defendants evidence had been closed and an adjournment had been granted to the plaintiff to adduce rebutting evidence. However that may be, the utmost that can be said upon the evidence as it stands is that by the implied consent of the parties the period of the lease was extended up to the 31st March, 1938. In this view, the respondent No. 1 became entitled to re-enter after the 31st March, and no notice under section 106 of the Transfer of Property Act was necessary. In the circumstances, the decree for ejectment passed by the courts below must be upheld. The next question which arises in the case turns on the proper construction of clause 11 of Part I and clause 1 of Part III of the lease, which have already been quoted. It seems to us that clause 11 should be read as a whole, and, when it is so read, it becomes clear that it was intended to be applicable only where the Secretary of State decided to exercise his right to terminate the lease at any time subject to 6 months notice, in the event of the lessee failing to observe and duly perform the conditions mentioned in the lease. In such a case, if the lessee did not remove the boilers, engines and all other materials and yield up the premises to the Secretary of State, those articles were to become the property of the Secretary of State. This clause is evidently not applicable to the present case. The clause which applies to this case is clause 1 of Part III, which is intended to be applicable to the normal case of the lease expiring by efflux of time. This clause, as we have seen, provides that the lessee shall be at liberty to keep on the demised premises for 3 months after the expiration of the lease any bricks, boilers, etc., but it also provides that any bricks and other materials left in contravention of this condition shall become the absolute property of the Secretary of State without payment. There can be no doubt that under this clause, the bricks and other materials have become the absolute property of the plaintiff. \n The only question is as to the meaning of other materials. It seems to us on an examination of the lease as a whole that there must be a distinction between materials, and machinery and tools and similar articles, and the words other materials have no reference to engines, trucks, railway and tramway lines and plant. They mean building materials such as bricks, tiles and similar articles that might have been manufactured by the appellants on the demised premises. That being so, the decree under appeal should be modified accordingly. The only other point which arises for consideration relates to the plaintiffs prayer for a decree for permanent injunction against the defendants, to restrain them from removing or otherwise disposing of the articles in regard to which the decree is to be passed. It was contended on behalf of the appellants that the respondent No. 1 not being in possession of these properties could not ask for the relief of injunction without asking for the declaration of its title in respect of them and possession over them, and in support of this proposition, the following cases were cited - Ratnasabhapathi Pillai and Others v. Ramaswami Aiyar I.L.R. 33 Mad. 482, Bhramar Lal Banduri and Others v. Nanda Lal Chowdhuri 24 I.C. 199 and Valia Tamburatti v. Parvati and Others I.L.R. 13 Mad. 455. After reading and fully considering those cases, we find them to be wholly inapplicable to the present case. In the present case, it has been found that the bricks and other materials have become the property of the plaintiff, and there can be no legal objection to the granting of an injunction as prayed.\n DECISION ??", "expert_1": {"rank1": ["Both the courts below, after dealing with the matter elaborately, have concurrently held that in the circumstances of the case the consent of respondent No. 1 to the appellants continuing in possession cannot be inferred, and we agree with this finding.", "But it seems to us that the very fact, that the payment was made at a time when there was no question of the lessor assenting to the lessees continuing in possession and neither party treated the payment as importing such assent, is sufficient to take the case out of the mischief of section 116 of the Transfer of Property Act.", "In the circumstances, the decree for ejectment passed by the courts below must be upheld.", "There can be no doubt that under this clause, the bricks and other materials have become the absolute property of the plaintiff.", "In the present case, it has been found that the bricks and other materials have become the property of the plaintiff, and there can be no legal objection to the granting of an injunction as prayed."], "rank2": ["The only other point which arises for consideration relates to the plaintiffs prayer for a decree for permanent injunction against the defendants, to restrain them from removing or otherwise disposing of the articles in regard to which the decree is to be passed.", "It was contended on behalf of the appellants that the respondent No. 1 not being in possession of these properties could not ask for the relief of injunction without asking for the declaration of its title in respect of them and possession over them, and in support of this proposition, the following cases were cited - Ratnasabhapathi Pillai and Others v. Ramaswami Aiyar I.L.R. 33 Mad. 482, Bhramar Lal Banduri and Others v. Nanda Lal Chowdhuri 24 I.C. 199 and Valia Tamburatti v. Parvati and Others I.L.R. 13 Mad. 455. After reading and fully considering those cases, we find them to be wholly inapplicable to the present case"], "rank3": ["The only question is as to the meaning of other materials. It seems to us on an examination of the lease as a whole that there must be a distinction between materials, and machinery and tools and similar articles, and the words other materials have no reference to engines, trucks, railway and tramway lines and plant. They mean building materials such as bricks, tiles and similar articles that might have been manufactured by the appellants on the demised premises. That being so, the decree under appeal should be modified accordingly."], "rank4": ["In our judgment, the present case cannot be governed by that decision, because of the fact, which in our opinion is important that here the payment of rent up to the 31st March, 1938, was made not after the date of expiry of the lease, but on the 5th April, 1937, nearly a year before the expiry of the lease.", "As we have seen the rent for the first year was paid in advance near about the time of the execution of the lease, and nothing turns upon it. When however the second payment was made, the sum paid was Rs. 6,714 and odd, and the payment was made in respect of rent up to the 31st March, 1930. After this, all the subsequent payments were made up to the 31st March of the succeeding year, evidently because the financial year, which the parties considered themselves to be governed by, ran from the 1st April to the 31st March of the succeeding year. It was presumably in view of this fact that the plaintiff filed an application on the 6th November, 1941, for amending the plaint so as to include the following statement - The plaintiff submits that even assuming that the registered lease terminated on the 23rd February, 1938, by an agreement between the plaintiff and the defendant No. 1, the latter was allowed to hold over up to the 31st March, 1938. \n This application however was rejected, because it was made at a very late stage, that is to say, after the defendants evidence had been closed and an adjournment had been granted to the plaintiff to adduce rebutting evidence", "However that may be, the utmost that can be said upon the evidence as it stands is that by the implied consent of the parties the period of the lease was extended up to the 31st March, 1938. In this view, the respondent No. 1 became entitled to re-enter after the 31st March, and no notice under section 106 of the Transfer of Property Act was necessary", "The next question which arises in the case turns on the proper construction of clause 11 of Part I and clause 1 of Part III of the lease, which have already been quoted. It seems to us that clause 11 should be read as a whole, and, when it is so read, it becomes clear that it was intended to be applicable only where the Secretary of State decided to exercise his right to terminate the lease at any time subject to 6 months notice, in the event of the lessee failing to observe and duly perform the conditions mentioned in the lease. In such a case, if the lessee did not remove the boilers, engines and all other materials and yield up the premises to the Secretary of State, those articles were to become the property of the Secretary of State. This clause is evidently not applicable to the present case. The clause which applies to this case is clause 1 of Part III, which is intended to be applicable to the normal case of the lease expiring by efflux of time. This clause, as we have seen, provides that the lessee shall be at liberty to keep on the demised premises for 3 months after the expiration of the lease any bricks, boilers, etc., but it also provides that any bricks and other materials left in contravention of this condition shall become the absolute property of the Secretary of State without payment."], "rank5": ["The circumstances under which this question and several subsidiary questions to which reference will be made later have arisen may be briefly stated as follows \n The Province of Bengal, (hereinafter referred to as the respondent No. 1 or plaintiff) is admittedly the owner of an area of 1125 bighas and odd of land in village Akra. On the 17th February, 1928, the respondent No. 1 executed a lease (exhibit 3) in respect of the said land for 10 years for manufacture of bricks in favour of the appellant, at a rental of Rs. 6,000 a year. The lease was to commence from the 24th February, 1928, and a years rent was payable in advance. By the terms of the said lease, the lessee was prohibited from assigning or subletting the premises or any part thereof without the consent of the lessor except to a limited company and the lease also contained a general provision that the lessee would at the expiration of the lease restore to the lessor the demised premises in as good condition as it was at the date of the lease, reasonable wear and tear excepted.", "The case of the respondent No. 1, who is the plaintiff in the present litigation, is that the appellant (defendant No. 1) had, in contravention of the terms of the lease, sublet the brickfield to defendants-respondents 2 to 18 without the consent of respondent No. 1, and they had caused serious damage to the brickfield in general and failed to maintain the embankments, sluices, etc. in proper repair resulting in a total loss of Rs. 16,840. It was further alleged that the defendants had refused to deliver possession though the lease had terminated, and they had not removed the bricks, pugmills and other materials within 3 months from the termination of the lease. On these allegations, the respondent No. 1 prayed for the following reliefs - \n (a) a decree for ejectment and khas possession over the brickfield \n (b) damages amounting to Rs. 4,000 for the period between the termination of the lease and institution of the suit and mesne profits for the subsequent period \n (c) a decree for Rs. 16,840 for damages caused to the field and \n (d) a decree for permanent injunction restraining the defendants from removing or otherwise disposing of the bricks, pugmils, etc. which were claimed to have become the property of the plaintiff.", "The suit was contested by the appellants, and the other defendants, and their defence was that the appellants had held over with the implied consent of respondent No. 1, and hence the lease had not validly terminated, that no damage or injury had been caused to the land, that the respondent No. 1 was not entitled to forfeit the properties of the appellants lying in the brickfield inasmuch as the term in the lease to that effect was by way of penalty and as such unenforceable, and that the respondent No. 1 was not entitled to the relief of injunction. The trial Judge by his judgment dated the 24th November, 1941, held that there was no holding over with the assent of the plaintiff and both parties were under a mistaken belief that the lease had expired on the 23rd February, 1938. He however held that the evidence did not show that there was any damage or injury caused to the property. \n On these findings, the suit was decreed in part, and the respondent No. 1 was directed to be put in possession of the brickfield and was also granted a decree for Rs. 4,000 as mesne profits up to the date on which the respondent No. 1 was put in possession. The prayer for damages for injury alleged to have been caused to the field and the prayer for injunction were however disallowed. The trial Judge allowed the appellants 3 months time to remove their belongings from the Akra brickfield including kilns, pugmills, bricks, coals and any other brick-making material that may be lying there after this period these properties, if any, left in the field. Were to become the absolute properties of the plaintiff. The appellants thereafter preferred an appeal to the High Court at Calcutta, and the respondent No. 1 also preferred a cross-objection claiming that the prayer for injunction should have been allowed and the claim for damages should have been decreed in full. The learned Judges of the High Court who heard the appeal, by their judgment dated the 13th February, 1948, dismissed the appellants appeal and allowed the cross-objection of the respondent No. 1 in part. They held that on the facts established in the case there was no holding over, and that the clause in the lease stating that if the appellants did not remove the bricks etc. from the field within 3 months after the termination of the lease they would become the property of respondent No. 1, was not a clause by way of penalty and should be given effect to. They further held that the claim of respondent No. 1 for damages for injury caused to the demised premises was not established. The present appeal is directed against the judgment of the High Court.", "The term of lease expires on the afternoon of the 23rd February, 1938. Apart from the fact that the appellants did not set up in any of their letters a case of holding over, we have to see whether the plea can be said to have been successfully made out by them. There is no doubt that the appellants have established that the rent was paid on their behalf up to the 31st March, 1938, and it was accepted by the respondent No. 1.", "It has also been established that this payment was made by a cheque and that cheque has been cashed by the Government. Section 116 of the Transfer of Property Act, on which reliance was placed on behalf of the appellants, runs as follows - If a lessee or underlessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased \n This section was construed by the Federal Court in K. B. Capadia v. Bai Jerbai Warden and Another 1959 F.C.R. 262, and it was held that where rent was accepted by the landlord after the expiration of the tenancy by efflux of time, section 116 applied even though the landlord accepted the amount remitted to him as part deposit towards his claim for compensation for illegal use and occupation, and without prejudice to his rights. It is to be noted that in that case rent had been accepted after the expiry of the tenancy."], "label": "REJECTED"}, "expert_2": {"rank1": ["Apart from the fact that the appellants did not set up in any of their letters a case of holding over, we have to see whether the plea can be said to have been successfully made out by them. There is no doubt that the appellants have established that the rent was paid on their behalf up to the 31st March, 1938, and it was accepted by the respondent No. 1. It has also been established that this payment was made by a cheque and that cheque has been cashed by the Government", "It seems to us on an examination of the lease as a whole that there must be a distinction between materials, and machinery and tools and similar articles, and the words other materials have no reference to engines, trucks, railway and tramway lines and plant. They mean building materials such as bricks, tiles and similar articles that might have been manufactured by the appellants on the demised premises."], "rank2": ["The principal question for determination in this appeal is whether a certain lease had validly terminated by efflux of time or whether there was holding over by the lessee of the leasehold property as contemplated in section 116 of the Transfer of Property Act.", "Even in the letter which was written on behalf of the appellants on the 3rd March, 1938, after the expiry of the date on which the lease was to terminate, the statement made in the earlier letters was repeated, and it was further stated we applied for renewal of the lease on the 23rd August, 1937, six months prior to the date of expiration of the lease. In this letter, it is nowhere suggested that the appellants were holding over by reason of the acceptance of rent up to the 31st March, 1938. On the other hand, at the end of this letter, we find the following statement - We therefore pray that if the Government is not at all inclined to renew the lease, time may be granted to us for dismantling and removing till the end of December, 1938, and we shall pay the proportional rent to the Government for seven months time in pursuance of the terms of the lease.", "A reference to section 116 of the Transfer of Property Act will show that for the application of that section, two things are necessary - (1) the lessee should be in possession after the termination of the lease and (2) the lessor or his representative should accept rent or otherwise assent to his continuing in possession. The use of the word otherwise suggests that acceptance of rent by the landlords has been treated as a form of his giving assent to the tenants continuance of possession. There can be no question of the lessee continuing in possession until the lease has expired, and the context in which the provision for acceptance of rent finds a place clearly shows that what is contemplated is that the payment of rent and its acceptance should be made at such a time and in such a manner as to be equivalent to the landlord assenting to the lessee continuing in possession.", "that the payment was made at a time when there was no question of the lessor assenting to the lessees continuing in possession and neither party treated the payment as importing such assent, is sufficient to take the case out of the mischief of section 116 of the Transfer of Property Act.", "The clause which applies to this case is clause 1 of Part III, which is intended to be applicable to the normal case of the lease expiring by efflux of time. This clause, as we have seen, provides that the lessee shall be at liberty to keep on the demised premises for 3 months after the expiration of the lease any bricks, boilers, etc., but it also provides that any bricks and other materials left in contravention of this condition shall become the absolute property of the Secretary of State without payment. There can be no doubt that under this clause, the bricks and other materials have become the absolute property of the plaintiff."], "label": "REJECTED"}, "expert_3": {"rank1": ["The principal question for determination in this appeal is whether a certain lease had validly terminated by efflux of time or whether there was holding over by the lessee of the leasehold property as contemplated in section 116 of the Transfer of Property Act.", "In a subsequent letter dated the 14th September, 1938, the Executive Engineer wrote to the appellants as follows - I am instructed to state that Government have decided that you cannot be allowed to continue in occupation of the premises any further However, as a matter of grace Government will allow you time till the 30th day of September next, to dismantle the kilns and to remove all your bricks, boiler etc. from the site, on which date Government will take over possession of the property from you. The correspondence to which reference has been made does not show that at any point of time the plaintiff had assented to the appellants continuance of possession", "On the other hand, some of the letters written by the appellants show that, notwithstanding their having paid rent up to the 31st March, 1938, they had proceeded all along on the footing that the lease was to expire in February, 1938", "For instance, in the appellants letter of the 23rd August, 1937, it is stated we are desirous of renewing the lease of the brickfield for a further period of 10 years from the date of the expiration of the period of the lease dated 17-2-1928. Again, in the letter dated the 23rd October, 1937, reference is made to the appellants application for renewal of the lease for a further period of 10 years on its expiry.", "Even in the letter which was written on behalf of the appellants on the 3rd March, 1938, after the expiry of the date on which the lease was to terminate, the statement made in the earlier letters was repeated, and it was further stated we applied for renewal of the lease on the 23rd August, 1937, six months prior to the date of expiration of the lease. In this letter, it is nowhere suggested that the appellants were holding over by reason of the acceptance of rent up to the 31st March, 1938.", "at the end of this letter, we find the following statement - We therefore pray that if the Government is not at all inclined to renew the lease, time may be granted to us for dismantling and removing till the end of December, 1938, and we shall pay the proportional rent to the Government for seven months time in pursuance of the terms of the lease.", "The reference to the period of 7 months shows that it was assumed that the lease had expired in February, 1938. The letters written on behalf of the Government point to the same conclusion, namely, that both the parties were acting on the assumption that the lease was to expire on the 23rd February, 1938", "For instance in a letter written on behalf of the Government on the 25th February, 1938, the following statement is made - I have the honour to inform you that none of your agents was present at the Akra brickfield today as previously arranged to make over the possession of the brickfields. You are therefore requested to please inform me about as to what arrangements are being made by you to make over the possession of the said brickfield to this department. The term of lease expires on the afternoon of the 23rd February, 1938", "Apart from the fact that the appellants did not set up in any of their letters a case of holding over, we have to see whether the plea can be said to have been successfully made out by them.", "There is no doubt that the appellants have established that the rent was paid on their behalf up to the 31st March, 1938, and it was accepted by the respondent No. 1. It has also been established that this payment was made by a cheque and that cheque has been cashed by the Government", "Section 116 of the Transfer of Property Act, on which reliance was placed on behalf of the appellants, runs as follows - If a lessee or underlessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased", "it was held that where rent was accepted by the landlord after the expiration of the tenancy by efflux of time, section 116 applied even though the landlord accepted the amount remitted to him as part deposit towards his claim for compensation for illegal use and occupation, and without prejudice to his rights.", "In our judgment, the present case cannot be governed by that decision, because of the fact, which in our opinion is important that here the payment of rent up to the 31st March, 1938, was made not after the date of expiry of the lease, but on the 5th April, 1937, nearly a year before the expiry of the lease", "Both the courts below, after dealing with the matter elaborately, have concurrently held that in the circumstances of the case the consent of respondent No. 1 to the appellants continuing in possession cannot be inferred, and we agree with this finding.", "But it seems to us that the very fact, that the payment was made at a time when there was no question of the lessor assenting to the lessees continuing in possession and neither party treated the payment as importing such assent, is sufficient to take the case out of the mischief of section 116 of the Transfer of Property Act", "the utmost that can be said upon the evidence as it stands is that by the implied consent of the parties the period of the lease was extended up to the 31st March, 1938. In this view, the respondent No. 1 became entitled to re-enter after the 31st March, and no notice under section 106 of the Transfer of Property Act was necessary. In the circumstances, the decree for ejectment passed by the courts below must be upheld", "The next question which arises in the case turns on the proper construction of clause 11 of Part I and clause 1 of Part III of the lease, which have already been quoted. It seems to us that clause 11 should be read as a whole, and, when it is so read, it becomes clear that it was intended to be applicable only where the Secretary of State decided to exercise his right to terminate the lease at any time subject to 6 months notice, in the event of the lessee failing to observe and duly perform the conditions mentioned in the lease", "This clause is evidently not applicable to the present case. The clause which applies to this case is clause 1 of Part III, which is intended to be applicable to the normal case of the lease expiring by efflux of time.", "It seems to us on an examination of the lease as a whole that there must be a distinction between materials, and machinery and tools and similar articles, and the words other materials have no reference to engines, trucks, railway and tramway lines and plant.", "They mean building materials such as bricks, tiles and similar articles that might have been manufactured by the appellants on the demised premises. That being so, the decree under appeal should be modified accordingly", "The only other point which arises for consideration relates to the plaintiffs prayer for a decree for permanent injunction against the defendants, to restrain them from removing or otherwise disposing of the articles in regard to which the decree is to be passed.", "In the present case, it has been found that the bricks and other materials have become the property of the plaintiff, and there can be no legal objection to the granting of an injunction as prayed."], "rank2": ["By the terms of the said lease, the lessee was prohibited from assigning or subletting the premises or any part thereof without the consent of the lessor except to a limited company and the lease also contained a general provision that the lessee would at the expiration of the lease restore to the lessor the demised premises in as good condition as it was at the date of the lease, reasonable wear and tear excepted.", "The case of the respondent No. 1, who is the plaintiff in the present litigation, is that the appellant (defendant No. 1) had, in contravention of the terms of the lease, sublet the brickfield to defendants-respondents 2 to 18 without the consent of respondent No. 1, and they had caused serious damage to the brickfield in general and failed to maintain the embankments, sluices, etc. in proper repair resulting in a total loss of Rs. 16,840. It was further alleged that the defendants had refused to deliver possession though the lease had terminated, and they had not removed the bricks, pugmills and other materials within 3 months from the termination of the lease.", "On the 27th August, 1937, the appellants applied to the Secretary to the Government of Bengal, Public Works Department, for renewing the lease for a further period of 10 years, but no reply was received to that letter. After addressing several other letters, the appellants received a letter dated the 23rd February, 1938, with which was enclosed a copy of an extract from a letter addressed by the Executive Engineer, Suburban Division to the Assistant Engineer, No. III Sub-division, which was as under - He is requested to make arrangements with Messrs. \n Karnani Industrial Bank Limited for vacant possession of the Akra brickfield on the 24th instant as the lease with the Bank will expire on the 23rd instant according to the terms of the agreement. Ultimately, on the 17th March, 1938, the appellants received the following communication from the Excecutive Engineer, Suburban Division - I would inform you that it is not the intention of Government in this Department to lease out the brickfields and arrangement is being accordingly made to make over the lands to the Government in the Revenue Department for disposal.", "A reference to section 116 of the Transfer of Property Act will show that for the application of that section, two things are necessary - (1) the lessee should be in possession after the termination of the lease and (2) the lessor or his representative should accept rent or otherwise assent to his continuing in possession. The use of the word otherwise suggests that acceptance of rent by the landlords has been treated as a form of his giving assent to the tenants continuance of possession", "There can be no question of the lessee continuing in possession until the lease has expired, and the context in which the provision for acceptance of rent finds a place clearly shows that what is contemplated is that the payment of rent and its acceptance should be made at such a time and in such a manner as to be equivalent to the landlord assenting to the lessee continuing in possession", "In such a case, if the lessee did not remove the boilers, engines and all other materials and yield up the premises to the Secretary of State, those articles were to become the property of the Secretary of State", "This clause, as we have seen, provides that the lessee shall be at liberty to keep on the demised premises for 3 months after the expiration of the lease any bricks, boilers, etc., but it also provides that any bricks and other materials left in contravention of this condition shall become the absolute property of the Secretary of State without payment.", "There can be no doubt that under this clause, the bricks and other materials have become the absolute property of the plaintiff. \n The only question is as to the meaning of other materials"], "rank3": ["The Province of Bengal, (hereinafter referred to as the respondent No. 1 or plaintiff) is admittedly the owner of an area of 1125 bighas and odd of land in village Akra. On the 17th February, 1928, the respondent No. 1 executed a lease (exhibit 3) in respect of the said land for 10 years for manufacture of bricks in favour of the appellant, at a rental of Rs. 6,000 a year. The lease was to commence from the 24th February, 1928, and a years rent was payable in advance", "The Secretary of State reserves the right to terminate the lease at any time subject to six months notice in the event of the lessees failing to observe and duly perform the conditions hereinbefore and after mentioned and it is hereby agreed that the lessee shall before the expiration or prior termination of the lease hereby granted remove his boilers engines trucks kilns railway and tram lines bricks tools and plant and all other materials whatsoever and yield up the said demised premises unto the Secretary of State and that those bricks tools and plant and other materials that shall not be removed before such expiration or prior termination shall become the property of the Secretary of State", "The lessee shall be at liberty to keep on the said premises hereby demised for three months after the expiration or prior termination of the term of this lease any bricks boilers engines trucks kilns railway and tram lines and all other materials whatsoever as may have been manufactured by him in the premises in accordance with the conditions of these presents but any bricks and other materials left in contravention to this condition shall become the absolute property of the Secretary of State without payment", "The appellants thereafter preferred an appeal to the High Court at Calcutta, and the respondent No. 1 also preferred a cross-objection claiming that the prayer for injunction should have been allowed and the claim for damages should have been decreed in full. The learned Judges of the High Court who heard the appeal, by their judgment dated the 13th February, 1948, dismissed the appellants appeal and allowed the cross-objection of the respondent No. 1 in part. They held that on the facts established in the case there was no holding over, and that the clause in the lease stating that if the appellants did not remove the bricks etc. from the field within 3 months after the termination of the lease they would become the property of respondent No. 1, was not a clause by way of penalty and should be given effect to. They further held that the claim of respondent No. 1 for damages for injury caused to the demised premises was not established. The present appeal is directed against the judgment of the High Court."], "rank4": ["On these allegations, the respondent No. 1 prayed for the following reliefs - \n (a) a decree for ejectment and khas possession over the brickfield \n (b) damages amounting to Rs. 4,000 for the period between the termination of the lease and institution of the suit and mesne profits for the subsequent period \n (c) a decree for Rs. 16,840 for damages caused to the field and \n (d) a decree for permanent injunction restraining the defendants from removing or otherwise disposing of the bricks, pugmils, etc. which were claimed to have become the property of the plaintiff", "The suit was contested by the appellants, and the other defendants, and their defence was that the appellants had held over with the implied consent of respondent No. 1, and hence the lease had not validly terminated, that no damage or injury had been caused to the land, that the respondent No. 1 was not entitled to forfeit the properties of the appellants lying in the brickfield inasmuch as the term in the lease to that effect was by way of penalty and as such unenforceable, and that the respondent No. 1 was not entitled to the relief of injunction. The trial Judge by his judgment dated the 24th November, 1941, held that there was no holding over with the assent of the plaintiff and both parties were under a mistaken belief that the lease had expired on the 23rd February, 1938.", "He however held that the evidence did not show that there was any damage or injury caused to the property. \n On these findings, the suit was decreed in part, and the respondent No. 1 was directed to be put in possession of the brickfield and was also granted a decree for Rs. 4,000 as mesne profits up to the date on which the respondent No. 1 was put in possession. The prayer for damages for injury alleged to have been caused to the field and the prayer for injunction were however disallowed"], "label": "REJECTED"}, "expert_4": {"rank1": ["The principal question for determination in this appeal is whether a certain lease had validly terminated by efflux of time or whether there was holding over by the lessee of the leasehold property as contemplated in section 116 of the Transfer of Property Act.", "The case of the respondent No. 1, who is the plaintiff in the present litigation, is that the appellant (defendant No. 1) had, in contravention of the terms of the lease, sublet the brickfield to defendants-respondents 2 to 18 without the consent of respondent No. 1, and they had caused serious damage to the brickfield in general and failed to maintain the embankments, sluices, etc. in proper repair resulting in a total loss of Rs. 16,840.", "In the circumstances, the decree for ejectment passed by the courts below must be upheld.", "There can be no doubt that under this clause, the bricks and other materials have become the absolute property of the plaintiff.", "In the present case, it has been found that the bricks and other materials have become the property of the plaintiff, and there can be no legal objection to the granting of an injunction as prayed."], "rank2": ["Two further clauses in the lease, which are material for the decision of this appeal, may be reproduced verbatim - \n Clause 11 of Part I of the Schedule.", "The Secretary of State reserves the right to terminate the lease at any time subject to six months notice in the event of the lessees failing to observe and duly perform the conditions hereinbefore and after mentioned and it is hereby agreed that the lessee shall before the expiration or prior termination of the lease hereby granted remove his boilers engines trucks kilns railway and tram lines bricks tools and plant and all other materials whatsoever and yield up the said demised premises unto the Secretary of State and that those bricks tools and plant and other materials that shall not be removed before such expiration or prior termination shall become the property of the Secretary of State.", "Clause 1 of Part III of the Schedule. The lessee shall be at liberty to keep on the said premises hereby demised for three months after the expiration or prior termination of the term of this lease any bricks boilers engines trucks kilns railway and tram lines and all other materials whatsoever as may have been manufactured by him in the premises in accordance with the conditions of these presents but any bricks and other materials left in contravention to this condition shall become the absolute property of the Secretary of State without payment.", "On these allegations, the respondent No. 1 prayed for the following reliefs - \n (a) a decree for ejectment and khas possession over the brickfield \n (b) damages amounting to Rs. 4,000 for the period between the termination of the lease and institution of the suit and mesne profits for the subsequent period \n (c) a decree for Rs. 16,840 for damages caused to the field and \n (d) a decree for permanent injunction restraining the defendants from removing or otherwise disposing of the bricks, pugmils, etc. which were claimed to have become the property of the plaintiff.", "The suit was contested by the appellants, and the other defendants, and their defence was that the appellants had held over with the implied consent of respondent No. 1, and hence the lease had not validly terminated, that no damage or injury had been caused to the land, that the respondent No. 1 was not entitled to forfeit the properties of the appellants lying in the brickfield inasmuch as the term in the lease to that effect was by way of penalty and as such unenforceable, and that the respondent No. 1 was not entitled to the relief of injunction.", "On these findings, the suit was decreed in part, and the respondent No. 1 was directed to be put in possession of the brickfield and was also granted a decree for Rs. 4,000 as mesne profits up to the date on which the respondent No. 1 was put in possession.", "The learned Judges of the High Court who heard the appeal, by their judgment dated the 13th February, 1948, dismissed the appellants appeal and allowed the cross-objection of the respondent No. 1 in part.", "But it seems to us that the very fact, that the payment was made at a time when there was no question of the lessor assenting to the lessees continuing in possession and neither party treated the payment as importing such assent, is sufficient to take the case out of the mischief of section 116 of the Transfer of Property Act.", "In this view, the respondent No. 1 became entitled to re-enter after the 31st March, and no notice under section 106 of the Transfer of Property Act was necessary.", "The next question which arises in the case turns on the proper construction of clause 11 of Part I and clause 1 of Part III of the lease, which have already been quoted.", "That being so, the decree under appeal should be modified accordingly.", "After reading and fully considering those cases, we find them to be wholly inapplicable to the present case."], "rank3": ["It may be stated here that at the time of the execution of the lease, the lessee had purchased from the lessor for Rs. 50,000 all the boilers, engines, trucks, kilns, railway and tramway lines and all other movable property, plant and machinery on the demised premises.", "It was further alleged that the defendants had refused to deliver possession though the lease had terminated, and they had not removed the bricks, pugmills and other materials within 3 months from the termination of the lease.", "The trial Judge by his judgment dated the 24th November, 1941, held that there was no holding over with the assent of the plaintiff and both parties were under a mistaken belief that the lease had expired on the 23rd February, 1938.", "He however held that the evidence did not show that there was any damage or injury caused to the property.", "The prayer for damages for injury alleged to have been caused to the field and the prayer for injunction were however disallowed.", "They held that on the facts established in the case there was no holding over, and that the clause in the lease stating that if the appellants did not remove the bricks etc. from the field within 3 months after the termination of the lease they would become the property of respondent No. 1, was not a clause by way of penalty and should be given effect to.", "They further held that the claim of respondent No. 1 for damages for injury caused to the demised premises was not established.", "On the 27th August, 1937, the appellants applied to the Secretary to the Government of Bengal, Public Works Department, for renewing the lease for a further period of 10 years, but no reply was received to that letter.", "Ultimately, on the 17th March, 1938, the appellants received the following communication from the Excecutive Engineer, Suburban Division - I would inform you that it is not the intention of Government in this Department to lease out the brickfields and arrangement is being accordingly made to make over the lands to the Government in the Revenue Department for disposal.", "In a subsequent letter dated the 14th September, 1938, the Executive Engineer wrote to the appellants as follows - I am instructed to state that Government have decided that you cannot be allowed to continue in occupation of the premises any further However, as a matter of grace Government will allow you time till the 30th day of September next, to dismantle the kilns and to remove all your bricks, boiler etc. from the site, on which date Government will take over possession of the property from you.", "On the other hand, some of the letters written by the appellants show that, notwithstanding their having paid rent up to the 31st March, 1938, they had proceeded all along on the footing that the lease was to expire in February, 1938.", "it is nowhere suggested that the appellants were holding over by reason of the acceptance of rent up to the 31st March, 1938.", "The reference to the period of 7 months shows that it was assumed that the lease had expired in February, 1938.", "The letters written on behalf of the Government point to the same conclusion, namely, that both the parties were acting on the assumption that the lease was to expire on the 23rd February, 1938.", "Apart from the fact that the appellants did not set up in any of their letters a case of holding over, we have to see whether the plea can be said to have been successfully made out by them.", "There is no doubt that the appellants have established that the rent was paid on their behalf up to the 31st March, 1938, and it was accepted by the respondent No. 1. It has also been established that this payment was made by a cheque and that cheque has been cashed by the Government.", "Section 116 of the Transfer of Property Act, on which reliance was placed on behalf of the appellants, runs as follows - If a lessee or underlessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased", "In our judgment, the present case cannot be governed by that decision, because of the fact, which in our opinion is important that here the payment of rent up to the 31st March, 1938, was made not after the date of expiry of the lease, but on the 5th April, 1937, nearly a year before the expiry of the lease.", "A reference to section 116 of the Transfer of Property Act will show that for the application of that section, two things are necessary - (1) the lessee should be in possession after the termination of the lease and (2) the lessor or his representative should accept rent or otherwise assent to his continuing in possession.", "The use of the word otherwise suggests that acceptance of rent by the landlords has been treated as a form of his giving assent to the tenants continuance of possession.", "Both the courts below, after dealing with the matter elaborately, have concurrently held that in the circumstances of the case the consent of respondent No. 1 to the appellants continuing in possession cannot be inferred, and we agree with this finding", "This application however was rejected, because it was made at a very late stage, that is to say, after the defendants evidence had been closed and an adjournment had been granted to the plaintiff to adduce rebutting evidence.", "However that may be, the utmost that can be said upon the evidence as it stands is that by the implied consent of the parties the period of the lease was extended up to the 31st March, 1938.", "It seems to us that clause 11 should be read as a whole, and, when it is so read, it becomes clear that it was intended to be applicable only where the Secretary of State decided to exercise his right to terminate the lease at any time subject to 6 months notice, in the event of the lessee failing to observe and duly perform the conditions mentioned in the lease.", "In such a case, if the lessee did not remove the boilers, engines and all other materials and yield up the premises to the Secretary of State, those articles were to become the property of the Secretary of State.", "This clause is evidently not applicable to the present case.", "It seems to us on an examination of the lease as a whole that there must be a distinction between materials, and machinery and tools and similar articles, and the words other materials have no reference to engines, trucks, railway and tramway lines and plant.", "They mean building materials such as bricks, tiles and similar articles that might have been manufactured by the appellants on the demised premises.", "The only other point which arises for consideration relates to the plaintiffs prayer for a decree for permanent injunction against the defendants, to restrain them from removing or otherwise disposing of the articles in regard to which the decree is to be passed.", "It was contended on behalf of the appellants that the respondent No. 1 not being in possession of these properties could not ask for the relief of injunction without asking for the declaration of its title in respect of them and possession over them, and in support of this proposition, the following cases were cited - Ratnasabhapathi Pillai and Others v. Ramaswami Aiyar I.L.R. 33 Mad. 482, Bhramar Lal Banduri and Others v. Nanda Lal Chowdhuri 24 I.C. 199 and Valia Tamburatti v. Parvati and Others I.L.R. 13 Mad. 455."], "rank4": ["The circumstances under which this question and several subsidiary questions to which reference will be made later have arisen may be briefly stated as follows \n The Province of Bengal, (hereinafter referred to as the respondent No. 1 or plaintiff) is admittedly the owner of an area of 1125 bighas and odd of land in village Akra.", "On the 17th February, 1928, the respondent No. 1 executed a lease (exhibit 3) in respect of the said land for 10 years for manufacture of bricks in favour of the appellant, at a rental of Rs. 6,000 a year. The lease was to commence from the 24th February, 1928, and a years rent was payable in advance. By the terms of the said lease, the lessee was prohibited from assigning or subletting the premises or any part thereof without the consent of the lessor except to a limited company and the lease also contained a general provision that the lessee would at the expiration of the lease restore to the lessor the demised premises in as good condition as it was at the date of the lease, reasonable wear and tear excepted.", "The trial Judge allowed the appellants 3 months time to remove their belongings from the Akra brickfield including kilns, pugmills, bricks, coals and any other brick-making material that may be lying there after this period these properties, if any, left in the field.", "Were to become the absolute properties of the plaintiff.", "The appellants thereafter preferred an appeal to the High Court at Calcutta, and the respondent No. 1 also preferred a cross-objection claiming that the prayer for injunction should have been allowed and the claim for damages should have been decreed in full.", "The present appeal is directed against the judgment of the High Court.", "The admitted facts of the case are briefly these. The appellants duly paid Rs. 6,000 as rent to respondent No. 1 in February, 1928. In February, 1929, a sum of Rs. 6,714 and odd was paid by the appellants as rent for the period 17th February, 1929, to the 31st March, 1930, and thereafter they continued to pay Rs. 6,000 as rent for the yearly period, 1st April to 31st March of the succeeding year, and the last payment was made in April, 1937, by means of a cheque sent with a covering letter, the material portion of which runs as follows - We beg to enclose herewith a cheque for Rs. 6,000 in payment of rent Akra brickfield for the year 1937-38 ending 31st March, 1938, and shall thank you to please favour us with your formal receipt for the above.", "The cheque was duly cashed and the amount was entered in the cash book of the plaintiff in the following terms - 5-4-37 (date of receipt).", "After addressing several other letters, the appellants received a letter dated the 23rd February, 1938, with which was enclosed a copy of an extract from a letter addressed by the Executive Engineer, Suburban Division to the Assistant Engineer, No. III Sub-division, which was as under - He is requested to make arrangements with Messrs. \n Karnani Industrial Bank Limited for vacant possession of the Akra brickfield on the 24th instant as the lease with the Bank will expire on the 23rd instant according to the terms of the agreement.", "The correspondence to which reference has been made does not show that at any point of time the plaintiff had assented to the appellants continuance of possession.", "For instance, in the appellants letter of the 23rd August, 1937, it is stated we are desirous of renewing the lease of the brickfield for a further period of 10 years from the date of the expiration of the period of the lease dated 17-2-1928.", "Again, in the letter dated the 23rd October, 1937, reference is made to the appellants application for renewal of the lease for a further period of 10 years on its expiry.", "Even in the letter which was written on behalf of the appellants on the 3rd March, 1938, after the expiry of the date on which the lease was to terminate, the statement made in the earlier letters was repeated, and it was further stated we applied for renewal of the lease on the 23rd August, 1937, six months prior to the date of expiration of the lease.", "On the other hand, at the end of this letter, we find the following statement - We therefore pray that if the Government is not at all inclined to renew the lease, time may be granted to us for dismantling and removing till the end of December, 1938, and we shall pay the proportional rent to the Government for seven months time in pursuance of the terms of the lease.", "For instance in a letter written on behalf of the Government on the 25th February, 1938, the following statement is made - I have the honour to inform you that none of your agents was present at the Akra brickfield today as previously arranged to make over the possession of the brickfields.", "You are therefore requested to please inform me about as to what arrangements are being made by you to make over the possession of the said brickfield to this department", "The term of lease expires on the afternoon of the 23rd February, 1938.", "This section was construed by the Federal Court in K. B. Capadia v. Bai Jerbai Warden and Another 1959 F.C.R. 262, and it was held that where rent was accepted by the landlord after the expiration of the tenancy by efflux of time, section 116 applied even though the landlord accepted the amount remitted to him as part deposit towards his claim for compensation for illegal use and occupation, and without prejudice to his rights.", "It is to be noted that in that case rent had been accepted after the expiry of the tenancy.", "There can be no question of the lessee continuing in possession until the lease has expired, and the context in which the provision for acceptance of rent finds a place clearly shows that what is contemplated is that the payment of rent and its acceptance should be made at such a time and in such a manner as to be equivalent to the landlord assenting to the lessee continuing in possession.", "It was pointed out to us on behalf of the respondent that the entry relating to this payment in the books of the plaintiff contains the words received without prejudice from Karnani Industrial Bank The same words however occur in several earlier entries, and we are not inclined to attach any special significance to them.", "There is also another view which we think is possible to take upon the facts of the case. As we have seen the rent for the first year was paid in advance near about the time of the execution of the lease, and nothing turns upon it.", "When however the second payment was made, the sum paid was Rs. 6,714 and odd, and the payment was made in respect of rent up to the 31st March, 1930.", "After this, all the subsequent payments were made up to the 31st March of the succeeding year, evidently because the financial year, which the parties considered themselves to be governed by, ran from the 1st April to the 31st March of the succeeding year.", "It was presumably in view of this fact that the plaintiff filed an application on the 6th November, 1941, for amending the plaint so as to include the following statement - The plaintiff submits that even assuming that the registered lease terminated on the 23rd February, 1938, by an agreement between the plaintiff and the defendant No. 1, the latter was allowed to hold over up to the 31st March, 1938.", "The clause which applies to this case is clause 1 of Part III, which is intended to be applicable to the normal case of the lease expiring by efflux of time.", "This clause, as we have seen, provides that the lessee shall be at liberty to keep on the demised premises for 3 months after the expiration of the lease any bricks, boilers, etc., but it also provides that any bricks and other materials left in contravention of this condition shall become the absolute property of the Secretary of State without payment.", "The only question is as to the meaning of other materials."], "rank5": ["Received without prejudice from Karnani Industrial Bank Ltd. on account of yearly rent for Akra brickfield for the year ending 31st March, 1938."], "label": "REJECTED"}, "expert_5": {"rank1": ["The correspondence to which reference has been made does not show that at any point of time the plaintiff had assented to the appellants continuance of possession.", "There can be no question of the lessee continuing in possession until the lease has expired, and the context in which the provision for acceptance of rent finds a place clearly shows that what is contemplated is that the payment of rent and its acceptance should be made at such a time and in such a manner as to be equivalent to the landlord assenting to the lessee continuing in possession.", "it has been found that the bricks and other materials have become the property of the plaintiff, and there can be no legal objection to the granting of an injunction as prayed."], "rank2": ["On the 27th August, 1937, the appellants applied to the Secretary to the Government of Bengal, Public Works Department, for renewing the lease for a further period of 10 years, but no reply was received to that letter.", "On the other hand, some of the letters written by the appellants show that, notwithstanding their having paid rent up to the 31st March, 1938, they had proceeded all along on the footing that the lease was to expire in February, 1938.", "The letters written on behalf of the Government point to the same conclusion, namely, that both the parties were acting on the assumption that the lease was to expire on the 23rd February, 1938."], "rank3": ["On the 17th February, 1928, the respondent No. 1 executed a lease (exhibit 3) in respect of the said land for 10 years", "The lease was to commence from the 24th February, 1928", "We beg to enclose herewith a cheque for Rs. 6,000 in payment of rent Akra brickfield for the year 1937-38 ending 31st March, 1938, and shall thank you to please favour us with your formal receipt for the above.", "For instance, in the appellants letter of the 23rd August, 1937, it is stated we are desirous of renewing the lease of the brickfield for a further period of 10 years from the date of the expiration of the period of the lease dated 17-2-1928. Again, in the letter dated the 23rd October, 1937, reference is made to the appellants application for renewal of the lease for a further period of 10 years on its expiry.", "Even in the letter which was written on behalf of the appellants on the 3rd March, 1938, after the expiry of the date on which the lease was to terminate, the statement made in the earlier letters was repeated, and it was further stated we applied for renewal of the lease on the 23rd August, 1937, six months prior to the date of expiration of the lease. In this letter, it is nowhere suggested that the appellants were holding over by reason of the acceptance of rent up to the 31st March, 1938.", "On the other hand, at the end of this letter, we find the following statement - We therefore pray that if the Government is not at all inclined to renew the lease, time may be granted to us for dismantling and removing till the end of December, 1938, and we shall pay the proportional rent to the Government for seven months time in pursuance of the terms of the lease. The reference to the period of 7 months shows that it was assumed that the lease had expired in February, 1938.", "For instance in a letter written on behalf of the Government on the 25th February, 1938, the following statement is made - I have the honour to inform you that none of your agents was present at the Akra brickfield today as previously arranged to make over the possession of the brickfields. You are therefore requested to please inform me about as to what arrangements are being made by you to make over the possession of the said brickfield to this department. The term of lease expires on the afternoon of the 23rd February, 1938.", "In our judgment, the present case cannot be governed by that decision, because of the fact, which in our opinion is important that here the payment of rent up to the 31st March, 1938, was made not after the date of expiry of the lease, but on the 5th April, 1937, nearly a year before the expiry of the lease.", "A reference to section 116 of the Transfer of Property Act will show that for the application of that section, two things are necessary - (1) the lessee should be in possession after the termination of the lease and (2) the lessor or his representative should accept rent or otherwise assent to his continuing in possession.", "As we have seen the rent for the first year was paid in advance near about the time of the execution of the lease, and nothing turns upon it. When however the second payment was made, the sum paid was Rs. 6,714 and odd, and the payment was made in respect of rent up to the 31st March, 1930. After this, all the subsequent payments were made up to the 31st March of the succeeding year, evidently because the financial year, which the parties considered themselves to be governed by, ran from the 1st April to the 31st March of the succeeding year.", "It was presumably in view of this fact that the plaintiff filed an application on the 6th November, 1941, for amending the plaint so as to include the following statement - The plaintiff submits that even assuming that the registered lease terminated on the 23rd February, 1938, by an agreement between the plaintiff and the defendant No. 1, the latter was allowed to hold over up to the 31st March, 1938.", "by the implied consent of the parties the period of the lease was extended up to the 31st March, 1938."], "rank4": ["After addressing several other letters, the appellants received a letter dated the 23rd February, 1938, with which was enclosed a copy of an extract from a letter addressed by the Executive Engineer, Suburban Division to the Assistant Engineer, No. III Sub-division, which was as under - He is requested to make arrangements with Messrs. \n Karnani Industrial Bank Limited for vacant possession of the Akra brickfield on the 24th instant as the lease with the Bank will expire on the 23rd instant according to the terms of the agreement.", "Ultimately, on the 17th March, 1938, the appellants received the following communication from the Excecutive Engineer, Suburban Division - I would inform you that it is not the intention of Government in this Department to lease out the brickfields and arrangement is being accordingly made to make over the lands to the Government in the Revenue Department for disposal.", "In a subsequent letter dated the 14th September, 1938, the Executive Engineer wrote to the appellants as follows - I am instructed to state that Government have decided that you cannot be allowed to continue in occupation of the premises any further However, as a matter of grace Government will allow you time till the 30th day of September next, to dismantle the kilns and to remove all your bricks, boiler etc. from the site, on which date Government will take over possession of the property from you.", "There is no doubt that the appellants have established that the rent was paid on their behalf up to the 31st March, 1938, and it was accepted by the respondent No. 1.", "But it seems to us that the very fact, that the payment was made at a time when there was no question of the lessor assenting to the lessees continuing in possession and neither party treated the payment as importing such assent, is sufficient to take the case out of the mischief of section 116 of the Transfer of Property Act."], "rank5": ["It is to be noted that in that case rent had been accepted after the expiry of the tenancy.", "The clause which applies to this case is clause 1 of Part III, which is intended to be applicable to the normal case of the lease expiring by efflux of time. This clause, as we have seen, provides that the lessee shall be at liberty to keep on the demised premises for 3 months after the expiration of the lease any bricks, boilers, etc., but it also provides that any bricks and other materials left in contravention of this condition shall become the absolute property of the Secretary of State without payment. There can be no doubt that under this clause, the bricks and other materials have become the absolute property of the plaintiff."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1951_35", "text": "CIVIL APPELLATE JURISDICTION Civil Appeal No. 90 of 1950. Appeal against the Judgment and Decree dated the 22nd July 1948 of the High Court of Judicature at Calcutta (K. C. Mitter, and K.C. Chunder J J) in appeal from Original Decree No. 49 of 1942 arising out of Decree dated the 8th September 1941 of the Subordi- nate Judge at Asansole in Suit No. 1 of 1941. Purusottam Chatterji (S. N. Mukherjee, with him) for the appellants. Panchanan Ghose, (P. C. Chatterjee, with him) for the respondent. 1951. May 4. the following judgments were delivered -- DAS J.--This appeal arises out of a suit filed by the appellants on January 2, 1941, in the Court of the Subordi- nate Judge, Asansole. That suit came to be filed in circum- stances which may now be stated shortly. A suit had been instituted by one Kumar Dakhineswar Malia against Rameswar Malia, Rani Bhaba Sundari and others for partition of the Searsole Raj Estate. One Bhagabati Charan Mitra was appointed receiver of that estate in that suit. \nOn August 10, 1908, the said receiver with the permis- sion of the Court which had appointed him as receiver grant- ed two mining leases, each for 999 years--one in respect of 5/16 share of the Malias in Mouza Monohar Bahal and the other in respect of 230 bighas in village Marich Kota--to a firm then carrying on business under the name and style of Laik Banerjee Company. On the same day the said receiver with like permission mortgaged these properties to the said firm as security for the due repayment of the loan of Rs. 100,000 advanced by that firm. The Malias joined the re- ceiver in executing the aforesaid leases and the mortgage. \nAs a result of these transactions the firm of Laik Banerjee Company became the lessees for 999 years of the two properties as well as the mortgagee of the lessors interest in the same. By diverse processes not necessary to be detailed, the appellants have become the successors in interest of the mortgagors and the respondent Deva Prasanna Mukerjee has become the successor in interest of the mortga- gee under the mortgage of August 10, 1908. On March 31, 1922, Deva Prasanna filed suit No. 78 of 1922 for enforcing the mortgage of 1908. Preliminary decree was passed in the last mentioned suit on July 31, 1928, and a final decree for sale was made I on February 26, 1929. In execution of this final decree the mortgaged properties were sold at a Court i sale and were purchased by Deva Prasanna for Rs. 59,000. This sale was confirmed by the Court on June 30, 1931. A large sum remaining still due to Deva Prasanna, he applied for, and on October 30, 1935, obtained a personal decree for Rs. 1,27,179-0-6 against Raja Pramatha Nath Malia who had by inheritance acquired the lessors interest and become the borrower. In 1936, Deva Prasanna started execution case No. 118 of 1936 for execution of the personal decree and attached certain properties alleging that the same belonged to the Raja. The exact date of the attachment does not appear from the printed record. \nThe Raja as Sibait of a certain deity and his two sons, the appellants before us, objected to the attachment of these properties and filed a claim case. Negotiations for settlement started and eventually, on January 30, 1937, a petition (Ex. 2) was filed in the exe- cuting Court stating as follows - The judgment debtor having made special requests to the decree-holder for an amicable settlement of the aforesaid execution case, the decree-holder has agreed to the same. But some time is required to settle the talks and all the terms etc. The judgment debtor has paid to the decree holder the costs of this execution amounting to Rs. 76-14-0, and he having made requests for this execution case being struck off for the present on keeping the attachment in force, the decreeholder has agreed to it. It is, therefore, prayed that under the circumstances aforesaid, the Court may be pleased to strike off this execution case keeping the attachment in force. Neither the original nor a certified copy of the order made on that date by the executing Court on the above petition is forthcoming but the parties have definite- ly agreed that the order is substantially and correctly entered in column 20 of Ex. F which is a certified copy of extract from the Register of applications for executions of decrees relating to execution Case No. 118 of 1936. The heading of column 20 is Date on which execution case was finally disposed of and purport of final order. The entry in column 20 under that head is \n H. admits receipt of Rs. 76-14/- as costs of this case from the J.D. The execution case is dismissed for non- prosecution--the attachment already effected in this case continuing. 30th January 1937. The entry under column 11 of that very exhibit reads as follows -- Claim case automatically drops as the execution case is dismissed. It is, therefore, rejected without any sort of adjudication. 30th January 1937. In May 1937, the Searsole Raj Estate came under the charge of the Court of Wards. By a Kobala executed with the permission of the Board of Revenue Raja Pramatha Nath Malia and his two sons Kumars Pashupati Nath Malia and Kshitipati Nath Malia represented by Kumar Kshitipati Nath Malia as the Manager of the Searsole Raj Wards Estate conveyed a property known as Senapati Mahal to Deva Prasanna in full settlement of his claim under the personal decree against the Raja. By an agreement of even date, Deva Prasanna agreed to reconvey Senapati Mahal to the Kumars if he was paid Rs. 90,000/- within two years from that date. Senapati Mahal orginally belonged to the Raja but had been tranSferred by him to his two sons. A creditor, however, had filed a suit under sec- tion 53 of the Transfer of Property Act challenging that transfer and had actually got a decree declaring that trans- fer as fradulent and void as against the creditors of the Raja An appeal was filed by the Kumars which was pending at the date of the Kobala of January 4, 1939, and, in the circum- stances, it was considered safer to join the Raja in the last mentioned Kobala in favour of Deva Prasanna. On June 2, 1939, a petition was filed in the Court of the Subordinate Judge, Asansole, on behalf of Deva Prasanna as the decree holder. It was headed Money Execution Case No. 118 of 1936. The relevant portions of this petition were as follows-- That the above execution case was disposed of on the 30th January 1937 with the attachment of the properties subsisting since then the decree put into execution in the above case has been adjusted after remission of a large amount of interest by the out and out sale of certain properties by a registered Kobala dated 4th January 1939 So there is no longer any need of the said attachment remaining subsisting. It is, therefore, prayed that the attachment may be withdrawn. \n On the same day the following order was made on that petition-- Heard learned pleaders for the parties. They jointly ask me to cancel the attachment (existing by special order) in Money Ex. 118 of 1936 though that case was dismissed. Order The said attachment is cancelled and the decree in question is recorded as adjusted as stated by learned plead- er for the decree-holder and pleader of the judgment-debtor according to the adjustment mentioned but not detailed in this petition of to-day. Make necessary notes and send this petition to the District Record Room. In the remarks column No. 22 in Ex. F the following entry was made -- The said attachment is cancelled and the decree in question is recorded as adjusted as stated by learned pleader for the D.H. and the pleader of the Judgment Debtor according to the adjustment mentioned but not detailed in this petition of to-day. Dated 2nd June 1989. The Raja died in August, 1940, leaving the two appellants as his sons and legal representatives. The Bengal Money Lend- ers Act, 1940 (Bengal Act X of 1940) hereinafter called the Act, came into force on September 1, 1940. On January 2, 1941, the appellants who, as the legal representatives of the Raja, became borrowers within the meaning of the Act filed the suit out of which the present appeal has arisen. The suit was filed by the appellants against the respondent under section 36 of the Act praying for reopening the trans- actions and taking accounts and for release from all liabil- ities in excess of the limits specified by law. In short, they asked the Court to give them relief by exercising the powers given to the Court by section 36 of the Act. There was also a prayer for reconveyance of the Senapati Mahal. The respondent filed his written statement setting up a variety of defences rounded on merits as well as on legal pleas in bar. On May 8, 1941, the Subordinate Judge settled the issues and fixed June 9, 1941, for a preliminary hear- ing of the suit and particularly of such of the issues as have been based on the pleas in bar. Eventually, the case was taken up for preliminary hearing on September 4, 1941, and by his judgment delivered on September 8, 1941, the learned Subordinate Judge dismissed the suit on issue No. 2 which was as follows Does the plaint disclose a valid cause of action for the suit ? The appellants preferred an appeal to the High Court at Calcutta. Although the High Court (R.C. Mitter and K.C. Chunder JJ.) did not accept all the reasonings on which the learned Subordinate Judge had based his decision, they, however, agreed that the appellants could get no relief as the decrees in suit No. 78 of 1922 could not be reopened, as they were not passed in a suit to which this Act applies and consequently dis- missed the appeal. \n The appellants have now come up on appeal before us after having obtained a certificate from the High Court under section 110 of the Code of Civil Procedure. Learned Advocate appearing in support of this appeal before us has contended that the High Court was in error in holding that the decrees in Suit No. 78 of 1922 were not liable to be reopened under the second proviso to section 36 (1). Learned advocate for the respondent while joining issue on this point also raised a point which, however, did not find favour with the High Court, namely, that the respondent as a bona fide assignee for value of the mortgage debt was protected by sub-section (5) of section 36. It is quite clear that if either of the two points is decided against the appellants, this appeal must fail. The main provisions of section 36 (1)are in the follow- ing terms -- Notwithstanding anything contained in any law for the time being in force, if in any suit to which this Act ap- plies, or in any suit brought by a borrower for relief under this section, whether heard ex parte or otherwise, the Court has reason to believe that the exercise of one or more of the powers under this section will give relief to the bor- rower, it shall exercise all or any of the following powers as it may consider appropriate namely, shall (a) reopen any transaction and take an account between the parties (b) notwithstanding any agreement, purporting to close previous dealings and to create new obligations, reopen any account already taken between the parties (c) release the borrower of all liability in excess of the limits specified in clauses (t) and (2) of section 30 (d) if anything has been paid or allowed in account on or after the first day of January, 1939, in respect of the liability referred to in clause (c), order the lender to repay any sum which the Court considers to be repayable in respect of such payment or allowance in account as aforesaid (e) set aside either wholly or in part or revise or alter any security given or agreement made in respect of any loan, and if the lender has parted with the security, order him to indemnify the borrower in such manner and to such extent as it may deem just. It will be noticed (a) that the provisions of this section apply notwithstanding anything contained in any law for the time being in force, (b) that the powers conferred on the Court or to be exercised either in any suit to which this Act applies or in any suit brought by a borrower for relief under the section and (c) that the Court is called upon to exercise all or any of the powers conferred on it by the section if the Court has reason to believe that the exercise of one or more of the powers will give relief to the borrower. In the present case the borrowers have insti- tuted a substantive suit for relief under section 36 and, therefore, if there was nothing also in the section and the Court had the requisite belief, the Court could exercise all or any of the powers and give relief to the borrowers in terms of the prayers of the plaint. There are, however, two provisions to sub-section (1) of section 36. The relevant portion of the second proviso is expressed in the words following Provided that in exercise of these powers the Court shall not- (i) \n do anything which affects any decree of a Court, other than a decree in a suit to which the Act applies which was not fully satisfied by the first day of January, 1939, or The proviso makes it quite clear that in exercise of the powers the Court cannot reopen or otherwise affect a decree of a Court unless such decree is one which was passed in a suit to which this Act applies and which was not fully satisfied by January 1, 1939. In the light of the decision of the Full Bench of the Calcutta High Court in Mrityunjay Mitra v. Satis Chandra Banerji(1) which was approved by the Privy Council in Jadu Nath Roy v. Kshitish Chandra Acharyya(2), it has not been contended, in view of the fact that the personal decree for the balance remained unsatisfied on January 1, 1939, that the decrees in Suit No. 78 of 1922 were fully satisfied within the meaning of the above proviso. Therefore, the only thing that remains to be ascertained is whether the decrees were passed in a suit to which this Act applies. Section 2 (22) of the Act is as follows \n In this Act, unless there is anything repugnant in the subject or context- \n Suit to which this Act applies means any suit or proceeding instituted or filed on or after the 1st day of January, 1939, or pending on that date and includes a pro- ceeding in execution-- (a) for the recovery of a loan advanced before or after the commencement of this Act (b) for the enforcement of any agreement entered into before or after the commencement of this Act, whether by way of settlement of account or otherwise, or of any security so taken, in respect of any loan advanced whether before or after the commencement of this Act or (c) for the redemption of any security given before or after the commencement of this Act in respect of any loan advanced whether before or after the commencement of this Act. The words instituted or filed on or after the 1st day of January, 1939, or pending on that date have been read and understood as qualifying the words any suit or proceed- ing in the beginning of the definition as well as the words proceeding in execution occurring further down see per Spens C.J. in Bank of Commerce Ltd. v. Amulya Krishna (3). Accordingly, it has \n I.L.R. 11944) 2Cal. 376 48 C.W.N. 361. L.R. 76 I.A. 179 at p. 190. (3) 1944 F.C.R. 126A.I.R. 1944 F.C. 18. been held in Ram Kumar De v. Abhoya Pada Bhattacharjee (1) that where a decree is such that the suit in which it was passed had terminated before January 1, 1939, and no pro- ceeding in execution was started or was actually pending on or after that date it is not a decree in a suit to which this Act appliesand cannot be reopened. The same view was upheld by a Special Bench of the Calcutta High Court in Aparna Kumari v. Girish Chandra (2)which overruled two earlier decisions to the contrary. The construction put upon section 2 (22)by the Special Bench and the reasons given by them appear to us to be well-founded. In the case now before us, the Suit No. 78 of 1922 was instituted and all the three decrees were passed long before the specified date. The only question that has therefore, to be consid- ered is whether any proceeding in execution was pending on or after that date. The answer to this question will depend on the true meaning and effect of the orders made by the executing Court (i) on January 30, 1937, and (ii) on June 2, 1939. As to (i)--It is not disputed that the order of January 30, 1937, was made under Order XXI, rule57, as amended by the Calcutta High Court. \n Order XXI, rule 57, is expressed in the following terms - Where any property has been attached in execution of a decree but by reason of the decree-holders default the Court is unable to proceed further with the application for execution, it shall either dismiss the application or for any sufficient reason adjourn the proceedings to a future date. Upon the dismissal of such application the attachment shall cease. The marginal note of the rule is determination of at- tachment. The reason why rule 57 was introduced in the Code of 1908 has been explained by Rank in C.J. in Shibnath Singh Ray v. Sheikh Saberuddin Ahmad(3) as follows-- (1) 46 C.W.N. 557 A.I.R. 1942 Cal. 441. (2) 48 C.W.N, 406. I.L.R. 56 Cal. 416 at pp. 421-422 Rule 57 of Order XXI was a new provision introduced in 1908. It is evident from the language of the rule itself, and it is still more evident from the circumstances under which it was passed, that it was intended to provide a remedy for the grievance or inconvenience which is apt to arise, where, after an attachment in execution, the applica- tion for execution cannot further be proceeded with by reason of the decree-holders default. This was, and still is, a very common case. The decree-holder makes some informal arrangement to give the judgment-debtor time with- out obtaining full satisfaction of the decree the applica- tion for execution is not further prosecuted it is not withdrawn neither party attends. In these circumstances, the object of the rule is to say that the Court must make either an order for adjournment or an order of dismissal. The reason why it was necessary to require the Court, if it did not adjourn a proceeding to a definite date, to dismiss the application for execution formally and definitely can be amply illustrated from the decided cases. In the absence of a definite order of dismissal the files of the Courts became encumbered with a number of applications for execution which were water-logged and derelict, and a practice arose whereby such applications were ordered to be struck off. \n This was a practice not justified by the Code and in cases where attachments in execution had already been entered, the question arose whether the effect of an order striking off was that the attachment made upon application for execution was itself struck off or whether it remained notwithstanding such an order. Many other awkward and important questions arose out of this practice and the object of rule 57 was to ensure that this illogical and inconvenient practice should be stopped. Applications for execution were to be definitely dismissed if they were not adjourned to a future date. The object of the last sentence in rule 57 is to settle the question whether, when the application in execution is dismissed any attachment made under that application should fall to the ground or should subsist, and the legislature has provided that it is to fall to the ground. The new rule thus introduced left two distinct courses open to the executing Court in the situation envisaged by the rule. Each course had its advantage as well as its disadvantage. Thus the adjournment of the execution pro- ceedings kept the attachment alive without any special direction. While the adoption of this course helped bona fide arrangement between the decree-holder and the judgment-debtor as to the time and manner of satisfaction of the decree it was calculated also to encourage desultory proceedings resulting in undesirable congestion in the files of the Executing Court by keeping alive so many execution proceedings. \n On the other hand, while the dismissal of an application in the circumstances mentioned in the rule had the merit of preventing a congestion of the file by finally disposing of the application by a final order, it was calcu- lated to discourage decreeholders from giving even reasona- ble accommodation to the judgment-debtor on account of the destruction of the attachment which left the judgment-debtor free to deal with the property to the detriment of the decreeholder after the attachment ceased. It was evidently with a view to preserve the advantage of a dismissal and at the same time to avoid the disadvantage of the rigid rule of cesser of the attachment that the Calcutta High Court amend- ed rule 57 by adding the words unless the Court shall make an order to the contrary at the end of the last sentence of that rule. The rule thus amended leaves three courses open to the Executing Court in case it finds it difficult to proceed with the execution case by reason of the default of the decree-holder. It may (1) adjourn the proceedings for good reason which will automatically keep the attachment alive or (2) simply dismiss the application which will automatically destroy the attachment or (3) dismiss the application but specifically keep alive the attachment by an express order. The rule, as amended, therefore, contemplates three distinct forms of order, any one of which may be made by the Court in the circumstances mentioned in the rule. The question before us is as to the category in which the order made on January 30, 1937, in Execution Case No. 118 of 1936 falls. It will be recalled that the order of January 30, 1937, was made on a petition (Exhibit 2) filed on that day in Execution Case No. 118 of 1936. Great stress was laid by the learned advocate for the appellants on the words struck off for the present occurring in the body of that petition. It will be noticed that those words formed part of the request of the judgmentdebtor which was being recited in the petition. In the actual prayer portion the decree-holder did not use the words for the present but only asked the Court to strike off the execution case keeping the attachment in force. Further, apart from what the parties wanted, the Court made its intention clear in the very order that it passed and which is entered in column 20 of Exhibit F. The Court regarded the willingness of the the decree-holder to enter into a long and protracted negotiation with the judg- ment-debtor as evidence of unwillingness on the part of the decree-holder to diligently prosecute the execution proceedings and accordingly dismissed the execution case for non-prosecution but thought fit to expressly keep alive the attachment. It is quite obvious that the Court made an order of the third kind mentioned above. The three forms of order permissible under rule 57 as amended by the High Court are quite distinct and independent of each other and there is no room for their overlapping. If the mere continuation of attachment will automatically convert an express order of dismissal of the execution application which is a final order into an order of adjournment which is not a final order then there was no point in the High Court taking the trouble of amending rule 57 at all. The Court could by simply adjourning the proceedings automatically continue the attachment without any express direction in that behalf. The fact that the Court gave an express direction that the attachment should continue clearly indicates that the Court intended to make a final order of dismissal. Again, the heading of column 20 in Exhibit F clearly indicates that only a final order is to be entered in that column. The fact that the order was entered in that column affords some justification for the conclusion that the Court made a final order of dismissal. That the claim case was automatically dropped is yet another indication that the execution case was at an end. The fact that the judgment-debtor had paid the full costs of the execution case is also a feature which goes to show, to a certain extent at any rate if not deci- sively, that the execution proceeding was finally disposed of by the order. The following endorsement appears on the petition Ex. 2 (a), dated June 2, 1939 Heard learned pleaders for the parties. They jointly ask me to cancel the attachment (existing by special order) in Money Ex. 118 of 1936 though that case was dismissed. \n This endorsement also clearly shows that the Court itself understood that the order that it made on January 30 1937, was a final order of dismissal and that the attachment had been continued by a special order. On a consideration of all these matters I have not the least doubt in my mind that the order of January 30, 1937, was in form and in substance a final order of dismissal of the Execution Case No. 118 of 1936 and that the attachment was continued by a special order such as is contemplated and authorised by the amend- ment made by the Calcutta High Court in rule 57. Learned advocate for the appellants contended that if the execution case came to an end the attachment could not be left hanging in the air. There is no substance in this argument. Ordi- narily, an attachment is supported by an execution case and if the execution case is simply dismissed the attachment must fail with it. But rule 57, as amended, expressly empow- ers the Court to dismiss an execution application but at the same time to keep alive the attachment by a special order. That is what was done in this case. Here the attachment does not, to use the expression of the learned advocate for the appellants, hang in the air. It rests upon the solid foundation of a special order which rule 57, as amended, in terms authorises the Court to make. The continuance of the attachment, in the circumstances, needs no execution proceeding to support it. Take the case of an attachment before judgment. Under Order XXXVIII, rule 11, where after an order of attachment before judgment a decree is passed in favour of the plaintiff, it is not necessary upon an application for execution of such a decree to apply for re-attachment of the property. It means that the attachment continues and the judgmentdebtor cannot deal with the property to the disadvantage of the decree- holder. After the decree is passed, the attachment continues but nobody will say that although there has been no applica- tion for the execution of the decree at any time by the decree-holder there is, nevertheless, an execution proceed- ing pending merely because the attachment continues. Here also the attachment subsists and rests only upon the terms of Order, XXXVIII rule 11, and without any proceeding. Such attachment cannot be called a proceeding in execution, for none was ever initiated after the decree was passed. In my judgment, the order of January 30, 1937, was a final order which brought the Execution Case No. 118 of 1936, to an and and the attachment continued, not because there was a pend- ing execution proceeding but because a special order was made under Order XXI, rule 57, as amended by the High Court. As to (ii)--Learned advocate for the appellants then contended that the petition (Ex. 2a) dated June 2, 1939, amounted to a proceeding in execution and as that was insti- tuted and was pending after January 1, 1939 the proceedings came within the definition in section 2 (22)of a suit to which this Act applies. I do not think this argument is sound. The petition (Ex.2a) was not really an application at all. See Raja Shri Prakash Singh v. \n The Allahabad Bank Ltd. (1). In substance, it was nothing but a certification by the decree-holder of the satisfaction of the decree. The mere fact (1) 33 C.W.N. 267 A.I.R. 1929 P.C. 19, that the document was in the form of a petition could not convert what was really the usual certifying procedure into a proceeding in execution for recovery of a loan or for enforcement of any agreement. It was purely an intimation given to the Court by the decreeholder that the decree had been satisfied out of Court and the prayer for withdrawal of the attachment was merely consequential and would follow as a matter of course on full satisfaction of the decree being recorded. The order made on that petition also shows that the decree was recorded as adjusted and the attachment was cancelled. In my judgment, that petition (Ex. 2a) was not an application such as would initiate a proceeding in execution for any of the purposes mentioned in clauses (a) or (b) or (c) of section 2 (22) of the Act. For reasons stated above, the decrees sought to be reopened were not decrees made in a suit to which this Act applies. Suit No. 78 of 1922 was neither instituted on or after January 1, 1939, nor was it pending on that date, all the three decrees having been passed long before that date. Nor was any proceeding in execution such as is contemplated by section 2 (22) instituted or pending on or after that date. The Execution Case No. 118 of 1936 was at an end on January 30, 1937, and the petition of June 2, 1939, was not an application at all and was certainly not a proceeding in execution within the meaning of section 2 (22) of the Act. This conclusion is sufficient to dismiss this appeal and it is not necessary for us to consider the other question raised by the respondent on the strength of section 36 (5) of the Act and I express no opinion on that question. The result is that this appeal must stand dismissed with costs and I order accordingly. KANIA C.J.--I agree. PATANJALI SASTRI J.--The facts bearing on the dispute in this appeal are fully stated in the judgment of ray brother Das which I have had the advantage of reading and it is unnecessary to recapitulate them here. The appellant mortgagor seeks in these proceedings the reliefs provided by the Bengal Money-lenders Act, 1940 (hereinafter referred to as the Act) in respect of a decree debt payable by him. The respondent who represents the sub-mortgagee decree-holder invokes the protection of two exemptions contained in the Act (1) Section 86 (1), proviso (ii), which exempts inter alia any decree other than a decree in a suit to which this Act applies which was not fully satisfied by the first day of January, 1939. \n This raises a dispute as to whether the respondents decree was passed in a suit to which the Act applies. (2) Section 36 (5) which exempts the rights of any assignee or holder for value if the Court is satisfied that the assignment to him was bona fide and that he had not received the notice re- ferred to in clause (a) of sub-section (1) of section 28. This raises the question whether a sub-mortgagee is an assignee within the meaning of the Act. On the first question a suit to which this Act applies is defined in section 2 (22) as meaning any suit or pro- ceeding instituted or filed on or after the 1st day of Janu- ary, 1939, or pending on that date and includes a proceeding in execution for (among other things) the recovery of a loan advanced before or after the commencement of this Act. This definition has been construed as requiring that the pro- ceeding in execution referred to therein should be pending on 1st January, 1939, and the question accordingly arises whether the order of the executing court dated 30th January, 1937, which purported to dismiss the respondents execution case for non-prosecution while continuing the attachment already effected, terminated the proceeding in execution which had resulted in the attachment. It was said that the order was made in accordance with Order XXI, rule 57, of the Civil Procedure Code as amended by the Calcutta High Court and must, therefore, be taken to have been intended to put an end to the execution proceeding altogether. I am not satisfied that such was the result of the dismissal. The amendment which added the words unless the court shall make an order to the contrary at the end of the rule envisages a dismissal of an applica- tion for execution while at the same time continuing a subsisting attachment. The dismissal of 30th January, 1987, must, therefore, be taken to be a dismissal of the execution application then before the court and cannot be taken to have any wider operation. On the other hand, the continu- ance, in express terms, of the attachment notwithstanding the dismissal, indicates that the proceeding which had resulted in the attachment was kept alive to be carried forward later on by sale of the attached property. Attachment itself is a proceeding in execution and, so long.as it subsists, the proceeding in execution can well be regarded as pending. In In re Clagetts Estate Fordham v. Clagett (1) Jessel M.R. declared that a pending matter in any court of justice means one in which some proceeding may still be taken. \n The attachment was cancelled by the court only on 2nd June, 1939, when the decree in question was recorded as adjusted and then, and not before, could execu- tion of the decree be properly considered to have terminat- ed. In this view, a proceeding in execution was pending on the 1st day of January, 1939, and the respondents decree must be taken to have been passed in a suit to which this Act applies , with the result that the respondents claim to exemption under proviso (ii) to sub-section (1) of sec- tion 36 of the Act must fail. I am, however, of opinion that the respondents claim to recover his decree debt is protected under section 36 (5). There is no question here but that the submortgage to the respondents predecessor in title was bona fide. Nor could he have received the notice referred to in clause (a) of sub-section (1) of section 28 as the transaction took place long before the Act was passed. It is not disputed that section 36 (5) applies to pre-Act debts. See Renula Bose v. Manmatha Nath Bose(2). The only question, therefore, is whether the respondent as sub-mortgagee is an assignee within the meaning of sub-section (5) of section 36. The learned (1) 20 Ch. D. 687. (2) L.R. 72 I.A. 156, Judges in the court below held that he was not, following an earlier decision of their own court in Promode Kumar Roy v. Nikhil Bhusan Mukhopadhya(1). That decision, however, was reversed by the Privy Council in Promode Kumar Roy v. Nikhil Bhusan Mukhopadhya(2) where their Lordships dealt with the question now before us in the following terms - It was suggested, in the judgment of Mitter J. (with which Waight J. agreed), and in the argument for the re- spondents that if a sub-mortgagee were an assignee within section 36, sub-section (5), of the Act., certain difficul- ties and anomalies would result. Their Lordships cannot agree with this suggestion. They express no view as to the position which arises if the sub-mortgage contains only a charge on the original mortgage debt, but when it contains an assignment of that debt, and of all the rights of the mortgagee, the position appears to be free from difficulty. Relief can be given to the original mortgagor as against the original mortgagee under section 36, but such relief must not affect the rights of the assignee by way of sub-mort- gage. To take an imaginary case by way of illustration, let it be assumed that the amount due on the original mortgage, for principal and interest at the original rate, is Rs. 1,000, and the sum due on the sub-mortgage by assignment, for principal and interest at the original rate, is Rs. 500. \n Let it further be assumed that if relief could be given, and were given, under section 36 as against both mortgagee and sub-mortgagee, the sums due to them respectively would be Rs. 800 and Rs. 400. By reason of sub-section (5), the sub- mortgagees rights cannot be affected. He can therefore, as assignee of the mortgage debt claim his full Rs. 500, as against both mortgagor and original mortgagee. But if the court gives the mortgagor relief as against the original mortgagee, the mortgagor will only be liable to pay to the original mortgagee Rs. 300, the balance of the reduced debt after paying the sub-mortgagee in full. As to contention (b), it is impossible to read subsec- tion (5) of section 36 as referring only to an assignee (1) 50 C.W.N. 407. (2) L.R. 76 I.A. 74. of a mortgage decree. The words and that he had not received the notice referred to in clause (a)of subsection (1) of section 28 make it plain that an assignee of a mortgage debt is within the sub-section, since section 28, sub- section (1) is concerned only with assignment of debts (pp. 83-84). The sub-mortgage here in question also contains an assignment of the debt due under the original mortgage debt and of the entire interest of the original mortgagee. After reciting their original mortgage, the mortgagees proceed to state in the deed of sub-mortgage We mortgage all that is at present due and that will in future become due to us, the first, second, third and fourth parties, on account of the said one lakh of rupees together with interest and the entire interest under the mortgage taken by us on the basis of the said Indenture in respect of five annas share of the said Niskar Mouza Mono- harbahal and in respect of sixteen annas of the surface and underground rights in the said Mouza Marichkota and we make over the said Deed of Indenture to you. \n The decision referred to above is, therefore, directly in point and rules the present case. It was suggested that the said decision was inconsist- ent with the earlier decisions of the same tribunal in Ram Kinkar Banerjee v. Satya Charan Srimani(1) and Jagadamba Loan Co. v. Raja Shiba Prasad Singh(2). Stress was laid upon the expression all the rights of the mortgagee used by their Lordships in the passage quoted above, and it was pointed out that in the earlier decisions they held that in India a legal interest remained in the mortgagor even when the mortgage was in the form of an English mortgage, and that the interest taken by the mortgagee was not an absolute interest. This proposition, it was said, implied that in a sub-mortgage all the rights of the original mortgagee are not assigned to the sub-mortgagee and that the mortgagee still retains a legal (1) 64 I.A. 50. (2) 68 I.A. 67. interest in the original mortgage. This is a rather super- ficial view of the matter. In the earlier cases their Lordships were considering the quantum of interest trans- ferred by a mortgagor to a mortgagee in a mortgage of leasehold interest for the purpose of determining whether or not there was privity of estate between the landlord and the mortgagee. If the mortgage could operate as an assign- ment of the entire interest of the mortgagor in the lease, the mortgagee would be liable by privity of estate for the burdens of the lease. If on the other hand, it operated only as a partial assignment of the mortgagors interest, no such result would follow. It was in determining that issue that their Lordships held that no privity of estate arose in India because a legal interest remained in the mortgagor and the interest taken by the mortgagee was not an absolute interest. These cases had no bearing on the question, which arose in Promode Kumar Roy v. Nikhil Bhusan Mukhopadhya (1) and arises in the present case, as to whether a sub-mortga- gee becomes an assignee of the mortgage debt and of the mortgagees right to recover the debt from the original mortgagor. \n The Act affords relief to certain classes of debtors by curtailing pro tanto the rights of the creditors, subject to certain exceptions in regard to assignments of loans. In such a context the only relevant consideration could be whether the assignment is such as to establish a debtor and creditor relation between the assignee and the debtor so as to bring the case within the purview of the Act. If the sub-mortgagee obtained, by virtue of the sub- mortgage, the right to sue the original mortgagor for recov- ery of the mortgage debt, that would seem sufficient to make him an assignee within the meaning of the Act. It was from this point of view that the question as to the nature of the right transferred to a sub-mortgagee under his sub-mortgage was considered in Promode Kumar Roy v. Nikhil Bhusan Mukho- padhya(1) as it has to be considered in the present case, and the reference to the sub-mortgage containing an assign- ment of all the rights (1) 76 I,A.\n DECISION ??", "expert_1": {"rank1": ["In my judgment, that petition (Ex. 2a) was not an application such as would initiate a proceeding in execution for any of the purposes mentioned in clauses (a) or (b) or (c) of section 2 (22) of the Act.", "For reasons stated above, the decrees sought to be reopened were not decrees made in a suit to which this Act applies. Suit No. 78 of 1922 was neither instituted on or after January 1, 1939, nor was it pending on that date, all the three decrees having been passed long before that date. Nor was any proceeding in execution such as is contemplated by section 2 (22) instituted or pending on or after that date. The Execution Case No. 118 of 1936 was at an end on January 30, 1937, and the petition of June 2, 1939, was not an application at all and was certainly not a proceeding in execution within the meaning of section 2 (22) of the Act.", "This conclusion is sufficient to dismiss this appeal", "The result is that this appeal must stand dismissed with costs and I order accordingly.", "-I agree."], "rank2": ["In my judgment, the order of January 30, 1937, was a final order which brought the Execution Case No. 118 of 1936, to an and and the attachment continued, not because there was a pend- ing execution proceeding but because a special order was made under Order XXI, rule 57, as amended by the High Court.", "Learned advocate for the appellants then contended that the petition (Ex. 2a) dated June 2, 1939, amounted to a proceeding in execution and as that was insti- tuted and was pending after January 1, 1939 the proceedings came within the definition in section 2 (22)of a suit to which this Act applies. I do not think this argument is sound. The petition (Ex.2a) was not really an application at all.", "In substance, it was nothing but a certification by the decree-holder of the satisfaction of the decree."], "rank3": ["In the case now before us, the Suit No. 78 of 1922 was instituted and all the three decrees were passed long before the specified date. The only question that has therefore, to be consid- ered is whether any proceeding in execution was pending on or after that date. The answer to this question will depend on the true meaning and effect of the orders made by the executing Court (i) on January 30, 1937, and (ii) on June 2, 1939. As to (i)--It is not disputed that the order of January 30, 1937, was made under Order XXI, rule57, as amended by the Calcutta High Court.", "The question before us is as to the category in which the order made on January 30, 1937, in Execution Case No. 118 of 1936 falls.", "But rule 57, as amended, expressly empow- ers the Court to dismiss an execution application but at the same time to keep alive the attachment by a special order. That is what was done in this case. Here the attachment does not, to use the expression of the learned advocate for the appellants, hang in the air. It rests upon the solid foundation of a special order which rule 57, as amended, in terms authorises the Court to make. The continuance of the attachment, in the circumstances, needs no execution proceeding to support it.", "Here also the attachment subsists and rests only upon the terms of Order, XXXVIII rule 11, and without any proceeding. Such attachment cannot be called a proceeding in execution, for none was ever initiated after the decree was passed.", "The mere fact (1) 33 C.W.N. 267 A.I.R. 1929 P.C. 19, that the document was in the form of a petition could not convert what was really the usual certifying procedure into a proceeding in execution for recovery of a loan or for enforcement of any agreement. It was purely an intimation given to the Court by the decreeholder that the decree had been satisfied out of Court and the prayer for withdrawal of the attachment was merely consequential and would follow as a matter of course on full satisfaction of the decree being recorded. The order made on that petition also shows that the decree was recorded as adjusted and the attachment was cancelled."], "rank4": ["In short, they asked the Court to give them relief by exercising the powers given to the Court by section 36 of the Act.", "There was also a prayer for reconveyance of the Senapati Mahal. The respondent filed his written statement setting up a variety of defences rounded on merits as well as on legal pleas in bar. On May 8, 1941, the Subordinate Judge settled the issues and fixed June 9, 1941, for a preliminary hear- ing of the suit and particularly of such of the issues as have been based on the pleas in bar. Eventually, the case was taken up for preliminary hearing on September 4, 1941, and by his judgment delivered on September 8, 1941, the learned Subordinate Judge dismissed the suit on issue No. 2 which was as follows Does the plaint disclose a valid cause of action for the suit ? The appellants preferred an appeal to the High Court at Calcutta. Although the High Court (R.C. Mitter and K.C. Chunder JJ.) did not accept all the reasonings on which the learned Subordinate Judge had based his decision, they, however, agreed that the appellants could get no relief as the decrees in suit No. 78 of 1922 could not be reopened, as they were not passed in a suit to which this Act applies and consequently dis- missed the appeal. \n The appellants have now come up on appeal before us after having obtained a certificate from the High Court under section 110 of the Code of Civil Procedure. Learned Advocate appearing in support of this appeal before us has contended that the High Court was in error in holding that the decrees in Suit No. 78 of 1922 were not liable to be reopened under the second proviso to section 36 (1). Learned advocate for the respondent while joining issue on this point also raised a point which, however, did not find favour with the High Court, namely, that the respondent as a bona fide assignee for value of the mortgage debt was protected by sub-section (5) of section 36. It is quite clear that if either of the two points is decided against the appellants, this appeal must fail.", "Learned advocate for the appellants contended that if the execution case came to an end the attachment could not be left hanging in the air. There is no substance in this argument. Ordi- narily, an attachment is supported by an execution case and if the execution case is simply dismissed the attachment must fail with it."], "rank5": ["It is evident from the language of the rule itself, and it is still more evident from the circumstances under which it was passed, that it was intended to provide a remedy for the grievance or inconvenience which is apt to arise, where, after an attachment in execution, the applica- tion for execution cannot further be proceeded with by reason of the decree-holders default.", "It will be noticed that those words formed part of the request of the judgmentdebtor which was being recited in the petition.", "In the actual prayer portion the decree-holder did not use the words for the present but only asked the Court to strike off the execution case keeping the attachment in force. Further, apart from what the parties wanted, the Court made its intention clear in the very order that it passed and which is entered in column 20 of Exhibit F.", "The fact that the Court gave an express direction that the attachment should continue clearly indicates that the Court intended to make a final order of dismissal.", "Again, the heading of column 20 in Exhibit F clearly indicates that only a final order is to be entered in that column. The fact that the order was entered in that column affords some justification for the conclusion that the Court made a final order of dismissal. That the claim case was automatically dropped is yet another indication that the execution case was at an end. The fact that the judgment-debtor had paid the full costs of the execution case is also a feature which goes to show, to a certain extent at any rate if not deci- sively, that the execution proceeding was finally disposed of by the order.", "This endorsement also clearly shows that the Court itself understood that the order that it made on January 30 1937, was a final order of dismissal and that the attachment had been continued by a special order. On a consideration of all these matters I have not the least doubt in my mind that the order of January 30, 1937, was in form and in substance a final order of dismissal of the Execution Case No. 118 of 1936 and that the attachment was continued by a special order such as is contemplated and authorised by the amend- ment made by the Calcutta High Court in rule 57.", "Under Order XXXVIII, rule 11, where after an order of attachment before judgment a decree is passed in favour of the plaintiff, it is not necessary upon an application for execution of such a decree to apply for re-attachment of the property. It means that the attachment continues and the judgmentdebtor cannot deal with the property to the disadvantage of the decree- holder. After the decree is passed, the attachment continues but nobody will say that although there has been no applica- tion for the execution of the decree at any time by the decree-holder there is, nevertheless, an execution proceed- ing pending merely because the attachment continues."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["In my judgment, the order of January 30, 1937, was a final order which brought the Execution Case No. 118 of 1936, to an and and the attachment continued, not because there was a pend- ing execution proceeding but because a special order was made under Order XXI, rule 57, as amended by the High Court.", "Suit No. 78 of 1922 was neither instituted on or after January 1, 1939, nor was it pending on that date, all the three decrees having been passed long before that date. Nor was any proceeding in execution such as is contemplated by section 2 (22) instituted or pending on or after that date. The Execution Case No. 118 of 1936 was at an end on January 30, 1937, and the petition of June 2, 1939, was not an application at all and was certainly not a proceeding in execution within the meaning of section 2 (22) of the Act.", "If the sub-mortgagee obtained, by virtue of the sub- mortgage, the right to sue the original mortgagor for recov- ery of the mortgage debt, that would seem sufficient to make him an assignee within the meaning of the Act. It was from this point of view that the question as to the nature of the right transferred to a sub-mortgagee under his sub-mortgage was considered in Promode Kumar Roy v. Nikhil Bhusan Mukho- padhya(1) as it has to be considered in the present case, and the reference to the sub-mortgage containing an assign- ment of all the rights (1) 76 I,A."], "rank2": ["Although the High Court (R.C. Mitter and K.C. Chunder JJ.) did not accept all the reasonings on which the learned Subordinate Judge had based his decision, they, however, agreed that the appellants could get no relief as the decrees in suit No. 78 of 1922 could not be reopened, as they were not passed in a suit to which this Act applies and consequently dis- missed the appeal. \n The appellants have now come up on appeal before us after having obtained a certificate from the High Court under section 110 of the Code of Civil Procedure.", "It is evident from the language of the rule itself, and it is still more evident from the circumstances under which it was passed, that it was intended to provide a remedy for the grievance or inconvenience which is apt to arise, where, after an attachment in execution, the applica- tion for execution cannot further be proceeded with by reason of the decree-holders default. This was, and still is, a very common case. The decree-holder makes some informal arrangement to give the judgment-debtor time with- out obtaining full satisfaction of the decree the applica- tion for execution is not further prosecuted it is not withdrawn neither party attends. In these circumstances, the object of the rule is to say that the Court must make either an order for adjournment or an order of dismissal.", "The Court regarded the willingness of the the decree-holder to enter into a long and protracted negotiation with the judg- ment-debtor as evidence of unwillingness on the part of the decree-holder to diligently prosecute the execution proceedings and accordingly dismissed the execution case for non-prosecution but thought fit to expressly keep alive the attachment. It is quite obvious that the Court made an order of the third kind mentioned above.", "The fact that the Court gave an express direction that the attachment should continue clearly indicates that the Court intended to make a final order of dismissal. Again, the heading of column 20 in Exhibit F clearly indicates that only a final order is to be entered in that column. The fact that the order was entered in that column affords some justification for the conclusion that the Court made a final order of dismissal.", "Ordi- narily, an attachment is supported by an execution case and if the execution case is simply dismissed the attachment must fail with it. But rule 57, as amended, expressly empow- ers the Court to dismiss an execution application but at the same time to keep alive the attachment by a special order.", "In substance, it was nothing but a certification by the decree-holder of the satisfaction of the decree. The mere fact (1) 33 C.W.N. 267 A.I.R. 1929 P.C. 19, that the document was in the form of a petition could not convert what was really the usual certifying procedure into a proceeding in execution for recovery of a loan or for enforcement of any agreement. It was purely an intimation given to the Court by the decreeholder that the decree had been satisfied out of Court and the prayer for withdrawal of the attachment was merely consequential and would follow as a matter of course on full satisfaction of the decree being recorded."], "rank3": ["Learned Advocate appearing in support of this appeal before us has contended that the High Court was in error in holding that the decrees in Suit No. 78 of 1922 were not liable to be reopened under the second proviso to section 36 (1). Learned advocate for the respondent while joining issue on this point also raised a point which, however, did not find favour with the High Court, namely, that the respondent as a bona fide assignee for value of the mortgage debt was protected by sub-section (5) of section 36.", "The proviso makes it quite clear that in exercise of the powers the Court cannot reopen or otherwise affect a decree of a Court unless such decree is one which was passed in a suit to which this Act applies and which was not fully satisfied by January 1, 1939. In the light of the decision of the Full Bench of the Calcutta High Court in Mrityunjay Mitra v. Satis Chandra Banerji(1) which was approved by the Privy Council in Jadu Nath Roy v. Kshitish Chandra Acharyya(2), it has not been contended, in view of the fact that the personal decree for the balance remained unsatisfied on January 1, 1939, that the decrees in Suit No. 78 of 1922 were fully satisfied within the meaning of the above proviso. Therefore, the only thing that remains to be ascertained is whether the decrees were passed in a suit to which this Act applies", "that where a decree is such that the suit in which it was passed had terminated before January 1, 1939, and no pro- ceeding in execution was started or was actually pending on or after that date it is not a decree in a suit to which this Act appliesand cannot be reopened.", "The rule thus amended leaves three courses open to the Executing Court in case it finds it difficult to proceed with the execution case by reason of the default of the decree-holder. It may (1) adjourn the proceedings for good reason which will automatically keep the attachment alive or (2) simply dismiss the application which will automatically destroy the attachment or (3) dismiss the application but specifically keep alive the attachment by an express order. The rule, as amended, therefore, contemplates three distinct forms of order, any one of which may be made by the Court in the circumstances mentioned in the rule.", "Learned advocate for the appellants then contended that the petition (Ex. 2a) dated June 2, 1939, amounted to a proceeding in execution and as that was insti- tuted and was pending after January 1, 1939 the proceedings came within the definition in section 2 (22)of a suit to which this Act applies.", "The amendment which added the words unless the court shall make an order to the contrary at the end of the rule envisages a dismissal of an applica- tion for execution while at the same time continuing a subsisting attachment.", "In this view, a proceeding in execution was pending on the 1st day of January, 1939, and the respondents decree must be taken to have been passed in a suit to which this Act applies , with the result that the respondents claim to exemption under proviso (ii) to sub-section (1) of sec- tion 36 of the Act must fail. I am, however, of opinion that the respondents claim to recover his decree debt is protected under section 36 (5).", "It is not disputed that section 36 (5) applies to pre-Act debts. See Renula Bose v. Manmatha Nath Bose(2). The only question, therefore, is whether the respondent as sub-mortgagee is an assignee within the meaning of sub-section (5) of section 36.", "They express no view as to the position which arises if the sub-mortgage contains only a charge on the original mortgage debt, but when it contains an assignment of that debt, and of all the rights of the mortgagee, the position appears to be free from difficulty. Relief can be given to the original mortgagor as against the original mortgagee under section 36, but such relief must not affect the rights of the assignee by way of sub-mort- gage.", "Promode Kumar Roy v. Nikhil Bhusan Mukhopadhya (1) and arises in the present case, as to whether a sub-mortga- gee becomes an assignee of the mortgage debt and of the mortgagees right to recover the debt from the original mortgagor. \n The Act affords relief to certain classes of debtors by curtailing pro tanto the rights of the creditors, subject to certain exceptions in regard to assignments of loans. In such a context the only relevant consideration could be whether the assignment is such as to establish a debtor and creditor relation between the assignee and the debtor so as to bring the case within the purview of the Act."], "rank4": ["the appellants have become the successors in interest of the mortgagors and the respondent Deva Prasanna Mukerjee has become the successor in interest of the mortga- gee under the mortgage of August 10, 1908.", "In 1936, Deva Prasanna started execution case No. 118 of 1936 for execution of the personal decree and attached certain properties alleging that the same belonged to the Raja. The exact date of the attachment does not appear from the printed record. \nThe Raja as Sibait of a certain deity and his two sons, the appellants before us, objected to the attachment of these properties and filed a claim case.", "On June 2, 1939, a petition was filed in the Court of the Subordinate Judge, Asansole, on behalf of Deva Prasanna as the decree holder. It was headed Money Execution Case No. 118 of 1936.", "Order The said attachment is cancelled and the decree in question is recorded as adjusted as stated by learned plead- er for the decree-holder and pleader of the judgment-debtor according to the adjustment mentioned but not detailed in this petition of to-day.", "The Bengal Money Lend- ers Act, 1940 (Bengal Act X of 1940) hereinafter called the Act, came into force on September 1, 1940. On January 2, 1941, the appellants who, as the legal representatives of the Raja, became borrowers within the meaning of the Act filed the suit out of which the present appeal has arisen. The suit was filed by the appellants against the respondent under section 36 of the Act praying for reopening the trans- actions and taking accounts and for release from all liabil- ities in excess of the limits specified by law. In short, they asked the Court to give them relief by exercising the powers given to the Court by section 36 of the Act.", "Thus the adjournment of the execution pro- ceedings kept the attachment alive without any special direction. While the adoption of this course helped bona fide arrangement between the decree-holder and the judgment-debtor as to the time and manner of satisfaction of the decree it was calculated also to encourage desultory proceedings resulting in undesirable congestion in the files of the Executing Court by keeping alive so many execution proceedings. \n On the other hand, while the dismissal of an application in the circumstances mentioned in the rule had the merit of preventing a congestion of the file by finally disposing of the application by a final order, it was calcu- lated to discourage decreeholders from giving even reasona- ble accommodation to the judgment-debtor on account of the destruction of the attachment which left the judgment-debtor free to deal with the property to the detriment of the decreeholder after the attachment ceased.", "The respondent who represents the sub-mortgagee decree-holder invokes the protection of two exemptions contained in the Act (1) Section 86 (1), proviso (ii), which exempts inter alia any decree other than a decree in a suit to which this Act applies which was not fully satisfied by the first day of January, 1939. \n This raises a dispute as to whether the respondents decree was passed in a suit to which the Act applies. (2) Section 36 (5) which exempts the rights of any assignee or holder for value if the Court is satisfied that the assignment to him was bona fide and that he had not received the notice re- ferred to in clause (a) of sub-section (1) of section 28. This raises the question whether a sub-mortgagee is an assignee within the meaning of the Act."], "label": "REJECTED"}, "expert_3": {"rank1": ["The relevant portion of the second proviso is expressed in the words following Provided that in exercise of these powers the Court shall not- (i) \n do anything which affects any decree of a Court, other than a decree in a suit to which the Act applies which was not fully satisfied by the first day of January, 1939, or The proviso makes it quite clear that in exercise of the powers the Court cannot reopen or otherwise affect a decree of a Court unless such decree is one which was passed in a suit to which this Act applies and which was not fully satisfied by January 1, 1939. In the light of the decision of the Full Bench of the Calcutta High Court in Mrityunjay Mitra v. Satis Chandra Banerji(1) which was approved by the Privy Council in Jadu Nath Roy v. Kshitish Chandra Acharyya(2), it has not been contended, in view of the fact that the personal decree for the balance remained unsatisfied on January 1, 1939, that the decrees in Suit No. 78 of 1922 were fully satisfied within the meaning of the above proviso", "Therefore, the only thing that remains to be ascertained is whether the decrees were passed in a suit to which this Act applies.", "In the case now before us, the Suit No. 78 of 1922 was instituted and all the three decrees were passed long before the specified date. The only question that has therefore, to be consid- ered is whether any proceeding in execution was pending on or after that date.", "The answer to this question will depend on the true meaning and effect of the orders made by the executing Court (i) on January 30, 1937, and (ii) on June 2, 1939. As to (i)--It is not disputed that the order of January 30, 1937, was made under Order XXI, rule57, as amended by the Calcutta High Court.", "The reason why rule 57 was introduced in the Code of 1908 has been explained by Rank in C.J. in Shibnath Singh Ray v. Sheikh Saberuddin Ahmad", "It is evident from the language of the rule itself, and it is still more evident from the circumstances under which it was passed, that it was intended to provide a remedy for the grievance or inconvenience which is apt to arise, where, after an attachment in execution, the applica- tion for execution cannot further be proceeded with by reason of the decree-holders default. This was, and still is, a very common case", "The decree-holder makes some informal arrangement to give the judgment-debtor time with- out obtaining full satisfaction of the decree the applica- tion for execution is not further prosecuted it is not withdrawn neither party attends", "In these circumstances, the object of the rule is to say that the Court must make either an order for adjournment or an order of dismissal. The reason why it was necessary to require the Court, if it did not adjourn a proceeding to a definite date, to dismiss the application for execution formally and definitely", "In the absence of a definite order of dismissal the files of the Courts became encumbered with a number of applications for execution which were water-logged and derelict, and a practice arose whereby such applications were ordered to be struck off", "This was a practice not justified by the Code and in cases where attachments in execution had already been entered, the question arose whether the effect of an order striking off was that the attachment made upon application for execution was itself struck off or whether it remained notwithstanding such an order. Many other awkward and important questions arose out of this practice and the object of rule 57 was to ensure that this illogical and inconvenient practice should be stopped", "Applications for execution were to be definitely dismissed if they were not adjourned to a future date", "The object of the last sentence in rule 57 is to settle the question whether, when the application in execution is dismissed any attachment made under that application should fall to the ground or should subsist, and the legislature has provided that it is to fall to the ground. The new rule thus introduced left two distinct courses open to the executing Court in the situation envisaged by the rule", "Thus the adjournment of the execution pro- ceedings kept the attachment alive without any special direction. While the adoption of this course helped bona fide arrangement between the decree-holder and the judgment-debtor as to the time and manner of satisfaction of the decree it was calculated also to encourage desultory proceedings resulting in undesirable congestion in the files of the Executing Court by keeping alive so many execution proceedings", "On the other hand, while the dismissal of an application in the circumstances mentioned in the rule had the merit of preventing a congestion of the file by finally disposing of the application by a final order, it was calcu- lated to discourage decreeholders from giving even reasona- ble accommodation to the judgment-debtor on account of the destruction of the attachment which left the judgment-debtor free to deal with the property to the detriment of the decreeholder after the attachment ceased", "It was evidently with a view to preserve the advantage of a dismissal and at the same time to avoid the disadvantage of the rigid rule of cesser of the attachment that the Calcutta High Court amend- ed rule 57 by adding the words unless the Court shall make an order to the contrary at the end of the last sentence of that rule", "The question before us is as to the category in which the order made on January 30, 1937, in Execution Case No. 118 of 1936 falls. It will be recalled that the order of January 30, 1937, was made on a petition (Exhibit 2) filed on that day in Execution Case No. 118 of 1936.", "Great stress was laid by the learned advocate for the appellants on the words struck off for the present occurring in the body of that petition. It will be noticed that those words formed part of the request of the judgmentdebtor which was being recited in the petition. In the actual prayer portion the decree-holder did not use the words for the present but only asked the Court to strike off the execution case keeping the attachment in force.", "Further, apart from what the parties wanted, the Court made its intention clear in the very order that it passed and which is entered in column 20 of Exhibit F. The Court regarded the willingness of the the decree-holder to enter into a long and protracted negotiation with the judg- ment-debtor as evidence of unwillingness on the part of the decree-holder to diligently prosecute the execution proceedings and accordingly dismissed the execution case for non-prosecution but thought fit to expressly keep alive the attachment", "It is quite obvious that the Court made an order of the third kind mentioned above", "The three forms of order permissible under rule 57 as amended by the High Court are quite distinct and independent of each other and there is no room for their overlapping. If the mere continuation of attachment will automatically convert an express order of dismissal of the execution application which is a final order into an order of adjournment which is not a final order then there was no point in the High Court taking the trouble of amending rule 57 at all", "The fact that the Court gave an express direction that the attachment should continue clearly indicates that the Court intended to make a final order of dismissal", "the heading of column 20 in Exhibit F clearly indicates that only a final order is to be entered in that column", "The fact that the order was entered in that column affords some justification for the conclusion that the Court made a final order of dismissal. That the claim case was automatically dropped is yet another indication that the execution case was at an end.", "The fact that the judgment-debtor had paid the full costs of the execution case is also a feature which goes to show, to a certain extent at any rate if not deci- sively, that the execution proceeding was finally disposed of by the order", "This endorsement also clearly shows that the Court itself understood that the order that it made on January 30 1937, was a final order of dismissal and that the attachment had been continued by a special order. On a consideration of all these matters I have not the least doubt in my mind that the order of January 30, 1937, was in form and in substance a final order of dismissal of the Execution Case No. 118 of 1936 and that the attachment was continued by a special order such as is contemplated and authorised by the amend- ment made by the Calcutta High Court in rule 57.", "Ordi- narily, an attachment is supported by an execution case and if the execution case is simply dismissed the attachment must fail with it", "But rule 57, as amended, expressly empow- ers the Court to dismiss an execution application but at the same time to keep alive the attachment by a special order. That is what was done in this case", "Here the attachment does not, to use the expression of the learned advocate for the appellants, hang in the air. It rests upon the solid foundation of a special order which rule 57, as amended, in terms authorises the Court to make. The continuance of the attachment, in the circumstances, needs no execution proceeding to support it.", "Here also the attachment subsists and rests only upon the terms of Order, XXXVIII rule 11, and without any proceeding. Such attachment cannot be called a proceeding in execution, for none was ever initiated after the decree was passed. In my judgment, the order of January 30, 1937, was a final order which brought the Execution Case No. 118 of 1936, to an and and the attachment continued, not because there was a pend- ing execution proceeding but because a special order was made under Order XXI, rule 57, as amended by the High Court.", "The petition (Ex.2a) was not really an application at all", "It was purely an intimation given to the Court by the decreeholder that the decree had been satisfied out of Court and the prayer for withdrawal of the attachment was merely consequential and would follow as a matter of course on full satisfaction of the decree being recorded", "The order made on that petition also shows that the decree was recorded as adjusted and the attachment was cancelled. In my judgment, that petition (Ex. 2a) was not an application such as would initiate a proceeding in execution for any of the purposes mentioned in clauses (a) or (b) or (c) of section 2 (22) of the Act.", "For reasons stated above, the decrees sought to be reopened were not decrees made in a suit to which this Act applies", "The Execution Case No. 118 of 1936 was at an end on January 30, 1937, and the petition of June 2, 1939, was not an application at all and was certainly not a proceeding in execution within the meaning of section 2 (22) of the Act", "This conclusion is sufficient to dismiss this appeal and it is not necessary for us to consider the other question raised by the respondent on the strength of section 36 (5) of the Act and I express no opinion on that question. The result is that this appeal must stand dismissed with costs and I order accordingly"], "rank2": ["The Raja died in August, 1940, leaving the two appellants as his sons and legal representatives. The Bengal Money Lend- ers Act, 1940 (Bengal Act X of 1940) hereinafter called the Act, came into force on September 1, 1940. On January 2, 1941, the appellants who, as the legal representatives of the Raja, became borrowers within the meaning of the Act filed the suit out of which the present appeal has arisen", "The suit was filed by the appellants against the respondent under section 36 of the Act praying for reopening the trans- actions and taking accounts and for release from all liabil- ities in excess of the limits specified by law. In short, they asked the Court to give them relief by exercising the powers given to the Court by section 36 of the Act", "There was also a prayer for reconveyance of the Senapati Mahal", "Eventually, the case was taken up for preliminary hearing on September 4, 1941, and by his judgment delivered on September 8, 1941, the learned Subordinate Judge dismissed the suit on issue No. 2 which was as follows Does the plaint disclose a valid cause of action for the suit", "Although the High Court (R.C. Mitter and K.C. Chunder JJ.) did not accept all the reasonings on which the learned Subordinate Judge had based his decision, they, however, agreed that the appellants could get no relief as the decrees in suit No. 78 of 1922 could not be reopened, as they were not passed in a suit to which this Act applies and consequently dis- missed the appeal", "It is quite clear that if either of the two points is decided against the appellants, this appeal must fail. The main provisions of section 36 (1)are in the follow- ing terms -- Notwithstanding anything contained in any law for the time being in force, if in any suit to which this Act ap- plies, or in any suit brought by a borrower for relief under this section, whether heard ex parte or otherwise, the Court has reason to believe that the exercise of one or more of the powers under this section will give relief to the bor- rower, it shall exercise all or any of the following powers as it may consider appropriate namely, shall (a) reopen any transaction and take an account between the parties (b) notwithstanding any agreement, purporting to close previous dealings and to create new obligations, reopen any account already taken between the parties (c) release the borrower of all liability in excess of the limits specified in clauses (t) and (2) of section 30 (d) if anything has been paid or allowed in account on or after the first day of January, 1939, in respect of the liability referred to in clause (c), order the lender to repay any sum which the Court considers to be repayable in respect of such payment or allowance in account as aforesaid (e) set aside either wholly or in part or revise or alter any security given or agreement made in respect of any loan, and if the lender has parted with the security, order him to indemnify the borrower in such manner and to such extent as it may deem just. It will be noticed (a) that the provisions of this section apply notwithstanding anything contained in any law for the time being in force, (b) that the powers conferred on the Court or to be exercised either in any suit to which this Act applies or in any suit brought by a borrower for relief under the section and (c) that the Court is called upon to exercise all or any of the powers conferred on it by the section if the Court has reason to believe that the exercise of one or more of the powers will give relief to the borrower. In the present case the borrowers have insti- tuted a substantive suit for relief under section 36 and, therefore, if there was nothing also in the section and the Court had the requisite belief, the Court could exercise all or any of the powers and give relief to the borrowers in terms of the prayers of the plaint.", "Section 2 (22) of the Act is as follows \n In this Act, unless there is anything repugnant in the subject or context- \n Suit to which this Act applies means any suit or proceeding instituted or filed on or after the 1st day of January, 1939, or pending on that date and includes a pro- ceeding in execution-- (a) for the recovery of a loan advanced before or after the commencement of this Act (b) for the enforcement of any agreement entered into before or after the commencement of this Act, whether by way of settlement of account or otherwise, or of any security so taken, in respect of any loan advanced whether before or after the commencement of this Act or (c) for the redemption of any security given before or after the commencement of this Act in respect of any loan advanced whether before or after the commencement of this Act. The words instituted or filed on or after the 1st day of January, 1939, or pending on that date have been read and understood as qualifying the words any suit or proceed- ing in the beginning of the definition as well as the words proceeding in execution occurring further down see per Spens C.J. in Bank of Commerce Ltd. v.", "Amulya Krishna (3", "where a decree is such that the suit in which it was passed had terminated before January 1, 1939, and no pro- ceeding in execution was started or was actually pending on or after that date it is not a decree in a suit to which this Act appliesand cannot be reopened.", "The same view was upheld by a Special Bench of the Calcutta High Court in Aparna Kumari v. Girish Chandra (2)which overruled two earlier decisions to the contrary", "Order XXI, rule 57, is expressed in the following terms - Where any property has been attached in execution of a decree but by reason of the decree-holders default the Court is unable to proceed further with the application for execution, it shall either dismiss the application or for any sufficient reason adjourn the proceedings to a future date", "Upon the dismissal of such application the attachment shall cease. The marginal note of the rule is determination of at- tachment.", "The rule thus amended leaves three courses open to the Executing Court in case it finds it difficult to proceed with the execution case by reason of the default of the decree-holder. It may (1) adjourn the proceedings for good reason which will automatically keep the attachment alive or (2) simply dismiss the application which will automatically destroy the attachment or (3) dismiss the application but specifically keep alive the attachment by an express order", "The Court could by simply adjourning the proceedings automatically continue the attachment without any express direction in that behalf", "In substance, it was nothing but a certification by the decree-holder of the satisfaction of the decree. The mere fact (1) 33 C.W.N. 267 A.I.R. 1929 P.C. 19, that the document was in the form of a petition could not convert what was really the usual certifying procedure into a proceeding in execution for recovery of a loan or for enforcement of any agreement", "Suit No. 78 of 1922 was neither instituted on or after January 1, 1939, nor was it pending on that date, all the three decrees having been passed long before that date. Nor was any proceeding in execution such as is contemplated by section 2 (22) instituted or pending on or after that date", "This definition has been construed as requiring that the pro- ceeding in execution referred to therein should be pending on 1st January, 1939, and the question accordingly arises whether the order of the executing court dated 30th January, 1937, which purported to dismiss the respondents execution case for non-prosecution while continuing the attachment already effected, terminated the proceeding in execution which had resulted in the attachment."], "rank3": ["A suit had been instituted by one Kumar Dakhineswar Malia against Rameswar Malia, Rani Bhaba Sundari and others for partition of the Searsole Raj Estate", "One Bhagabati Charan Mitra was appointed receiver of that estate in that suit. \nOn August 10, 1908, the said receiver with the permis- sion of the Court which had appointed him as receiver grant- ed two mining leases, each for 999 years--one in respect of 5/16 share of the Malias in Mouza Monohar Bahal and the other in respect of 230 bighas in village Marich Kota--to a firm then carrying on business under the name and style of Laik Banerjee Company.", "On the same day the said receiver with like permission mortgaged these properties to the said firm as security for the due repayment of the loan of Rs. 100,000 advanced by that firm.", "The Malias joined the re- ceiver in executing the aforesaid leases and the mortgage. \nAs a result of these transactions the firm of Laik Banerjee Company became the lessees for 999 years of the two properties as well as the mortgagee of the lessors interest in the same", "the appellants have become the successors in interest of the mortgagors and the respondent Deva Prasanna Mukerjee has become the successor in interest of the mortga- gee under the mortgage of August 10, 1908", "This sale was confirmed by the Court on June 30, 1931. A large sum remaining still due to Deva Prasanna, he applied for, and on October 30, 1935, obtained a personal decree for Rs. 1,27,179-0-6 against Raja Pramatha Nath Malia who had by inheritance acquired the lessors interest and become the borrower.", "In 1936, Deva Prasanna started execution case No. 118 of 1936 for execution of the personal decree and attached certain properties alleging that the same belonged to the Raja.", "The Raja as Sibait of a certain deity and his two sons, the appellants before us, objected to the attachment of these properties and filed a claim case.", "Negotiations for settlement started and eventually, on January 30, 1937, a petition (Ex. 2) was filed in the exe- cuting Court stating as follows - The judgment debtor having made special requests to the decree-holder for an amicable settlement of the aforesaid execution case, the decree-holder has agreed to the same.", "It is, therefore, prayed that under the circumstances aforesaid, the Court may be pleased to strike off this execution case keeping the attachment in force", "The execution case is dismissed for non- prosecution--the attachment already effected in this case continuing. 30th January 1937. The entry under column 11 of that very exhibit reads as follows -- Claim case automatically drops as the execution case is dismissed. It is, therefore, rejected without any sort of adjudication. 30th January 1937", "By an agreement of even date, Deva Prasanna agreed to reconvey Senapati Mahal to the Kumars if he was paid Rs. 90,000/- within two years from that date.", "Senapati Mahal orginally belonged to the Raja but had been tranSferred by him to his two sons. A creditor, however, had filed a suit under sec- tion 53 of the Transfer of Property Act challenging that transfer and had actually got a decree declaring that trans- fer as fradulent and void as against the creditors of the Raja An appeal was filed by the Kumars which was pending at the date of the Kobala of January 4, 1939, and, in the circum- stances, it was considered safer to join the Raja in the last mentioned Kobala in favour of Deva Prasanna.", "The relevant portions of this petition were as follows-- That the above execution case was disposed of on the 30th January 1937 with the attachment of the properties subsisting since then the decree put into execution in the above case has been adjusted after remission of a large amount of interest by the out and out sale of certain properties by a registered Kobala dated 4th January 1939 So there is no longer any need of the said attachment remaining subsisting.", "It is, therefore, prayed that the attachment may be withdrawn. \n On the same day the following order was made on that petition", "Order The said attachment is cancelled and the decree in question is recorded as adjusted as stated by learned plead- er for the decree-holder and pleader of the judgment-debtor according to the adjustment mentioned but not detailed in this petition of to-day.", "the following entry was made -- The said attachment is cancelled and the decree in question is recorded as adjusted as stated by learned pleader for the D.H. and the pleader of the Judgment Debtor according to the adjustment mentioned but not detailed in this petition of to-day", "Eventually, the case was taken up for preliminary hearing on September 4, 1941, and by his judgment delivered on September 8, 1941, the learned Subordinate Judge dismissed the suit on issue No. 2 which was as follows Does the plaint disclose a valid cause of action for the suit ? The appellants preferred an appeal to the High Court at Calcutta."], "rank4": ["On March 31, 1922, Deva Prasanna filed suit No. 78 of 1922 for enforcing the mortgage of 1908. Preliminary decree was passed in the last mentioned suit on July 31, 1928, and a final decree for sale was made I on February 26, 1929", "In execution of this final decree the mortgaged properties were sold at a Court i sale and were purchased by Deva Prasanna for Rs. 59,000", "In May 1937, the Searsole Raj Estate came under the charge of the Court of Wards. By a Kobala executed with the permission of the Board of Revenue Raja Pramatha Nath Malia and his two sons Kumars Pashupati Nath Malia and Kshitipati Nath Malia represented by Kumar Kshitipati Nath Malia as the Manager of the Searsole Raj Wards Estate conveyed a property known as Senapati Mahal to Deva Prasanna in full settlement of his claim under the personal decree against the Raja.", "On June 2, 1939, a petition was filed in the Court of the Subordinate Judge, Asansole, on behalf of Deva Prasanna as the decree holder."], "label": "REJECTED"}, "expert_4": {"rank1": ["On a consideration of all these matters I have not the least doubt in my mind that the order of January 30, 1937, was in form and in substance a final order of dismissal of the Execution Case No. 118 of 1936 and that the attachment was continued by a special order such as is contemplated and authorised by the amend- ment made by the Calcutta High Court in rule 57.", "The continuance of the attachment, in the circumstances, needs no execution proceeding to support it.", "For reasons stated above, the decrees sought to be reopened were not decrees made in a suit to which this Act applies.", "The result is that this appeal must stand dismissed with costs and I order accordingly.", "--I agree."], "rank2": ["By diverse processes not necessary to be detailed, the appellants have become the successors in interest of the mortgagors and the respondent Deva Prasanna Mukerjee has become the successor in interest of the mortga- gee under the mortgage of August 10, 1908.", "Negotiations for settlement started and eventually, on January 30, 1937, a petition (Ex. 2) was filed in the exe- cuting Court stating as follows - The judgment debtor having made special requests to the decree-holder for an amicable settlement of the aforesaid execution case, the decree-holder has agreed to the same.", "The execution case is dismissed for non- prosecution--the attachment already effected in this case continuing. 30th January 1937.", "The relevant portions of this petition were as follows-- That the above execution case was disposed of on the 30th January 1937 with the attachment of the properties subsisting since then the decree put into execution in the above case has been adjusted after remission of a large amount of interest by the out and out sale of certain properties by a registered Kobala dated 4th January 1939 So there is no longer any need of the said attachment remaining subsisting.", "Eventually, the case was taken up for preliminary hearing on September 4, 1941, and by his judgment delivered on September 8, 1941, the learned Subordinate Judge dismissed the suit on issue No. 2 which was as follows Does the plaint disclose a valid cause of action for the suit ?", "Although the High Court (R.C. Mitter and K.C. Chunder JJ.) did not accept all the reasonings on which the learned Subordinate Judge had based his decision, they, however, agreed that the appellants could get no relief as the decrees in suit No. 78 of 1922 could not be reopened, as they were not passed in a suit to which this Act applies and consequently dis- missed the appeal.", "It is quite clear that if either of the two points is decided against the appellants, this appeal must fail.", "Therefore, the only thing that remains to be ascertained is whether the decrees were passed in a suit to which this Act applies.", "If the mere continuation of attachment will automatically convert an express order of dismissal of the execution application which is a final order into an order of adjournment which is not a final order then there was no point in the High Court taking the trouble of amending rule 57 at all.", "Here the attachment does not, to use the expression of the learned advocate for the appellants, hang in the air.", "It rests upon the solid foundation of a special order which rule 57, as amended, in terms authorises the Court to make.", "In my judgment, the order of January 30, 1937, was a final order which brought the Execution Case No. 118 of 1936, to an and and the attachment continued, not because there was a pend- ing execution proceeding but because a special order was made under Order XXI, rule 57, as amended by the High Court.", "The order made on that petition also shows that the decree was recorded as adjusted and the attachment was cancelled.", "In my judgment, that petition (Ex. 2a) was not an application such as would initiate a proceeding in execution for any of the purposes mentioned in clauses (a) or (b) or (c) of section 2 (22) of the Act.", "This conclusion is sufficient to dismiss this appeal and it is not necessary for us to consider the other question raised by the respondent on the strength of section 36 (5) of the Act and I express no opinion on that question."], "rank3": ["This appeal arises out of a suit filed by the appellants on January 2, 1941, in the Court of the Subordi- nate Judge, Asansole.", "In execution of this final decree the mortgaged properties were sold at a Court i sale and were purchased by Deva Prasanna for Rs. 59,000.", "A large sum remaining still due to Deva Prasanna, he applied for, and on October 30, 1935, obtained a personal decree for Rs. 1,27,179-0-6 against Raja Pramatha Nath Malia who had by inheritance acquired the lessors interest and become the borrower.", "The Raja as Sibait of a certain deity and his two sons, the appellants before us, objected to the attachment of these properties and filed a claim case.", "The judgment debtor has paid to the decree holder the costs of this execution amounting to Rs. 76-14-0, and he having made requests for this execution case being struck off for the present on keeping the attachment in force, the decreeholder has agreed to it.", "It is, therefore, prayed that under the circumstances aforesaid, the Court may be pleased to strike off this execution case keeping the attachment in force.", "By a Kobala executed with the permission of the Board of Revenue Raja Pramatha Nath Malia and his two sons Kumars Pashupati Nath Malia and Kshitipati Nath Malia represented by Kumar Kshitipati Nath Malia as the Manager of the Searsole Raj Wards Estate conveyed a property known as Senapati Mahal to Deva Prasanna in full settlement of his claim under the personal decree against the Raja.", "By an agreement of even date, Deva Prasanna agreed to reconvey Senapati Mahal to the Kumars if he was paid Rs. 90,000/- within two years from that date.", "On June 2, 1939, a petition was filed in the Court of the Subordinate Judge, Asansole, on behalf of Deva Prasanna as the decree holder.", "It is, therefore, prayed that the attachment may be withdrawn.", "On January 2, 1941, the appellants who, as the legal representatives of the Raja, became borrowers within the meaning of the Act filed the suit out of which the present appeal has arisen.", "The suit was filed by the appellants against the respondent under section 36 of the Act praying for reopening the trans- actions and taking accounts and for release from all liabil- ities in excess of the limits specified by law.", "In short, they asked the Court to give them relief by exercising the powers given to the Court by section 36 of the Act. There was also a prayer for reconveyance of the Senapati Mahal.", "The main provisions of section 36 (1)are in the follow- ing terms -- Notwithstanding anything contained in any law for the time being in force, if in any suit to which this Act ap- plies, or in any suit brought by a borrower for relief under this section, whether heard ex parte or otherwise, the Court has reason to believe that the exercise of one or more of the powers under this section will give relief to the bor- rower, it shall exercise all or any of the following powers as it may consider appropriate namely, shall (a) reopen any transaction and take an account between the parties (b) notwithstanding any agreement, purporting to close previous dealings and to create new obligations, reopen any account already taken between the parties (c) release the borrower of all liability in excess of the limits specified in clauses (t) and (2) of section 30 (d) if anything has been paid or allowed in account on or after the first day of January, 1939, in respect of the liability referred to in clause (c), order the lender to repay any sum which the Court considers to be repayable in respect of such payment or allowance in account as aforesaid (e) set aside either wholly or in part or revise or alter any security given or agreement made in respect of any loan, and if the lender has parted with the security, order him to indemnify the borrower in such manner and to such extent as it may deem just.", "It will be noticed (a) that the provisions of this section apply notwithstanding anything contained in any law for the time being in force, (b) that the powers conferred on the Court or to be exercised either in any suit to which this Act applies or in any suit brought by a borrower for relief under the section and (c) that the Court is called upon to exercise all or any of the powers conferred on it by the section if the Court has reason to believe that the exercise of one or more of the powers will give relief to the borrower.", "In the present case the borrowers have insti- tuted a substantive suit for relief under section 36 and, therefore, if there was nothing also in the section and the Court had the requisite belief, the Court could exercise all or any of the powers and give relief to the borrowers in terms of the prayers of the plaint.", "The relevant portion of the second proviso is expressed in the words following Provided that in exercise of these powers the Court shall not- (i) \n do anything which affects any decree of a Court, other than a decree in a suit to which the Act applies which was not fully satisfied by the first day of January, 1939, or The proviso makes it quite clear that in exercise of the powers the Court cannot reopen or otherwise affect a decree of a Court unless such decree is one which was passed in a suit to which this Act applies and which was not fully satisfied by January 1, 1939.", "Section 2 (22) of the Act is as follows \n In this Act, unless there is anything repugnant in the subject or context- \n Suit to which this Act applies means any suit or proceeding instituted or filed on or after the 1st day of January, 1939, or pending on that date and includes a pro- ceeding in execution-- (a) for the recovery of a loan advanced before or after the commencement of this Act (b) for the enforcement of any agreement entered into before or after the commencement of this Act, whether by way of settlement of account or otherwise, or of any security so taken, in respect of any loan advanced whether before or after the commencement of this Act or (c) for the redemption of any security given before or after the commencement of this Act in respect of any loan advanced whether before or after the commencement of this Act.", "The construction put upon section 2 (22)by the Special Bench and the reasons given by them appear to us to be well-founded.", "The only question that has therefore, to be consid- ered is whether any proceeding in execution was pending on or after that date.", "Many other awkward and important questions arose out of this practice and the object of rule 57 was to ensure that this illogical and inconvenient practice should be stopped.", "Applications for execution were to be definitely dismissed if they were not adjourned to a future date.", "It was evidently with a view to preserve the advantage of a dismissal and at the same time to avoid the disadvantage of the rigid rule of cesser of the attachment that the Calcutta High Court amend- ed rule 57 by adding the words unless the Court shall make an order to the contrary at the end of the last sentence of that rule.", "The rule, as amended, therefore, contemplates three distinct forms of order, any one of which may be made by the Court in the circumstances mentioned in the rule.", "The question before us is as to the category in which the order made on January 30, 1937, in Execution Case No. 118 of 1936 falls.", "In the actual prayer portion the decree-holder did not use the words for the present but only asked the Court to strike off the execution case keeping the attachment in force.", "The Court regarded the willingness of the the decree-holder to enter into a long and protracted negotiation with the judg- ment-debtor as evidence of unwillingness on the part of the decree-holder to diligently prosecute the execution proceedings and accordingly dismissed the execution case for non-prosecution but thought fit to expressly keep alive the attachment. It is quite obvious that the Court made an order of the third kind mentioned above.", "The three forms of order permissible under rule 57 as amended by the High Court are quite distinct and independent of each other and there is no room for their overlapping.", "The fact that the Court gave an express direction that the attachment should continue clearly indicates that the Court intended to make a final order of dismissal.", "Again, the heading of column 20 in Exhibit F clearly indicates that only a final order is to be entered in that column.", "The fact that the order was entered in that column affords some justification for the conclusion that the Court made a final order of dismissal.", "That the claim case was automatically dropped is yet another indication that the execution case was at an end.", "The fact that the judgment-debtor had paid the full costs of the execution case is also a feature which goes to show, to a certain extent at any rate if not deci- sively, that the execution proceeding was finally disposed of by the order.", "This endorsement also clearly shows that the Court itself understood that the order that it made on January 30 1937, was a final order of dismissal and that the attachment had been continued by a special order.", "Ordi- narily, an attachment is supported by an execution case and if the execution case is simply dismissed the attachment must fail with it.", "But rule 57, as amended, expressly empow- ers the Court to dismiss an execution application but at the same time to keep alive the attachment by a special order. That is what was done in this case.", "After the decree is passed, the attachment continues but nobody will say that although there has been no applica- tion for the execution of the decree at any time by the decree-holder there is, nevertheless, an execution proceed- ing pending merely because the attachment continues.", "Here also the attachment subsists and rests only upon the terms of Order, XXXVIII rule 11, and without any proceeding.", "Such attachment cannot be called a proceeding in execution, for none was ever initiated after the decree was passed.", "As to (ii)--Learned advocate for the appellants then contended that the petition (Ex. 2a) dated June 2, 1939, amounted to a proceeding in execution and as that was insti- tuted and was pending after January 1, 1939 the proceedings came within the definition in section 2 (22)of a suit to which this Act applies.", "I do not think this argument is sound.", "The petition (Ex.2a) was not really an application at all.", "In substance, it was nothing but a certification by the decree-holder of the satisfaction of the decree.", "The mere fact (1) 33 C.W.N. 267 A.I.R. 1929 P.C. 19, that the document was in the form of a petition could not convert what was really the usual certifying procedure into a proceeding in execution for recovery of a loan or for enforcement of any agreement.", "It was purely an intimation given to the Court by the decreeholder that the decree had been satisfied out of Court and the prayer for withdrawal of the attachment was merely consequential and would follow as a matter of course on full satisfaction of the decree being recorded.", "Suit No. 78 of 1922 was neither instituted on or after January 1, 1939, nor was it pending on that date, all the three decrees having been passed long before that date.", "Nor was any proceeding in execution such as is contemplated by section 2 (22) instituted or pending on or after that date.", "The Execution Case No. 118 of 1936 was at an end on January 30, 1937, and the petition of June 2, 1939, was not an application at all and was certainly not a proceeding in execution within the meaning of section 2 (22) of the Act."], "rank4": ["A suit had been instituted by one Kumar Dakhineswar Malia against Rameswar Malia, Rani Bhaba Sundari and others for partition of the Searsole Raj Estate.", "One Bhagabati Charan Mitra was appointed receiver of that estate in that suit.", "On August 10, 1908, the said receiver with the permis- sion of the Court which had appointed him as receiver grant- ed two mining leases, each for 999 years--one in respect of 5/16 share of the Malias in Mouza Monohar Bahal and the other in respect of 230 bighas in village Marich Kota--to a firm then carrying on business under the name and style of Laik Banerjee Company.", "On the same day the said receiver with like permission mortgaged these properties to the said firm as security for the due repayment of the loan of Rs. 100,000 advanced by that firm.", "The Malias joined the re- ceiver in executing the aforesaid leases and the mortgage.", "As a result of these transactions the firm of Laik Banerjee Company became the lessees for 999 years of the two properties as well as the mortgagee of the lessors interest in the same.", "On March 31, 1922, Deva Prasanna filed suit No. 78 of 1922 for enforcing the mortgage of 1908.", "Preliminary decree was passed in the last mentioned suit on July 31, 1928, and a final decree for sale was made I on February 26, 1929.", "This sale was confirmed by the Court on June 30, 1931.", "In 1936, Deva Prasanna started execution case No. 118 of 1936 for execution of the personal decree and attached certain properties alleging that the same belonged to the Raja.", "Neither the original nor a certified copy of the order made on that date by the executing Court on the above petition is forthcoming but the parties have definite- ly agreed that the order is substantially and correctly entered in column 20 of Ex. F which is a certified copy of extract from the Register of applications for executions of decrees relating to execution Case No. 118 of 1936.", "The heading of column 20 is Date on which execution case was finally disposed of and purport of final order.", "The entry in column 20 under that head is \n H. admits receipt of Rs. 76-14/- as costs of this case from the J.D.", "The entry under column 11 of that very exhibit reads as follows -- Claim case automatically drops as the execution case is dismissed.", "It is, therefore, rejected without any sort of adjudication. 30th January 1937.", "In May 1937, the Searsole Raj Estate came under the charge of the Court of Wards.", "Senapati Mahal orginally belonged to the Raja but had been tranSferred by him to his two sons.", "A creditor, however, had filed a suit under sec- tion 53 of the Transfer of Property Act challenging that transfer and had actually got a decree declaring that trans- fer as fradulent and void as against the creditors of the Raja An appeal was filed by the Kumars which was pending at the date of the Kobala of January 4, 1939, and, in the circum- stances, it was considered safer to join the Raja in the last mentioned Kobala in favour of Deva Prasanna.", "It was headed Money Execution Case No. 118 of 1936.", "On the same day the following order was made on that petition-- Heard learned pleaders for the parties. They jointly ask me to cancel the attachment (existing by special order) in Money Ex. 118 of 1936 though that case was dismissed.", "Order The said attachment is cancelled and the decree in question is recorded as adjusted as stated by learned plead- er for the decree-holder and pleader of the judgment-debtor according to the adjustment mentioned but not detailed in this petition of to-day.", "The said attachment is cancelled and the decree in question is recorded as adjusted as stated by learned pleader for the D.H. and the pleader of the Judgment Debtor according to the adjustment mentioned but not detailed in this petition of to-day.", "The respondent filed his written statement setting up a variety of defences rounded on merits as well as on legal pleas in bar.", "The appellants preferred an appeal to the High Court at Calcutta.", "The appellants have now come up on appeal before us after having obtained a certificate from the High Court under section 110 of the Code of Civil Procedure.", "Learned Advocate appearing in support of this appeal before us has contended that the High Court was in error in holding that the decrees in Suit No. 78 of 1922 were not liable to be reopened under the second proviso to section 36 (1).", "Learned advocate for the respondent while joining issue on this point also raised a point which, however, did not find favour with the High Court, namely, that the respondent as a bona fide assignee for value of the mortgage debt was protected by sub-section (5) of section 36.", "There are, however, two provisions to sub-section (1) of section 36.", "In the light of the decision of the Full Bench of the Calcutta High Court in Mrityunjay Mitra v. Satis Chandra Banerji(1) which was approved by the Privy Council in Jadu Nath Roy v. Kshitish Chandra Acharyya(2), it has not been contended, in view of the fact that the personal decree for the balance remained unsatisfied on January 1, 1939, that the decrees in Suit No. 78 of 1922 were fully satisfied within the meaning of the above proviso.", "The words instituted or filed on or after the 1st day of January, 1939, or pending on that date have been read and understood as qualifying the words any suit or proceed- ing in the beginning of the definition as well as the words proceeding in execution occurring further down see per Spens C.J. in Bank of Commerce Ltd. v. Amulya Krishna (3).", "Accordingly, it has \n I.L.R. 11944) 2Cal. 376 48 C.W.N. 361. L.R. 76 I.A. 179 at p. 190. (3) 1944 F.C.R. 126A.I.R. 1944 F.C. 18. been held in Ram Kumar De v. Abhoya Pada Bhattacharjee (1) that where a decree is such that the suit in which it was passed had terminated before January 1, 1939, and no pro- ceeding in execution was started or was actually pending on or after that date it is not a decree in a suit to which this Act appliesand cannot be reopened.", "The same view was upheld by a Special Bench of the Calcutta High Court in Aparna Kumari v. Girish Chandra (2)which overruled two earlier decisions to the contrary.", "In the case now before us, the Suit No. 78 of 1922 was instituted and all the three decrees were passed long before the specified date.", "The answer to this question will depend on the true meaning and effect of the orders made by the executing Court (i) on January 30, 1937, and (ii) on June 2, 1939.", "As to (i)--It is not disputed that the order of January 30, 1937, was made under Order XXI, rule57, as amended by the Calcutta High Court", "Order XXI, rule 57, is expressed in the following terms - Where any property has been attached in execution of a decree but by reason of the decree-holders default the Court is unable to proceed further with the application for execution, it shall either dismiss the application or for any sufficient reason adjourn the proceedings to a future date. Upon the dismissal of such application the attachment shall cease.", "The marginal note of the rule is determination of at- tachment.", "The decree-holder makes some informal arrangement to give the judgment-debtor time with- out obtaining full satisfaction of the decree the applica- tion for execution is not further prosecuted it is not withdrawn neither party attends.", "In these circumstances, the object of the rule is to say that the Court must make either an order for adjournment or an order of dismissal.", "The object of the last sentence in rule 57 is to settle the question whether, when the application in execution is dismissed any attachment made under that application should fall to the ground or should subsist, and the legislature has provided that it is to fall to the ground.", "The new rule thus introduced left two distinct courses open to the executing Court in the situation envisaged by the rule.", "Thus the adjournment of the execution pro- ceedings kept the attachment alive without any special direction.", "While the adoption of this course helped bona fide arrangement between the decree-holder and the judgment-debtor as to the time and manner of satisfaction of the decree it was calculated also to encourage desultory proceedings resulting in undesirable congestion in the files of the Executing Court by keeping alive so many execution proceedings.", "On the other hand, while the dismissal of an application in the circumstances mentioned in the rule had the merit of preventing a congestion of the file by finally disposing of the application by a final order, it was calcu- lated to discourage decreeholders from giving even reasona- ble accommodation to the judgment-debtor on account of the destruction of the attachment which left the judgment-debtor free to deal with the property to the detriment of the decreeholder after the attachment ceased.", "The rule thus amended leaves three courses open to the Executing Court in case it finds it difficult to proceed with the execution case by reason of the default of the decree-holder.", "It may (1) adjourn the proceedings for good reason which will automatically keep the attachment alive or (2) simply dismiss the application which will automatically destroy the attachment or (3) dismiss the application but specifically keep alive the attachment by an express order.", "It will be noticed that those words formed part of the request of the judgmentdebtor which was being recited in the petition", "Further, apart from what the parties wanted, the Court made its intention clear in the very order that it passed and which is entered in column 20 of Exhibit F.", "The Court could by simply adjourning the proceedings automatically continue the attachment without any express direction in that behalf.", "The following endorsement appears on the petition Ex. 2 (a), dated June 2, 1939 Heard learned pleaders for the parties. They jointly ask me to cancel the attachment (existing by special order) in Money Ex. 118 of 1936 though that case was dismissed.", "Learned advocate for the appellants contended that if the execution case came to an end the attachment could not be left hanging in the air.", "There is no substance in this argument.", "Take the case of an attachment before judgment.", "Under Order XXXVIII, rule 11, where after an order of attachment before judgment a decree is passed in favour of the plaintiff, it is not necessary upon an application for execution of such a decree to apply for re-attachment of the property.", "It means that the attachment continues and the judgmentdebtor cannot deal with the property to the disadvantage of the decree- holder."], "rank5": ["The Raja died in August, 1940, leaving the two appellants as his sons and legal representatives.", "The Bengal Money Lend- ers Act, 1940 (Bengal Act X of 1940) hereinafter called the Act, came into force on September 1, 1940.", "On May 8, 1941, the Subordinate Judge settled the issues and fixed June 9, 1941, for a preliminary hear- ing of the suit and particularly of such of the issues as have been based on the pleas in bar.", "The reason why rule 57 was introduced in the Code of 1908 has been explained by Rank in C.J. in Shibnath Singh Ray v. Sheikh Saberuddin Ahmad(3) as follows-- (1) 46 C.W.N. 557 A.I.R. 1942 Cal. 441. (2) 48 C.W.N, 406. I.L.R. 56 Cal. 416 at pp. 421-422 Rule 57 of Order XXI was a new provision introduced in 1908.", "It is evident from the language of the rule itself, and it is still more evident from the circumstances under which it was passed, that it was intended to provide a remedy for the grievance or inconvenience which is apt to arise, where, after an attachment in execution, the applica- tion for execution cannot further be proceeded with by reason of the decree-holders default.", "This was, and still is, a very common case.", "The reason why it was necessary to require the Court, if it did not adjourn a proceeding to a definite date, to dismiss the application for execution formally and definitely can be amply illustrated from the decided cases.", "In the absence of a definite order of dismissal the files of the Courts became encumbered with a number of applications for execution which were water-logged and derelict, and a practice arose whereby such applications were ordered to be struck off.", "This was a practice not justified by the Code and in cases where attachments in execution had already been entered, the question arose whether the effect of an order striking off was that the attachment made upon application for execution was itself struck off or whether it remained notwithstanding such an order.", "Each course had its advantage as well as its disadvantage.", "It will be recalled that the order of January 30, 1937, was made on a petition (Exhibit 2) filed on that day in Execution Case No. 118 of 1936.", "Great stress was laid by the learned advocate for the appellants on the words struck off for the present occurring in the body of that petition.", "See Raja Shri Prakash Singh v. \n The Allahabad Bank Ltd. (1)."], "label": "REJECTED"}, "expert_5": {"rank1": ["It is quite obvious that the Court made an order of the third kind mentioned above.", "The fact that the Court gave an express direction that the attachment should continue clearly indicates that the Court intended to make a final order of dismissal.", "On a consideration of all these matters I have not the least doubt in my mind that the order of January 30, 1937, was in form and in substance a final order of dismissal of the Execution Case No. 118 of 1936 and that the attachment was continued by a special order such as is contemplated and authorised by the amend- ment made by the Calcutta High Court in rule 57.", "the order of January 30, 1937, was a final order which brought the Execution Case No. 118 of 1936, to an and and the attachment continued, not because there was a pend- ing execution proceeding but because a special order was made under Order XXI, rule 57, as amended by the High Court.", "For reasons stated above, the decrees sought to be reopened were not decrees made in a suit to which this Act applies. Suit No. 78 of 1922 was neither instituted on or after January 1, 1939, nor was it pending on that date, all the three decrees having been passed long before that date. Nor was any proceeding in execution such as is contemplated by section 2 (22) instituted or pending on or after that date. The Execution Case No. 118 of 1936 was at an end on January 30, 1937, and the petition of June 2, 1939, was not an application at all and was certainly not a proceeding in execution within the meaning of section 2 (22) of the Act.", "This conclusion is sufficient to dismiss this appeal", "The result is that this appeal must stand dismissed", "KANIA C.J.--I agree."], "rank2": ["or (3) dismiss the application but specifically keep alive the attachment by an express order.", "The fact that the order was entered in that column affords some justification for the conclusion that the Court made a final order of dismissal.", "The fact that the judgment-debtor had paid the full costs of the execution case is also a feature which goes to show, to a certain extent at any rate if not deci- sively, that the execution proceeding was finally disposed of by the order.", "The petition (Ex.2a) was not really an application at all.", "that petition (Ex. 2a) was not an application such as would initiate a proceeding in execution for any of the purposes mentioned in clauses (a) or (b) or (c) of section 2 (22) of the Act."], "rank3": ["-It is not disputed that the order of January 30, 1937, was made under Order XXI, rule57, as amended by the Calcutta High Court.", "The Court regarded the willingness of the the decree-holder to enter into a long and protracted negotiation with the judg- ment-debtor as evidence of unwillingness on the part of the decree-holder to diligently prosecute the execution proceedings and accordingly dismissed the execution case for non-prosecution but thought fit to expressly keep alive the attachment.", "If the mere continuation of attachment will automatically convert an express order of dismissal of the execution application which is a final order into an order of adjournment which is not a final order then there was no point in the High Court taking the trouble of amending rule 57 at all.", "That the claim case was automatically dropped is yet another indication that the execution case was at an end.", "The following endorsement appears on the petition Ex. 2 (a), dated June 2, 1939 Heard learned pleaders for the parties. They jointly ask me to cancel the attachment (existing by special order) in Money Ex. 118 of 1936 though that case was dismissed. \n This endorsement also clearly shows that the Court itself understood that the order that it made on January 30 1937, was a final order of dismissal and that the attachment had been continued by a special order.", "But rule 57, as amended, expressly empow- ers the Court to dismiss an execution application but at the same time to keep alive the attachment by a special order. That is what was done in this case.", "The mere fact (1) 33 C.W.N. 267 A.I.R. 1929 P.C. 19, that the document was in the form of a petition could not convert what was really the usual certifying procedure into a proceeding in execution for recovery of a loan or for enforcement of any agreement. It was purely an intimation given to the Court by the decreeholder that the decree had been satisfied out of Court and the prayer for withdrawal of the attachment was merely consequential and would follow as a matter of course on full satisfaction of the decree being recorded.", "The order made on that petition also shows that the decree was recorded as adjusted and the attachment was cancelled"], "rank4": ["The execution case is dismissed for non- prosecution--the attachment already effected in this case continuing. 30th January 1937. The entry under column 11 of that very exhibit reads as follows -- Claim case automatically drops as the execution case is dismissed. It is, therefore, rejected without any sort of adjudication. 30th January 1937.", "Where any property has been attached in execution of a decree but by reason of the decree-holders default the Court is unable to proceed further with the application for execution, it shall either dismiss the application or for any sufficient reason adjourn the proceedings to a future date. Upon the dismissal of such application the attachment shall cease.", "The rule thus amended leaves three courses open to the Executing Court in case it finds it difficult to proceed with the execution case by reason of the default of the decree-holder.", "It may (1) adjourn the proceedings for good reason which will automatically keep the attachment alive or (2) simply dismiss the application which will automatically destroy the attachment", "In the actual prayer portion the decree-holder did not use the words for the present but only asked the Court to strike off the execution case keeping the attachment in force.", "The three forms of order permissible under rule 57 as amended by the High Court are quite distinct and independent of each other and there is no room for their overlapping.", "It rests upon the solid foundation of a special order which rule 57, as amended, in terms authorises the Court to make.", "See Raja Shri Prakash Singh v. \n The Allahabad Bank Ltd. (1)."], "rank5": ["The judgment debtor has paid to the decree holder the costs of this execution amounting to Rs. 76-14-0, and he having made requests for this execution case being struck off for the present on keeping the attachment in force, the decreeholder has agreed to it.", "Provided that in exercise of these powers the Court shall not- (i) \n do anything which affects any decree of a Court, other than a decree in a suit to which the Act applies which was not fully satisfied by the first day of January, 1939, or The proviso makes it quite clear that in exercise of the powers the Court cannot reopen or otherwise affect a decree of a Court unless such decree is one which was passed in a suit to which this Act applies and which was not fully satisfied by January 1, 1939.", "In the light of the decision of the Full Bench of the Calcutta High Court in Mrityunjay Mitra v. Satis Chandra Banerji(1) which was approved by the Privy Council in Jadu Nath Roy v. Kshitish Chandra Acharyya(2), it has not been contended, in view of the fact that the personal decree for the balance remained unsatisfied on January 1, 1939, that the decrees in Suit No. 78 of 1922 were fully satisfied within the meaning of the above proviso.", "In this Act, unless there is anything repugnant in the subject or context- \n Suit to which this Act applies means any suit or proceeding instituted or filed on or after the 1st day of January, 1939, or pending on that date and includes a pro- ceeding in execution-- (a) for the recovery of a loan advanced before or after the commencement of this Act (b) for the enforcement of any agreement entered into before or after the commencement of this Act, whether by way of settlement of account or otherwise, or of any security so taken, in respect of any loan advanced whether before or after the commencement of this Act or (c) for the redemption of any security given before or after the commencement of this Act in respect of any loan advanced whether before or after the commencement of this Act.", "The construction put upon section 2 (22)by the Special Bench and the reasons given by them appear to us to be well-founded.", "The reason why rule 57 was introduced in the Code of 1908 has been explained by Rank in C.J. in Shibnath Singh Ray v. Sheikh Saberuddin Ahmad(3) as follows-- (1) 46 C.W.N. 557 A.I.R. 1942 Cal. 441. (2) 48 C.W.N, 406. I.L.R. 56 Cal. 416 at pp. 421-422 Rule 57 of Order XXI was a new provision introduced in 1908. It is evident from the language of the rule itself, and it is still more evident from the circumstances under which it was passed, that it was intended to provide a remedy for the grievance or inconvenience which is apt to arise, where, after an attachment in execution, the applica- tion for execution cannot further be proceeded with by reason of the decree-holders default.", "The object of the last sentence in rule 57 is to settle the question whether, when the application in execution is dismissed any attachment made under that application should fall to the ground or should subsist, and the legislature has provided that it is to fall to the ground.", "It was evidently with a view to preserve the advantage of a dismissal and at the same time to avoid the disadvantage of the rigid rule of cesser of the attachment that the Calcutta High Court amend- ed rule 57 by adding the words unless the Court shall make an order to the contrary at the end of the last sentence of that rule.", "Great stress was laid by the learned advocate for the appellants on the words struck off for the present occurring in the body of that petition. It will be noticed that those words formed part of the request of the judgmentdebtor which was being recited in the petition.", "The continuance of the attachment, in the circumstances, needs no execution proceeding to support it. Take the case of an attachment before judgment. Under Order XXXVIII, rule 11, where after an order of attachment before judgment a decree is passed in favour of the plaintiff, it is not necessary upon an application for execution of such a decree to apply for re-attachment of the property. It means that the attachment continues and the judgmentdebtor cannot deal with the property to the disadvantage of the decree- holder. After the decree is passed, the attachment continues but nobody will say that although there has been no applica- tion for the execution of the decree at any time by the decree-holder there is, nevertheless, an execution proceed- ing pending merely because the attachment continues."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1951_36", "text": "CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 11 of 1950. Appeal under Art. 134 (1) (c) of the Constitution of India against the Judgment and Order dated the 10th April, 1950, of the High Court of Judicature at Simla in Criminal Revision No. 449 of 1949. The facts of the case appear in the judgment. Kundan Lal Arora for the appellant. S.N. Chopra for the respondent. 1951. May 23. The Judgment of the Court was delivered by Bose J. --This is a criminal appeal against a convic- tion under section 16 of the Punjab Trade Employees Act, 1940, as amended in 1943, read with section 7(1). The appellant is a shopkeeper who owns and runs a shop in the Cantonment Area of Ferozepore. He has no employees within the meaning of the Act but is assisted by his son in running the shop. The shop is divided into two sections. In one, articles of haberdashery are sold in the other, articles of stationery. Section 7(1) of the Act as amended requires that Save as otherwise provided by this Act, every shop shall remain closed on a close day. Sub-section (2)(i) states that-- The choice of a close day shall rest with the owner or occupier of a shop and shall be intimated to the prescribed authority within etc. The appellant made the following choice. He elected to close the haberdashery section on Mondays and the stationery section on Saturdays and gave the necessary intimation to the prescribed authority to that effect. On Monday, the 17th of May, 1948, the appellants son sold a tin of boot polish to a customer from the haberdash- ery, section of the shop. The appellant was present in person at the time of the sale. Monday was a close day for the haberdashery section and so the appellant was prosecuted under section 16 read with section 7. \nThe trying Magistrate held that in selling the article of haberdashery on a close day and in not observing Monday as a close day the appellant had infringed the provisions of section 7(1) of the Act. He accordingly convicted him and imposed a fine of Rs. 20. A revision application to the High Court failed. The High Court held that as the appellant had failed to keep his shop closed one day in the week, his conviction was proper. A certificate for leave to appeal to this Court, on the ground that a substantial question of law relating to the Govern- ment of India Act, 1935, was involved, was granted and that is how we come to be seized of the matter. The learned counsel for the appellant contended that section 7 of the Act is ultra vires in that it does not fall under any of the items in either the Provincial or the Concurrent Legislative Lists in the Government of India Act, 1935. In our opinion, the matter can come either under item No. 27 in List II or item No. 27 in List III. Item No. 27 in List II covers trade and commerce within the Province. In our opinion, a Provincial Government could, under that entry, regulate the hours, place, date and manner of sale of any particular commodity or commodities. It could, for example, state that the sale of explosives or other dangerous substances should only be in selected areas, at specified times or on specified days when extra precau- tions for the general safety of the public and those direct- ly concerned could be arranged for. \nThat would appear to be obvious. In the same way, it could, if it so pleased, say that there shall be no sales on a particular day, say a Sunday or a Friday, or on days of religious festivals and so forth. Instead of doing that, it has chosen to regulate the internal trade of the Province in this manner which is only one of the various ways in which it could have acted. The matter can also be brought under item 27 in List III welfare of labour conditions of labour. The im- pugned section is a general one and applies to all kinds of shops that is to say, to those in which labour is employed as well as to those which are run by the owners and their families. The Act in which the section occurs is directed at regulating the hours of employment of persons who are employed in the business of shops or commercial establish- ments. Therefore, in so far as section 7 covers establish- ments where labour is employed, it is undoubtedly intra vires. But it was argued that the section can have no appli- cation to shops which an owner runs with or without the assistance of his family. Reliance for this was placed on section 2-A (i) and (j) which is as follows 2-A. Nothing in this Act shall apply to-- \n persons employed in a managerial capacity and (j) the members of the family of the employer. It was argued that the sale was by the son. He is not affected by the Act. Therefore. he was entitled to sell and he could not sell unless the shop was kept open to enable him to do so. So also as regards the appel- lant, the owner, who was there in a managerial capacity. In our opinion, this is fallacious because the conviction here is not for the sale but for keeping the shop open on a close day. Section 2-A (j) does not give the son a right to keep the shop open or, for that matter, a right to sell. All it says is that he, being a member of the family, shall not be affected by the provisions of the Act. Section 7(1), on the other hand, is directed against the owner of the shop, not against his family. It compels the owner to keep his shop closed one day in a week. \n It was then contended that if a person employed in a managerial capacity cannot be affected by the Act, then the appellant who was there in that capacity cannot be compelled to close the shop under section 7. This is also fallacious. It happens in the present case that the owner and the manag- er are the same but the Act obviously makes provision for a class of case in which they are different. The owner is obliged to close the shop one day in a week, though the manager of the shop can work without, for example, having the twenty-four consecutive hours of rest every week which section 7-A enjoins. The appellants capacity as manager will have to be separated from his character as owner for this purpose. Section 2-A(i) does not control section 7 (1). Lastly, it was argued that the scheme of the Act makes it plain that it is for ameliorating the conditions of labour employed in shops. It cannot therefore apply to shops in which no labour is employed, particularly when the family of the employer is expressly excluded from the purview of the Act. For this reason also, it cannot fall under item 27 in List III. We are of opinion that such a narrow interpre- tation cannot be placed upon the entry. The legislature may have felt it necessary, in order to reduce the possibilities of evasion to a minimum, to encroach upon the liberties of those who would not otherwise have been affected. That we think it had power to do.\n DECISION ??", "expert_1": {"rank1": ["Therefore, in so far as section 7 covers establish- ments where labour is employed, it is undoubtedly intra vires.", "Therefore. he was entitled to sell and he could not sell unless the shop was kept open to enable him to do so.", "In our opinion, this is fallacious because the conviction here is not for the sale but for keeping the shop open on a close day.", "It happens in the present case that the owner and the manag- er are the same but the Act obviously makes provision for a class of case in which they are different.", "The appellants capacity as manager will have to be separated from his character as owner for this purpose.", "Section 2-A(i) does not control section 7 (1).", "For this reason also, it cannot fall under item 27 in List III.", "We are of opinion that such a narrow interpre- tation cannot be placed upon the entry."], "rank2": ["In our opinion, the matter can come either under item No. 27 in List II or item No. 27 in List III.", "But it was argued that the section can have no appli- cation to shops which an owner runs with or without the assistance of his family. Reliance for this was placed on section 2-A (i) and (j) which is as follows 2-A. Nothing in this Act shall apply to-- \n persons employed in a managerial capacity and (j) the members of the family of the employer. It was argued that the sale was by the son. He is not affected by the Act.", "The legislature may have felt it necessary, in order to reduce the possibilities of evasion to a minimum, to encroach upon the liberties of those who would not otherwise have been affected. That we think it had power to do."], "rank3": ["Item No. 27 in List II covers trade and commerce within the Province. In our opinion, a Provincial Government could, under that entry, regulate the hours, place, date and manner of sale of any particular commodity or commodities. It could, for example, state that the sale of explosives or other dangerous substances should only be in selected areas, at specified times or on specified days when extra precau- tions for the general safety of the public and those direct- ly concerned could be arranged for. \nThat would appear to be obvious. In the same way, it could, if it so pleased, say that there shall be no sales on a particular day, say a Sunday or a Friday, or on days of religious festivals and so forth. Instead of doing that, it has chosen to regulate the internal trade of the Province in this manner which is only one of the various ways in which it could have acted.", "The matter can also be brought under item 27 in List III welfare of labour conditions of labour. The im- pugned section is a general one and applies to all kinds of shops that is to say, to those in which labour is employed as well as to those which are run by the owners and their families. The Act in which the section occurs is directed at regulating the hours of employment of persons who are employed in the business of shops or commercial establish- ments.", "Section 2-A (j) does not give the son a right to keep the shop open or, for that matter, a right to sell. All it says is that he, being a member of the family, shall not be affected by the provisions of the Act. Section 7(1), on the other hand, is directed against the owner of the shop, not against his family. It compels the owner to keep his shop closed one day in a week. \n It was then contended that if a person employed in a managerial capacity cannot be affected by the Act, then the appellant who was there in that capacity cannot be compelled to close the shop under section 7.", "The owner is obliged to close the shop one day in a week, though the manager of the shop can work without, for example, having the twenty-four consecutive hours of rest every week which section 7-A enjoins.", "Lastly, it was argued that the scheme of the Act makes it plain that it is for ameliorating the conditions of labour employed in shops. It cannot therefore apply to shops in which no labour is employed, particularly when the family of the employer is expressly excluded from the purview of the Act."], "rank4": ["This is a criminal appeal against a convic- tion under section 16 of the Punjab Trade Employees Act, 1940, as amended in 1943, read with section 7(1).", "The appellant is a shopkeeper who owns and runs a shop in the Cantonment Area of Ferozepore. He has no employees within the meaning of the Act but is assisted by his son in running the shop. The shop is divided into two sections. In one, articles of haberdashery are sold in the other, articles of stationery. Section 7(1) of the Act as amended requires that Save as otherwise provided by this Act, every shop shall remain closed on a close day. Sub-section (2)(i) states that-- The choice of a close day shall rest with the owner or occupier of a shop and shall be intimated to the prescribed authority within etc. The appellant made the following choice. He elected to close the haberdashery section on Mondays and the stationery section on Saturdays and gave the necessary intimation to the prescribed authority to that effect. On Monday, the 17th of May, 1948, the appellants son sold a tin of boot polish to a customer from the haberdash- ery, section of the shop. The appellant was present in person at the time of the sale. Monday was a close day for the haberdashery section and so the appellant was prosecuted under section 16 read with section 7. \nThe trying Magistrate held that in selling the article of haberdashery on a close day and in not observing Monday as a close day the appellant had infringed the provisions of section 7(1) of the Act. He accordingly convicted him and imposed a fine of Rs. 20. A revision application to the High Court failed. The High Court held that as the appellant had failed to keep his shop closed one day in the week, his conviction was proper. A certificate for leave to appeal to this Court, on the ground that a substantial question of law relating to the Govern- ment of India Act, 1935, was involved, was granted and that is how we come to be seized of the matter. The learned counsel for the appellant contended that section 7 of the Act is ultra vires in that it does not fall under any of the items in either the Provincial or the Concurrent Legislative Lists in the Government of India Act, 1935."], "label": "REJECTED"}, "expert_2": {"rank1": ["the conviction here is not for the sale but for keeping the shop open on a close day.", "Section 2-A (j) does not give the son a right to keep the shop open or, for that matter, a right to sell. All it says is that he, being a member of the family, shall not be affected by the provisions of the Act. Section 7(1), on the other hand, is directed against the owner of the shop, not against his family.", "The owner is obliged to close the shop one day in a week, though the manager of the shop can work without, for example, having the twenty-four consecutive hours of rest every week which section 7-A enjoins. The appellants capacity as manager will have to be separated from his character as owner for this purpose. Section 2-A(i) does not control section 7 (1).", "We are of opinion that such a narrow interpre- tation cannot be placed upon the entry. The legislature may have felt it necessary, in order to reduce the possibilities of evasion to a minimum, to encroach upon the liberties of those who would not otherwise have been affected."], "rank2": ["section 7 of the Act is ultra vires in that it does not fall under any of the items in either the Provincial or the Concurrent Legislative Lists in the Government of India Act, 1935. In our opinion, the matter can come either under item No. 27 in List II or item No. 27 in List III.", "Item No. 27 in List II covers trade and commerce within the Province. In our opinion, a Provincial Government could, under that entry, regulate the hours, place, date and manner of sale of any particular commodity or commodities.", "The matter can also be brought under item 27 in List III welfare of labour conditions of labour. The im- pugned section is a general one and applies to all kinds of shops that is to say, to those in which labour is employed as well as to those which are run by the owners and their families.", "Reliance for this was placed on section 2-A (i) and (j) which is as follows 2-A. Nothing in this Act shall apply to-- \n persons employed in a managerial capacity and (j) the members of the family of the employer. It was argued that the sale was by the son.", "It was then contended that if a person employed in a managerial capacity cannot be affected by the Act, then the appellant who was there in that capacity cannot be compelled to close the shop under section 7.", "it was argued that the scheme of the Act makes it plain that it is for ameliorating the conditions of labour employed in shops. It cannot therefore apply to shops in which no labour is employed, particularly when the family of the employer is expressly excluded from the purview of the Act. For this reason also, it cannot fall under item 27 in List III."], "rank3": ["Section 7(1) of the Act as amended requires that Save as otherwise provided by this Act, every shop shall remain closed on a close day.", "the appellants son sold a tin of boot polish to a customer from the haberdash- ery, section of the shop. The appellant was present in person at the time of the sale. Monday was a close day for the haberdashery section and so the appellant was prosecuted under section 16 read with section 7."], "label": "REJECTED"}, "expert_3": {"rank1": ["On Monday, the 17th of May, 1948, the appellants son sold a tin of boot polish to a customer from the haberdash- ery, section of the shop", "The appellant was present in person at the time of the sale. Monday was a close day for the haberdashery section and so the appellant was prosecuted under section 16 read with section 7.", "In our opinion, the matter can come either under item No. 27 in List II or item No. 27 in List III.", "Item No. 27 in List II covers trade and commerce within the Province. In our opinion, a Provincial Government could, under that entry, regulate the hours, place, date and manner of sale of any particular commodity or commodities", "The matter can also be brought under item 27 in List III welfare of labour conditions of labour. The im- pugned section is a general one and applies to all kinds of shops that is to say, to those in which labour is employed as well as to those which are run by the owners and their families. The Act in which the section occurs is directed at regulating the hours of employment of persons who are employed in the business of shops or commercial establish- ments", "Therefore, in so far as section 7 covers establish- ments where labour is employed, it is undoubtedly intra vires", "In our opinion, this is fallacious because the conviction here is not for the sale but for keeping the shop open on a close day. Section 2-A (j) does not give the son a right to keep the shop open or, for that matter, a right to sell. All it says is that he, being a member of the family, shall not be affected by the provisions of the Act.", "Section 7(1), on the other hand, is directed against the owner of the shop, not against his family. It compels the owner to keep his shop closed one day in a week.", "It happens in the present case that the owner and the manag- er are the same but the Act obviously makes provision for a class of case in which they are different", "The owner is obliged to close the shop one day in a week, though the manager of the shop can work without, for example, having the twenty-four consecutive hours of rest every week which section 7-A enjoins. The appellants capacity as manager will have to be separated from his character as owner for this purpose", "Section 2-A(i) does not control section 7 (1).", "We are of opinion that such a narrow interpre- tation cannot be placed upon the entry. The legislature may have felt it necessary, in order to reduce the possibilities of evasion to a minimum, to encroach upon the liberties of those who would not otherwise have been affected."], "rank2": ["Section 7(1) of the Act as amended requires that Save as otherwise provided by this Act, every shop shall remain closed on a close day. Sub-section (2)(i) states that-- The choice of a close day shall rest with the owner or occupier of a shop and shall be intimated to the prescribed authority within etc.", "The appellant made the following choice. He elected to close the haberdashery section on Mondays and the stationery section on Saturdays and gave the necessary intimation to the prescribed authority to that effect.", "The trying Magistrate held that in selling the article of haberdashery on a close day and in not observing Monday as a close day the appellant had infringed the provisions of section 7(1) of the Act", "He accordingly convicted him and imposed a fine of Rs. 20. A revision application to the High Court failed.", "The High Court held that as the appellant had failed to keep his shop closed one day in the week, his conviction was proper", "Reliance for this was placed on section 2-A (i) and (j) which is as follows 2-A. Nothing in this Act shall apply to-- \n persons employed in a managerial capacity and (j) the members of the family of the employer. It was argued that the sale was by the son", "it was argued that the scheme of the Act makes it plain that it is for ameliorating the conditions of labour employed in shops. It cannot therefore apply to shops in which no labour is employed, particularly when the family of the employer is expressly excluded from the purview of the Act. For this reason also, it cannot fall under item 27 in List III."], "rank3": ["This is a criminal appeal against a convic- tion under section 16 of the Punjab Trade Employees Act, 1940, as amended in 1943, read with section 7(1)", "The appellant is a shopkeeper who owns and runs a shop in the Cantonment Area of Ferozepore. He has no employees within the meaning of the Act but is assisted by his son in running the shop.", "The shop is divided into two sections. In one, articles of haberdashery are sold in the other, articles of stationery.", "A certificate for leave to appeal to this Court, on the ground that a substantial question of law relating to the Govern- ment of India Act, 1935, was involved, was granted and"], "label": "REJECTED"}, "expert_4": {"rank1": ["Appeal under Art. 134 (1) (c) of the Constitution of India against the Judgment and Order dated the 10th April, 1950, of the High Court of Judicature at Simla in Criminal Revision No. 449 of 1949."], "rank2": ["This is a criminal appeal against a convic- tion under section 16 of the Punjab Trade Employees Act, 1940, as amended in 1943, read with section 7(1).", "The trying Magistrate held that in selling the article of haberdashery on a close day and in not observing Monday as a close day the appellant had infringed the provisions of section 7(1) of the Act.", "The High Court held that as the appellant had failed to keep his shop closed one day in the week, his conviction was proper.", "Therefore, in so far as section 7 covers establish- ments where labour is employed, it is undoubtedly intra vires.", "Section 2-A (j) does not give the son a right to keep the shop open or, for that matter, a right to sell.", "The appellants capacity as manager will have to be separated from his character as owner for this purpose.", "Section 2-A(i) does not control section 7 (1).", "We are of opinion that such a narrow interpre- tation cannot be placed upon the entry.", "The legislature may have felt it necessary, in order to reduce the possibilities of evasion to a minimum, to encroach upon the liberties of those who would not otherwise have been affected. That we think it had power to do."], "rank3": ["Section 7(1) of the Act as amended requires that Save as otherwise provided by this Act, every shop shall remain closed on a close day.", "Sub-section (2)(i) states that-- The choice of a close day shall rest with the owner or occupier of a shop and shall be intimated to the prescribed authority within etc.", "On Monday, the 17th of May, 1948, the appellants son sold a tin of boot polish to a customer from the haberdash- ery, section of the shop.", "The appellant was present in person at the time of the sale.", "Monday was a close day for the haberdashery section and so the appellant was prosecuted under section 16 read with section 7.", "In our opinion, the matter can come either under item No. 27 in List II or item No. 27 in List III.", "Item No. 27 in List II covers trade and commerce within the Province. In our opinion, a Provincial Government could, under that entry, regulate the hours, place, date and manner of sale of any particular commodity or commodities.", "The matter can also be brought under item 27 in List III welfare of labour conditions of labour.", "The im- pugned section is a general one and applies to all kinds of shops that is to say, to those in which labour is employed as well as to those which are run by the owners and their families.", "The Act in which the section occurs is directed at regulating the hours of employment of persons who are employed in the business of shops or commercial establish- ments.", "2-A. Nothing in this Act shall apply to-- \n persons employed in a managerial capacity and (j) the members of the family of the employer.", "In our opinion, this is fallacious because the conviction here is not for the sale but for keeping the shop open on a close day.", "All it says is that he, being a member of the family, shall not be affected by the provisions of the Act. Section 7(1), on the other hand, is directed against the owner of the shop, not against his family.", "It compels the owner to keep his shop closed one day in a week.", "It happens in the present case that the owner and the manag- er are the same but the Act obviously makes provision for a class of case in which they are different.", "The owner is obliged to close the shop one day in a week, though the manager of the shop can work without, for example, having the twenty-four consecutive hours of rest every week which section 7-A enjoins."], "rank4": ["The appellant is a shopkeeper who owns and runs a shop in the Cantonment Area of Ferozepore.", "He has no employees within the meaning of the Act but is assisted by his son in running the shop.", "The shop is divided into two sections.", "In one, articles of haberdashery are sold in the other, articles of stationery.", "The appellant made the following choice. He elected to close the haberdashery section on Mondays and the stationery section on Saturdays and gave the necessary intimation to the prescribed authority to that effect.", "A revision application to the High Court failed.", "The learned counsel for the appellant contended that section 7 of the Act is ultra vires in that it does not fall under any of the items in either the Provincial or the Concurrent Legislative Lists in the Government of India Act, 1935.", "It could, for example, state that the sale of explosives or other dangerous substances should only be in selected areas, at specified times or on specified days when extra precau- tions for the general safety of the public and those direct- ly concerned could be arranged for. \nThat would appear to be obvious. In the same way, it could, if it so pleased, say that there shall be no sales on a particular day, say a Sunday or a Friday, or on days of religious festivals and so forth.", "Instead of doing that, it has chosen to regulate the internal trade of the Province in this manner which is only one of the various ways in which it could have acted.", "But it was argued that the section can have no appli- cation to shops which an owner runs with or without the assistance of his family.", "Reliance for this was placed on section 2-A (i) and (j) which is as follows", "It was argued that the sale was by the son.", "He is not affected by the Act.", "Therefore. he was entitled to sell and he could not sell unless the shop was kept open to enable him to do so.", "So also as regards the appel- lant, the owner, who was there in a managerial capacity.", "It was then contended that if a person employed in a managerial capacity cannot be affected by the Act, then the appellant who was there in that capacity cannot be compelled to close the shop under section 7. This is also fallacious.", "Lastly, it was argued that the scheme of the Act makes it plain that it is for ameliorating the conditions of labour employed in shops", "It cannot therefore apply to shops in which no labour is employed, particularly when the family of the employer is expressly excluded from the purview of the Act.", "For this reason also, it cannot fall under item 27 in List III."], "rank5": ["He accordingly convicted him and imposed a fine of Rs. 20.", "A certificate for leave to appeal to this Court, on the ground that a substantial question of law relating to the Govern- ment of India Act, 1935, was involved, was granted and that is how we come to be seized of the matter."], "label": "REJECTED"}, "expert_5": {"rank1": ["In our opinion, this is fallacious because the conviction here is not for the sale but for keeping the shop open on a close day.", "Section 2-A (j) does not give the son a right to keep the shop open or, for that matter, a right to sell. All it says is that he, being a member of the family, shall not be affected by the provisions of the Act.", "Section 7(1), on the other hand, is directed against the owner of the shop, not against his family. It compels the owner to keep his shop closed one day in a week."], "rank2": ["Section 2-A(i) does not control section 7 (1)."], "rank3": ["On Monday, the 17th of May, 1948, the appellants son sold a tin of boot polish to a customer from the haberdash- ery, section of the shop. The appellant was present in person at the time of the sale. Monday was a close day for the haberdashery section and so the appellant was prosecuted under section 16 read with section 7.", "The Act in which the section occurs is directed at regulating the hours of employment of persons who are employed in the business of shops or commercial establish- ments.", "Therefore, in so far as section 7 covers establish- ments where labour is employed, it is undoubtedly intra vires.", "It happens in the present case that the owner and the manag- er are the same but the Act obviously makes provision for a class of case in which they are different.", "The owner is obliged to close the shop one day in a week, though the manager of the shop can work without, for example, having the twenty-four consecutive hours of rest every week which section 7-A enjoins. The appellants capacity as manager will have to be separated from his character as owner for this purpose."], "rank4": ["Section 7(1) of the Act as amended requires that Save as otherwise provided by this Act, every shop shall remain closed on a close day. Sub-section (2)(i) states that-- The choice of a close day shall rest with the owner or occupier of a shop and shall be intimated to the prescribed authority within etc.", "The appellant made the following choice. He elected to close the haberdashery section on Mondays and the stationery section on Saturdays and gave the necessary intimation to the prescribed authority to that effect.", "In our opinion, the matter can come either under item No. 27 in List II or item No. 27 in List III. Item No. 27 in List II covers trade and commerce within the Province. In our opinion, a Provincial Government could, under that entry, regulate the hours, place, date and manner of sale of any particular commodity or commodities.", "The matter can also be brought under item 27 in List III welfare of labour conditions of labour.", "The im- pugned section is a general one and applies to all kinds of shops that is to say, to those in which labour is employed as well as to those which are run by the owners and their families.", "The legislature may have felt it necessary, in order to reduce the possibilities of evasion to a minimum, to encroach upon the liberties of those who would not otherwise have been affected."], "rank5": ["It could, for example, state that the sale of explosives or other dangerous substances should only be in selected areas, at specified times or on specified days when extra precau- tions for the general safety of the public and those direct- ly concerned could be arranged for. \nThat would appear to be obvious.", "In the same way, it could, if it so pleased, say that there shall be no sales on a particular day, say a Sunday or a Friday, or on days of religious festivals and so forth. Instead of doing that, it has chosen to regulate the internal trade of the Province in this manner which is only one of the various ways in which it could have acted."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1951_40", "text": "CIVIL APPELLATE JURISDICTION Civil Appeal No. 46 of 1950. Appeal by special leave from a judgment of the High Court of Judicature at Bombay dated 23rd March, 1948, (Chagla C.J. and Tendolkar J.) in Income Tax Reference No. 16 of 1947. C. Setalvad, Attorney-General for India (Gopal Singh, with him) for the appellant. C. Chatterjee (B. Sen, with him)for the respondent. 1951. September 18. The Judgment of the Court was deliv- ered by MAHAJAN J.--The sole controversy in this appeal centres round the point as to whether or not excess profits tax is payable on the sum of Rs. 20,005 received by the respondent from Messrs Parakh Co. by way of rent for the dyeing plant let out to them during the chargeable accounting period. The respondent (Sri Lakshmi Silk Mills Ltd.) is a manu- facturer of silk cloth, and as a part of its business it installed a plant for dyeing silk yarn. During the charge- able accounting period (1st January, 1943, to 31st December, 1943) owing to difficulty in obtaining silk yarn on account of the war it could make no use of this plant and it re- mained idle for some time. On the 20th August, 1943, it was let out to Messrs E. Parakh Co. on a rent of Rs. 4,001 per month. The Excess Profits Tax Officer by his assessment order dated 11th June, 1945, included the sum of Rs. 20,005 realized as rent for five months, in the profits of the business of the respondent and held that excess profits tax was payable on this amount. \nThis order was confirmed on appeal by the Appellate Assistant Commissioner and on fur- ther appeal by the Income-tax Tribunal. The Tribunal, however, on being asked referred the following question of law to the High Court for its opinion Whether in the circumstances of the case, the asses- sees income of Rs. 20,005 is profits from business within the meaning of section 2 (5) of the Excess Profits Tax Act and therefore or otherwise liable to pay excess profits tax ? The High Court answered the question in the negative. \nThis is an appeal by special leave from this decision. It was contended on behalf of the Commissioner before the High Court that the dyeing plant was a commercial asset of the assessees business for the purpose of earning profit and if this commercial asset yielded income to him in any particular manner, it was income from the assessees busi- ness for the purpose of the Excess Profits Tax Act. It was said that it was immaterial whether a commercial asset yields income by use of the assessee himself or its being used by someone else. This contention was disposed of by the learned Chief Justice in these words - Mr. Joshi seems to be right but with this qualification that the commercial asset must be at the time it was let out in a condition to be used as a commercial asset by the assessee. \nIf it has ceased to be a commercial asset, if its use as a commercial asset has been discontinued, then if the assessee lets it out, he is not putting to use something which is a commercial asset at the time. Now, on the facts found by the Tribunal, it is clear that when the assessee let out this dyeing plant, it had remained idle for some time. \nHe could not obtain silk yarn on account of the war and therefore it was not possible to make use of it as a commercial asset as far as the assessee himself was concerned and it was only for that reason that he let it out to Messrs E. Parakh Co. I can understand the principle for which Mr. Joshi is contending that it makes no difference what an assessee does with a commercial asset belonging to him. \nHe may use it as he likes. So long as it yields income it is the income of his business. Var- ious cases have been cited at the Bar and I think that those cases though apparently conflicting are reconcilable if we accept this principle to be the correct principle and apply this ratio as the ratio emerging from these cases and I will state the principle and the ratio again that if an assessee derives income from a commercial asset which is capable at the time of being used as a commercial asset, then it is income from his business, whether he uses that commercial asset himself or lets it out to somebody else to be used. \nBut if the commercial asset is not capable of being used as such, then its being let out does not result in an income which is the income of the business. Mr. Justice Tendolkar concurred in this view and ob- served as follows -- The ratio of all these cases to my mind is that if there is a commercial asset which is capable of being worked by the assessee himself for the purpose of earning profits and the assessee instead of doing so, either voluntarily allows someone else to use it on payment of a certain sum or is compelled by law to allow it to be used in such manner, then what he receives is income from business. \nBut if the commercial asset has ceased to be a commercial asset in the hands of the assessee and thereafter he gets what he can out of it by letting it out to be used by others, then the rent he receives is not income from any business that he carries on. The learned Attorney-General pointed out that the nature of a commercial asset is not changed because a par- ticular person is unable to use it. The inability of the assessee to make use of it in certain circumstances does not in any way affect the nature of the asset and cause an infirmity in the asset itself. \nIt was contended that when the dyeing plant became idle for a short time during the chargeable accounting period it did not cease to be a com- mercial asset of the respondent for it had no other busi- ness that all the assets of the respondent including the dyeing plant were the assets of the business, that whatever income was derived by the use of these assets including the income that an asset fetched by its being let out was the business income of the assessee, and that there was no warrant in law for the proposition that a commercial asset which yields income must be used as an asset by the respondent himself before its income becomes chargeable to tax. \nThe learned counsel for the respondent urged that as soon as the assessee found difficulty in obtaining yarn the dyeing plant became redundant for its business and ceased to be an asset of its business and any income derived from the rent by letting out this asset was income received by the assessee from other sources and therefore was not charge- able to excess profits tax. In our opinion, the contention raised by the learned Attorney-General is sound. The High Court was in error in engrafting a proviso on the rule deduced by it from the authorities considered by it, to the effect that a commer- cial asset of a business concern which yields income must at the time it was let out be in a condition to be used as a commercial asset by the assessee himself. We respectfully concur in the opinion of the learned Chief Justice that if the commercial asset is not capable of being used as such, then its being let out to others does not result in an income which is the income of the business, but we cannot accept the view that an asset which was acquired and used for the purpose of the business ceased to be a commercial asset of that business as soon as it was temporarily put out of use or let out to another person for use in his business or trade. The yield of income by a commercial asset is the profit of the business irrespective of the manner in which. that asset is exploited by the owner of the business. \nHe is entitled to exploit it to his best advantage and he may do so either by using it himself personally or by letting it out to somebody else. Suppose, for instance, in a manufac- turing concern the use of its plant and machinery can advan- tageously be made owing to paucity of raw materials only for six hours in a working day, and in order to get the best yield out of it, another person who has got the requisite raw materials is allowed to use it as a licensee on payment of certain consideration for three hours can it be said in such a situation with any justification that the amount realized from the licensee is not a part of the business income of the licensor. \nIn this case the company was incorporated purely as a manufacturing concern with the object of making profit. It installed plant and machinery for the purpose of its business, and it was open to it if at any time it found that any part of its plant for the time being could not be advantageously employed for earning profit by the company itself, to earn profit by leasing it to somebody else. It is difficult to hold that the income thus earned by the commer- cial asset is not income from the business of the company that has been solely incorporated for the purpose of doing business and earning profits. There is no material whatever for taking the view that the assessee company was incorpo- rated with any other object than of carrying on business or trade. Owning properties and letting them was not a purpose for which it was formed and that being so, the disputed income cannot be said to fall under any section of the Indian Income-tax Act other than section 10. Cases of undertakings of this nature stand on an entirely different footing and are distinguishable from cases of individuals or companies acquiring lands or buildings and making income by letting them on hire. \nThese latter cases may legitimately fall under the specific provisions of section 9 or section 12, though the High Courts in this country are by no means unanimous on this subject but for the purpose of this case it is unnecessary to resolve that conflict. It may be observed that no general principle can be laid down which is applicable to all cases, and each case has to be decided on its own circumstances. Decisions of the Eng- lish courts given under the Finance Acts, the scheme of which is different from the Indian Income-tax statutes, are not always very helpful in dealing with matters arising under the Indian law and analogies and inferences drawn from those decisions are at times misleading. We, however, are in respectful agreement with the observations of Lord President Strathclyde in Sutherland v. The Commissioners of Inland Revenue(1) that if a commercial asset is susceptible of being put to a variety of different uses in which gain might be acquired, whichever of these uses it was put to by the appellant, the profit earned was a user of the asset of the same business. \nA mere substituted use of the commercial asset does not change or alter the nature of that asset. Whatever the commercial asset produces is income of the business of which it is an asset, the process by which the asset makes the income being immaterial. Mr. Chatterjee for the respondent stressed the point that as the dyeing plant in the present case could not be made use of by the assessee in its manufacturing business owing to the non-availability of yarn, it ceased to be a commercial asset of the business of the assessee and became redundant to that business and that being so, any income earned by this asset which had ceased to be a commercial asset was not an income of the business but must be held to have been derived from a source other than business and fell within the ambit of section 12 of the Indian Income tax Act, and on this income excess profits tax was not payable. \nHe contended that the facts of this case were analogous to the case of Inland Revenue Commissioners v. lies(2) and it should be similarly decided. In that case the taxpayer carried on the business of sand and gravel merchant on certain land and at the same time he granted licences to three firms to enter his land and win gravel for themselves in return for which he received from them a royalty for each cubic yard of gravel taken away. It was held that the royalties were not part of the profits of the business because, in granting the licences, the taxpayer was exploit- ing his rights of ownership in the land and was not carrying on his business of a sand and gravel merchant. \nThe income was held taxable as an income from an investment and did not fall under Schedule D which concerns profits earned from a trade. Mr. Chatterjee also laid emphasis on the observations of Lord (1) (1918) 12 Tax Cas. 63. (2) 1947 1 A.E.R. 798. Greene M.R. in Croft v. Sywell Aerodrome Ltd. (1), wherein the learned Master of the Rolls observed as fol- lows I cannot myself see that a person who leases the land to others, or grants licences to others to come upon it, is doing anything more than exploiting his own rights of property, even if the tenant or licensee is, by the terms of the lease or licence, entitled himself to carry on a trade on the land. \nIt was urged that what the assessee was doing in this case was exploiting his rights of property by letting the dyeing plant to other persons precisely in the same manner as the owner of land in the case cited above was exploiting his own rights to property by granting a licence to another to come on his land. The argument, in our opinion, though attractive, is fallacious. The analogy between the case of land and of a dyeing plant for the purpose of taxing stat- utes is inappropriate. \nThe distinction becomes apparent from the following passage which occurs in Atkinson J.s judgment in I less case(2) -- Then it was suggested by counsel for the Crown that the case was like the Desoutter case(3), where it was held that, if you make use of a patent in your business and also receive royalties from the use of the patent by others licensed to use it, those royalties cannot be regarded as receipts from an investment. In other words, the door has to be either open or shut. A patent is either an investment or it is not. The suggestion was that freehold land is in the same position, and if you carry on business on part of it, whatever you do with the rest by way of licensing or letting cannot be regarded as producing income from investment. That, however, is dead in the teeth of the judgment in the Broadway Car Co. case(4). The same argument was tried there, but Tucker L.J. said he thought the Desoutter case(3) had very little to do with it, as there was a great difference between land (1) 1942 1 A.E.R. 110. (3) 1946 1 \n E.R. 58. (2) 1947 1 A.E.R. 798 (4) 1946 2 \n E.R. 609. and a patent, and he did not think the Desoutter case(1) threw any light on the matter A patent is quite different from freehold land. These observations appositely apply to the case of a company incorporated for the purpose of doing business and earning profit by the process of manufacture. Letting out a part of its machinery in a certain situation in order to make the business advantageous as a whole does not alter the nature of the income. The case of an owner of land letting out his land and carrying on exploitation of part of that land by selling gravel out of it, as at present advised, in our opinion, would fall under section 9 of the Indian In- come-tax Act, as income earned, no matter by whatever meth- od, from land, and specifically dealt with by that section. The observations therefore made in I less case(2) can have no apposite application to the case of a manufacturing concern letting out a part of its machinery temporarily which it cannot advantageously use itself. Mr. Chatterjee also laid stress on the decision of the Court of Appeal in Inland Revenue Commissioners v. Broadway Car Co. Ltd.(3). In this case the company carried on the business of motor car agents and repairers on land held on lease from 1935 to 1956 at an annual rent of pound 750. By 1940 the companys business had dwindled under war condi- tions to such an extent that no more than one third of the land was required. \n In those circumstances the remainder was sublet for fourteen years at an annual rent of pound 1,150. The general commissioners of income-tax decided that the difference of pound 400 between the outgoing of pound 750 for the land retained and the incoming of pound 1,150 for the land disposed of was income received from an invest- ment, and, the business not being one within the special categories mentioned in the Finance Act, 1939, that pound 400 was not taxable. \n It was held that the word investment must be construed in the ordinary, popular sense of the word as used by businessmen and not as a (1) 1946 1 A.E.R.58. (3) 1946 2 A.E.R. 609. (2) 1947 1 A.E.R. 798. term of art having a defined or technical meaning and that it was impossible to say that the commissioners had erred in law in coming to the conclusion that the transaction result- ed in an investment. Scott L.J. in delivering his judgment laid emphasis on the point that after the business of the company had dwindled, it partitioned part of the land from the rest and sublet it by installing a heating apparatus for the sub-lessee. \n It was found that war conditions had reduced the companys business to very small proportions and they cut their loss by going out of business in respect of the major part of their land and put it out of their power for 14 years to resume business there. In this situation it was observed that in that case they were dealing with part of the property of the company which had come redundant and was sublet purely to produce income--a transaction. quite apart from the ordinary business activities of the company. \n It was pointed out that the question whether a particular source of income was income or not must be decided, as it could be, according to ordinary commonsense principles. The short question to decide in this case is whether on the facts found, it could be said reasonably that the dyeing plant had become redundant for its business as a silk manu- facturing concern, simply by the circumstance that for the time being it could not be used by it personally for the purpose of dyeing silk yarn owing to the non-availability of yarn. It is difficult to conceive that the company would not have immediately started dyeing yarn as soon as it became available. Instead of dyeing yarn, another person was allowed to dye jute (we are told), the assessee company making income out of its use as a commercial asset.\n DECISION ??", "expert_1": {"rank1": ["The short question to decide in this case is whether on the facts found, it could be said reasonably that the dyeing plant had become redundant for its business as a silk manu- facturing concern, simply by the circumstance that for the time being it could not be used by it personally for the purpose of dyeing silk yarn owing to the non-availability of yarn. It is difficult to conceive that the company would not have immediately started dyeing yarn as soon as it became available. Instead of dyeing yarn, another person was allowed to dye jute (we are told), the assessee company making income out of its use as a commercial asset."], "rank2": ["The argument, in our opinion, though attractive, is fallacious. The analogy between the case of land and of a dyeing plant for the purpose of taxing stat- utes is inappropriate.", "These observations appositely apply to the case of a company incorporated for the purpose of doing business and earning profit by the process of manufacture. Letting out a part of its machinery in a certain situation in order to make the business advantageous as a whole does not alter the nature of the income.", "The observations therefore made in I less case(2) can have no apposite application to the case of a manufacturing concern letting out a part of its machinery temporarily which it cannot advantageously use itself."], "rank3": ["It is difficult to hold that the income thus earned by the commer- cial asset is not income from the business of the company that has been solely incorporated for the purpose of doing business and earning profits. There is no material whatever for taking the view that the assessee company was incorpo- rated with any other object than of carrying on business or trade.", "We, however, are in respectful agreement with the observations of Lord President Strathclyde in Sutherland v. The Commissioners of Inland Revenue(1) that if a commercial asset is susceptible of being put to a variety of different uses in which gain might be acquired, whichever of these uses it was put to by the appellant, the profit earned was a user of the asset of the same business. \nA mere substituted use of the commercial asset does not change or alter the nature of that asset. Whatever the commercial asset produces is income of the business of which it is an asset, the process by which the asset makes the income being immaterial.", "The distinction becomes apparent from the following passage which occurs in Atkinson J.s judgment in I less case(2) -- Then it was suggested by counsel for the Crown that the case was like the Desoutter case(3), where it was held that, if you make use of a patent in your business and also receive royalties from the use of the patent by others licensed to use it, those royalties cannot be regarded as receipts from an investment. In other words, the door has to be either open or shut. A patent is either an investment or it is not. The suggestion was that freehold land is in the same position, and if you carry on business on part of it, whatever you do with the rest by way of licensing or letting cannot be regarded as producing income from investment. That, however, is dead in the teeth of the judgment in the Broadway Car Co. case(4)."], "rank4": ["I can understand the principle for which Mr. Joshi is contending that it makes no difference what an assessee does with a commercial asset belonging to him. \nHe may use it as he likes. So long as it yields income it is the income of his business.", "These latter cases may legitimately fall under the specific provisions of section 9 or section 12, though the High Courts in this country are by no means unanimous on this subject but for the purpose of this case it is unnecessary to resolve that conflict. It may be observed that no general principle can be laid down which is applicable to all cases, and each case has to be decided on its own circumstances."], "rank5": ["The sole controversy in this appeal centres round the point as to whether or not excess profits tax is payable on the sum of Rs. 20,005 received by the respondent from Messrs Parakh Co. by way of rent for the dyeing plant let out to them during the chargeable accounting period. The respondent (Sri Lakshmi Silk Mills Ltd.) is a manu- facturer of silk cloth, and as a part of its business it installed a plant for dyeing silk yarn. During the charge- able accounting period (1st January, 1943, to 31st December, 1943) owing to difficulty in obtaining silk yarn on account of the war it could make no use of this plant and it re- mained idle for some time. On the 20th August, 1943, it was let out to Messrs E. Parakh Co. on a rent of Rs. 4,001 per month. The Excess Profits Tax Officer by his assessment order dated 11th June, 1945, included the sum of Rs. 20,005 realized as rent for five months, in the profits of the business of the respondent and held that excess profits tax was payable on this amount. \nThis order was confirmed on appeal by the Appellate Assistant Commissioner and on fur- ther appeal by the Income-tax Tribunal. The Tribunal, however, on being asked referred the following question of law to the High Court for its opinion Whether in the circumstances of the case, the asses- sees income of Rs. 20,005 is profits from business within the meaning of section 2 (5) of the Excess Profits Tax Act and therefore or otherwise liable to pay excess profits tax ? The High Court answered the question in the negative. \nThis is an appeal by special leave from this decision.", "It was contended on behalf of the Commissioner before the High Court that the dyeing plant was a commercial asset of the assessees business for the purpose of earning profit and if this commercial asset yielded income to him in any particular manner, it was income from the assessees busi- ness for the purpose of the Excess Profits Tax Act. It was said that it was immaterial whether a commercial asset yields income by use of the assessee himself or its being used by someone else.", "Var- ious cases have been cited at the Bar and I think that those cases though apparently conflicting are reconcilable if we accept this principle to be the correct principle and apply this ratio as the ratio emerging from these cases and I will state the principle and the ratio again that if an assessee derives income from a commercial asset which is capable at the time of being used as a commercial asset, then it is income from his business, whether he uses that commercial asset himself or lets it out to somebody else to be used. \nBut if the commercial asset is not capable of being used as such, then its being let out does not result in an income which is the income of the business."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["if an assessee derives income from a commercial asset which is capable at the time of being used as a commercial asset, then it is income from his business, whether he uses that commercial asset himself or lets it out to somebody else to be used.", "if the commercial asset has ceased to be a commercial asset in the hands of the assessee and thereafter he gets what he can out of it by letting it out to be used by others, then the rent he receives is not income from any business that he carries on.", "Lord President Strathclyde in Sutherland v. The Commissioners of Inland Revenue(1) that if a commercial asset is susceptible of being put to a variety of different uses in which gain might be acquired, whichever of these uses it was put to by the appellant, the profit earned was a user of the asset of the same business. \nA mere substituted use of the commercial asset does not change or alter the nature of that asset. Whatever the commercial asset produces is income of the business of which it is an asset, the process by which the asset makes the income being immaterial.", "These observations appositely apply to the case of a company incorporated for the purpose of doing business and earning profit by the process of manufacture. Letting out a part of its machinery in a certain situation in order to make the business advantageous as a whole does not alter the nature of the income.", "it was observed that in that case they were dealing with part of the property of the company which had come redundant and was sublet purely to produce income--a transaction. quite apart from the ordinary business activities of the company."], "rank2": ["The sole controversy in this appeal centres round the point as to whether or not excess profits tax is payable on the sum of Rs. 20,005 received by the respondent from Messrs Parakh Co. by way of rent for the dyeing plant let out to them during the chargeable accounting period.", "Inland Revenue Commissioners v. lies(2) and it should be similarly decided. In that case the taxpayer carried on the business of sand and gravel merchant on certain land and at the same time he granted licences to three firms to enter his land and win gravel for themselves in return for which he received from them a royalty for each cubic yard of gravel taken away. It was held that the royalties were not part of the profits of the business because, in granting the licences, the taxpayer was exploit- ing his rights of ownership in the land and was not carrying on his business of a sand and gravel merchant. \nThe income was held taxable as an income from an investment and did not fall under Schedule D which concerns profits earned from a trade.", "The analogy between the case of land and of a dyeing plant for the purpose of taxing stat- utes is inappropriate. \nThe distinction becomes apparent from the following passage which occurs in Atkinson J.s judgment in I less case(2) -- Then it was suggested by counsel for the Crown that the case was like the Desoutter case(3), where it was held that, if you make use of a patent in your business and also receive royalties from the use of the patent by others licensed to use it, those royalties cannot be regarded as receipts from an investment."], "rank3": ["During the charge- able accounting period (1st January, 1943, to 31st December, 1943) owing to difficulty in obtaining silk yarn on account of the war it could make no use of this plant and it re- mained idle for some time. On the 20th August, 1943, it was let out to Messrs E.", "The yield of income by a commercial asset is the profit of the business irrespective of the manner in which. that asset is exploited by the owner of the business.", "It is difficult to hold that the income thus earned by the commer- cial asset is not income from the business of the company that has been solely incorporated for the purpose of doing business and earning profits."], "rank4": ["the dyeing plant was a commercial asset of the assessees business for the purpose of earning profit and if this commercial asset yielded income to him in any particular manner, it was income from the assessees busi- ness for the purpose of the Excess Profits Tax Act. It was said that it was immaterial whether a commercial asset yields income by use of the assessee himself or its being used by someone else.", "the commercial asset must be at the time it was let out in a condition to be used as a commercial asset by the assessee. \nIf it has ceased to be a commercial asset, if its use as a commercial asset has been discontinued, then if the assessee lets it out, he is not putting to use something which is a commercial asset at the time. Now, on the facts found by the Tribunal, it is clear that when the assessee let out this dyeing plant, it had remained idle for some time."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["The sole controversy in this appeal centres round the point as to whether or not excess profits tax is payable on the sum of Rs. 20,005 received by the respondent from Messrs Parakh Co. by way of rent for the dyeing plant let out to them during the chargeable accounting period.", "Now, on the facts found by the Tribunal, it is clear that when the assessee let out this dyeing plant, it had remained idle for some time. \nHe could not obtain silk yarn on account of the war and therefore it was not possible to make use of it as a commercial asset as far as the assessee himself was concerned and it was only for that reason that he let it out to Messrs E. Parakh Co.", "I will state the principle and the ratio again that if an assessee derives income from a commercial asset which is capable at the time of being used as a commercial asset, then it is income from his business, whether he uses that commercial asset himself or lets it out to somebody else to be used. \nBut if the commercial asset is not capable of being used as such, then its being let out does not result in an income which is the income of the business.", "In our opinion, the contention raised by the learned Attorney-General is sound.", "The High Court was in error in engrafting a proviso on the rule deduced by it from the authorities considered by it, to the effect that a commer- cial asset of a business concern which yields income must at the time it was let out be in a condition to be used as a commercial asset by the assessee himself. We respectfully concur in the opinion of the learned Chief Justice that if the commercial asset is not capable of being used as such, then its being let out to others does not result in an income which is the income of the business, but we cannot accept the view that an asset which was acquired and used for the purpose of the business ceased to be a commercial asset of that business as soon as it was temporarily put out of use or let out to another person for use in his business or trade.", "The yield of income by a commercial asset is the profit of the business irrespective of the manner in which. that asset is exploited by the owner of the business.", "He is entitled to exploit it to his best advantage and he may do so either by using it himself personally or by letting it out to somebody else.", "In this case the company was incorporated purely as a manufacturing concern with the object of making profit.", "It installed plant and machinery for the purpose of its business, and it was open to it if at any time it found that any part of its plant for the time being could not be advantageously employed for earning profit by the company itself, to earn profit by leasing it to somebody else. It is difficult to hold that the income thus earned by the commer- cial asset is not income from the business of the company that has been solely incorporated for the purpose of doing business and earning profits", "Owning properties and letting them was not a purpose for which it was formed and that being so, the disputed income cannot be said to fall under any section of the Indian Income-tax Act other than section 10. Cases of undertakings of this nature stand on an entirely different footing and are distinguishable from cases of individuals or companies acquiring lands or buildings and making income by letting them on hire", "These latter cases may legitimately fall under the specific provisions of section 9 or section 12", "if a commercial asset is susceptible of being put to a variety of different uses in which gain might be acquired, whichever of these uses it was put to by the appellant, the profit earned was a user of the asset of the same business.", "A mere substituted use of the commercial asset does not change or alter the nature of that asset. Whatever the commercial asset produces is income of the business of which it is an asset, the process by which the asset makes the income being immaterial", "These observations appositely apply to the case of a company incorporated for the purpose of doing business and earning profit by the process of manufacture. Letting out a part of its machinery in a certain situation in order to make the business advantageous as a whole does not alter the nature of the income", "The short question to decide in this case is whether on the facts found, it could be said reasonably that the dyeing plant had become redundant for its business as a silk manu- facturing concern, simply by the circumstance that for the time being it could not be used by it personally for the purpose of dyeing silk yarn owing to the non-availability of yarn. It is difficult to conceive that the company would not have immediately started dyeing yarn as soon as it became available. Instead of dyeing yarn, another person was allowed to dye jute (we are told), the assessee company making income out of its use as a commercial asset."], "rank2": ["The Excess Profits Tax Officer by his assessment order dated 11th June, 1945, included the sum of Rs. 20,005 realized as rent for five months, in the profits of the business of the respondent and held that excess profits tax was payable on this amount", "This order was confirmed on appeal by the Appellate Assistant Commissioner and on fur- ther appeal by the Income-tax Tribunal. The Tribunal, however, on being asked referred the following question of law to the High Court for its opinion Whether in the circumstances of the case, the asses- sees income of Rs. 20,005 is profits from business within the meaning of section 2 (5) of the Excess Profits Tax Act and therefore or otherwise liable to pay excess profits tax ?", "The High Court answered the question in the negative", "It was contended on behalf of the Commissioner before the High Court that the dyeing plant was a commercial asset of the assessees business for the purpose of earning profit and if this commercial asset yielded income to him in any particular manner, it was income from the assessees busi- ness for the purpose of the Excess Profits Tax Act. It was said that it was immaterial whether a commercial asset yields income by use of the assessee himself or its being used by someone else. This contention was disposed of by the learned Chief Justice in these words - Mr. Joshi seems to be right but with this qualification that the commercial asset must be at the time it was let out in a condition to be used as a commercial asset by the assessee.", "If it has ceased to be a commercial asset, if its use as a commercial asset has been discontinued, then if the assessee lets it out, he is not putting to use something which is a commercial asset at the time", "The learned Attorney-General pointed out that the nature of a commercial asset is not changed because a par- ticular person is unable to use it. The inability of the assessee to make use of it in certain circumstances does not in any way affect the nature of the asset and cause an infirmity in the asset itself. \nIt was contended that when the dyeing plant became idle for a short time during the chargeable accounting period it did not cease to be a com- mercial asset of the respondent for it had no other busi- ness that all the assets of the respondent including the dyeing plant were the assets of the business, that whatever income was derived by the use of these assets including the income that an asset fetched by its being let out was the business income of the assessee, and that there was no warrant in law for the proposition that a commercial asset which yields income must be used as an asset by the respondent himself before its income becomes chargeable to tax.", "The analogy between the case of land and of a dyeing plant for the purpose of taxing stat- utes is inappropriate", "The distinction becomes apparent from the following passage which occurs in Atkinson J.s judgment in I less case(2) -- Then it was suggested by counsel for the Crown that the case was like the Desoutter case(3), where it was held that, if you make use of a patent in your business and also receive royalties from the use of the patent by others licensed to use it, those royalties cannot be regarded as receipts from an investment", "In other words, the door has to be either open or shut."], "rank3": ["The respondent (Sri Lakshmi Silk Mills Ltd.) is a manu- facturer of silk cloth, and as a part of its business it installed a plant for dyeing silk yarn", "During the charge- able accounting period (1st January, 1943, to 31st December, 1943) owing to difficulty in obtaining silk yarn on account of the war it could make no use of this plant and it re- mained idle for some time.", "On the 20th August, 1943, it was let out to Messrs E. Parakh Co. on a rent of Rs. 4,001 per month.", "This is an appeal by special leave from this decision."], "label": "ACCEPTED"}, "expert_4": {"rank1": ["The sole controversy in this appeal centres round the point as to whether or not excess profits tax is payable on the sum of Rs. 20,005 received by the respondent from Messrs Parakh Co. by way of rent for the dyeing plant let out to them during the chargeable accounting period.", "The yield of income by a commercial asset is the profit of the business irrespective of the manner in which. that asset is exploited by the owner of the business."], "rank2": ["The High Court answered the question in the negative.", "The High Court was in error in engrafting a proviso on the rule deduced by it from the authorities considered by it, to the effect that a commer- cial asset of a business concern which yields income must at the time it was let out be in a condition to be used as a commercial asset by the assessee himself.", "We respectfully concur in the opinion of the learned Chief Justice that if the commercial asset is not capable of being used as such, then its being let out to others does not result in an income which is the income of the business, but we cannot accept the view that an asset which was acquired and used for the purpose of the business ceased to be a commercial asset of that business as soon as it was temporarily put out of use or let out to another person for use in his business or trade.", "He is entitled to exploit it to his best advantage and he may do so either by using it himself personally or by letting it out to somebody else.", "The short question to decide in this case is whether on the facts found, it could be said reasonably that the dyeing plant had become redundant for its business as a silk manu- facturing concern, simply by the circumstance that for the time being it could not be used by it personally for the purpose of dyeing silk yarn owing to the non-availability of yarn.", "It is difficult to conceive that the company would not have immediately started dyeing yarn as soon as it became available.", "Instead of dyeing yarn, another person was allowed to dye jute (we are told), the assessee company making income out of its use as a commercial asset."], "rank3": ["The respondent (Sri Lakshmi Silk Mills Ltd.) is a manu- facturer of silk cloth, and as a part of its business it installed a plant for dyeing silk yarn.", "The Excess Profits Tax Officer by his assessment order dated 11th June, 1945, included the sum of Rs. 20,005 realized as rent for five months, in the profits of the business of the respondent and held that excess profits tax was payable on this amount.", "This order was confirmed on appeal by the Appellate Assistant Commissioner and on fur- ther appeal by the Income-tax Tribunal.", "The Tribunal, however, on being asked referred the following question of law to the High Court for its opinion Whether in the circumstances of the case, the asses- sees income of Rs. 20,005 is profits from business within the meaning of section 2 (5) of the Excess Profits Tax Act and therefore or otherwise liable to pay excess profits tax ?", "This contention was disposed of by the learned Chief Justice in these words - Mr. Joshi seems to be right but with this qualification that the commercial asset must be at the time it was let out in a condition to be used as a commercial asset by the assessee.", "If it has ceased to be a commercial asset, if its use as a commercial asset has been discontinued, then if the assessee lets it out, he is not putting to use something which is a commercial asset at the time.", "Now, on the facts found by the Tribunal, it is clear that when the assessee let out this dyeing plant, it had remained idle for some time", "He could not obtain silk yarn on account of the war and therefore it was not possible to make use of it as a commercial asset as far as the assessee himself was concerned and it was only for that reason that he let it out to Messrs E.", "So long as it yields income it is the income of his business.", "if the commercial asset is not capable of being used as such, then its being let out does not result in an income which is the income of the business.", "Mr. Justice Tendolkar concurred in this view and ob- served as follows -- The ratio of all these cases to my mind is that if there is a commercial asset which is capable of being worked by the assessee himself for the purpose of earning profits and the assessee instead of doing so, either voluntarily allows someone else to use it on payment of a certain sum or is compelled by law to allow it to be used in such manner, then what he receives is income from business.", "But if the commercial asset has ceased to be a commercial asset in the hands of the assessee and thereafter he gets what he can out of it by letting it out to be used by others, then the rent he receives is not income from any business that he carries on.", "There is no material whatever for taking the view that the assessee company was incorpo- rated with any other object than of carrying on business or trade.", "A mere substituted use of the commercial asset does not change or alter the nature of that asset.", "Whatever the commercial asset produces is income of the business of which it is an asset, the process by which the asset makes the income being immaterial.", "The analogy between the case of land and of a dyeing plant for the purpose of taxing stat- utes is inappropriate."], "rank4": ["On the 20th August, 1943, it was let out to Messrs E.", "Parakh Co. on a rent of Rs. 4,001 per month.", "It was contended on behalf of the Commissioner before the High Court that the dyeing plant was a commercial asset of the assessees business for the purpose of earning profit and if this commercial asset yielded income to him in any particular manner, it was income from the assessees busi- ness for the purpose of the Excess Profits Tax Act.", "It was said that it was immaterial whether a commercial asset yields income by use of the assessee himself or its being used by someone else.", "I can understand the principle for which Mr. Joshi is contending that it makes no difference what an assessee does with a commercial asset belonging to him.", "He may use it as he likes.", "Var- ious cases have been cited at the Bar and I think that those cases though apparently conflicting are reconcilable if we accept this principle to be the correct principle and apply this ratio as the ratio emerging from these cases and I will state the principle and the ratio again that if an assessee derives income from a commercial asset which is capable at the time of being used as a commercial asset, then it is income from his business, whether he uses that commercial asset himself or lets it out to somebody else to be used.", "The learned Attorney-General pointed out that the nature of a commercial asset is not changed because a par- ticular person is unable to use it.", "The inability of the assessee to make use of it in certain circumstances does not in any way affect the nature of the asset and cause an infirmity in the asset itself.", "It was contended that when the dyeing plant became idle for a short time during the chargeable accounting period it did not cease to be a com- mercial asset of the respondent for it had no other busi- ness that all the assets of the respondent including the dyeing plant were the assets of the business, that whatever income was derived by the use of these assets including the income that an asset fetched by its being let out was the business income of the assessee, and that there was no warrant in law for the proposition that a commercial asset which yields income must be used as an asset by the respondent himself before its income becomes chargeable to tax.", "The learned counsel for the respondent urged that as soon as the assessee found difficulty in obtaining yarn the dyeing plant became redundant for its business and ceased to be an asset of its business and any income derived from the rent by letting out this asset was income received by the assessee from other sources and therefore was not charge- able to excess profits tax.", "In our opinion, the contention raised by the learned Attorney-General is sound.", "Suppose, for instance, in a manufac- turing concern the use of its plant and machinery can advan- tageously be made owing to paucity of raw materials only for six hours in a working day, and in order to get the best yield out of it, another person who has got the requisite raw materials is allowed to use it as a licensee on payment of certain consideration for three hours can it be said in such a situation with any justification that the amount realized from the licensee is not a part of the business income of the licensor.", "In this case the company was incorporated purely as a manufacturing concern with the object of making profit.", "It installed plant and machinery for the purpose of its business, and it was open to it if at any time it found that any part of its plant for the time being could not be advantageously employed for earning profit by the company itself, to earn profit by leasing it to somebody else.", "It is difficult to hold that the income thus earned by the commer- cial asset is not income from the business of the company that has been solely incorporated for the purpose of doing business and earning profits.", "It may be observed that no general principle can be laid down which is applicable to all cases, and each case has to be decided on its own circumstances.", "We, however, are in respectful agreement with the observations of Lord President Strathclyde in Sutherland v.", "The Commissioners of Inland Revenue(1) that if a commercial asset is susceptible of being put to a variety of different uses in which gain might be acquired, whichever of these uses it was put to by the appellant, the profit earned was a user of the asset of the same business.", "Mr. Chatterjee for the respondent stressed the point that as the dyeing plant in the present case could not be made use of by the assessee in its manufacturing business owing to the non-availability of yarn, it ceased to be a commercial asset of the business of the assessee and became redundant to that business and that being so, any income earned by this asset which had ceased to be a commercial asset was not an income of the business but must be held to have been derived from a source other than business and fell within the ambit of section 12 of the Indian Income tax Act, and on this income excess profits tax was not payable.", "He contended that the facts of this case were analogous to the case of Inland Revenue Commissioners v. lies(2) and it should be similarly decided.", "In that case the taxpayer carried on the business of sand and gravel merchant on certain land and at the same time he granted licences to three firms to enter his land and win gravel for themselves in return for which he received from them a royalty for each cubic yard of gravel taken away.", "It was held that the royalties were not part of the profits of the business because, in granting the licences, the taxpayer was exploit- ing his rights of ownership in the land and was not carrying on his business of a sand and gravel merchant", "The income was held taxable as an income from an investment and did not fall under Schedule D which concerns profits earned from a trade.", "Mr. Chatterjee also laid emphasis on the observations of Lord (1) (1918) 12 Tax Cas. 63. (2) 1947 1 A.E.R. 798. Greene M.R. in Croft v. Sywell Aerodrome Ltd. (1), wherein the learned Master of the Rolls observed as fol- lows I cannot myself see that a person who leases the land to others, or grants licences to others to come upon it, is doing anything more than exploiting his own rights of property, even if the tenant or licensee is, by the terms of the lease or licence, entitled himself to carry on a trade on the land.", "It was urged that what the assessee was doing in this case was exploiting his rights of property by letting the dyeing plant to other persons precisely in the same manner as the owner of land in the case cited above was exploiting his own rights to property by granting a licence to another to come on his land.", "The argument, in our opinion, though attractive, is fallacious.", "The distinction becomes apparent from the following passage which occurs in Atkinson J.s judgment in I less case(2) -- Then it was suggested by counsel for the Crown that the case was like the Desoutter case(3), where it was held that, if you make use of a patent in your business and also receive royalties from the use of the patent by others licensed to use it, those royalties cannot be regarded as receipts from an investment.", "In other words, the door has to be either open or shut.", "A patent is either an investment or it is not.", "The suggestion was that freehold land is in the same position, and if you carry on business on part of it, whatever you do with the rest by way of licensing or letting cannot be regarded as producing income from investment.", "That, however, is dead in the teeth of the judgment in the Broadway Car Co. case(4).", "The same argument was tried there, but Tucker L.J. said he thought the Desoutter case(3) had very little to do with it, as there was a great difference between land (1) 1942 1 A.E.R. 110. (3) 1946 1 \n E.R. 58. (2) 1947 1 A.E.R. 798 (4) 1946 2 \n E.R. 609. and a patent, and he did not think the Desoutter case(1) threw any light on the matter A patent is quite different from freehold land.", "These observations appositely apply to the case of a company incorporated for the purpose of doing business and earning profit by the process of manufacture.", "Letting out a part of its machinery in a certain situation in order to make the business advantageous as a whole does not alter the nature of the income.", "The case of an owner of land letting out his land and carrying on exploitation of part of that land by selling gravel out of it, as at present advised, in our opinion, would fall under section 9 of the Indian In- come-tax Act, as income earned, no matter by whatever meth- od, from land, and specifically dealt with by that section.", "The observations therefore made in I less case(2) can have no apposite application to the case of a manufacturing concern letting out a part of its machinery temporarily which it cannot advantageously use itself.", "It was held that the word investment must be construed in the ordinary, popular sense of the word as used by businessmen and not as a (1) 1946 1 A.E.R.58. (3) 1946 2 A.E.R. 609. (2) 1947 1 A.E.R. 798. term of art having a defined or technical meaning and that it was impossible to say that the commissioners had erred in law in coming to the conclusion that the transaction result- ed in an investment.", "Scott L.J. in delivering his judgment laid emphasis on the point that after the business of the company had dwindled, it partitioned part of the land from the rest and sublet it by installing a heating apparatus for the sub-lessee.", "It was pointed out that the question whether a particular source of income was income or not must be decided, as it could be, according to ordinary commonsense principles."], "rank5": ["During the charge- able accounting period (1st January, 1943, to 31st December, 1943) owing to difficulty in obtaining silk yarn on account of the war it could make no use of this plant and it re- mained idle for some time.", "This is an appeal by special leave from this decision.", "Owning properties and letting them was not a purpose for which it was formed and that being so, the disputed income cannot be said to fall under any section of the Indian Income-tax Act other than section 10.", "Cases of undertakings of this nature stand on an entirely different footing and are distinguishable from cases of individuals or companies acquiring lands or buildings and making income by letting them on hire.", "These latter cases may legitimately fall under the specific provisions of section 9 or section 12, though the High Courts in this country are by no means unanimous on this subject but for the purpose of this case it is unnecessary to resolve that conflict.", "Decisions of the Eng- lish courts given under the Finance Acts, the scheme of which is different from the Indian Income-tax statutes, are not always very helpful in dealing with matters arising under the Indian law and analogies and inferences drawn from those decisions are at times misleading.", "Mr. Chatterjee also laid stress on the decision of the Court of Appeal in Inland Revenue Commissioners v. Broadway Car Co. Ltd.(3). In this case the company carried on the business of motor car agents and repairers on land held on lease from 1935 to 1956 at an annual rent of pound 750. By 1940 the companys business had dwindled under war condi- tions to such an extent that no more than one third of the land was required. \n In those circumstances the remainder was sublet for fourteen years at an annual rent of pound 1,150. The general commissioners of income-tax decided that the difference of pound 400 between the outgoing of pound 750 for the land retained and the incoming of pound 1,150 for the land disposed of was income received from an invest- ment, and, the business not being one within the special categories mentioned in the Finance Act, 1939, that pound 400 was not taxable", "It was found that war conditions had reduced the companys business to very small proportions and they cut their loss by going out of business in respect of the major part of their land and put it out of their power for 14 years to resume business there.", "In this situation it was observed that in that case they were dealing with part of the property of the company which had come redundant and was sublet purely to produce income--a transaction. quite apart from the ordinary business activities of the company."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["but we cannot accept the view that an asset which was acquired and used for the purpose of the business ceased to be a commercial asset of that business as soon as it was temporarily put out of use or let out to another person for use in his business or trade.", "Instead of dyeing yarn, another person was allowed to dye jute (we are told), the assessee company making income out of its use as a commercial asset."], "rank2": ["Letting out a part of its machinery in a certain situation in order to make the business advantageous as a whole does not alter the nature of the income.", "the question whether a particular source of income was income or not must be decided, as it could be, according to ordinary commonsense principles.", "The short question to decide in this case is whether on the facts found, it could be said reasonably that the dyeing plant had become redundant for its business as a silk manu- facturing concern, simply by the circumstance that for the time being it could not be used by it personally for the purpose of dyeing silk yarn owing to the non-availability of yarn. It is difficult to conceive that the company would not have immediately started dyeing yarn as soon as it became available."], "rank3": ["the nature of a commercial asset is not changed because a par- ticular person is unable to use it.", "The inability of the assessee to make use of it in certain circumstances does not in any way affect the nature of the asset and cause an infirmity in the asset itself.", "Cases of undertakings of this nature stand on an entirely different footing and are distinguishable from cases of individuals or companies acquiring lands or buildings and making income by letting them on hire.", "The analogy between the case of land and of a dyeing plant for the purpose of taxing stat- utes is inappropriate."], "rank4": ["The High Court was in error in engrafting a proviso on the rule deduced by it from the authorities considered by it, to the effect that a commer- cial asset of a business concern which yields income must at the time it was let out be in a condition to be used as a commercial asset by the assessee himself.", "The yield of income by a commercial asset is the profit of the business irrespective of the manner in which. that asset is exploited by the owner of the business. \nHe is entitled to exploit it to his best advantage and he may do so either by using it himself personally or by letting it out to somebody else.", "Suppose, for instance, in a manufac- turing concern the use of its plant and machinery can advan- tageously be made owing to paucity of raw materials only for six hours in a working day, and in order to get the best yield out of it, another person who has got the requisite raw materials is allowed to use it as a licensee on payment of certain consideration for three hours can it be said in such a situation with any justification that the amount realized from the licensee is not a part of the business income of the licensor. \nIn this case the company was incorporated purely as a manufacturing concern with the object of making profit. It installed plant and machinery for the purpose of its business, and it was open to it if at any time it found that any part of its plant for the time being could not be advantageously employed for earning profit by the company itself, to earn profit by leasing it to somebody else. It is difficult to hold that the income thus earned by the commer- cial asset is not income from the business of the company that has been solely incorporated for the purpose of doing business and earning profits. There is no material whatever for taking the view that the assessee company was incorpo- rated with any other object than of carrying on business or trade. Owning properties and letting them was not a purpose for which it was formed and that being so, the disputed income cannot be said to fall under any section of the Indian Income-tax Act other than section 10.", "A mere substituted use of the commercial asset does not change or alter the nature of that asset.", "Whatever the commercial asset produces is income of the business of which it is an asset, the process by which the asset makes the income being immaterial.", "The suggestion was that freehold land is in the same position, and if you carry on business on part of it, whatever you do with the rest by way of licensing or letting cannot be regarded as producing income from investment. That, however, is dead in the teeth of the judgment in the Broadway Car Co. case(4). The same argument was tried there, but Tucker L.J. said he thought the Desoutter case(3) had very little to do with it, as there was a great difference between land (1) 1942 1 A.E.R. 110. (3) 1946 1 \n E.R. 58. (2) 1947 1 A.E.R. 798 (4) 1946 2 \n E.R. 609. and a patent, and he did not think the Desoutter case(1) threw any light on the matter A patent is quite different from freehold land. These observations appositely apply to the case of a company incorporated for the purpose of doing business and earning profit by the process of manufacture."], "rank5": ["if the commercial asset is not capable of being used as such, then its being let out to others does not result in an income which is the income of the business", "These latter cases may legitimately fall under the specific provisions of section 9 or section 12", "We, however, are in respectful agreement with the observations of Lord President Strathclyde in Sutherland v. The Commissioners of Inland Revenue(1) that if a commercial asset is susceptible of being put to a variety of different uses in which gain might be acquired, whichever of these uses it was put to by the appellant, the profit earned was a user of the asset of the same business.", "The distinction becomes apparent from the following passage which occurs in Atkinson J.s judgment in I less case(2) -- Then it was suggested by counsel for the Crown that the case was like the Desoutter case(3), where it was held that, if you make use of a patent in your business and also receive royalties from the use of the patent by others licensed to use it, those royalties cannot be regarded as receipts from an investment."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1951_64", "text": "CIVIL APPELLATE JURISDICTION. Civil Appeal No. 89 of 1950. Appeal against the Judgment and Order dated 5th July, 1949, of the High Court of Judicature at Calcutta (G. N. Das and Mukherjee JJ.) in Income-tax Reference No. 11 of 1948. Mitra (S. N. Mukherjee, with him) for the appellant. C. Setalvad, Attorney-General for India (S.M. Sikri, with him) for the respondent. 1951. May 4. \nThe Judgment of the Court was delivered by Boss J.--This is an assessees appeal from a judgment of the High Court at Calcutta delivered on a reference made to it under section 66(1 )of the Incometax Act. The question submitted for the High CourtS opinion was as follows-- Whether in the circumstances of this case, the interest paid by the assessee on debentures was incurred solely for the purpose of making or earning such income, profits or gains which are assessable under sub-section (1) of section 12. \nThe assessee is a private limited company which was incor- porated on 3rd January, 1927. It is an investment company known as the Eastern Investments Limited. The objects set out in the memorandum of association are to buy, sell and otherwise deal with shares, securities, bonds and so forth generally. The company was originally formed for acquiring, holding and otherwise dealing with shares and Government securities which had previously belonged to one Lord Cable. The share capital of the company at the date of its incorpo- ration was 250 lacs and consisted partly of preference shares and partly of ordinary shares. Of these Lord Cable held the majority including the 50,000 ordinary shares of the face value of Rs. 50,00,000 with which we are here concerned. \nThe rest of the share capital was held by the nominees of the late Lord Cable. Lord Cable died on the 28th of March, 1937, leaving an estate in Great Britain as well as in India. One Geoffrey Lacy Scott was appointed administrator of his estate in India and held these 50,000 shares in question in that capacity. According to the statement of the case drawn up by the Income-tax Appellate Tribunal in its. reference to the High Court, money was needed by the executors of Lord Cable, and accordingly the administrator of the estate in India reached an agreement with the company on 9th February, 1937, the terms of which were as follows - The company agreed to reduce its share capital by Rs. 50 lacs and to do it by taking over from Scott the 50,000 shares mentioned above which stood in Lord Cables name at the rate of Rs. 100 a share. \nScott on his part agreed to forego cash payment and agreed instead to receive debentures of the face value of Rs. 50 lacs carrying interest at 5 per cent. per annum redeemable at the option of the registered holder at any time. The sanction of the Calcutta High Court was obtained in due course and the agreement was carried out by the parties. \nThe 5 per cent. interest paid to Scott on these deben- tures forms the subject-matter of the question before the Court. The company claims to deduct this from its income as part of its working expenses under section 12 (2) of the Income-tax Act, that is to say, to use the words of the section, as expenditure (not being in the nature of capital expend- iture) incurred solely for the purpose of making or earning such income, profits or gains. \nThis contention failed before the Income-tax Appellate Tribunal and also before the High Court. It was agreed all through that the expenditure was not in the nature of capi- tal expenditure, but the view of the Income-tax Commissioner is that (a) it is not expenditure incurred for the purpose of earning the income, profits and gains of the company and (b) that even if it is, it is at any rate not expenditure incurred solely for that purpose. In general, the Income-tax Appellate Tribunal and the High Court both took that view. The grounds on which these conclusions were based may be summarised as follows (1) the purpose of the agreement was to effect the conversion without in any way disturbing the holding of the investments of the company or interfering with the earning of its income (2) by this transaction the taxable income of the compa- ny was diminished \n There was complete identity of the person who -- (a) brought about this transaction without disturbing the affairs of the company, (b) to whom the share money was repaid. and (c) who took up the debentures and (4) that the transaction was more in the interest of the shareholder Scott than that of the company. \n The decision of this appeal rests on the true construc- tion of section 12 (2). In our Opinion, the law on this point has been correctly summarised in the judgment of the High Court. The following principles are relevant (a) though the question must be decided on the facts of each case, the final conclusion is one of law Indian Radio Cable Communications Ltd. v. The Commissioner of Income- tax, Bombay(1) and Tara Hydro-Electric Agencies Ltd. v. The Commissioner of Income-tax, Bombay(2) (b) it is not necessary to show that the expenditure was a profitable one or that in fact any profit was earned Moore v. Stewart Lloyds(3) and Ushers case(4) (c) it is enough to show that the money was expended not of necessity and with a view to a direct and immediate benefit to the trade, but voluntarily and on the ground of commercial expediency. and in order indirectly to facilitate the carrying on of the business British Insulated Helsby Cables Ltd. v. Atherton(5) and (d) beyond that no hard and fast rule can be laid down to explain what is meant by the word solely A case somewhat similar to the present is Farmer v. Scottish North American Trust Ltd. (6) where it was held that interest paid on an overdraft required for purchasing shares (the shares purchased being retained as security for the overdraft) was an outgoing which could be deducted from the receipts to ascertain the taxable profits and gains Which were earned by them. \n In our opinion, the present case falls within these principles. (1) 1937 I.T.R. 270 P.C. (2) 1937 I.T.R. 202 P.C. (3) 6 Tax Cases 501. (4) 1915 A.C. 433. (5) 1926 A.C. 205 at 221 and 235. (6) 1912 A.C. 118. One of the points which weighed with the Incometax Appellate Tribunal and the High Court was that though the conversion did not in any way disturb the holding of the investments of the company or interfere with the earning of its income, it had the effect of diminishing its taxable income. In our judgment, this is not a proper consideration when the transaction is not challenged on the ground of fraud. In the present case there is not even an allegation of fraud. The next point on which some stress was placed was that there was complete identity of person between the person whose shares were sold and the person who took the deben- tures and that the transaction resulted in considerable benefit to him. In the absence of a suggestion of fraud this is not relevant at all for giving effect to the provisions of section 12(2) of the Incometax Act. \n Most commercial transactions are entered into for the mutual benefit of both sides, or at any rate each side hopes to gain something for itself. The test for present purposes is not whether the other party benefitted, nor indeed whether this was a pru- dent transaction which resulted in ultimate gain to the appellant, but whether it was properly entered into as apart of the appellants legitimate commercial undertakings in order indirectly to facilitate the carrying on of its busi- ness. The High Court doubted whether the transaction could be brought within the functions of an investment company and found it difficult to reconcile it with the objects set out in the Memorandum of Association. But we see no such diffi- culty. \n Clause 5 empowers a reduction of capital of the company and clause 8(3) empowers the company to borrow or raise money by the issue of debentures. The matter is clear- ly writ in the bond. Moreover, we do not think that this inquiry is relevant, for we are dealing with a question of income-tax and not judging the legality or propriety of the transaction on an application to reduce the capital of the company. \n The only question is whether this was done in the ordinary course of business for the purposes we have already pointed out, however mistaken the directors and shareholders of the company may have been. Therefore, as stated by the Income-tax Appellate Tribu- nal in its statement of the case, the executors of Lord Cables estate needed money. In the next place, the transac- tion was brought about at the instance of the holder of the majority of ordinary shares, and also that the shares were originally held by Lord Cable and his nominees. It seems evident therefore that Scott could have compelled the company to pay him cash for the shares. \n He seems to have had the whip hand. Instead of doing that he entered into an arrangement which, while giving him the necessary facili- ties, appears to have satisfied the company by allowing it to retain its investments without a precipitate liquidation of a large portion thereof. It does not matter whether the company was right in this view or wrong, and in any event we are in no position to judge of the soundness of its decision because we have not all the materials before us. It has to be remembered that considerations of this kind go deeper than the apparent profit or loss on an isolated transaction standing by itself. \n It is not enough to say that the 50,000 shares which were cancelled earned in the following year only 31/2 per cent. interest as against 5 per cent. on the debentures because we do not know to what extent the hold- ings of the company would have been disturbed if this had not been done. What we do know is what the Income-tax Appel- late Tribunal has stated, namely, that-- the change brought about had been so designed that the investments of the company were not to be disturbed and as a consequence the income accrued was in no way to be affected. This has only to be stated to show the commercial nature of the transaction from the companys point of view. \n The High Court considered that the capital of the compa- ny could have been reduced in other ways. But that again is not the point. There are usually many ways in which a given thing can be brought about in business circles but it is not for the Court to decide which of them should have been employed when the Court is deciding a question under section 12(2) of the Income-tax Act. \nIt was argued on behalf of the respondent (basing the same on paragraph 7 of the appellants application to the High Court dated 5th April, 1947) that the company had at the time sufficient liquid resources to effect the reduction of capital desired and so it was not necessary to resort to this process. But that again is not the point. The company chose to do it this way, and as there was not even a sugges- tion of fraud, the only question is whether it was gone through as an ordinary commercial proposition. But we doubt if that is what paragraph 7 meant because in paragraph 4 of the application to the High Court dated 11th February, 1944, the petitioner stated that the money on hand and at short notice was only Rs. 8,94,379. That is a good deal short of 50 lacs. However, we need not enter into this in detail. On a full review of the facts it is clear that this transaction was voluntarily entered into in order indirectly to facilitate the carrying on of the business of the company and was made on the ground of commercial expediency. \n It therefore falls within the purview of section 12(2) of the Income-tax Act, 1922 before its amendment in 1939. This being an investment company, if it borrowed money and utilised the same for its investments on which it earned income, the interest paid by it on the loans will clearly be a permissible deduction under section 12(2) of the Income- tax Act. Whether the loan is taken on an overdraft, or is a fixed deposit or on a debenture makes no difference in law. The only argument urged against allowing this deduction to be made is that the person who took the debentures was the party who sold the ordinary shares. \n It cannot be disputed that if the debentures were held by a third party, the interest payable on the same would be an allowable deduction in calculating the total income of the assessee company. What difference does it make if the holder of the debentures is a shareholder ?\n DECISION ??", "expert_1": {"rank1": ["On a full review of the facts it is clear that this transaction was voluntarily entered into in order indirectly to facilitate the carrying on of the business of the company and was made on the ground of commercial expediency. \n It therefore falls within the purview of section 12(2) of the Income-tax Act, 1922 before its amendment in 1939. This being an investment company, if it borrowed money and utilised the same for its investments on which it earned income, the interest paid by it on the loans will clearly be a permissible deduction under section 12(2) of the Income- tax Act. Whether the loan is taken on an overdraft, or is a fixed deposit or on a debenture makes no difference in law."], "rank2": ["In our opinion, the present case falls within these principles. (1) 1937 I.T.R. 270 P.C. (2) 1937 I.T.R. 202 P.C. (3) 6 Tax Cases 501. (4) 1915 A.C. 433. (5) 1926 A.C. 205 at 221 and 235. (6) 1912 A.C. 118. One of the points which weighed with the Incometax Appellate Tribunal and the High Court was that though the conversion did not in any way disturb the holding of the investments of the company or interfere with the earning of its income, it had the effect of diminishing its taxable income. In our judgment, this is not a proper consideration when the transaction is not challenged on the ground of fraud. In the present case there is not even an allegation of fraud.", "The test for present purposes is not whether the other party benefitted, nor indeed whether this was a pru- dent transaction which resulted in ultimate gain to the appellant, but whether it was properly entered into as apart of the appellants legitimate commercial undertakings in order indirectly to facilitate the carrying on of its busi- ness.", "It does not matter whether the company was right in this view or wrong, and in any event we are in no position to judge of the soundness of its decision because we have not all the materials before us. It has to be remembered that considerations of this kind go deeper than the apparent profit or loss on an isolated transaction standing by itself. \n It is not enough to say that the 50,000 shares which were cancelled earned in the following year only 31/2 per cent. interest as against 5 per cent. on the debentures because we do not know to what extent the hold- ings of the company would have been disturbed if this had not been done. What we do know is what the Income-tax Appel- late Tribunal has stated, namely, that-- the change brought about had been so designed that the investments of the company were not to be disturbed and as a consequence the income accrued was in no way to be affected. This has only to be stated to show the commercial nature of the transaction from the companys point of view.", "The company chose to do it this way, and as there was not even a sugges- tion of fraud, the only question is whether it was gone through as an ordinary commercial proposition. But we doubt if that is what paragraph 7 meant because in paragraph 4 of the application to the High Court dated 11th February, 1944, the petitioner stated that the money on hand and at short notice was only Rs. 8,94,379. That is a good deal short of 50 lacs."], "rank3": ["The decision of this appeal rests on the true construc- tion of section 12 (2).", "In our Opinion, the law on this point has been correctly summarised in the judgment of the High Court.", "The High Court doubted whether the transaction could be brought within the functions of an investment company and found it difficult to reconcile it with the objects set out in the Memorandum of Association. But we see no such diffi- culty.", "Moreover, we do not think that this inquiry is relevant, for we are dealing with a question of income-tax and not judging the legality or propriety of the transaction on an application to reduce the capital of the company. \n The only question is whether this was done in the ordinary course of business for the purposes we have already pointed out, however mistaken the directors and shareholders of the company may have been. Therefore, as stated by the Income-tax Appellate Tribu- nal in its statement of the case, the executors of Lord Cables estate needed money.", "It seems evident therefore that Scott could have compelled the company to pay him cash for the shares. \n He seems to have had the whip hand. Instead of doing that he entered into an arrangement which, while giving him the necessary facili- ties, appears to have satisfied the company by allowing it to retain its investments without a precipitate liquidation of a large portion thereof.", "The High Court considered that the capital of the compa- ny could have been reduced in other ways. But that again is not the point. There are usually many ways in which a given thing can be brought about in business circles but it is not for the Court to decide which of them should have been employed when the Court is deciding a question under section 12(2) of the Income-tax Act.", "The only argument urged against allowing this deduction to be made is that the person who took the debentures was the party who sold the ordinary shares. \n It cannot be disputed that if the debentures were held by a third party, the interest payable on the same would be an allowable deduction in calculating the total income of the assessee company. What difference does it make if the holder of the debentures is a shareholder ?"], "rank4": ["This is an assessees appeal from a judgment of the High Court at Calcutta delivered on a reference made to it under section 66(1 )of the Incometax Act. The question submitted for the High CourtS opinion was as follows-- Whether in the circumstances of this case, the interest paid by the assessee on debentures was incurred solely for the purpose of making or earning such income, profits or gains which are assessable under sub-section (1) of section 12. \nThe assessee is a private limited company which was incor- porated on 3rd January, 1927. It is an investment company known as the Eastern Investments Limited. The objects set out in the memorandum of association are to buy, sell and otherwise deal with shares, securities, bonds and so forth generally. The company was originally formed for acquiring, holding and otherwise dealing with shares and Government securities which had previously belonged to one Lord Cable. The share capital of the company at the date of its incorpo- ration was 250 lacs and consisted partly of preference shares and partly of ordinary shares. Of these Lord Cable held the majority including the 50,000 ordinary shares of the face value of Rs. 50,00,000 with which we are here concerned. \nThe rest of the share capital was held by the nominees of the late Lord Cable. Lord Cable died on the 28th of March, 1937, leaving an estate in Great Britain as well as in India. One Geoffrey Lacy Scott was appointed administrator of his estate in India and held these 50,000 shares in question in that capacity. According to the statement of the case drawn up by the Income-tax Appellate Tribunal in its. reference to the High Court, money was needed by the executors of Lord Cable, and accordingly the administrator of the estate in India reached an agreement with the company on 9th February, 1937, the terms of which were as follows - The company agreed to reduce its share capital by Rs. 50 lacs and to do it by taking over from Scott the 50,000 shares mentioned above which stood in Lord Cables name at the rate of Rs. 100 a share. \nScott on his part agreed to forego cash payment and agreed instead to receive debentures of the face value of Rs. 50 lacs carrying interest at 5 per cent. per annum redeemable at the option of the registered holder at any time. The sanction of the Calcutta High Court was obtained in due course and the agreement was carried out by the parties. \nThe 5 per cent. interest paid to Scott on these deben- tures forms the subject-matter of the question before the Court. The company claims to deduct this from its income as part of its working expenses under section 12 (2) of the Income-tax Act, that is to say, to use the words of the section, as expenditure (not being in the nature of capital expend- iture) incurred solely for the purpose of making or earning such income, profits or gains. \nThis contention failed before the Income-tax Appellate Tribunal and also before the High Court.", "It was agreed all through that the expenditure was not in the nature of capi- tal expenditure, but the view of the Income-tax Commissioner is that (a) it is not expenditure incurred for the purpose of earning the income, profits and gains of the company and (b) that even if it is, it is at any rate not expenditure incurred solely for that purpose. In general, the Income-tax Appellate Tribunal and the High Court both took that view. The grounds on which these conclusions were based may be summarised as follows (1) the purpose of the agreement was to effect the conversion without in any way disturbing the holding of the investments of the company or interfering with the earning of its income (2) by this transaction the taxable income of the compa- ny was diminished \n There was complete identity of the person who -- (a) brought about this transaction without disturbing the affairs of the company, (b) to whom the share money was repaid. and (c) who took up the debentures and (4) that the transaction was more in the interest of the shareholder Scott than that of the company."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["it is not necessary to show that the expenditure was a profitable one or that in fact any profit was earned Moore v. Stewart Lloyds(3) and Ushers case(4) (c) it is enough to show that the money was expended not of necessity and with a view to a direct and immediate benefit to the trade, but voluntarily and on the ground of commercial expediency. and in order indirectly to facilitate the carrying on of the business", "The test for present purposes is not whether the other party benefitted, nor indeed whether this was a pru- dent transaction which resulted in ultimate gain to the appellant, but whether it was properly entered into as apart of the appellants legitimate commercial undertakings in order indirectly to facilitate the carrying on of its busi- ness.", "Clause 5 empowers a reduction of capital of the company and clause 8(3) empowers the company to borrow or raise money by the issue of debentures.", "On a full review of the facts it is clear that this transaction was voluntarily entered into in order indirectly to facilitate the carrying on of the business of the company and was made on the ground of commercial expediency. \n It therefore falls within the purview of section 12(2) of the Income-tax Act, 1922 before its amendment in 1939. This being an investment company, if it borrowed money and utilised the same for its investments on which it earned income, the interest paid by it on the loans will clearly be a permissible deduction under section 12(2) of the Income- tax Act. Whether the loan is taken on an overdraft, or is a fixed deposit or on a debenture makes no difference in law."], "rank2": ["money was needed by the executors of Lord Cable, and accordingly the administrator of the estate in India reached an agreement with the company on 9th February, 1937, the terms of which were as follows - The company agreed to reduce its share capital by Rs. 50 lacs and to do it by taking over from Scott the 50,000 shares mentioned above which stood in Lord Cables name at the rate of Rs. 100 a share. \nScott on his part agreed to forego cash payment and agreed instead to receive debentures of the face value of Rs. 50 lacs carrying interest at 5 per cent. per annum redeemable at the option of the registered holder at any time.", "The 5 per cent. interest paid to Scott on these deben- tures forms the subject-matter of the question before the Court."], "rank3": ["The company claims to deduct this from its income as part of its working expenses under section 12 (2) of the Income-tax Act, that is to say, to use the words of the section, as expenditure (not being in the nature of capital expend- iture) incurred solely for the purpose of making or earning such income, profits or gains.", "the expenditure was not in the nature of capi- tal expenditure, but the view of the Income-tax Commissioner is that (a) it is not expenditure incurred for the purpose of earning the income, profits and gains of the company and (b) that even if it is, it is at any rate not expenditure incurred solely for that purpose.", "the transac- tion was brought about at the instance of the holder of the majority of ordinary shares, and also that the shares were originally held by Lord Cable and his nominees. It seems evident therefore that Scott could have compelled the company to pay him cash for the shares. \n He seems to have had the whip hand. Instead of doing that he entered into an arrangement which, while giving him the necessary facili- ties, appears to have satisfied the company by allowing it to retain its investments without a precipitate liquidation of a large portion thereof. It does not matter whether the company was right in this view or wrong, and in any event we are in no position to judge of the soundness of its decision because we have not all the materials before us.", "This has only to be stated to show the commercial nature of the transaction from the companys point of view."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["The decision of this appeal rests on the true construc- tion of section 12 (2)", "The following principles are relevant (a) though the question must be decided on the facts of each case, the final conclusion is one of law", "(b) it is not necessary to show that the expenditure was a profitable one or that in fact any profit was earned", "(c) it is enough to show that the money was expended not of necessity and with a view to a direct and immediate benefit to the trade, but voluntarily and on the ground of commercial expediency. and in order indirectly to facilitate the carrying on of the business", "(d) beyond that no hard and fast rule can be laid down to explain what is meant by the word solely", "In our opinion, the present case falls within these principles.", "One of the points which weighed with the Incometax Appellate Tribunal and the High Court was that though the conversion did not in any way disturb the holding of the investments of the company or interfere with the earning of its income, it had the effect of diminishing its taxable income. In our judgment, this is not a proper consideration when the transaction is not challenged on the ground of fraud.", "The next point on which some stress was placed was that there was complete identity of person between the person whose shares were sold and the person who took the deben- tures and that the transaction resulted in considerable benefit to him. In the absence of a suggestion of fraud this is not relevant at all for giving effect to the provisions of section 12(2) of the Incometax Act", "The test for present purposes is not whether the other party benefitted, nor indeed whether this was a pru- dent transaction which resulted in ultimate gain to the appellant, but whether it was properly entered into as apart of the appellants legitimate commercial undertakings in order indirectly to facilitate the carrying on of its busi- ness.", "The High Court doubted whether the transaction could be brought within the functions of an investment company and found it difficult to reconcile it with the objects set out in the Memorandum of Association. But we see no such diffi- culty.", "Clause 5 empowers a reduction of capital of the company and clause 8(3) empowers the company to borrow or raise money by the issue of debentures. The matter is clear- ly writ in the bond.", "The only question is whether this was done in the ordinary course of business for the purposes we have already pointed out, however mistaken the directors and shareholders of the company may have been.", "the executors of Lord Cables estate needed money. In the next place, the transac- tion was brought about at the instance of the holder of the majority of ordinary shares, and also that the shares were originally held by Lord Cable and his nominees. It seems evident therefore that Scott could have compelled the company to pay him cash for the shares. \n He seems to have had the whip hand.", "Instead of doing that he entered into an arrangement which, while giving him the necessary facili- ties, appears to have satisfied the company by allowing it to retain its investments without a precipitate liquidation of a large portion thereof.", "What we do know is what the Income-tax Appel- late Tribunal has stated, namely, that-- the change brought about had been so designed that the investments of the company were not to be disturbed and as a consequence the income accrued was in no way to be affected. This has only to be stated to show the commercial nature of the transaction from the companys point of view", "The High Court considered that the capital of the compa- ny could have been reduced in other ways. But that again is not the point.", "The company chose to do it this way, and as there was not even a sugges- tion of fraud, the only question is whether it was gone through as an ordinary commercial proposition. But we doubt if that is what paragraph 7 meant because in paragraph 4 of the application to the High Court dated 11th February, 1944, the petitioner stated that the money on hand and at short notice was only Rs. 8,94,379", "That is a good deal short of 50 lacs", "On a full review of the facts it is clear that this transaction was voluntarily entered into in order indirectly to facilitate the carrying on of the business of the company and was made on the ground of commercial expediency", "It therefore falls within the purview of section 12(2) of the Income-tax Act, 1922 before its amendment in 1939. This being an investment company, if it borrowed money and utilised the same for its investments on which it earned income, the interest paid by it on the loans will clearly be a permissible deduction under section 12(2) of the Income- tax Act.", "Whether the loan is taken on an overdraft, or is a fixed deposit or on a debenture makes no difference in law"], "rank2": ["According to the statement of the case drawn up by the Income-tax Appellate Tribunal in its. reference to the High Court, money was needed by the executors of Lord Cable, and accordingly the administrator of the estate in India reached an agreement with the company on 9th February, 1937, the terms of which were as follows - The company agreed to reduce its share capital by Rs. 50 lacs and to do it by taking over from Scott the 50,000 shares mentioned above which stood in Lord Cables name at the rate of Rs. 100 a share. \nScott on his part agreed to forego cash payment and agreed instead to receive debentures of the face value of Rs. 50 lacs carrying interest at 5 per cent. per annum redeemable at the option of the registered holder at any time", "The sanction of the Calcutta High Court was obtained in due course and the agreement was carried out by the parties. \nThe 5 per cent. interest paid to Scott on these deben- tures forms the subject-matter of the question before the Court. The company claims to deduct this from its income as part of its working expenses under section 12 (2) of the Income-tax Act, that is to say, to use the words of the section, as expenditure (not being in the nature of capital expend- iture) incurred solely for the purpose of making or earning such income, profits or gains", "This contention failed before the Income-tax Appellate Tribunal and also before the High Court. It was agreed all through that the expenditure was not in the nature of capi- tal expenditure, but the view of the Income-tax Commissioner is that (a) it is not expenditure incurred for the purpose of earning the income, profits and gains of the company and (b) that even if it is, it is at any rate not expenditure incurred solely for that purpose", "In general, the Income-tax Appellate Tribunal and the High Court both took that view. The grounds on which these conclusions were based may be summarised as follows (1) the purpose of the agreement was to effect the conversion without in any way disturbing the holding of the investments of the company or interfering with the earning of its income (2) by this transaction the taxable income of the compa- ny was diminished \n There was complete identity of the person who -- (a) brought about this transaction without disturbing the affairs of the company, (b) to whom the share money was repaid. and (c) who took up the debentures and (4) that the transaction was more in the interest of the shareholder Scott than that of the company.", "A case somewhat similar to the present is Farmer v. Scottish North American Trust Ltd. (6) where it was held that interest paid on an overdraft required for purchasing shares (the shares purchased being retained as security for the overdraft) was an outgoing which could be deducted from the receipts to ascertain the taxable profits and gains Which were earned by them.", "Most commercial transactions are entered into for the mutual benefit of both sides, or at any rate each side hopes to gain something for itself", "we do not think that this inquiry is relevant, for we are dealing with a question of income-tax and not judging the legality or propriety of the transaction on an application to reduce the capital of the company", "It does not matter whether the company was right in this view or wrong, and in any event we are in no position to judge of the soundness of its decision because we have not all the materials before us. It has to be remembered that considerations of this kind go deeper than the apparent profit or loss on an isolated transaction standing by itself.", "It is not enough to say that the 50,000 shares which were cancelled earned in the following year only 31/2 per cent. interest as against 5 per cent. on the debentures because we do not know to what extent the hold- ings of the company would have been disturbed if this had not been done.", "There are usually many ways in which a given thing can be brought about in business circles but it is not for the Court to decide which of them should have been employed when the Court is deciding a question under section 12(2) of the Income-tax Act.", "The only argument urged against allowing this deduction to be made is that the person who took the debentures was the party who sold the ordinary shares. \n It cannot be disputed that if the debentures were held by a third party, the interest payable on the same would be an allowable deduction in calculating the total income of the assessee company.", "What difference does it make if the holder of the debentures is a shareholder ?"], "rank3": ["This is an assessees appeal from a judgment of the High Court at Calcutta delivered on a reference made to it under section 66(1 )of the Incometax Act. The question submitted for the High CourtS opinion was as follows-- Whether in the circumstances of this case, the interest paid by the assessee on debentures was incurred solely for the purpose of making or earning such income, profits or gains which are assessable under sub-section (1) of section 12", "The assessee is a private limited company which was incor- porated on 3rd January, 1927.", "It is an investment company known as the Eastern Investments Limited. The objects set out in the memorandum of association are to buy, sell and otherwise deal with shares, securities, bonds and so forth generally"], "rank4": ["The company was originally formed for acquiring, holding and otherwise dealing with shares and Government securities which had previously belonged to one Lord Cable.", "The share capital of the company at the date of its incorpo- ration was 250 lacs and consisted partly of preference shares and partly of ordinary shares. Of these Lord Cable held the majority including the 50,000 ordinary shares of the face value of Rs. 50,00,000 with which we are here concerned", "The rest of the share capital was held by the nominees of the late Lord Cable. Lord Cable died on the 28th of March, 1937, leaving an estate in Great Britain as well as in India. One Geoffrey Lacy Scott was appointed administrator of his estate in India and held these 50,000 shares in question in that capacity"], "label": "ACCEPTED"}, "expert_4": {"rank1": ["The question submitted for the High CourtS opinion was as follows-- Whether in the circumstances of this case, the interest paid by the assessee on debentures was incurred solely for the purpose of making or earning such income, profits or gains which are assessable under sub-section (1) of section 12.", "In our Opinion, the law on this point has been correctly summarised in the judgment of the High Court."], "rank2": ["This is an assessees appeal from a judgment of the High Court at Calcutta delivered on a reference made to it under section 66(1 )of the Incometax Act.", "It was agreed all through that the expenditure was not in the nature of capi- tal expenditure, but the view of the Income-tax Commissioner is that (a) it is not expenditure incurred for the purpose of earning the income, profits and gains of the company and (b) that even if it is, it is at any rate not expenditure incurred solely for that purpose.", "In general, the Income-tax Appellate Tribunal and the High Court both took that view.", "The grounds on which these conclusions were based may be summarised as follows (1) the purpose of the agreement was to effect the conversion without in any way disturbing the holding of the investments of the company or interfering with the earning of its income (2) by this transaction the taxable income of the compa- ny was diminished \n There was complete identity of the person who -- (a) brought about this transaction without disturbing the affairs of the company, (b) to whom the share money was repaid. and (c) who took up the debentures and (4) that the transaction was more in the interest of the shareholder Scott than that of the company.", "The decision of this appeal rests on the true construc- tion of section 12 (2).", "The following principles are relevant (a) though the question must be decided on the facts of each case, the final conclusion is one of law", "(b) it is not necessary to show that the expenditure was a profitable one or that in fact any profit was earned", "(c) it is enough to show that the money was expended not of necessity and with a view to a direct and immediate benefit to the trade, but voluntarily and on the ground of commercial expediency. and in order indirectly to facilitate the carrying on of the business", "and (d) beyond that no hard and fast rule can be laid down to explain what is meant by the word solely", "In our opinion, the present case falls within these principles.", "The next point on which some stress was placed was that there was complete identity of person between the person whose shares were sold and the person who took the deben- tures and that the transaction resulted in considerable benefit to him. In the absence of a suggestion of fraud this is not relevant at all for giving effect to the provisions of section 12(2) of the Incometax Act.", "There are usually many ways in which a given thing can be brought about in business circles but it is not for the Court to decide which of them should have been employed when the Court is deciding a question under section 12(2) of the Income-tax Act.", "On a full review of the facts it is clear that this transaction was voluntarily entered into in order indirectly to facilitate the carrying on of the business of the company and was made on the ground of commercial expediency.", "It therefore falls within the purview of section 12(2) of the Income-tax Act, 1922 before its amendment in 1939.", "This being an investment company, if it borrowed money and utilised the same for its investments on which it earned income, the interest paid by it on the loans will clearly be a permissible deduction under section 12(2) of the Income- tax Act.", "Whether the loan is taken on an overdraft, or is a fixed deposit or on a debenture makes no difference in law."], "rank3": ["The assessee is a private limited company which was incor- porated on 3rd January, 1927.", "It is an investment company known as the Eastern Investments Limited.", "The objects set out in the memorandum of association are to buy, sell and otherwise deal with shares, securities, bonds and so forth generally.", "The company was originally formed for acquiring, holding and otherwise dealing with shares and Government securities which had previously belonged to one Lord Cable.", "Scott on his part agreed to forego cash payment and agreed instead to receive debentures of the face value of Rs. 50 lacs carrying interest at 5 per cent. per annum redeemable at the option of the registered holder at any time.", "The sanction of the Calcutta High Court was obtained in due course and the agreement was carried out by the parties.", "The 5 per cent. interest paid to Scott on these deben- tures forms the subject-matter of the question before the Court.", "This contention failed before the Income-tax Appellate Tribunal and also before the High Court.", "A case somewhat similar to the present is Farmer v. Scottish North American Trust Ltd. (6) where it was held that interest paid on an overdraft required for purchasing shares (the shares purchased being retained as security for the overdraft) was an outgoing which could be deducted from the receipts to ascertain the taxable profits and gains Which were earned by them.", "One of the points which weighed with the Incometax Appellate Tribunal and the High Court was that though the conversion did not in any way disturb the holding of the investments of the company or interfere with the earning of its income, it had the effect of diminishing its taxable income.", "In our judgment, this is not a proper consideration when the transaction is not challenged on the ground of fraud.", "In the present case there is not even an allegation of fraud.", "Most commercial transactions are entered into for the mutual benefit of both sides, or at any rate each side hopes to gain something for itself.", "The test for present purposes is not whether the other party benefitted, nor indeed whether this was a pru- dent transaction which resulted in ultimate gain to the appellant, but whether it was properly entered into as apart of the appellants legitimate commercial undertakings in order indirectly to facilitate the carrying on of its busi- ness.", "The High Court doubted whether the transaction could be brought within the functions of an investment company and found it difficult to reconcile it with the objects set out in the Memorandum of Association.", "But we see no such diffi- culty.", "Clause 5 empowers a reduction of capital of the company and clause 8(3) empowers the company to borrow or raise money by the issue of debentures.", "The matter is clear- ly writ in the bond.", "Moreover, we do not think that this inquiry is relevant, for we are dealing with a question of income-tax and not judging the legality or propriety of the transaction on an application to reduce the capital of the company.", "The only question is whether this was done in the ordinary course of business for the purposes we have already pointed out, however mistaken the directors and shareholders of the company may have been.", "Therefore, as stated by the Income-tax Appellate Tribu- nal in its statement of the case, the executors of Lord Cables estate needed money.", "In the next place, the transac- tion was brought about at the instance of the holder of the majority of ordinary shares, and also that the shares were originally held by Lord Cable and his nominees.", "It does not matter whether the company was right in this view or wrong, and in any event we are in no position to judge of the soundness of its decision because we have not all the materials before us.", "It has to be remembered that considerations of this kind go deeper than the apparent profit or loss on an isolated transaction standing by itself.", "What we do know is what the Income-tax Appel- late Tribunal has stated, namely, that-- the change brought about had been so designed that the investments of the company were not to be disturbed and as a consequence the income accrued was in no way to be affected.", "This has only to be stated to show the commercial nature of the transaction from the companys point of view.", "The company chose to do it this way, and as there was not even a sugges- tion of fraud, the only question is whether it was gone through as an ordinary commercial proposition.", "The only argument urged against allowing this deduction to be made is that the person who took the debentures was the party who sold the ordinary shares", "It cannot be disputed that if the debentures were held by a third party, the interest payable on the same would be an allowable deduction in calculating the total income of the assessee company.", "What difference does it make if the holder of the debentures is a shareholder ?"], "rank4": ["The share capital of the company at the date of its incorpo- ration was 250 lacs and consisted partly of preference shares and partly of ordinary shares.", "Of these Lord Cable held the majority including the 50,000 ordinary shares of the face value of Rs. 50,00,000 with which we are here concerned.", "The rest of the share capital was held by the nominees of the late Lord Cable.", "Lord Cable died on the 28th of March, 1937, leaving an estate in Great Britain as well as in India.", "One Geoffrey Lacy Scott was appointed administrator of his estate in India and held these 50,000 shares in question in that capacity.", "According to the statement of the case drawn up by the Income-tax Appellate Tribunal in its. reference to the High Court, money was needed by the executors of Lord Cable, and accordingly the administrator of the estate in India reached an agreement with the company on 9th February, 1937, the terms of which were as follows - The company agreed to reduce its share capital by Rs. 50 lacs and to do it by taking over from Scott the 50,000 shares mentioned above which stood in Lord Cables name at the rate of Rs. 100 a share.", "The company claims to deduct this from its income as part of its working expenses under section 12 (2) of the Income-tax Act, that is to say, to use the words of the section, as expenditure (not being in the nature of capital expend- iture) incurred solely for the purpose of making or earning such income, profits or gains.", "Indian Radio Cable Communications Ltd. v. The Commissioner of Income- tax, Bombay(1) and Tara Hydro-Electric Agencies Ltd. v. The Commissioner of Income-tax, Bombay(2)", "Moore v. Stewart Lloyds(3) and Ushers case(4)", "It seems evident therefore that Scott could have compelled the company to pay him cash for the shares. \n He seems to have had the whip hand.", "Instead of doing that he entered into an arrangement which, while giving him the necessary facili- ties, appears to have satisfied the company by allowing it to retain its investments without a precipitate liquidation of a large portion thereof.", "It is not enough to say that the 50,000 shares which were cancelled earned in the following year only 31/2 per cent. interest as against 5 per cent. on the debentures because we do not know to what extent the hold- ings of the company would have been disturbed if this had not been done.", "The High Court considered that the capital of the compa- ny could have been reduced in other ways. But that again is not the point.", "It was argued on behalf of the respondent (basing the same on paragraph 7 of the appellants application to the High Court dated 5th April, 1947) that the company had at the time sufficient liquid resources to effect the reduction of capital desired and so it was not necessary to resort to this process.", "But that again is not the point.", "But we doubt if that is what paragraph 7 meant because in paragraph 4 of the application to the High Court dated 11th February, 1944, the petitioner stated that the money on hand and at short notice was only Rs. 8,94,379.", "That is a good deal short of 50 lacs. However, we need not enter into this in detail."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["This has only to be stated to show the commercial nature of the transaction from the companys point of view.", "On a full review of the facts it is clear that this transaction was voluntarily entered into in order indirectly to facilitate the carrying on of the business of the company and was made on the ground of commercial expediency. \n It therefore falls within the purview of section 12(2) of the Income-tax Act, 1922 before its amendment in 1939.", "This being an investment company, if it borrowed money and utilised the same for its investments on which it earned income, the interest paid by it on the loans will clearly be a permissible deduction under section 12(2) of the Income- tax Act."], "rank2": ["it is not necessary to show that the expenditure was a profitable one or that in fact any profit was earned Moore v. Stewart Lloyds(3) and Ushers case(4)", "it is enough to show that the money was expended not of necessity and with a view to a direct and immediate benefit to the trade, but voluntarily and on the ground of commercial expediency. and in order indirectly to facilitate the carrying on of the business British Insulated Helsby Cables Ltd. v. Atherton", "The test for present purposes is not whether the other party benefitted, nor indeed whether this was a pru- dent transaction which resulted in ultimate gain to the appellant, but whether it was properly entered into as apart of the appellants legitimate commercial undertakings in order indirectly to facilitate the carrying on of its busi- ness.", "Clause 5 empowers a reduction of capital of the company and clause 8(3) empowers the company to borrow or raise money by the issue of debentures. The matter is clear- ly writ in the bond.", "Instead of doing that he entered into an arrangement which, while giving him the necessary facili- ties, appears to have satisfied the company by allowing it to retain its investments without a precipitate liquidation of a large portion thereof.", "the Income-tax Appel- late Tribunal has stated, namely, that-- the change brought about had been so designed that the investments of the company were not to be disturbed and as a consequence the income accrued was in no way to be affected."], "rank3": ["though the question must be decided on the facts of each case, the final conclusion is one of law Indian Radio Cable Communications Ltd. v. The Commissioner of Income- tax, Bombay(1) and Tara Hydro-Electric Agencies Ltd. v. The Commissioner of Income-tax, Bombay", "In our opinion, the present case falls within these principles.", "In the present case there is not even an allegation of fraud.", "It seems evident therefore that Scott could have compelled the company to pay him cash for the shares. \n He seems to have had the whip hand.", "It does not matter whether the company was right in this view or wrong, and in any event we are in no position to judge of the soundness of its decision because we have not all the materials before us.", "There are usually many ways in which a given thing can be brought about in business circles but it is not for the Court to decide which of them should have been employed when the Court is deciding a question under section 12(2) of the Income-tax Act."], "rank4": ["beyond that no hard and fast rule can be laid down to explain what is meant by the word solely", "A case somewhat similar to the present is Farmer v. Scottish North American Trust Ltd. (6) where it was held that interest paid on an overdraft required for purchasing shares (the shares purchased being retained as security for the overdraft) was an outgoing which could be deducted from the receipts to ascertain the taxable profits and gains Which were earned by them.", "In our judgment, this is not a proper consideration when the transaction is not challenged on the ground of fraud.", "In the absence of a suggestion of fraud this is not relevant at all for giving effect to the provisions of section 12(2) of the Incometax Act.", "the executors of Lord Cables estate needed money. In the next place, the transac- tion was brought about at the instance of the holder of the majority of ordinary shares, and also that the shares were originally held by Lord Cable and his nominees.", "Whether the loan is taken on an overdraft, or is a fixed deposit or on a debenture makes no difference in law."], "rank5": ["Most commercial transactions are entered into for the mutual benefit of both sides, or at any rate each side hopes to gain something for itself.", "It has to be remembered that considerations of this kind go deeper than the apparent profit or loss on an isolated transaction standing by itself."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1951_80", "text": "ORIGINAL JURISDICTION. Petition No. 308 of 1951. Application under article 32 of the Constitution for a writ in the nature of habeas corpus praying for the release of the petitioner from detention. J. Umrigar (amicus curiae), for the petitioner. M. Sikri, Advocate-General of the Punjab, (Jindra Lal, with him) for the respondent. 1951. December 10. The Judgment of the Court was deliv- ered by PATANJALI SASTRI C.J.--This is a petition under article 32 of the Constitution praying for the release of the peti- tioner from his alleged unlawful detention. \nWe accepted the petition and, at the conclusion of the hearing, ordered the petitioner to be released., We now proceed to give the reasons for our order. The petitioner was arrested and detained under an order dated 1st March, 1950, made by the District Magistrate, Amritsar, under section3(1) of the Preventive Detention Act, 1950 (hereinafter referred to as the Act ) and the grounds of detention were communicated to the petitioner as required by section7 of the Act on 15th March, 1950. \nThe petitioner challenged the validity of the order on various grounds but, while the petition was pending after this Court issued a rule nisi to the respondent, the petitioner was served on 6th August with another detention order dated 30th July,1951 1, purporting to be made by the Governor of Punjab under sub-section(1) of section 3 and section 4 of the Act as amended by the Preventive Detention (Amendment) Act, 1951, and he was served with fresh grounds of detention on 16th August, 1951. \nThereupon the petitioner filed a supplementary petition impugning the validity of the said order on the ground, inter alia, that it directed the detention of the petitioner up to 31st March, 1952, the date on which the Act itself was to expire and that this was contrary to the provisions of the Act as amended. On behalf of the respondent, the Advocate-General of Punjab urged that the said order was not intended to be a fresh order of detention but was passed only with a view to limiting the period of detention till 31st March, 1952, as it had been held in some cases that an order of detention for an indefinite period was bad. \nThe order runs as follows - WHEREAS the Governor of Punjab is satisfied with respect to the person known as Makhan Singh Tarsikka, son of Gujjar Singh, Jat, of Tarsikka, Police Station Jandiala, Amritsar District, that with a view to preventing him from acting in a manner prejudicial to the security of the State, it is necessary to make the following order Now, THEREFORE, in exercise of the powers conferred by sub-section (1) of section 3 and section 4 of the Preventive Detention Act, 1950 (Act IV of 1950), as amended by the Preventive Detention (Amendment) Act, 1951 (Act IV of 1951), the Governor of Punjab hereby directs that the said Makhan Singh Tarsikka be committed to the custody of the InspectorGeneral of Prisons, Punjab, and detained in any jail of the State till 31st March, 1952, subject to such conditions as to mainte- nance, discipline and punishment for breaches of discipline as have been specified by a general order or as contained in the Punjab Communist Detenu Rules, 1950. \nIt will be seen that the terms of the order make it clear that it was intended to operate as a fresh order for the detention of the petitioner and this view is strengthened by the fact that the order was followed by the service of a fresh set of grounds on the petitioner as required by sec- tion 7 of the Act a proceeding which would be wholly unnec- essary if no fresh order of detention was intended. Indeed, it was suggested on behalf of the petitioner that the said order followed by service of fresh grounds only four days before the date fixed for the hearing of the petition by this Court was a deliberate move by the respondent to cir- cumvent the objections raised by the petitioner to the validity of the earlier order of 1st March, 1950, and thus render the proceeding infructuous. \nHowever that may be, we are clearly of opinion that the order dated 30th July, 1951. must be regarded as a fresh order made for the petitioners detention in superession of the earlier order and the ques- tion is whether it was illegal in that it straightaway directed that the petitioner be detained till 31st March, 1952, which was the date of the expiry of the Act. Whatever might be the position under the Act before its amendment in February, 1951, it is clear that the Act as amended requires that every.case of detention should be placed before an Advisory Board constituted under the Act (section 9) and provides that if the Board reports that there is sufficient cause for the detention the appropriate Government may confirm the detention order and continue the detention of the person concerned for such period as it thinks fit (section 11). \nIt is, therefore, plain that it is only after the Advisory Board, to which the case has been referred, reports that the detention is justified, the Government should determine what the period of deten- tion should be and not before. The fixing of the period of detention in the initial order itself in the present case was, therefore, contrary to the scheme of the Act and cannot be supported. The learned Advocate-General, however, urged that in view of the provision in section 11 (2) that if the Advisory Board reports that there is no sufficient cause for the detention, the person concerned would be released forth- with, the direction in the order dated 30th July, 1951, that the petitioner should be detained till 31st March, 1952, could be ignored as mere surplusage.\nDECISION ??", "expert_1": {"rank1": ["We accepted the petition and, at the conclusion of the hearing, ordered the petitioner to be released.", "It will be seen that the terms of the order make it clear that it was intended to operate as a fresh order for the detention of the petitioner and this view is strengthened by the fact that the order was followed by the service of a fresh set of grounds on the petitioner as required by sec- tion 7 of the Act a proceeding which would be wholly unnec- essary if no fresh order of detention was intended.", "However that may be, we are clearly of opinion that the order dated 30th July, 1951. must be regarded as a fresh order made for the petitioners detention in superession of the earlier order and the ques- tion is whether it was illegal in that it straightaway directed that the petitioner be detained till 31st March, 1952, which was the date of the expiry of the Act. Whatever might be the position under the Act before its amendment in February, 1951, it is clear that the Act as amended requires that every.case of detention should be placed before an Advisory Board constituted under the Act (section 9) and provides that if the Board reports that there is sufficient cause for the detention the appropriate Government may confirm the detention order and continue the detention of the person concerned for such period as it thinks fit (section 11). \nIt is, therefore, plain that it is only after the Advisory Board, to which the case has been referred, reports that the detention is justified, the Government should determine what the period of deten- tion should be and not before. The fixing of the period of detention in the initial order itself in the present case was, therefore, contrary to the scheme of the Act and cannot be supported."], "rank2": ["The petitioner challenged the validity of the order on various grounds but, while the petition was pending after this Court issued a rule nisi to the respondent, the petitioner was served on 6th August with another detention order dated 30th July,1951 1, purporting to be made by the Governor of Punjab under sub-section(1) of section 3 and section 4 of the Act as amended by the Preventive Detention (Amendment) Act, 1951, and he was served with fresh grounds of detention on 16th August, 1951. \nThereupon the petitioner filed a supplementary petition impugning the validity of the said order on the ground, inter alia, that it directed the detention of the petitioner up to 31st March, 1952, the date on which the Act itself was to expire and that this was contrary to the provisions of the Act as amended."], "rank3": ["This is a petition under article 32 of the Constitution praying for the release of the peti- tioner from his alleged unlawful detention.", "On behalf of the respondent, the Advocate-General of Punjab urged that the said order was not intended to be a fresh order of detention but was passed only with a view to limiting the period of detention till 31st March, 1952, as it had been held in some cases that an order of detention for an indefinite period was bad.", "Indeed, it was suggested on behalf of the petitioner that the said order followed by service of fresh grounds only four days before the date fixed for the hearing of the petition by this Court was a deliberate move by the respondent to cir- cumvent the objections raised by the petitioner to the validity of the earlier order of 1st March, 1950, and thus render the proceeding infructuous.", "The learned Advocate-General, however, urged that in view of the provision in section 11 (2) that if the Advisory Board reports that there is no sufficient cause for the detention, the person concerned would be released forth- with, the direction in the order dated 30th July, 1951, that the petitioner should be detained till 31st March, 1952, could be ignored as mere surplusage."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["Whatever might be the position under the Act before its amendment in February, 1951, it is clear that the Act as amended requires that every.case of detention should be placed before an Advisory Board constituted under the Act (section 9) and provides that if the Board reports that there is sufficient cause for the detention the appropriate Government may confirm the detention order and continue the detention of the person concerned for such period as it thinks fit (section 11). \nIt is, therefore, plain that it is only after the Advisory Board, to which the case has been referred, reports that the detention is justified, the Government should determine what the period of deten- tion should be and not before. The fixing of the period of detention in the initial order itself in the present case was, therefore, contrary to the scheme of the Act and cannot be supported."], "rank2": ["It will be seen that the terms of the order make it clear that it was intended to operate as a fresh order for the detention of the petitioner and this view is strengthened by the fact that the order was followed by the service of a fresh set of grounds on the petitioner as required by sec- tion 7 of the Act a proceeding which would be wholly unnec- essary if no fresh order of detention was intended."], "rank3": ["The petitioner was arrested and detained under an order dated 1st March, 1950, made by the District Magistrate, Amritsar, under section3(1) of the Preventive Detention Act, 1950 (hereinafter referred to as the Act ) and the grounds of detention were communicated to the petitioner as required by section7 of the Act on 15th March, 1950. \nThe petitioner challenged the validity of the order on various grounds but, while the petition was pending after this Court issued a rule nisi to the respondent, the petitioner was served on 6th August with another detention order dated 30th July,1951 1, purporting to be made by the Governor of Punjab under sub-section(1) of section 3 and section 4 of the Act as amended by the Preventive Detention (Amendment) Act, 1951, and he was served with fresh grounds of detention on 16th August, 1951."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["This is a petition under article 32 of the Constitution praying for the release of the peti- tioner from his alleged unlawful detention", "We accepted the petition and, at the conclusion of the hearing, ordered the petitioner to be released.", "It will be seen that the terms of the order make it clear that it was intended to operate as a fresh order for the detention of the petitioner and this view is strengthened by the fact that the order was followed by the service of a fresh set of grounds on the petitioner as required by sec- tion 7 of the Act a proceeding which would be wholly unnec- essary if no fresh order of detention was intended. Indeed, it was suggested on behalf of the petitioner that the said order followed by service of fresh grounds only four days before the date fixed for the hearing of the petition by this Court was a deliberate move by the respondent to cir- cumvent the objections raised by the petitioner to the validity of the earlier order of 1st March, 1950, and thus render the proceeding infructuous.", "However that may be, we are clearly of opinion that the order dated 30th July, 1951. must be regarded as a fresh order made for the petitioners detention in superession of the earlier order and the ques- tion is whether it was illegal in that it straightaway directed that the petitioner be detained till 31st March, 1952, which was the date of the expiry of the Act", "Whatever might be the position under the Act before its amendment in February, 1951, it is clear that the Act as amended requires that every.case of detention should be placed before an Advisory Board constituted under the Act (section 9) and provides that if the Board reports that there is sufficient cause for the detention the appropriate Government may confirm the detention order and continue the detention of the person concerned for such period as it thinks fit (section 11). \nIt is, therefore, plain that it is only after the Advisory Board, to which the case has been referred, reports that the detention is justified, the Government should determine what the period of deten- tion should be and not before", "The fixing of the period of detention in the initial order itself in the present case was, therefore, contrary to the scheme of the Act and cannot be supported"], "rank2": ["The order runs as follows - WHEREAS the Governor of Punjab is satisfied with respect to the person known as Makhan Singh Tarsikka, son of Gujjar Singh, Jat, of Tarsikka, Police Station Jandiala, Amritsar District, that with a view to preventing him from acting in a manner prejudicial to the security of the State, it is necessary to make the following order Now, THEREFORE, in exercise of the powers conferred by sub-section (1) of section 3 and section 4 of the Preventive Detention Act, 1950 (Act IV of 1950), as amended by the Preventive Detention (Amendment) Act, 1951 (Act IV of 1951), the Governor of Punjab hereby directs that the said Makhan Singh Tarsikka be committed to the custody of the InspectorGeneral of Prisons, Punjab, and detained in any jail of the State till 31st March, 1952, subject to such conditions as to mainte- nance, discipline and punishment for breaches of discipline as have been specified by a general order or as contained in the Punjab Communist Detenu Rules, 1950."], "rank3": ["The petitioner was arrested and detained under an order dated 1st March, 1950, made by the District Magistrate, Amritsar, under section3(1) of the Preventive Detention Act, 1950 (hereinafter referred to as the Act ) and the grounds of detention were communicated to the petitioner as required by section7 of the Act on 15th March, 1950. \nThe petitioner challenged the validity of the order on various grounds but, while the petition was pending after this Court issued a rule nisi to the respondent, the petitioner was served on 6th August with another detention order dated 30th July,1951 1, purporting to be made by the Governor of Punjab under sub-section(1) of section 3 and section 4 of the Act as amended by the Preventive Detention (Amendment) Act, 1951, and he was served with fresh grounds of detention on 16th August, 1951", "Thereupon the petitioner filed a supplementary petition impugning the validity of the said order on the ground, inter alia, that it directed the detention of the petitioner up to 31st March, 1952, the date on which the Act itself was to expire and that this was contrary to the provisions of the Act as amended"], "label": "ACCEPTED"}, "expert_4": {"rank1": ["Application under article 32 of the Constitution for a writ in the nature of habeas corpus praying for the release of the petitioner from detention.", "We accepted the petition and, at the conclusion of the hearing, ordered the petitioner to be released., We now proceed to give the reasons for our order."], "rank2": ["This is a petition under article 32 of the Constitution praying for the release of the peti- tioner from his alleged unlawful detention.", "It is, therefore, plain that it is only after the Advisory Board, to which the case has been referred, reports that the detention is justified, the Government should determine what the period of deten- tion should be and not before.", "The fixing of the period of detention in the initial order itself in the present case was, therefore, contrary to the scheme of the Act and cannot be supported."], "rank3": ["The petitioner was arrested and detained under an order dated 1st March, 1950, made by the District Magistrate, Amritsar, under section3(1) of the Preventive Detention Act, 1950 (hereinafter referred to as the Act ) and the grounds of detention were communicated to the petitioner as required by section7 of the Act on 15th March, 1950.", "The petitioner challenged the validity of the order on various grounds but, while the petition was pending after this Court issued a rule nisi to the respondent, the petitioner was served on 6th August with another detention order dated 30th July,1951 1, purporting to be made by the Governor of Punjab under sub-section(1) of section 3 and section 4 of the Act as amended by the Preventive Detention (Amendment) Act, 1951, and he was served with fresh grounds of detention on 16th August, 1951.", "Thereupon the petitioner filed a supplementary petition impugning the validity of the said order on the ground, inter alia, that it directed the detention of the petitioner up to 31st March, 1952, the date on which the Act itself was to expire and that this was contrary to the provisions of the Act as amended.", "It will be seen that the terms of the order make it clear that it was intended to operate as a fresh order for the detention of the petitioner and this view is strengthened by the fact that the order was followed by the service of a fresh set of grounds on the petitioner as required by sec- tion 7 of the Act a proceeding which would be wholly unnec- essary if no fresh order of detention was intended.", "However that may be, we are clearly of opinion that the order dated 30th July, 1951. must be regarded as a fresh order made for the petitioners detention in superession of the earlier order and the ques- tion is whether it was illegal in that it straightaway directed that the petitioner be detained till 31st March, 1952, which was the date of the expiry of the Act.", "Whatever might be the position under the Act before its amendment in February, 1951, it is clear that the Act as amended requires that every.case of detention should be placed before an Advisory Board constituted under the Act (section 9) and provides that if the Board reports that there is sufficient cause for the detention the appropriate Government may confirm the detention order and continue the detention of the person concerned for such period as it thinks fit (section 11)."], "rank4": ["On behalf of the respondent, the Advocate-General of Punjab urged that the said order was not intended to be a fresh order of detention but was passed only with a view to limiting the period of detention till 31st March, 1952, as it had been held in some cases that an order of detention for an indefinite period was bad.", "The order runs as follows - WHEREAS the Governor of Punjab is satisfied with respect to the person known as Makhan Singh Tarsikka, son of Gujjar Singh, Jat, of Tarsikka, Police Station Jandiala, Amritsar District, that with a view to preventing him from acting in a manner prejudicial to the security of the State, it is necessary to make the following order Now, THEREFORE, in exercise of the powers conferred by sub-section (1) of section 3 and section 4 of the Preventive Detention Act, 1950 (Act IV of 1950), as amended by the Preventive Detention (Amendment) Act, 1951 (Act IV of 1951), the Governor of Punjab hereby directs that the said Makhan Singh Tarsikka be committed to the custody of the InspectorGeneral of Prisons, Punjab, and detained in any jail of the State till 31st March, 1952, subject to such conditions as to mainte- nance, discipline and punishment for breaches of discipline as have been specified by a general order or as contained in the Punjab Communist Detenu Rules, 1950.", "Indeed, it was suggested on behalf of the petitioner that the said order followed by service of fresh grounds only four days before the date fixed for the hearing of the petition by this Court was a deliberate move by the respondent to cir- cumvent the objections raised by the petitioner to the validity of the earlier order of 1st March, 1950, and thus render the proceeding infructuous.", "The learned Advocate-General, however, urged that in view of the provision in section 11 (2) that if the Advisory Board reports that there is no sufficient cause for the detention, the person concerned would be released forth- with, the direction in the order dated 30th July, 1951, that the petitioner should be detained till 31st March, 1952, could be ignored as mere surplusage."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["We accepted the petition and, at the conclusion of the hearing, ordered the petitioner to be released.", "the Act as amended requires that every.case of detention should be placed before an Advisory Board constituted under the Act (section 9) and provides that if the Board reports that there is sufficient cause for the detention the appropriate Government may confirm the detention order and continue the detention of the person concerned for such period as it thinks fit (section 11).", "The fixing of the period of detention in the initial order itself in the present case was, therefore, contrary to the scheme of the Act and cannot be supported."], "rank2": ["while the petition was pending after this Court issued a rule nisi to the respondent, the petitioner was served on 6th August with another detention order dated 30th July,1951", "the order dated 30th July, 1951. must be regarded as a fresh order made for the petitioners detention in superession of the earlier order"], "rank3": ["it directed the detention of the petitioner up to 31st March, 1952, the date on which the Act itself was to expire", "it straightaway directed that the petitioner be detained till 31st March, 1952, which was the date of the expiry of the Act.", "The learned Advocate-General, however, urged that in view of the provision in section 11 (2) that if the Advisory Board reports that there is no sufficient cause for the detention, the person concerned would be released forth- with, the direction in the order dated 30th July, 1951, that the petitioner should be detained till 31st March, 1952, could be ignored as mere surplusage."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1952_42", "text": "Mahajan, J. Petition No. 166 of 1951. This is a petition under article 32 of the Constitution of India by Shri Visheswar Rao, zamindar and proprietor of Ahiri zamindari, an estate as defined in section 2 (3) of the Central Provinces Land Revenue Act, II of 1917, and situated in tehsil Sironcha, district Chanda (Madhya Pradesh), for the enforcement of his fundamental right to property under article 31(1) of the Constitution by the issue of an appropriate writ or a direction to the respondent State restraining it from disturbing his possession of the estate, and eighty malguzari villages situate in the Garchiroli tehsil of the same district. The petitioner and his ancestors have been owing and enjoying these properties in full proprietary right for several generations past. \nOn the 5th April, 1950, the Madhya Pradesh Legislative Assembly enacted an Act called the Madhya Pradesh Abolition of Proprietary Right Act. The Act received the assent of the President of India on the 22nd January, 1951, and was published in the Madhya Pradesh Gazette on the 26th January, 1951, as Act I of 1951. By a notification in a gazette extraordinary issued on the 27th January, 1951, the Madhya Pradesh Government fixed 31st March 1951, as the date of vesting of the estates under section 3 of the Act. The petitioner thus was to lose his estate and lands on the 31st March 1951. On the 9th March, 1951, i.e. before the vesting date, he presented the present application to this court for the issue of appropriate writs against the government prohibiting it from taking possession of his properties. It was alleged that the Madhya Pradesh Act, I of 1951 was unconstitutional and void and infringed the fundamental rights of the petitioner in a variety of ways. For a proper appreciation of the ground on which the validity of the Act is being challenged it is necessary to set out the relevant provisions of the Act and to state the facts which led to this enactment. Madhya Pradesh is a composite State, comprising the Central Provisions, Berar and the merged territories. By an agreement of merger made between the rules of States and the Dominion of in India dated the 15th December 1947, certain territories which at one time were under the Indian States Agency and were held by these rulers were integrated with the Dominion. The intergration actually took place on the 1st January, 1948. \nOn the 1st August, 1949, the States were merged in the Madhya Pradesh. There were in all 106 estates in Madhya Pradesh as defined in section 2 (3) of Act I of 1951 and held by zamindars. Most of the lands are owned by malguzars of mahals in the status of Malkan cabza. The land system prevailing in Madhya Pradesh is malguzari (except in certain areas where the ryotwari system is in vogue), the malguzar being an intermediary between the State and the tiller. Land is also held on a variety of subordinate tenures by absolute occupancy tenants, occupancy tenants, ryots, thikedars, mafidars ilaqadars etc. Land revenue in Madhya Pradesh was last assessed under the Central Provinces Land Revenue Act, II of 1917. The estate holders pay land revenue on the lands comprised in the estates at a concession rate. The payment is technically called tekoli In 1939 there was an ad hoc increase in the amount of tekoli by the Central Provinces Revision of Land Revenue Estates Act, I of 1939. On the 3rd September 1946 the Central Provinces and Bear Legislative Assembly passed a resolution for the elimination of intermediaries between the State and the peasant. Soon after passing of this resolution several laws were enacted, it is said with a view to achieve this result, the impugned Act being the last of the series. In 1947, the Central Provinces Land Revenue Estates Act, XXV of 1947, was enacted. The revenue assessment, viz., tekoli, on the estates was, we are told enhanced, in some places from thirty to fifty per cent, of the full jama and in others from forty to sixty per cent. \nIn the same year was enacted the Central Provinces Land Revenue Revision Mahals Act, XXVI of 1947. The land assessment on malguzari villages was it is alleged, raised to 75 per cent. from 45 to 50 per cent. of malguzari assets. This was done without recourse to a settlement. In 1948 came the Central Provinces and Berar Revocation of Exemptions Act, XXXVII of 1948, making persons exempted from payment of land revenue liable for it. This legislation, it is urged, resulted in the reduction of the net income of the proprietors to a large extent. On the 11th October, 1949, the impugned Act was introduced in the Madhya Pradesh Assembly. It was referred to a Select Committee on the 15th October, 1949 the Select Committee reported on the 9th March, 1950, the report was published on the 17th March, 1950, and was taken into consideration on the 29th March, 1950, by the Assembly. On the 30th March, 1950, the opposition moved for the circulation of the Bill. The circulation motion was negatived on the 3rd April 1950, and the Bill was discussed clause by clause were passed between the 3rd of April of the 5th of April. On the 5th April. On the 5th April, 1950, the member in charge of the Bill moved as follows - \n Speaker Sir, I now move that the Central Provinces Berar Abolition of Proprietary Rights (Estates, Mahals Alienated Lands) Bill, 1949 (No. 64 of 1949) as considered by the House be passed into law. The Honble the Speaker said Motion moved that the Central Provisions Berar Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Bill 1949 (No. 64 of 1949) as considered by the House be passed into law, \n A number of speeches were made at the third reading stage. The opposition was in a hopeless minority. The trend of the speeches was of a laudatory character, each member hailing the Bill as a peace of great reform in the Madhya Pradesh land system. No motion of a dilatory nature was tabled and as a matter of fact there was no opposition whatsoever to the passing of the Bill. Some members expressed the opinion that the provisions of the Act did not go far enough, others thought that the provisions as to compensation should have been more liberal, but there was none who was for rejecting the Bill as it stood. The report of the proceedings of the 5th April, 1950, does not contain the note that the motion that the Bill be passed into law was carried.\n The omission of this note in the proceedings of the proceedings of the legislature has furnished a basis for the argument that the Bill was never passed into law. The proceedings were printed on the 21st June, 1950, and were signed by the Speaker on the 1st October 1950. The original Bill that was submitted to the President for his assent was printed on the 29th April, 1950, and it bears on it the certificate of the Speaker dated the 10th May, 1950, stating that the Bill was duly passed by the legislature on the 5th April, 1950. This certificate was signed by the Speaker a considerable time ahead of his signing the proceedings. The Act, as already stated, received the assent of the President on the 22nd January, 1951, and was published in the Madhya Pradesh Gazette on the 26th January, 1951, as Madhya Pradesh Act I of 1951. Against the constitutionality of this Act a number of petitioners were made in the High Court of Nagpur but they were all dismissed by that court on the 9th April, while this petition along with some others was pending in this Court. \n The preamble of the Act is in these terms - An Act to provide for the acquisition of the rights of proprietors in estates, mahals, alienated villages and alienated lands in Madhya Pradesh and to make provision for other matters connected there with. The legislation clearly falls within entry 36 of List II of the Seventh Schedule of the Constitution. The Madhya Pradesh Legislature had therefore undoubted competence to enact it. The Act is divided into eleven chapters and three schedules. Chapter II deals with the vesting of proprietary rights in the State and states the consequences of the vesting. Section 3 is in these terms - Save as other wise provided in this Act, on and from a date to be specified by a notification by the State Government in this behalf all proprietary rights in an estate, mahal alienated village or alienated land, as the case may be, in the area specified in the notification vesting in a proprietor of such estate, mahal, alienated village, alienated land, or in a person having interest in such proprietary right through the proprietor, shall pass from such proprietor or such other person to and vest in the State for the purposes of the State free of all encumbrances \n Section 4 provides that after the publication of the notification under Section 3, all rights titles and interest vesting in the proprietor or any person having interest in such proprietary right through the proprietor in such area including land (cultivable or barren), grass land, scrub jungle, forest trees fishes, wells, tanks ponds water-channels, ferries, pathways, villages sites, hats bazars and meals and in all subsoil including rights if any in mines and minerals, whether being worked or not, shall cease and be vested in the State for purposes of the State free of all encumbrances but that the proprietor shall continue to retain the possession of his homestead, home-farm land, and in the Central Provisions, also of land brought under cultivation by him after the agricultural year 1948-49 but before the date of vesting. \n The proprietor is entitled to recover any sums which became due to him before the date of vesting by virtue of his proprietor rights. All open enclosures used for agricultural or domestic purposes, all buildings, places of worship wells situated in and trees standings on lands included in such enclosures or house sites etc. continue to remain in possession of proprietor and are to be settled with him by the State Government on such terms and conditions as it may determine. Similarly, certain private wells, trees tanks and groves continue to remain in possession of proprietor or other person who may be interested in them. Chapter III deals with the assessment of compensation. It is provided in section 8 that the State Government shall pay compensation to the proprietor in accordance with the rules contained in Schedule I. Besides the amount so determined, Government has to pay compensation for any amount spent on the construction of a tank or well used for agricultural purposes, where such tank or well vests in the State Government. In addition to all these amounts, the State Government has pay compensation for lands within the area of a municipality or cantonment in accordance with the rules contained in Schedule II. The Compensation for divestment of proprietary rights becomes due from the date vesting and it is enacted that it shall carry interest at the rate of two and a half per cent. per annum from the date of vestings to the date of payment. Section 9 provides as follows - \n The compensation payable under section 8, may, in accordance with the rules made in this behalf, be paid in one or more of the following modes, namely - \n in cash in full or in annual instalments not exceeding thirty \n in bonds either negotiable or not negotiable carrying interest at the rate specified in sub-section (4) of section 8 and of guaranteed face value maturing within a specified period not exceeding thirty years. The other sections in this chapter deal with interim payment and appointment of compensation officers and lay down the procedure for the determination of compensation. Schedule I provides that the amount of compensation in the Central Provinces and in Berar shall be ten times the net income determined in accordance with the rules mentioned in the schedule. In merged territories the compensation is payable on a sliding scale varying from two times to ten times the net income. Schedule II lays down the measure of compensation on a scale varying from five to fifteen times the assessment on the land as specified in the schedule. Section 2 of the Schedule I provides for the calculation of the gross income by adding the amount of income received by a proprietor from the aggregate of the rents from the tenants as recorded in the jamabandi for the previous agricultural year the siwai income that is income from various sources such as jalkar, bankar, phalkar, hats, bazars, melas grazing and village forest calculated at two times the income recorded in the current settlement of 1923 and the consent money on transfer of tenancy lands-the average of transactions recorded in the village papers for ten years preceding the agricultural year in which the date of vesting falls. The schedule also provides the method of determination of the gross income of a mahal as well as of an alienated village or alienated land separately. It also provides for the determination of this income in the case of mines and forests. The method suggested for assessing the net income is that out of the gross income the following items have to be deducted, i.e. assessed land revenue, sums payable during the previous agricultural year on account of cesses and local rates, the average of income-tax paid in respect of income received from big forests during the period of thirty agricultural years preceding the agricultural year in which the relevant date falls and cost of management varying from 8 to 15 per cent. of the gross annual income on incomes varying from Rs. 2,000 to Rs. 15,000. It is further provided that not withstanding anything contained in sub-rule (2) the net incomes shall in case be reduced to less than five per cent. of the gross income. Chapter IV deals with certain incidental matters in respect of the determination of the debts of proprietors. Its provisions are analgulus to the provisions of Debt Conciliation or Relief of Indebtedness Act. \n It is provided in Chapter V how the actual amount of compensation is to be determined and paid. Chapter VI deals with that part of Madhya Pradesh which is defined as Central Provinces in the Act. It is provided herein that a proprietor who has been divested of his estate will have malik-makbuza rights in his homenfarm lands. Absolute occupancy tenants and occupancy tenants can also acquire malik - makbuza rights. Provision is made for reservation of grazing lands and for the collection of land revenue. Similar provisions are made in Chapter VII in respect of management and tenures of land in the merged territories. Chapter VIII deals with management and tenures of lands in Berar. Separate provision has been made for the determination of compensation payable to lessees of mines and minerals. Under the provisions of section 218 of the Central Provinces Land Revenue Act and Section 44 of the Berar Land Revenue Code there is a presumption that all mines and minerals belong to the State and the proprietary rights in them could be granted by the State to any person. Wherever a right of minerals has been so assigned, provision has been made regarding its acquisition and the consequences as resulting from such acquisition. The Act provides for the giving of rehabilitation grant to expropriated proprietors within a certain range provided for in Schedule III. The last chapter in the Act deals with miscellaneous matters including the power of making rules. The main purpose of the Act is to bring the actual tillers of the soil in direct contract with the State by the elimination of intermediary holders. In short, the Act aims at converting malguzari into ryotwari land system. In also aims at giving to the gram panchayats the management of common lands freed from the grip of proprietors and contemplates the establishment of self-government for the villages. The provisions of the Act in respect of payment of compensation, though they do not in any way provide for an equivalent in money of the property taken and in that sense may not be adequate cannot be called illusory. \n This Act is a definite improvement on the Bihar Act it leaves the arrears of rents due in the hands of the proprietors and does not operate artificially to reduce the net income by any device. It also provides that in no case the net income should be reduced below five per cent of the gross income. The result is that in every case some amount of money becomes payable by the State by way of compensation to the proprietor and in no case does the compensation work into a negative sum or to a mere zero or a minus figure. In other respects the provisions of the Act in regard to compensation follow the pattern which is common to all zamindari legislation, which is to inflate the amount of expenditure and deflate the actual income. The siwai income from jalkar, bankar, etc. and from village forests is calculated at two times the siwai income recorded in the settlement made in 1923. This is Act was passed in 1951. The siwai income recorded in the year 1923 is appreciably less than the actual income of the properties from these sources in 1951. Similarly the income from consent money has to be calculated by taking the average income for ten years preceding the date of vesting and not the actual income as in the case of rent realized during the previous agricultural year. The expenditure has been inflated by taking in respect of the big forests the average income-tax paid during the period of thirty agricultural years. No agricultural income-tax existed during most of this period. It only came into existence recently. The cost of management has been calculated at a flat rate of eight to fifteen per cent. There can therefore be no doubt that the principles laid down for determination of compensation cannot be called equitable and they do not provided for payment of just compensation to the expropriated proprietor. The Petitioners case is that under the formula stated in the Act, a compensation of 25 lakhs which would be due to him on he basis of the value of property taken, has been reduced to a sum of Rs. 65,000 and is payable in thirty unspecified instalments and therefore it is purely nominal and illusory. This figure of Rs. 65,000 is arrived at by the following process - \n Gross income from rents. Rs. 55,000 \n Siwai income Rs. 80,500 Actually (according to the affidavit the petitioner was realizing 4,65,000 from this source). Total 1,35,000 Deductions permissible under the Act are the following - \n Revenue 45,000 \n Income-tax on 30 years average 66,600 \n Cost of management 21,000 Total ------- 1,32,600 Net income 2,400 \n Ten times net income would be Rs. 24,000 but as the net income cannot be reduced below five per cent. of the gross income which comes to Rs. 6500, compensation payable is Rs. 65,000 while the yearly income of the petitioner was in the neighbourhood of Rs. 5,65,000 and the market value of his property is 25 lakhs. The first and the main objection to the validity of the Act taken by the learned counsel is that the Bill was never passed into law. As already indicated, this objection is founded on the omission from the proceedings of the Madhya Pradesh Legislative Assembly dated the 5th April, 1950, of a statement to the effect that the Bill was put to the House by the speaker and was passed by it. Reference was made to rules 20,22, 34 and 115 of the rules regulating the procedure of the legislature framed under the Government of India Act, 1935, in the year 1936, which provides as follows - \n 20 (1). A matter requiring the decision of the Assembly shall be decided by means of a question put by the Speaker on a motion made by a member \n After a motion has been made, the speaker shall read the motion for the consideration of the Assembly. 34 (1) Votes may be taken by voices or division and shall be taken by division if any member so desires. The Speaker shall determine the method of taking votes by division. The result of a division shall be announced by the Speaker and shall not be challenged. 115 (1) The Secretary shall cause to be prepared a full report of the proceedings of the Assembly at each of its meetings and publish it as soon as practicable. One impression of this printed report shall be submitted to the Speaker for his confirmation and signature and when signed shall constitute the authentic record of the proceedings of the Assembly. It was urged that the authentic report of the proceedings of the Assembly was conclusive on the point, that the Bill was not put to the Assembly by means of a question and was not voted upon, and hence it could not be said to have been passed by the legislature. It was said that even if there was no open opposition to the passing of the Bill, it was possible that if it was put to the Assembly, it might have rejected it. As already pointed out, the proceedings were signed by the Speaker on the 1st October, 1950, while the certificate that the Bill was passed was recorded by him on the original Bill when it was submitted to the President for his assent on the 10th May, 1950. \n The certificate of the Speaker is conclusive on the point that the Bill was passed by the legislature (Vide Craies Statute Law, 4th Edn., p. 36). It seems to me that by an oversight it was not recorded in the proceedings that the mission was put to and passed by the House and the Speaker while signing the proceedings six months after the event failed to notice the error. There can be no about that the sense of the House on the 5th April, 1950, was for passing the Bill and there was no one present who was for rejecting it. The motion before the House that the Bill be passed. The Speaker could not possibly have appended a certificate on a Bill that it was passed by the House if it had not been so passed. There are no grounds whatever for doubting the correctness of his certificate. In my opinion the contention raised that the Bill was not passed into law fails and must be rejected. Next it is contended that articles 31-A and 31-B have no application to this Bill as it never became law by following the procedure prescribed in the Constitution and that those articles have only application to a Bill that had becomes an Act. The Legislature of Madhya Pradesh consists of the Governor and the Legislative Assembly. It was said that even if the Bill was passed by the Legislative Assembly, it was not assented to by the Governor but was straightway sent to the President and that without the assent of the Governor the Bill could not become law despite the fact that it was assented to by the President and it was pointed out that sub-clause (3) of article 31 of the Constitution speaks of law being reserved for the consideration of President and not merely a Bill. \n This argument, in my opinion, has not much force having regard to the terms and scope of article 200. The Governor under that article could assent to a Bill or could reserve it for the consideration of the President at his option. The Governor being empowered to reserve the Bill for the consideration of the President and this having been done, it was for the President either to assent to the Bill or to withhold his assent. The President having given his assent, the Bill must be held to have been passed into law. It does not seem to have been intended that the Governor should give his assent to the Bill and make it a full-fledged law and then reserve it for the Presidents consideration so that it may have effect. Mr. Somayya pressed the point that the President could not perform both his functions under article 200 and article 31(4) concerning this Bill at one and the same time, that first the procedure laid down in article 200 for the passing of the Bill in to law should been followed, i.e. the Governor should have either assented to the Bill or should have reserved it for the consideration of the President and if it was so reserved, the President should then have given his assent and the Bill would then become law, that after the Bill had become law, the Governor should again have reserved this Bill for the consideration of the President as required by the provisions of article 31(3) in order to make it effective law against the provision of article 31(2) and that if the President then gave his assent, the law so assented to could not be called in question in a court of law. \n It was said that only in case where this double procedure is followed that it could be said that the President had satisfied himself that the law did not contravene the provisions of article 31(2). In my opinion, the argument is fallacious. It would be a meaningless formality for the President to give his assent to the same Bill twice over. I cannot see why the President cannot perform both the duties entrusted to him by articles 200 and 31(3) and (4) at one the same time. He is not disabled under the Constitution from applying his mind to such a Bill once and for all to see whether it has to be passed into law and whether it fulfils the requirements of article 31(2). The Presidents assent therefore to the Bill attracts the application of articles 31-A and 31-B to it and deprives persons affected by it of the rights guaranteed in Part III of the Constitution. The Provisions of article 31(4) support the view of the learned Attorney-General that what has to be sent to the President is the Bill as passed by the legislature and not the Bill after it has been assented to by the Governor. The article reads thus - If any Bill pending at the commencement of this Constitution in the Legislature of a State has, after it has been passed by such Legislature been reversed for the consideration of the President and has received his assent, them notwithstanding anything in this Constitution, the law so assented to shall not be called in question in any court on the ground that it contravenes the provisions of clause (2). In this context the word Legislature means the House or Houses of Legislature and does not include the Governor with in its ambit. This word has not the same meaning in all the articles. In some articles it means the Governor as well as the Houses of Legislature, while in a number of other articles it only means the House or Houses of Legislature. Article 31(4) means that if any Bill contravening the provisions of clause (2) of article 31 is passed by the House or Houses of Legislature but is reserved for he consideration of the President and receives his assent, then it shall become law, not open to any objection on the ground of such contravention. Next it was contended that the obligation to pay compensation was implicit in the legislative power contained in entry 36 of List II and that the Act was unconstitutional as it had provided for acquisition of zamindaris without payment of compensation, the provisions relating to it being illusory. \n This contention fails for the reasons given in my judgment in the Bihar case. Moreover, the compensation provided for in the impugned Act cannot be dubbed as illusory. All that can be said is that it is grossly inadequate and it is not the equivalent of the value of the property acquired, but this issue is not justiciable in view of the provisions of article 31(4). This Bill was pending at the commencement of the Constitution, it was reserved for the consideration of the president and the President gave his assent to it. The conditions for the application of article 31(4) thus stand fulfilled. Besides the obstacle of article 31(4). two further hurdles, viz., of articles 31-A and 31-B introduced by the amendments to the Constitution, stand in the way of the petitioner and bar an enquiry into the question of the quantum of compensation. The contention that there is no public purpose behind the impugned Act has also to be repelled on the same reasoning as given by me in the Bihar case. The purpose behind the Act is to establish direct contact between tillers of the soil and the Government and to eliminate the intermediaries, as in the view of the Government this is for the welfare of the society as a whole. It is also the purpose of the Act to confer malik maqbuza status on occupancy tenants and improve their present position and to vest management of village affairs and cultivation in a democratic village body. It is too late in the day to contend that reform in this directions is not for general public benefit. The next argument of Mr. Somayya that the Act is a fraud on the Constitution in that in legislating under entry 42 of List III, it has legislated for non-payment of compensation has also to be repelled, for the reasons given in the Bihar case. Under the provisions of this Act compensation can in no case work out into a mere nothing. On the other hand, in every case some amount of compensation is payable and in the majority of cases it is also not inadequate, Mr. Somayya contended that payment of Rs. 65,000 as compensation to his client for property worth twenty-five lakhs of rupees was purely illusory. \n The assessment of value by the petitioner cannot be taken at its full value. It cannot at any rate be held that legislation which provides for the payment of a sum of Rs. 65,000 provides for no compensation. The amount of instalments, if payment is to be in instalments, is bound to be fixed by the rules made under the statute and in case the rules are so made that they amount to an abuse of the exercise of that power, they can always be challenged on that ground. The argument that the Act is bad inasmuch as it delegates essential legislative power to the executive is negatived for the reasons given in the Bihar case. A point was raised that the constitutional amendments in articles 31-A and 31-B could not affect the petitioners guaranteed rights contained in Part III of the Constitution in so far as the eighty malguzari villages were concerned, because those mahals did not fall within, the ambit of the word estate as defined in article 31-A. In sub-clause (2) (a) the definition is in these terms - The expression estate shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area, and shall also include any jagir, inam or muafi or other similar grant. Section 2 (3) of Act II of 1917, C. P. Land Revenue Act, defines the expression estate thus - an estate as declared by the State Government. The learned Advocate - General conceded that these villages are not within the ambit of this definition but he contended that they are within the scope of the definition of the expression given in article 31-A, as mahals in Central Provisions are local equivalents of the expression estate, though not so declared by the Act. There is nothing on the record to support this contention. The contention that those eighty mahals are not an estateand are thus excluded from the reach of article 31-A does not, however very much advances the petitioners case, because the hurdles created in his way by articles 31-B and 31(4) stand in spite of the circumstances that article 31-A has no application. It was contended that article 31-B was merely illustrative of the rule stated in article 31-A and if article 31-A had no application, that article also should be left out of consideration. Reference was made to the decision of the Privy Council in King Emperor v. Sibnath Banerjee ((1945) L.R. 72 I.A. 241 1945 F.C.R. 195), on the construction of sub-sections (1) and (2) of section 2 of the Defence of India Act. The material portion of section 2 considered in that case runs thus - \n (1). The Central Government may, be notification in the official gazette, make such rules as appear to it to be necessary or expedient for securing the defence of Birth India, the Public safety, the maintenance of public order or the efficient prosecution of war, or for maintaining supplies and services essential to the life of the community. (2) without prejudice to the generality of the powers conferred by sub-section (1), the rule may provide for, or may, empower any authority to make orders providing for all any of the following matters, namely \n Their Lordships made the following observations about the meaning to be given to the language of sub-section (2) -- the function of sub - section (2) is merely an illustrative one the rule-making, power is conferred by sub-section (1), and the rules which are referred to in the opening sentence of sub-section (2) are the rules which are authorised by, and made under, sub-section (1) the provisions of sub-section (2) are not restrictive of sub-section (1), as indeed is expressly stated by the words without prejudice to the generality of the power conferred by sub-section (1). Article 31-B is in these terms - \n Without prejudice to the generality of the provisions continued in article in article 31-A none, of the Acts and Regulations specified in the Ninth Schedule nor any of the provisions thereof shall be deemed to be void on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges any of the rights conferred by, any provisions of this Part, and notwithstanding any judgment, decree or order of the court or tribunal to the contrary, each of the said Acts and Regulations shall, subject to the power of any competent Legislature to repeal or amend it, continue in force. On the basis of the similarity of the language in the opening part of article 31-B with that of sub-section (2) of section 2 part of the Defence of India Act, without prejudice to the generality of the provisions contained in article 31-A, it was urged that article 31-B was merely illustrative of article 31-A and as the latter was limited in its application to estates as defined therein, article 31-B was also so limited. In my opinion, the observations in Sibnath Banerjees case ((1945) L.R. 72 I.A. 241 1945 F.C.R. 195), far from supporting the contention raised, negatives it. Article 31-B specifically validates certain Acts mentioned in the schedule despite the provisions of article 31-A and is not illustrative of article 31A but stands independent of it. The impugned Act in this situation qua the acquisition on the eighty malguzari villages cannot be questioned on the ground that it contravenes the provisions of article 31(2) of the Constitution or any of the other provisions of Part III. The applicability of article 31(4) is not limited to estates and its provisions save the law in its entirety. This petition is accordingly dismissed but in the circumstances I make no order as to costs. Petition No. 317 of 1951. Mr. Bindra, who appeared for the petitioner placed reliance on the observations of Holmes C.J. in Communications Assns. v. Douds (339 U.S. 382, 384), viz., that the provisions of the Constitution are not mathematical formulas having their essence in their form they are orgnic living institutions transplanted from English soil. \n Their significance is vital, not formal it is to be gathered not simply by taking the words and a dictionary, but by considering their origin and the line of their growth, and contended that if the Constitution of India was constructed in the light of these observations, then despite the express provisions of article 31(2) it would be found that there is something pervading it which makes the obligations to pay real compensation a necessary incident of the compulsory acquisition of property. It was said that right to compensation is implied in entry 36 List II of the Seventh Schedule and that article 31(2) does not confer the right but merely protects it. Mr. Bindra merely tried to annotate the arguments of Mr. Das but with no better result. The dictum of Holmes C.J. has no application to the construction of a Constitution which has in express terms made the payment of compensation obligatory for compulsory acquisition of property, which again in express terms by an amendment of it, has deprived persons affected by the impugned Act of this right. One further point taken by Mr. Bindra was that nationalization of land is a separate head of legislation and that acquisition in general does not fall within the scope of entry 36 List II of the Seventh Schedule. This proposition was sought to be supported by reference to a passage from Stephens Commentaries on the Laws of England, Vol. III, p. 541. The passage, however read in its entirety, negatives the contention. It may be mentioned that under powers of compulsory acquisition a number of properties have been nationalized in England and other countries. Lastly, it was urged that the legislation in question was not enacted bona fide inasmuch as in 1946 the legislature having passed a resolution to end zamindaries, proceeded to enact laws with the purpose of defeating the constitutional guarantees regarding payment of compensation by various devices. As a first step in this direction the revenue was enhanced in order to reduce the gross income of the zamindars, then other Acts mentioned in the earlier part of the main judgment were enacted with the same end in view. In my opinion this argument is void of force. It was within the competence of the Government in exercise of its governmental power to enhanced land revenue, to withdraw exemption of land revenue, wherever those had been granted, and to enact other laws of a similar character. There is no evidence whatsoever that all these enactments were enacted with a fraudulent design of defeating the provisions of payment of compensation contained in the Constitution. The Constitution had not even come into force by the time that most of these statutes were enacted. The petition is therefore dismissed. I however, making no order as to costs. Petition No. 286 of 1951 \n This petition is concluded by my decision in Petition No. 166 of 1951 except as regards one matter. The properties belonging to the petitioner and acquired under the statute were originally situate in an Indian State which became subsequently merged with Madhya Pradesh. It was contended that by the terms of the covenant of merger those properties were declared as the petitioners private properties and were protected from State legislation by the guarantee given in article 362 of the Constitution and hence the impugned Act was bad as it contravened the provisions of this article. Article 362 is in these terms - In the exercise of the power of Parliament or of the legislature of a State to make laws or in the exercise of the executive power of the Union or of a State due regard shall be had to the guarantee or assurance given under any such covenant or agreement as is referred to in clause (1) of article 291 with respect to the personal rights, privileges and dignities of the Ruler of an Indian State. Article 363 takes away the jurisdiction of the courts regarding disputes arising out of treaties agreements, covenants, engagements, sanads etc. It is true that by the covenant of merger the properties of the petitioner became his private properties as distinguished from properties of the State but in respect of them he is no better position than any other owner possessing private property. Article 362 does not prohibit the acquisition of properties declared as private properties by the covenant of merger and does not guarantee their perpetual existence. The guarantee contained in the articles is of a limited extent only. It assures that the Rules properties declared as their private properties will not be claimed as State properties. \n The guarantee has no greater scope than this. That guarantee has been fully respected by the impugned statue as it treats treats those properties is their private properties and seeks to acquire them on that assumption. Moreover it seems to me that in view of the comprehensive language of article 363 this issue is not justiciable. This petition is accordingly dismissed but there will be no order of costs. Petitions Nos. 228, 230, 237, 245, 246, 257, 280, 281, 282, 283, 284, 285, 287, 288 and 289 of 1951. In all these fifteen petitions, Mr. Swami appeared for the petitioners. Seven of these are by zamindars from Madhya Pradesh who are owners of estates. The petitioner in Petition No. 246 also owns certain malguzari villages. Petitioner in Petition No. 237 is a malguzar of eighteen villages but owns no estate. Petitions Nos. 280 to 285 and 257 relate to merged territories. The petitioner in Petition No. 282 was ruler of a State (Jashpur) and the petition concerns his private properties. Petitioners in Petitions Nos. 283, 284 and 285 are Ilakadars and in Petitions Nos. 280 and 285 they are mafidars. Petitioner in Petition No. 281 is a Thikedar i.e., revenue farmer of three villages. Mr. Swami reiterated the contention raised by Mr. Somayya that the Act was not duly passed by the legislature. For the reasons given in Petition No. 166 of 1951, I see no force in this contention, Mr. Swami also reiterated Mr. Bindras contention that the legislation was not bona fide. For the reasons given in Petition No. 317, this contention is not accepted. Mr. Swami Vehemently argued that the Government has by this Act become a super- zamindar, that there is no public purpose behind the Act, that there is no change in the existing order of things, that the Act has achieved nothing new, the tenants remain as they were, the malikan cabza were also already in existence, that acquisition of that status by occupancy tenants was possible under existing statutes and that they had also the power of transfer of their holdings. In my opinion, the argument is based on a fallacy. As already stated, the purpose of the Act is to bring about reforms in the land tenure system of the State by establishing direct contact between the tillers of the soil and the Government. These petitions are accordingly dismissed. I make no order of costs in them. Mr. Mukherji who appeared in this petition merely adopted the arguments taken in other petitioners. For the reasons given therein this petition is also dismissed, but I make no order as to costs in it. Petition No. 487 of 1951. Mr. Jog appeared in this petition and raised the same points as in other petitions. This petition also fails and is dismissed. There will be no order as to costs. Mukherjea, J. \n I agree with my Lord the Chief Justice that these petitions should be dismissed. Das, J. The Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act 1950 (Act I of 1951) having on January 22, 1951), received the assent of the President of India a Notification was published in the Madhya Pradesh Gazette of January 27, 1951, fixing March 31, 1951, as the date of vesting of all propriety rights in the State under section 3 of the Act. A number of applications were made under article 226 of the Constitution to the Madhya Pradesh High Court by or on behalf of different persons variously described as Zamindars or Malguzars or Proprietors of alienated villages paying for the issue of appropriate writs against the State of Madhya Pradesh prohibiting them from proceeding under the Act the validity of which was challenged on a variety of grounds. Eleven of these applications came up for hearing before a Full Bench of the High Court (B. P. Sinha C.J. and Mangalmurthi and Mudholkar JJ.) and were, on 9th April 1951, dismissed. The High Court certified under article 132(1) that the cases involved a substantial question of law as to the interpretation of the Constitution. No appeal, however, appears to have been actually filed presumably because the present applications under under article 32 had already been filed in this Court. \n It may be mentioned here that the States of Bihar and Uttar Pradesh also passed legislation for the abolition of zamindar in their receptive States and the validity of those legislations was also contested by the proprietors affected thereby. While the High Court of Allahabad upheld the validity of the Uttar Pradesh Act, the High Court of Patna held the Bihar Land Reforms Act, 1950 to be unconstitutional only on the ground that it offended the fundamental right of equal protection of the law guaranteed by article 14 of the Constitution. In the circumstances, the Constituent Assembly passed the Constitution (First Amendment) Act, 1951, by section 4 and 5 of which two new articles, namely, article 31-A and article 31-B were inserted into the Constitution. A new schedule called the Ninth Schedule specifying 13 several Acts and Regulations including the Madhya Pradesh Act, I of 1951, was also added to the Constitution. The legal validity of the Constitution (First Amendment) Act, 1951, which was challenged, has however, been upheld by this Court and all courts must give effect to the two new articles which are now substantive parts of our Constitution. Articles 31-A relates back to the Constitution and article 31-B to the respective dates of the Acts and Regulations specified in the Ninth Schedule. The present bunch of petitions has been filed in this Court under article 32 of the Constitutional challenged the validity of the Madhya Pradesh Act and praying for appropriate writs, directions and orders restraining the State of Madhya Pradesh from acting under that Act and disturbing the petition title to, and possession of their respective estates, villages or properties. Learned counsel appearing for the different petitioners accepted the position that as a result of the Constitutional amendments the impugned Act has been removed from the operation of the provisions of the Part III of the Constitution and that consequently the attract on the Act will have to be founded on some other provisions of the Constitution. Mr. B. Somayya appearing for the petitioner in Petition No. 166 of 1951 (Visheshwar Rao v. The State of Madhya Pradesh) challenged the validity of the Act of the following grounds - \n (a) that the Bill itself itself was not passed by the Madhya Pradesh Legislature \n (b) that the procedure laid down in article 31(3) had not been complied with \n (c) that the Madhya Pradesh Legislature was not competent to enact the said Act, in as much as - \n the acquisition sought to be made under the Act is not for the a public purpose, and \n there is no provision for payment of compensation in the legal sense \n (d) that the Act constitutes a fraud on the Constitution \n (e) that the Act is unenforceable in that it provides for payment of compensation by instalments but does not specify the amount of the instalments \n (F) that the Act has delegated essential legislative functions to the executive Government \n (g) that the Act in so far as it purports to acquire the Malguzari villages or Mahals is not protected by article 31-A. Learned counsel for other petitioners adopted and in some measure reinforced the arguments of Mr. B. Somayya. Re. (a) In dealing with this ground of objection it will be helpful to note the course which the Bill took before it was put on the Statute Book. There is no dispute as to the correctness of the dates given to us by counsel for the petitioners. The Bill was introduced in the Madhya Pradesh Assembly on 11th October, 1949. It was referred to a Select Committee on 15th October 1949. The Select Committee made its Report on 9th March, 1950, which was presented to the Assembly on 29th March, 1950. The Assembly considered the Bill in the light of the Report between that date and 5th April 1950, during which period the amendments proposed by the Selected Committee were moved and disposed of. It appears from the Official Proceeding of the Madhya Pradesh Legislative Assembly of 5th April, 1950 that the after the last amendment had put to the House and accepted, the Honble Minister for Education (Sri P. S. Deshmukh) moved that the Bill be passed into law and and delivered a short speech inviting the members to finally pass the Bill. \n The Speaker then read out the motion. Then followed speeches by 11 speakers congratulating the Government and some of the members who took an active part in carrying, through this important measure of land reform and relief to the tillers of the soil. Nobody put forward any reasoned amendment and the trend of the speeches shows that the House accepted the Bill. From the official Report of proceedings it does, not however appear that after the speeches the speaker formally put the motion to the vote or declared it carried. It only shows that the House passed on to discuss another Bill, namely the Madhya Pradesh State Aid to Industries (Amendment) Bill, 1950. The next of the Bill as it emerged through, the House was printed on 29th April, 1950, and Speaker signed a copy of the Printed Bill on 5th May, 1950, and certified that it had been passed by the House and forwarded it to the Governor. By an endorsement on that copy of the Printed Bill the Governor reserved the Bill for the assent of the President and the President, on 22nd January, 1951, signified his assent by endorsing his signature at the foot of that copy of the Printed Bill. The learned Advocate - General has produced the original printed Act signed by the Speaker the Governor and the President. It appears that the official Report of Proceedings of the Legislative Assembly of 5th April, 1950, was printed in June, 1950, and were on 1st October, 1950, signed by the Speaker along with the proceedings of many other meetings of the Assembly. \n It is to be noted that the Speaker simply signed the printed proceedings without starting one way or the other whether the Bill in question was passed or not. The Objection formulated by learned counsel for the petitioners is founded is founded on the Rules of Procedure framed by the Assembly under section 84 of the Government of India Act, 1953 which were continued in force until new rules were farmed under article 208 of the Constitution. That old rules 22 which required that after at motion was made the Speaker should red the motion for the consideration of the Assembly has been complied with is not disputed. What is contended is that the provisions of old rule 20(1) have not been followed. That rule was in these terms A matter requiring the decision of the Assembly shall be decided by means of a question put by the Speaker on a motion made by a member. It is urged that the question that the Bill be passed into law was not to the Assembly under rule 20 and if it was at all put the result of the voting, whether by voices or division, was never announced by the Speaker as required by old rule 34. There being a presumption of regularity attached to all official business the onus is undoubtedly on the petitioners to allege and prove that the procedure prescribed by the rules was not followed. There is no evidence on affidavit by anybody who was present at the meeting of the Assembly held on 5th April, 1950, as to be what actually happened on that date. The petitioners rely only on the absence in the Official Report of proceedings of any mention of the question being put to or carried by the Assembly. The Official Proceedings were prepared and confirmed in terms of old rule 115 which was as follows - \n The Secretary shall cause to be prepared a full report of the proceedings of the Assembly at each of its meetings and publish it as soon as practicable. One impression of this printed report shall be submitted to the Speaker for his confirmation and signature and when signed shall constitute the authentic record of the proceedings of the Assembly. The argument is that the initial onus that was on the petitioners has been quite adequately and effectively discharged by the authentic record of the proceedings of the Assembly and consequently it must be held that the Bill did not actually become law at all. I am not prepared to accept this contention as sound. I have already pointed out that the original printed Act produced before us clearly shows that on 5th May 1950, the Speaker certified that the Bill had been passed by the Assembly. It is pointed out that old rule 87 under which the Speaker certified that the Bill had been passed did not give any finality or conclusiveness to the Speaker Certificate that the Bill had been passed such as is provided for in old rules 34 (2) or 39 (3) and, therefore, the certification under old rule 87 cannot affect the authenticity of the record confirmed and signed by the Speaker under old rule 115. \n This does not appear to me to be a correct approach to the problem. The question before us is whether as a matter of fact the Bill had duly passed according to the rules. The certification of the Speaker was within a month from 5th April 1950, while the confirmation of the proceedings took place on 1st October, 1950. There can be no doubt that the memory of the Speaker was fresher on the 5th May, 1950, than it was on 1st October, 1950, when he singed a bunch of reports of proceedings. Therefore, as a statement of a fact more reliance must be placed on the certification of the Bill than on the confirmation of the proceedings and it will not be unreasonable to hold that the omission of any mention of the question having been put to and carried by the Assembly was an accidental slip or omission. Further the speeches delivered by the eleven speakers clearly indicate that the stage there was no opposition the Bill. Therefore, putting the question at the end of the third reading of the Bill would have been at best a mere formality. (See Mays Parliamentary Practice, 14th Edn p. 544). It is after all, a matter for the Speaker to declare the result, The authentication by the Speaker on the printed Act that the Bill was passed involves such a declaration having been duly made. In British Parliamentary practice the Speakers authentication is taken as conclusive (See Cries on Statute Law, 4th Ed., p. 36). The Petitioners as I have said, strongly rely on the official Report of the Proceedings. It should, in this connection be borne in mind that article 208 of the Constitution continued the old rules until new rules were framed. \n It appears that new rules were framed and actually came into force on 8th September 1950, New rule 148 does not reproduce sub-rule (2) of old rule 115 After the new rules came into force it was no longer the duty of the Speaker to confirm the proceedings at all. Therefore the purported confirmation of the proceedings by the Speaker on 1st October 1950, cannot be given any legal validity and the argument founded on authentication under defunct rule 115 (2) must lose all its force. Finally, the irregularity of procedure, if any, is expressly cured by article 212. I am not impressed by the argument founded on the fine distinction sought to be made between an irregularity of procedure and on omission to take a particular step in the procedure. Such an omission in my opinion is nothing more than an irregularity of procedure. In my judgment this ground of attack on the validity of the Act is not well-founded and must be rejected. Re. (b) Article 31(3) on which this ground of attack is based runs as follows - \n No such law as is referred to in clause (2) made by the Legislature of a State Shall have effect unless such law, having been reserved for the consideration of the President, has received his assent. Great, stress is laid on the words law and legislatures of a state. It is said that this clause postulates a lawmade by the Legislature of a State. Reference is then made to article 168 which provides that for every State there shall be a Legislature which shall consist of the Governor and so far as Madhya Pradesh is concerned, of one House, i.e. the Legislative Assembly. The argument is that article 31(3) requires that a law must be reserved for the consideration of the President. If a bill Passed by the Assembly is reserved by the Governor for the consideration of the President without giving his own assent thereto, it cannot be said that a law is reserved for the consideration of the President, for up to that stage the Bill remains a Bill and has not been passed into law. Therefore, it is urged that after a Bill is passed by the State Assembly, the Governor must assent to it so that the Bill becomes a law and then that law, to have effect, must be reserved for the consideration of the president. This admittedly, not having been done, the provisions of article 31(3) cannot be said to have been complied with and, therefore, the Act cannot have any effect at all. \n I am unable to accept this line of reasoning. For one thing, it assumes that a Bill passed by the State Assembly can become a law only by the assent of the Governor. That is not so. The procedure to be followed after a Bill is passed by the State Assembly is laid down in article 200. Under that article, the Governor can do one of three things, namely he may declare that he assents to it, in which case the Bill becomes a law, or he may declare that he with holds assent therefrom in which case the Bill falls through unless the procedure indicated in the proviso is followed or he may declare that he reserves the Bill for the consideration of the President in which case the president will adopt the procedure laid down in article 201. Under that article the President shall declare either that he assents to the Bill in which case the Bill will become law or that he withholds assent therefrom, in which case the Bill falls through unless the procedure indicated in the proviso is followed. Thus it is clear that a Bill passed by a State Assembly may become a law if the Governor gives his assent to it or if, having been reserved by the Governor for the consideration of the President, it is assented to by the President. In the latter event happening, the argument of the learned counsel for the petitioners will require that what has become a law by the assent of the President will, in order to be effective, have to be again reserved for the consideration of the President, a curious conclusion I should be loath to reach unless I am compelled to do so. Article 200 does not contemplate a second reservation by the Governor. The plain meaning of the language of article 31(3) does not lead me to the conclusion. The whole arguments is built on the word law. I do not think that what is referred to as law in article 31(3) is necessarily hat had already become a law before receiving the assent of the President. \n If that were the meaning the clause would have said unless such law, having been reserved for the consideration of the President, receives his assent. The words has received his assent clearly imply and point to an accomplished fact and the clause read as a whole does not grammatically exclude a law that eventually become a law by having had received the assent to the President. The question whether the requirements of article 31(3) have been complied with will arise only when the State purports to acquire the Property of any person under a law and that person denies that the asserted law has any effect. It is at that point of time that the Court has to ask itself-is it a law which, having been reserved for the consideration of the President has received his assent I think it is in this sense that the word law has been used. In other words, the word law has been used to mean what at the time of dispute purpose to be or is asserted to be a law. The language of article 31(4) also supports this interpretation. In my judgment article 31(3) on its true interpretation, does not require that the Governor must first assent to the Bill passed by the Assembly so as to convert it into a law and then reserve that law for the consideration of the President. I have already pointed out that article 200 does not contemplate a second reservation which will be necessary if initially the Governor instead of himself assenting to the Bill had reserved it for the consideration of the President. In my opinion there is no substance in the second objection which must, therefore, be over ruled. Re. (c) (d) (e) and (f) Similar heads of objections were formulated and argued at considerable length by Mr. P. R. Das in the Bihar appeals and learned counsel appearing for the petitioners in the President proceedings have adopted the same. \n Shortly the argument is that although the impugned Act cannot in view of articles 31(4) and 31-B be called in question on the ground that it takes away or abridge or is inconsistent with the fundamental rights, it can, nevertheless, be challenged on other grounds. Thus it is open to the petitioners to show that the Legislature had no power to enact the law or that it offends against any other provision of the Constitution. Mr. N. S. Bindra and Mr. Swami have sought to reinforce those argument by citing certain further passager from certain text books and reported decisions. The Provisions of the impugned Act have been analysed and summarised by Mahajan J. in the judgment just delivered by him and it is not necessary for me to recapitulate the same. Nor is it necessary for me to formulate in detail the various heads of arguments founded principally on what is said to be the legislative incompetence of the Madhya Pradesh Legislature to enact the impugned Act in view of the language of legislative topics set forth in entry 36 in List II and entry 42 in List III or on the ground that the Act is a fraud on the Constitution or that it delegates essential legislative power to the executive Government which is not permissible. Suffice it to say that for reasons stated in my judgments in the Bihar appeals I repeal these heads of objections. If anything the existence of a public purpose is more apparent in the Madhya Pradesh Act than in the Bihar Land Reforms Act. Further the compensation provided in the Madhya Pradesh Act is more liberal than that provided in the Bihar Act, for under clause 4 (2) of Schedule I the net income can in no case be reduced to less than 5 per cent. of the gross income. In any event the Act cannot, for reasons stated by me in my judgment in the Bihar appeals, be questioned on the ground of absence of public purpose or of compensation. The fact that the Madhya Pradesh Legislature passed several Acts one after another, e.g. C. P. Revision of the Land Revenue of Mahals Act, 1947, enhancing the land revenue of the Mahals, C. P. Revision of Land Revenue of Estates Act 1939 and C. P. Revision of Land Revenue of Estates Act, 1947, increasing the land revenue of the estates, Revocations of Exemptions Act, 1948, revoking the exemptions from land revenue enjoyed by certain proprietors and finally the impugned Act, has been relied on as evidence of a systematic scheme for expropriating the zamindars and it is contended that such a conduct clearly amounts to a fraud on the Constitution. \n I am unable to accept this line of reasoning for the series of legislation referred to above may well have been conceived and undertaken from time to time in utmost good faith. It is true that section 9 of the Acts does not specially indicate when the instalments will began or what the amount of each instalments will be but the Section clearly contemplates that these details should be worked out by rules to be framed under section 91 of the Act. Further under section 10 the State Government is bound to direct payment of an interim compensation amounting to one-tenth of the estimated amount of compensation if the whole amount is not paid within a period of six months from the date of vesting of the property in the State. I see no improper delegation of legislative power at all. In my opinion all these heads of objections must be rejected. Re (g) The last ground of attack is that the 80 Malaguzari Mahals belonging to the petitioner in Petition No. 166 of 1951 are not estates and, therefore, the impugned Act in so far as it purports to acquire the Malguzari Mahals is not a law which is protected by article 31-A. Learned Advocate-General of Madhya Pradesh concedes that these Malguzari Mahals are not estates within the meaning of the C. P. Land Revenue Act but contends that the word estate has been used in a larger sense in article 31-A. In any case the impugned Act is protected by article 31-B. I do not think it necessary to discuss the meaning of the word estate as used in article 31-A for in my opinion, the argument of the learned Advocate - General founded on article 31-B is well-founded and ought to prevail. Mr. B. Somayya has drawn our attention to the words without prejudice to the generality of the provisions of article 31-A occurring in the beginning of article 31-B and contended that the interpretation put upon these words by the Judicial Committee in Shibnath Banerjees case ((1945) L.R. 72 I.A. 241 1945 F.C.R. 195), should be applied to them. I do not see how the Principles enunciated by the Judicial Committee can have any possible application in the interpretation of article 31-B. Article 31-B is neither illustrative of nor dependant on article 31-A. The words referred to were used obviously to prevent any possible argument that article 30-B cut down the scope or ambit of the general words used in article 31-A. \n A question was raised by Mr. Asthana appearing for the Ruler of Khairagarh who is the petitioner in Petition No. 268 of 1951. Khairagarh is one of the States which formerly fell within the Eastern States Agency. On 15th December, 1947, the Ruler entered into a covenant of merger. In that covenant the properties in question were recognised as the personal properties of the Ruler as distinct from the State Properties. Reference is made to article 362 which provides that in the exercise of the per of Parliament or of the Legislature of a State to make laws or in the exercise of the executive power of the Union or of a State, due regard shall be had to the guarantee or assurance given under any such covenant or agreement as is referred to in clause (1) of article 291 with respect to the personal rights privileges and dignities of the Ruler of an Indian State. It is said that the impugned Act is bad as it contravenes the above provisions. The occur to me several answers to this contention. The guarantee or assurance to which due regard is to be had is limited to personal rights, privileges and dignities of the Ruler qua a Ruler. It does not extend to personal property which is different from personal rights. Further this article does not import any legal obligation but is an assurance only. All that the covenant does is to recognise the title of the Ruler as owner of certain properties. To say that the Ruler is the power of certain properties is not to say that those properties shall in no circumstances be acquired by the State. The fact that his personal properties are sought to be acquired on payment of compensation clearly recognises his title just as the titles of other proprietors are recognised. Finally, the jurisdiction of the Court to decide any dispute arising out of the covenant is barred by article 363.\n DECISION ??", "expert_1": {"rank1": ["This petition is accordingly dismissed but there will be no order of costs.", "These petitions are accordingly dismissed. I make no order of costs in them.", "For the reasons given therein this petition is also dismissed, but I make no order as to costs in it.", "This petition also fails and is dismissed. There will be no order as to costs.", "I agree with my Lord the Chief Justice that these petitions should be dismissed."], "rank2": ["In my opinion the contention raised that the Bill was not passed into law fails and must be rejected.", "This argument, in my opinion, has not much force having regard to the terms and scope of article 200. The Governor under that article could assent to a Bill or could reserve it for the consideration of the President at his option. The Governor being empowered to reserve the Bill for the consideration of the President and this having been done, it was for the President either to assent to the Bill or to withhold his assent. The President having given his assent, the Bill must be held to have been passed into law.", "In my opinion, the argument is fallacious. It would be a meaningless formality for the President to give his assent to the same Bill twice over.", "In my opinion this argument is void of force. It was within the competence of the Government in exercise of its governmental power to enhanced land revenue, to withdraw exemption of land revenue, wherever those had been granted, and to enact other laws of a similar character. There is no evidence whatsoever that all these enactments were enacted with a fraudulent design of defeating the provisions of payment of compensation contained in the Constitution. The Constitution had not even come into force by the time that most of these statutes were enacted. The petition is therefore dismissed. I however, making no order as to costs.", "Article 363 takes away the jurisdiction of the courts regarding disputes arising out of treaties agreements, covenants, engagements, sanads etc.", "It is true that by the covenant of merger the properties of the petitioner became his private properties as distinguished from properties of the State but in respect of them he is no better position than any other owner possessing private property. Article 362 does not prohibit the acquisition of properties declared as private properties by the covenant of merger and does not guarantee their perpetual existence.", "The guarantee contained in the articles is of a limited extent only. It assures that the Rules properties declared as their private properties will not be claimed as State properties. \n The guarantee has no greater scope than this. That guarantee has been fully respected by the impugned statue as it treats treats those properties is their private properties and seeks to acquire them on that assumption. Moreover it seems to me that in view of the comprehensive language of article 363 this issue is not justiciable.", "In my opinion, the argument is based on a fallacy. As already stated, the purpose of the Act is to bring about reforms in the land tenure system of the State by establishing direct contact between the tillers of the soil and the Government."], "rank3": ["It seems to me that by an oversight it was not recorded in the proceedings that the mission was put to and passed by the House and the Speaker while signing the proceedings six months after the event failed to notice the error. There can be no about that the sense of the House on the 5th April, 1950, was for passing the Bill and there was no one present who was for rejecting it.", "It does not seem to have been intended that the Governor should give his assent to the Bill and make it a full-fledged law and then reserve it for the Presidents consideration so that it may have effect.", "I cannot see why the President cannot perform both the duties entrusted to him by articles 200 and 31(3) and (4) at one the same time. He is not disabled under the Constitution from applying his mind to such a Bill once and for all to see whether it has to be passed into law and whether it fulfils the requirements of article 31(2). The Presidents assent therefore to the Bill attracts the application of articles 31-A and 31-B to it and deprives persons affected by it of the rights guaranteed in Part III of the Constitution. The Provisions of article 31(4) support the view of the learned Attorney-General that what has to be sent to the President is the Bill as passed by the legislature and not the Bill after it has been assented to by the Governor.", "In this context the word Legislature means the House or Houses of Legislature and does not include the Governor with in its ambit. This word has not the same meaning in all the articles. In some articles it means the Governor as well as the Houses of Legislature, while in a number of other articles it only means the House or Houses of Legislature.", "This contention fails for the reasons given in my judgment in the Bihar case. Moreover, the compensation provided for in the impugned Act cannot be dubbed as illusory. All that can be said is that it is grossly inadequate and it is not the equivalent of the value of the property acquired, but this issue is not justiciable in view of the provisions of article 31(4).", "The next argument of Mr. Somayya that the Act is a fraud on the Constitution in that in legislating under entry 42 of List III, it has legislated for non-payment of compensation has also to be repelled, for the reasons given in the Bihar case. Under the provisions of this Act compensation can in no case work out into a mere nothing. On the other hand, in every case some amount of compensation is payable and in the majority of cases it is also not inadequate, Mr. Somayya contended that payment of Rs. 65,000 as compensation to his client for property worth twenty-five lakhs of rupees was purely illusory. \n The assessment of value by the petitioner cannot be taken at its full value. It cannot at any rate be held that legislation which provides for the payment of a sum of Rs. 65,000 provides for no compensation. The amount of instalments, if payment is to be in instalments, is bound to be fixed by the rules made under the statute and in case the rules are so made that they amount to an abuse of the exercise of that power, they can always be challenged on that ground. The argument that the Act is bad inasmuch as it delegates essential legislative power to the executive is negatived for the reasons given in the Bihar case.", "There is nothing on the record to support this contention. The contention that those eighty mahals are not an estateand are thus excluded from the reach of article 31-A does not, however very much advances the petitioners case, because the hurdles created in his way by articles 31-B and 31(4) stand in spite of the circumstances that article 31-A has no application", "In my opinion, the observations in Sibnath Banerjees case ((1945) L.R. 72 I.A. 241 1945 F.C.R. 195), far from supporting the contention raised, negatives it.", "The dictum of Holmes C.J. has no application to the construction of a Constitution which has in express terms made the payment of compensation obligatory for compulsory acquisition of property, which again in express terms by an amendment of it, has deprived persons affected by the impugned Act of this right."], "rank4": ["This is a petition under article 32 of the Constitution of India by Shri Visheswar Rao, zamindar and proprietor of Ahiri zamindari, an estate as defined in section 2 (3) of the Central Provinces Land Revenue Act, II of 1917, and situated in tehsil Sironcha, district Chanda (Madhya Pradesh), for the enforcement of his fundamental right to property under article 31(1) of the Constitution by the issue of an appropriate writ or a direction to the respondent State restraining it from disturbing his possession of the estate, and eighty malguzari villages situate in the Garchiroli tehsil of the same district.", "Against the constitutionality of this Act a number of petitioners were made in the High Court of Nagpur but they were all dismissed by that court on the 9th April, while this petition along with some others was pending in this Court.", "The Petitioners case is that under the formula stated in the Act, a compensation of 25 lakhs which would be due to him on he basis of the value of property taken, has been reduced to a sum of Rs. 65,000 and is payable in thirty unspecified instalments and therefore it is purely nominal and illusory.", "As already pointed out, the proceedings were signed by the Speaker on the 1st October, 1950, while the certificate that the Bill was passed was recorded by him on the original Bill when it was submitted to the President for his assent on the 10th May, 1950. \n The certificate of the Speaker is conclusive on the point that the Bill was passed by the legislature (Vide Craies Statute Law, 4th Edn., p. 36).", "The contention that there is no public purpose behind the impugned Act has also to be repelled on the same reasoning as given by me in the Bihar case. The purpose behind the Act is to establish direct contact between tillers of the soil and the Government and to eliminate the intermediaries, as in the view of the Government this is for the welfare of the society as a whole. It is also the purpose of the Act to confer malik maqbuza status on occupancy tenants and improve their present position and to vest management of village affairs and cultivation in a democratic village body. It is too late in the day to contend that reform in this directions is not for general public benefit."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["As already pointed out, the proceedings were signed by the Speaker on the 1st October, 1950, while the certificate that the Bill was passed was recorded by him on the original Bill when it was submitted to the President for his assent on the 10th May, 1950. \n The certificate of the Speaker is conclusive on the point that the Bill was passed by the legislature (Vide Craies Statute Law, 4th Edn., p. 36). It seems to me that by an oversight it was not recorded in the proceedings that the mission was put to and passed by the House and the Speaker while signing the proceedings six months after the event failed to notice the error.", "The Speaker could not possibly have appended a certificate on a Bill that it was passed by the House if it had not been so passed. There are no grounds whatever for doubting the correctness of his certificate. In my opinion the contention raised that the Bill was not passed into law fails and must be rejected.", "The Governor under that article could assent to a Bill or could reserve it for the consideration of the President at his option. The Governor being empowered to reserve the Bill for the consideration of the President and this having been done, it was for the President either to assent to the Bill or to withhold his assent. The President having given his assent, the Bill must be held to have been passed into law. It does not seem to have been intended that the Governor should give his assent to the Bill and make it a full-fledged law and then reserve it for the Presidents consideration so that it may have effect.", "Article 31(4) means that if any Bill contravening the provisions of clause (2) of article 31 is passed by the House or Houses of Legislature but is reserved for he consideration of the President and receives his assent, then it shall become law, not open to any objection on the ground of such contravention.", "Besides the obstacle of article 31(4). two further hurdles, viz., of articles 31-A and 31-B introduced by the amendments to the Constitution, stand in the way of the petitioner and bar an enquiry into the question of the quantum of compensation.", "It was within the competence of the Government in exercise of its governmental power to enhanced land revenue, to withdraw exemption of land revenue, wherever those had been granted, and to enact other laws of a similar character. There is no evidence whatsoever that all these enactments were enacted with a fraudulent design of defeating the provisions of payment of compensation contained in the Constitution. The Constitution had not even come into force by the time that most of these statutes were enacted.", "It is true that by the covenant of merger the properties of the petitioner became his private properties as distinguished from properties of the State but in respect of them he is no better position than any other owner possessing private property. Article 362 does not prohibit the acquisition of properties declared as private properties by the covenant of merger and does not guarantee their perpetual existence. The guarantee contained in the articles is of a limited extent only.", "That guarantee has been fully respected by the impugned statue as it treats treats those properties is their private properties and seeks to acquire them on that assumption"], "rank2": ["This is a petition under article 32 of the Constitution of India by Shri Visheswar Rao, zamindar and proprietor of Ahiri zamindari, an estate as defined in section 2 (3) of the Central Provinces Land Revenue Act, II of 1917, and situated in tehsil Sironcha, district Chanda (Madhya Pradesh), for the enforcement of his fundamental right to property under article 31(1) of the Constitution by the issue of an appropriate writ or a direction to the respondent State restraining it from disturbing his possession of the estate, and eighty malguzari villages situate in the Garchiroli tehsil of the same district.", "It was alleged that the Madhya Pradesh Act, I of 1951 was unconstitutional and void and infringed the fundamental rights of the petitioner in a variety of ways.", "The Provisions of article 31(4) support the view of the learned Attorney-General that what has to be sent to the President is the Bill as passed by the legislature and not the Bill after it has been assented to by the Governor.", "Next it was contended that the obligation to pay compensation was implicit in the legislative power contained in entry 36 of List II and that the Act was unconstitutional as it had provided for acquisition of zamindaris without payment of compensation, the provisions relating to it being illusory.", "Article 31-B specifically validates certain Acts mentioned in the schedule despite the provisions of article 31-A and is not illustrative of article 31A but stands independent of it. The impugned Act in this situation qua the acquisition on the eighty malguzari villages cannot be questioned on the ground that it contravenes the provisions of article 31(2) of the Constitution or any of the other provisions of Part III. The applicability of article 31(4) is not limited to estates and its provisions save the law in its entirety.", "It is true that section 9 of the Acts does not specially indicate when the instalments will began or what the amount of each instalments will be but the Section clearly contemplates that these details should be worked out by rules to be framed under section 91 of the Act. Further under section 10 the State Government is bound to direct payment of an interim compensation amounting to one-tenth of the estimated amount of compensation if the whole amount is not paid within a period of six months from the date of vesting of the property in the State. I see no improper delegation of legislative power at all."], "rank3": ["The main purpose of the Act is to bring the actual tillers of the soil in direct contract with the State by the elimination of intermediary holders. In short, the Act aims at converting malguzari into ryotwari land system.", "There can therefore be no doubt that the principles laid down for determination of compensation cannot be called equitable and they do not provided for payment of just compensation to the expropriated proprietor. The Petitioners case is that under the formula stated in the Act, a compensation of 25 lakhs which would be due to him on he basis of the value of property taken, has been reduced to a sum of Rs. 65,000 and is payable in thirty unspecified instalments and therefore it is purely nominal and illusory.", "The first and the main objection to the validity of the Act taken by the learned counsel is that the Bill was never passed into law. As already indicated, this objection is founded on the omission from the proceedings of the Madhya Pradesh Legislative Assembly dated the 5th April, 1950, of a statement to the effect that the Bill was put to the House by the speaker and was passed by it.", "It was urged that the authentic report of the proceedings of the Assembly was conclusive on the point, that the Bill was not put to the Assembly by means of a question and was not voted upon, and hence it could not be said to have been passed by the legislature. It was said that even if there was no open opposition to the passing of the Bill, it was possible that if it was put to the Assembly, it might have rejected it.", "It was said that even if the Bill was passed by the Legislative Assembly, it was not assented to by the Governor but was straightway sent to the President and that without the assent of the Governor the Bill could not become law despite the fact that it was assented to by the President and it was pointed out that sub-clause (3) of article 31 of the Constitution speaks of law being reserved for the consideration of President and not merely a Bill.", "All that can be said is that it is grossly inadequate and it is not the equivalent of the value of the property acquired, but this issue is not justiciable in view of the provisions of article 31(4). This Bill was pending at the commencement of the Constitution, it was reserved for the consideration of the president and the President gave his assent to it. The conditions for the application of article 31(4) thus stand fulfilled.", "the Act is a fraud on the Constitution in that in legislating under entry 42 of List III, it has legislated for non-payment of compensation has also to be repelled, for the reasons given in the Bihar case. Under the provisions of this Act compensation can in no case work out into a mere nothing.", "The dictum of Holmes C.J. has no application to the construction of a Constitution which has in express terms made the payment of compensation obligatory for compulsory acquisition of property, which again in express terms by an amendment of it, has deprived persons affected by the impugned Act of this right."], "rank4": ["The preamble of the Act is in these terms - An Act to provide for the acquisition of the rights of proprietors in estates, mahals, alienated villages and alienated lands in Madhya Pradesh and to make provision for other matters connected there with. The legislation clearly falls within entry 36 of List II of the Seventh Schedule of the Constitution. The Madhya Pradesh Legislature had therefore undoubted competence to enact it.", "The amount of instalments, if payment is to be in instalments, is bound to be fixed by the rules made under the statute and in case the rules are so made that they amount to an abuse of the exercise of that power, they can always be challenged on that ground. The argument that the Act is bad inasmuch as it delegates essential legislative power to the executive is negatived for the reasons given in the Bihar case.", "The contention that those eighty mahals are not an estateand are thus excluded from the reach of article 31-A does not, however very much advances the petitioners case, because the hurdles created in his way by articles 31-B and 31(4) stand in spite of the circumstances that article 31-A has no application. It was contended that article 31-B was merely illustrative of the rule stated in article 31-A and if article 31-A had no application, that article also should be left out of consideration."], "rank5": ["Swami Vehemently argued that the Government has by this Act become a super- zamindar, that there is no public purpose behind the Act, that there is no change in the existing order of things, that the Act has achieved nothing new, the tenants remain as they were, the malikan cabza were also already in existence, that acquisition of that status by occupancy tenants was possible under existing statutes and that they had also the power of transfer of their holdings. In my opinion, the argument is based on a fallacy. As already stated, the purpose of the Act is to bring about reforms in the land tenure system of the State by establishing direct contact between the tillers of the soil and the Government."], "label": "REJECTED"}, "expert_3": {"rank1": ["There can therefore be no doubt that the principles laid down for determination of compensation cannot be called equitable and they do not provided for payment of just compensation to the expropriated proprietor", "the proceedings were signed by the Speaker on the 1st October, 1950, while the certificate that the Bill was passed was recorded by him on the original Bill when it was submitted to the President for his assent on the 10th May, 1950. \n The certificate of the Speaker is conclusive on the point that the Bill was passed by the legislature (Vide Craies Statute Law, 4th Edn., p. 36). It seems to me that by an oversight it was not recorded in the proceedings that the mission was put to and passed by the House and the Speaker while signing the proceedings six months after the event failed to notice the error. There can be no about that the sense of the House on the 5th April, 1950, was for passing the Bill and there was no one present who was for rejecting it.", "The motion before the House that the Bill be passed. The Speaker could not possibly have appended a certificate on a Bill that it was passed by the House if it had not been so passed. There are no grounds whatever for doubting the correctness of his certificate. In my opinion the contention raised that the Bill was not passed into law fails and must be rejected", "This argument, in my opinion, has not much force having regard to the terms and scope of article 200. The Governor under that article could assent to a Bill or could reserve it for the consideration of the President at his option. The Governor being empowered to reserve the Bill for the consideration of the President and this having been done, it was for the President either to assent to the Bill or to withhold his assent. The President having given his assent, the Bill must be held to have been passed into law. It does not seem to have been intended that the Governor should give his assent to the Bill and make it a full-fledged law and then reserve it for the Presidents consideration so that it may have effect", "It was said that only in case where this double procedure is followed that it could be said that the President had satisfied himself that the law did not contravene the provisions of article 31(2). In my opinion, the argument is fallacious. It would be a meaningless formality for the President to give his assent to the same Bill twice over", "I cannot see why the President cannot perform both the duties entrusted to him by articles 200 and 31(3) and (4) at one the same time. He is not disabled under the Constitution from applying his mind to such a Bill once and for all to see whether it has to be passed into law and whether it fulfils the requirements of article 31(2)", "The Presidents assent therefore to the Bill attracts the application of articles 31-A and 31-B to it and deprives persons affected by it of the rights guaranteed in Part III of the Constitution.", "This contention fails for the reasons given in my judgment in the Bihar case. Moreover, the compensation provided for in the impugned Act cannot be dubbed as illusory. All that can be said is that it is grossly inadequate and it is not the equivalent of the value of the property acquired, but this issue is not justiciable in view of the provisions of article 31(4). This Bill was pending at the commencement of the Constitution, it was reserved for the consideration of the president and the President gave his assent to it", "The conditions for the application of article 31(4) thus stand fulfilled. Besides the obstacle of article 31(4). two further hurdles, viz., of articles 31-A and 31-B introduced by the amendments to the Constitution, stand in the way of the petitioner and bar an enquiry into the question of the quantum of compensation. The contention that there is no public purpose behind the impugned Act has also to be repelled on the same reasoning as given by me in the Bihar case. The purpose behind the Act is to establish direct contact between tillers of the soil and the Government and to eliminate the intermediaries, as in the view of the Government this is for the welfare of the society as a whole. It is also the purpose of the Act to confer malik maqbuza status on occupancy tenants and improve their present position and to vest management of village affairs and cultivation in a democratic village body. It is too late in the day to contend that reform in this directions is not for general public benefit", "Under the provisions of this Act compensation can in no case work out into a mere nothing. On the other hand, in every case some amount of compensation is payable and in the majority of cases it is also not inadequate,", "The assessment of value by the petitioner cannot be taken at its full value. It cannot at any rate be held that legislation which provides for the payment of a sum of Rs. 65,000 provides for no compensation", "The amount of instalments, if payment is to be in instalments, is bound to be fixed by the rules made under the statute and in case the rules are so made that they amount to an abuse of the exercise of that power, they can always be challenged on that ground. The argument that the Act is bad inasmuch as it delegates essential legislative power to the executive is negatived for the reasons given in the Bihar case", "Article 31-B specifically validates certain Acts mentioned in the schedule despite the provisions of article 31-A and is not illustrative of article 31A but stands independent of it", "The impugned Act in this situation qua the acquisition on the eighty malguzari villages cannot be questioned on the ground that it contravenes the provisions of article 31(2) of the Constitution or any of the other provisions of Part III. The applicability of article 31(4) is not limited to estates and its provisions save the law in its entirety. This petition is accordingly dismissed but in the circumstances I make no order as to costs", "The dictum of Holmes C.J. has no application to the construction of a Constitution which has in express terms made the payment of compensation obligatory for compulsory acquisition of property, which again in express terms by an amendment of it, has deprived persons affected by the impugned Act of this right", "It was within the competence of the Government in exercise of its governmental power to enhanced land revenue, to withdraw exemption of land revenue, wherever those had been granted, and to enact other laws of a similar character. There is no evidence whatsoever that all these enactments were enacted with a fraudulent design of defeating the provisions of payment of compensation contained in the Constitution. The Constitution had not even come into force by the time that most of these statutes were enacted. The petition is therefore dismissed.", "It is true that by the covenant of merger the properties of the petitioner became his private properties as distinguished from properties of the State but in respect of them he is no better position than any other owner possessing private property. Article 362 does not prohibit the acquisition of properties declared as private properties by the covenant of merger and does not guarantee their perpetual existence. The guarantee contained in the articles is of a limited extent only", "It assures that the Rules properties declared as their private properties will not be claimed as State properties. \n The guarantee has no greater scope than this. That guarantee has been fully respected by the impugned statue as it treats treats those properties is their private properties and seeks to acquire them on that assumption. Moreover it seems to me that in view of the comprehensive language of article 363 this issue is not justiciable. This petition is accordingly dismissed", "In my opinion, the argument is based on a fallacy. As already stated, the purpose of the Act is to bring about reforms in the land tenure system of the State by establishing direct contact between the tillers of the soil and the Government. These petitions are accordingly dismissed", "Mr. Mukherji who appeared in this petition merely adopted the arguments taken in other petitioners. For the reasons given therein this petition is also dismissed,", "Mr. Jog appeared in this petition and raised the same points as in other petitions. This petition also fails and is dismissed"], "rank2": ["Under the provisions of section 218 of the Central Provinces Land Revenue Act and Section 44 of the Berar Land Revenue Code there is a presumption that all mines and minerals belong to the State and the proprietary rights in them could be granted by the State to any person. Wherever a right of minerals has been so assigned, provision has been made regarding its acquisition and the consequences as resulting from such acquisition. The Act provides for the giving of rehabilitation grant to expropriated proprietors within a certain range provided for in Schedule III. The last chapter in the Act deals with miscellaneous matters including the power of making rules. The main purpose of the Act is to bring the actual tillers of the soil in direct contract with the State by the elimination of intermediary holders. In short, the Act aims at converting malguzari into ryotwari land system.", "In also aims at giving to the gram panchayats the management of common lands freed from the grip of proprietors and contemplates the establishment of self-government for the villages. The provisions of the Act in respect of payment of compensation, though they do not in any way provide for an equivalent in money of the property taken and in that sense may not be adequate cannot be called illusory. \n This Act is a definite improvement on the Bihar Act it leaves the arrears of rents due in the hands of the proprietors and does not operate artificially to reduce the net income by any device. It also provides that in no case the net income should be reduced below five per cent of the gross income", "The result is that in every case some amount of money becomes payable by the State by way of compensation to the proprietor and in no case does the compensation work into a negative sum or to a mere zero or a minus figure", "In other respects the provisions of the Act in regard to compensation follow the pattern which is common to all zamindari legislation, which is to inflate the amount of expenditure and deflate the actual income.", "The siwai income from jalkar, bankar, etc. and from village forests is calculated at two times the siwai income recorded in the settlement made in 1923. This is Act was passed in 1951. The siwai income recorded in the year 1923 is appreciably less than the actual income of the properties from these sources in 1951.", "Similarly the income from consent money has to be calculated by taking the average income for ten years preceding the date of vesting and not the actual income as in the case of rent realized during the previous agricultural year. The expenditure has been inflated by taking in respect of the big forests the average income-tax paid during the period of thirty agricultural years", "No agricultural income-tax existed during most of this period. It only came into existence recently. The cost of management has been calculated at a flat rate of eight to fifteen per cent", "The Petitioners case is that under the formula stated in the Act, a compensation of 25 lakhs which would be due to him on he basis of the value of property taken, has been reduced to a sum of Rs. 65,000 and is payable in thirty unspecified instalments and therefore it is purely nominal and illusory", "The first and the main objection to the validity of the Act taken by the learned counsel is that the Bill was never passed into law", "this objection is founded on the omission from the proceedings of the Madhya Pradesh Legislative Assembly dated the 5th April, 1950, of a statement to the effect that the Bill was put to the House by the speaker and was passed by it", "It was urged that the authentic report of the proceedings of the Assembly was conclusive on the point, that the Bill was not put to the Assembly by means of a question and was not voted upon, and hence it could not be said to have been passed by the legislature. It was said that even if there was no open opposition to the passing of the Bill, it was possible that if it was put to the Assembly, it might have rejected it.", "Next it is contended that articles 31-A and 31-B have no application to this Bill as it never became law by following the procedure prescribed in the Constitution and that those articles have only application to a Bill that had becomes an Act", "The Legislature of Madhya Pradesh consists of the Governor and the Legislative Assembly. It was said that even if the Bill was passed by the Legislative Assembly, it was not assented to by the Governor but was straightway sent to the President and that without the assent of the Governor the Bill could not become law despite the fact that it was assented to by the President and it was pointed out that sub-clause (3) of article 31 of the Constitution speaks of law being reserved for the consideration of President and not merely a Bill", "The Provisions of article 31(4) support the view of the learned Attorney-General that what has to be sent to the President is the Bill as passed by the legislature and not the Bill after it has been assented to by the Governor. The article reads thus - If any Bill pending at the commencement of this Constitution in the Legislature of a State has, after it has been passed by such Legislature been reversed for the consideration of the President and has received his assent, them notwithstanding anything in this Constitution, the law so assented to shall not be called in question in any court on the ground that it contravenes the provisions of clause (2).", "In this context the word Legislature means the House or Houses of Legislature and does not include the Governor with in its ambit. This word has not the same meaning in all the articles. In some articles it means the Governor as well as the Houses of Legislature, while in a number of other articles it only means the House or Houses of Legislature", "Article 31(4) means that if any Bill contravening the provisions of clause (2) of article 31 is passed by the House or Houses of Legislature but is reserved for he consideration of the President and receives his assent, then it shall become law, not open to any objection on the ground of such contravention.", "Next it was contended that the obligation to pay compensation was implicit in the legislative power contained in entry 36 of List II and that the Act was unconstitutional as it had provided for acquisition of zamindaris without payment of compensation, the provisions relating to it being illusory", "A point was raised that the constitutional amendments in articles 31-A and 31-B could not affect the petitioners guaranteed rights contained in Part III of the Constitution in so far as the eighty malguzari villages were concerned, because those mahals did not fall within, the ambit of the word estate as defined in article 31-A. In sub-clause (2) (a) the definition is in these terms - The expression estate shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area, and shall also include any jagir, inam or muafi or other similar grant. Section 2 (3) of Act II of 1917, C. P. Land Revenue Act, defines the expression estate thus - an estate as declared by the State Government. The learned Advocate - General conceded that these villages are not within the ambit of this definition but he contended that they are within the scope of the definition of the expression given in article 31-A, as mahals in Central Provisions are local equivalents of the expression estate, though not so declared by the Act. There is nothing on the record to support this contention", "The contention that those eighty mahals are not an estateand are thus excluded from the reach of article 31-A does not, however very much advances the petitioners case, because the hurdles created in his way by articles 31-B and 31(4) stand in spite of the circumstances that article 31-A has no application", "Mr. Bindra, who appeared for the petitioner placed reliance on the observations of Holmes C.J. in Communications Assns. v. Douds (339 U.S. 382, 384), viz., that the provisions of the Constitution are not mathematical formulas having their essence in their form they are orgnic living institutions transplanted from English soil. \n Their significance is vital, not formal it is to be gathered not simply by taking the words and a dictionary, but by considering their origin and the line of their growth, and contended that if the Constitution of India was constructed in the light of these observations, then despite the express provisions of article 31(2) it would be found that there is something pervading it which makes the obligations to pay real compensation a necessary incident of the compulsory acquisition of property. It was said that right to compensation is implied in entry 36 List II of the Seventh Schedule and that article 31(2) does not confer the right but merely protects it.", "Article 362 is in these terms - In the exercise of the power of Parliament or of the legislature of a State to make laws or in the exercise of the executive power of the Union or of a State due regard shall be had to the guarantee or assurance given under any such covenant or agreement as is referred to in clause (1) of article 291 with respect to the personal rights, privileges and dignities of the Ruler of an Indian State. Article 363 takes away the jurisdiction of the courts regarding disputes arising out of treaties agreements, covenants, engagements, sanads etc.", "For the reasons given in Petition No. 166 of 1951, I see no force in this contention", "For the reasons given in Petition No. 317, this contention is not accepted.", "Swami Vehemently argued that the Government has by this Act become a super- zamindar, that there is no public purpose behind the Act, that there is no change in the existing order of things, that the Act has achieved nothing new, the tenants remain as they were, the malikan cabza were also already in existence, that acquisition of that status by occupancy tenants was possible under existing statutes and that they had also the power of transfer of their holdings"], "rank3": ["This is a petition under article 32 of the Constitution of India by Shri Visheswar Rao, zamindar and proprietor of Ahiri zamindari, an estate as defined in section 2 (3) of the Central Provinces Land Revenue Act, II of 1917, and situated in tehsil Sironcha, district Chanda (Madhya Pradesh), for the enforcement of his fundamental right to property under article 31(1) of the Constitution by the issue of an appropriate writ or a direction to the respondent State restraining it from disturbing his possession of the estate, and eighty malguzari villages situate in the Garchiroli tehsil of the same district.", "By a notification in a gazette extraordinary issued on the 27th January, 1951, the Madhya Pradesh Government fixed 31st March 1951, as the date of vesting of the estates under section 3 of the Act. The petitioner thus was to lose his estate and lands on the 31st March 1951", "On the 9th March, 1951, i.e. before the vesting date, he presented the present application to this court for the issue of appropriate writs against the government prohibiting it from taking possession of his properties. It was alleged that the Madhya Pradesh Act, I of 1951 was unconstitutional and void and infringed the fundamental rights of the petitioner in a variety of ways", "Against the constitutionality of this Act a number of petitioners were made in the High Court of Nagpur but they were all dismissed by that court on the 9th April, while this petition along with some others was pending in this Court", "The preamble of the Act is in these terms - An Act to provide for the acquisition of the rights of proprietors in estates, mahals, alienated villages and alienated lands in Madhya Pradesh and to make provision for other matters connected there with. The legislation clearly falls within entry 36 of List II of the Seventh Schedule of the Constitution. The Madhya Pradesh Legislature had therefore undoubted competence to enact it.", "Reference was made to rules 20,22, 34 and 115 of the rules regulating the procedure of the legislature framed under the Government of India Act, 1935, in the year 1936, which provides as follows - \n 20 (1). A matter requiring the decision of the Assembly shall be decided by means of a question put by the Speaker on a motion made by a member \n After a motion has been made, the speaker shall read the motion for the consideration of the Assembly. 34 (1) Votes may be taken by voices or division and shall be taken by division if any member so desires. The Speaker shall determine the method of taking votes by division. The result of a division shall be announced by the Speaker and shall not be challenged. 115 (1) The Secretary shall cause to be prepared a full report of the proceedings of the Assembly at each of its meetings and publish it as soon as practicable", "One impression of this printed report shall be submitted to the Speaker for his confirmation and signature and when signed shall constitute the authentic record of the proceedings of the Assembly.", "The properties belonging to the petitioner and acquired under the statute were originally situate in an Indian State which became subsequently merged with Madhya Pradesh. It was contended that by the terms of the covenant of merger those properties were declared as the petitioners private properties and were protected from State legislation by the guarantee given in article 362 of the Constitution and hence the impugned Act was bad as it contravened the provisions of this article", "Mr. Swami reiterated the contention raised by Mr. Somayya that the Act was not duly passed by the legislature", "Swami also reiterated Mr. Bindras contention that the legislation was not bona fide."], "rank4": ["The petitioner and his ancestors have been owing and enjoying these properties in full proprietary right for several generations past. \nOn the 5th April, 1950, the Madhya Pradesh Legislative Assembly enacted an Act called the Madhya Pradesh Abolition of Proprietary Right Act. The Act received the assent of the President of India on the 22nd January, 1951, and was published in the Madhya Pradesh Gazette on the 26th January, 1951, as Act I of 1951.", "The intergration actually took place on the 1st January, 1948. \nOn the 1st August, 1949, the States were merged in the Madhya Pradesh. There were in all 106 estates in Madhya Pradesh as defined in section 2 (3) of Act I of 1951 and held by zamindars.", "Most of the lands are owned by malguzars of mahals in the status of Malkan cabza. The land system prevailing in Madhya Pradesh is malguzari (except in certain areas where the ryotwari system is in vogue), the malguzar being an intermediary between the State and the tiller. Land is also held on a variety of subordinate tenures by absolute occupancy tenants, occupancy tenants, ryots, thikedars, mafidars ilaqadars etc. Land revenue in Madhya Pradesh was last assessed under the Central Provinces Land Revenue Act, II of 1917. The estate holders pay land revenue on the lands comprised in the estates at a concession rate.", "The payment is technically called tekoli In 1939 there was an ad hoc increase in the amount of tekoli by the Central Provinces Revision of Land Revenue Estates Act, I of 1939.", "On the 3rd September 1946 the Central Provinces and Bear Legislative Assembly passed a resolution for the elimination of intermediaries between the State and the peasant. Soon after passing of this resolution several laws were enacted, it is said with a view to achieve this result, the impugned Act being the last of the series. In 1947, the Central Provinces Land Revenue Estates Act, XXV of 1947, was enacted. The revenue assessment, viz., tekoli, on the estates was, we are told enhanced, in some places from thirty to fifty per cent, of the full jama and in others from forty to sixty per cent.", "In the same year was enacted the Central Provinces Land Revenue Revision Mahals Act, XXVI of 1947. The land assessment on malguzari villages was it is alleged, raised to 75 per cent. from 45 to 50 per cent. of malguzari assets. This was done without recourse to a settlement. In 1948 came the Central Provinces and Berar Revocation of Exemptions Act, XXXVII of 1948, making persons exempted from payment of land revenue liable for it. This legislation, it is urged, resulted in the reduction of the net income of the proprietors to a large extent.", "Some members expressed the opinion that the provisions of the Act did not go far enough, others thought that the provisions as to compensation should have been more liberal, but there was none who was for rejecting the Bill as it stood. The report of the proceedings of the 5th April, 1950, does not contain the note that the motion that the Bill be passed into law was carried.\n The omission of this note in the proceedings of the proceedings of the legislature has furnished a basis for the argument that the Bill was never passed into law", "The original Bill that was submitted to the President for his assent was printed on the 29th April, 1950, and it bears on it the certificate of the Speaker dated the 10th May, 1950, stating that the Bill was duly passed by the legislature on the 5th April, 1950. This certificate was signed by the Speaker a considerable time ahead of his signing the proceedings. The Act, as already stated, received the assent of the President on the 22nd January, 1951, and was published in the Madhya Pradesh Gazette on the 26th January, 1951, as Madhya Pradesh Act I of 1951", "Seven of these are by zamindars from Madhya Pradesh who are owners of estates. The petitioner in Petition No. 246 also owns certain malguzari villages", "Petitioner in Petition No. 237 is a malguzar of eighteen villages but owns no estate. Petitions Nos. 280 to 285 and 257 relate to merged territories. The petitioner in Petition No. 282 was ruler of a State (Jashpur) and the petition concerns his private properties", "Petitioners in Petitions Nos. 283, 284 and 285 are Ilakadars and in Petitions Nos. 280 and 285 they are mafidars. Petitioner in Petition No. 281 is a Thikedar i.e., revenue farmer of three villages"], "rank5": ["Madhya Pradesh is a composite State, comprising the Central Provisions, Berar and the merged territories. By an agreement of merger made between the rules of States and the Dominion of in India dated the 15th December 1947, certain territories which at one time were under the Indian States Agency and were held by these rulers were integrated with the Dominion"], "label": "REJECTED"}, "expert_4": {"rank1": ["This is a petition under article 32 of the Constitution of India by Shri Visheswar Rao, zamindar and proprietor of Ahiri zamindari, an estate as defined in section 2 (3) of the Central Provinces Land Revenue Act, II of 1917, and situated in tehsil Sironcha, district Chanda (Madhya Pradesh), for the enforcement of his fundamental right to property under article 31(1) of the Constitution by the issue of an appropriate writ or a direction to the respondent State restraining it from disturbing his possession of the estate, and eighty malguzari villages situate in the Garchiroli tehsil of the same district."], "rank2": ["The petitioner and his ancestors have been owing and enjoying these properties in full proprietary right for several generations past. \nOn the 5th April, 1950, the Madhya Pradesh Legislative Assembly enacted an Act called the Madhya Pradesh Abolition of Proprietary Right Act. The Act received the assent of the President of India on the 22nd January, 1951, and was published in the Madhya Pradesh Gazette on the 26th January, 1951, as Act I of 1951.", "By a notification in a gazette extraordinary issued on the 27th January, 1951, the Madhya Pradesh Government fixed 31st March 1951, as the date of vesting of the estates under section 3 of the Act. The petitioner thus was to lose his estate and lands on the 31st March 1951", "The legislation clearly falls within entry 36 of List II of the Seventh Schedule of the Constitution. The Madhya Pradesh Legislature had therefore undoubted competence to enact it.", "The proprietor is entitled to recover any sums which became due to him before the date of vesting by virtue of his proprietor rights. All open enclosures used for agricultural or domestic purposes, all buildings, places of worship wells situated in and trees standings on lands included in such enclosures or house sites etc. continue to remain in possession of proprietor and are to be settled with him by the State Government on such terms and conditions as it may determine. Similarly, certain private wells, trees tanks and groves continue to remain in possession of proprietor or other person who may be interested in them.", "In addition to all these amounts, the State Government has pay compensation for lands within the area of a municipality or cantonment in accordance with the rules contained in Schedule II. The Compensation for divestment of proprietary rights becomes due from the date vesting and it is enacted that it shall carry interest at the rate of two and a half per cent. per annum from the date of vestings to the date of payment. Section 9 provides as follows - \n The compensation payable under section 8, may, in accordance with the rules made in this behalf, be paid in one or more of the following modes, namely - \n in cash in full or in annual instalments not exceeding thirty \n in bonds either negotiable or not negotiable carrying interest at the rate specified in sub-section (4) of section 8 and of guaranteed face value maturing within a specified period not exceeding thirty years.", "It is provided herein that a proprietor who has been divested of his estate will have malik-makbuza rights in his homenfarm lands.", "The main purpose of the Act is to bring the actual tillers of the soil in direct contract with the State by the elimination of intermediary holders. In short, the Act aims at converting malguzari into ryotwari land system. In also aims at giving to the gram panchayats the management of common lands freed from the grip of proprietors and contemplates the establishment of self-government for the villages.", "The result is that in every case some amount of money becomes payable by the State by way of compensation to the proprietor and in no case does the compensation work into a negative sum or to a mere zero or a minus figure. In other respects the provisions of the Act in regard to compensation follow the pattern which is common to all zamindari legislation, which is to inflate the amount of expenditure and deflate the actual income.", "The first and the main objection to the validity of the Act taken by the learned counsel is that the Bill was never passed into law. As already indicated, this objection is founded on the omission from the proceedings of the Madhya Pradesh Legislative Assembly dated the 5th April, 1950, of a statement to the effect that the Bill was put to the House by the speaker and was passed by it.", "There are no grounds whatever for doubting the correctness of his certificate. In my opinion the contention raised that the Bill was not passed into law fails and must be rejected. Next it is contended that articles 31-A and 31-B have no application to this Bill as it never became law by following the procedure prescribed in the Constitution and that those articles have only application to a Bill that had becomes an Act.", "On the basis of the similarity of the language in the opening part of article 31-B with that of sub-section (2) of section 2 part of the Defence of India Act, without prejudice to the generality of the provisions contained in article 31-A, it was urged that article 31-B was merely illustrative of article 31-A and as the latter was limited in its application to estates as defined therein, article 31-B was also so limited. In my opinion, the observations in Sibnath Banerjees case ((1945) L.R. 72 I.A. 241 1945 F.C.R. 195), far from supporting the contention raised, negatives it. Article 31-B specifically validates certain Acts mentioned in the schedule despite the provisions of article 31-A and is not illustrative of article 31A but stands independent of it.", "It was contended that by the terms of the covenant of merger those properties were declared as the petitioners private properties and were protected from State legislation by the guarantee given in article 362 of the Constitution and hence the impugned Act was bad as it contravened the provisions of this article.", "Article 363 takes away the jurisdiction of the courts regarding disputes arising out of treaties agreements, covenants, engagements, sanads etc. It is true that by the covenant of merger the properties of the petitioner became his private properties as distinguished from properties of the State but in respect of them he is no better position than any other owner possessing private property. Article 362 does not prohibit the acquisition of properties declared as private properties by the covenant of merger and does not guarantee their perpetual existence. The guarantee contained in the articles is of a limited extent only. It assures that the Rules properties declared as their private properties will not be claimed as State properties. \n The guarantee has no greater scope than this.", "These petitions are accordingly dismissed. I make no order of costs in them."], "rank3": ["This legislation, it is urged, resulted in the reduction of the net income of the proprietors to a large extent.", "The preamble of the Act is in these terms - An Act to provide for the acquisition of the rights of proprietors in estates, mahals, alienated villages and alienated lands in Madhya Pradesh and to make provision for other matters connected there with.", "Schedule II lays down the measure of compensation on a scale varying from five to fifteen times the assessment on the land as specified in the schedule. Section 2 of the Schedule I provides for the calculation of the gross income by adding the amount of income received by a proprietor from the aggregate of the rents from the tenants as recorded in the jamabandi for the previous agricultural year the siwai income that is income from various sources such as jalkar, bankar, phalkar, hats, bazars, melas grazing and village forest calculated at two times the income recorded in the current settlement of 1923 and the consent money on transfer of tenancy lands-the average of transactions recorded in the village papers for ten years preceding the agricultural year in which the date of vesting falls. The schedule also provides the method of determination of the gross income of a mahal as well as of an alienated village or alienated land separately. It also provides for the determination of this income in the case of mines and forests.", "The method suggested for assessing the net income is that out of the gross income the following items have to be deducted, i.e. assessed land revenue, sums payable during the previous agricultural year on account of cesses and local rates, the average of income-tax paid in respect of income received from big forests during the period of thirty agricultural years preceding the agricultural year in which the relevant date falls and cost of management varying from 8 to 15 per cent. of the gross annual income on incomes varying from Rs. 2,000 to Rs. 15,000. It is further provided that not withstanding anything contained in sub-rule (2) the net incomes shall in case be reduced to less than five per cent.", "of the gross income.", "No agricultural income-tax existed during most of this", "period.", "It only came into existence recently. The cost of management has been calculated at a flat rate of eight to fifteen per cent.", "Reference was made to rules 20,22, 34 and 115 of the rules regulating the procedure of the legislature framed under the Government of India Act, 1935, in the year 1936, which provides as follows - \n 20 (1).", "A matter requiring the decision of the Assembly shall be decided by means of a question put by the Speaker on a motion made by a member \n After a motion has been made, the speaker shall read the motion for the consideration of the Assembly. 34 (1) Votes may be taken by voices or division and shall be taken by division if any member so desires. The Speaker shall determine the method of taking votes by division.", "The result of a division shall be announced by the Speaker and shall not be challenged. 115 (1) The Secretary shall cause to be prepared a full report of the proceedings of the Assembly at each of its meetings and publish it as soon as practicable.", "One impression of this printed report shall be submitted to the Speaker for his confirmation and signature and when signed shall constitute the authentic record of the proceedings of the Assembly.", "As already pointed out, the proceedings were signed by the Speaker on the 1st October, 1950, while the certificate that the Bill was passed was recorded by him on the original Bill when it was submitted to the President for his assent on the 10th May, 1950.", "The certificate of the Speaker is conclusive on the point that the Bill was passed by the legislature (Vide Craies Statute Law, 4th Edn., p. 36). It seems to me that by an oversight it was not recorded in the proceedings that the mission was put to and passed by the House and the Speaker while signing the proceedings six months after the event failed to notice the error.", "There can be no about that the sense of the House on the 5th April, 1950, was for passing the Bill and there was no one present who was for rejecting it.", "This argument, in my opinion, has not much force having regard to the terms and scope of article 200.", "The Governor under that article could assent to a Bill or could reserve it for the consideration of the President at his option. The Governor being empowered to reserve the Bill for the consideration of the President and this having been done, it was for the President either to assent to the Bill or to withhold his assent. The President having given his assent, the Bill must be held to have been passed into law. It does not seem to have been intended that the Governor should give his assent to the Bill and make it a full-fledged law and then reserve it for the Presidents consideration so that it may have effect.", "In my opinion, the argument is fallacious.", "It would be a meaningless formality for the President to give his assent to the same Bill twice over. I cannot see why the President cannot perform both the duties entrusted to him by articles 200 and 31(3) and (4) at one the same time.", "He is not disabled under the Constitution from applying his mind to such a Bill once and for all to see whether it has to be passed into law and whether it fulfils the requirements of article 31(2).", "The Presidents assent therefore to the Bill attracts the application of articles 31-A and 31-B to it and deprives persons affected by it of the rights guaranteed in Part III of the Constitution. The Provisions of article 31(4) support the view of the learned Attorney-General that what has to be sent to the President is the Bill as passed by the legislature and not the Bill after it has been assented to by the Governor.", "The article reads thus - If any Bill pending at the commencement of this Constitution in the Legislature of a State has, after it has been passed by such Legislature been reversed for the consideration of the President and has received his assent, them notwithstanding anything in this Constitution, the law so assented to shall not be called in question in any court on the ground that it contravenes the provisions of clause (2).", "In this context the word Legislature means the House or Houses of Legislature and does not include the Governor with in its ambit. This word has not the same meaning in all the articles.", "In some articles it means the Governor as well as the Houses of Legislature, while in a number of other articles it only means the House or Houses of Legislature.", "Article 31(4) means that if any Bill contravening the provisions of clause (2) of article 31 is passed by the House or Houses of Legislature but is reserved for he consideration of the President and receives his assent, then it shall become law, not open to any objection on the ground of such contravention.", "This contention fails for the reasons given in my judgment in the Bihar case. Moreover, the compensation provided for in the impugned Act cannot be dubbed as illusory.", "All that can be said is that it is grossly inadequate and it is not the equivalent of the value of the property acquired, but this issue is not justiciable in view of the provisions of article 31(4).", "This Bill was pending at the commencement of the Constitution, it was reserved for the consideration of the president and the President gave his assent to it. The conditions for the application of article 31(4) thus stand fulfilled.", "Besides the obstacle of article 31(4). two further hurdles, viz., of articles 31-A and 31-B introduced by the amendments to the Constitution, stand in the way of the petitioner and bar an enquiry into the question of the quantum of compensation.", "The contention that there is no public purpose behind the impugned Act has also to be repelled on the same reasoning as given by me in the Bihar case. The purpose behind the Act is to establish direct contact between tillers of the soil and the Government and to eliminate the intermediaries, as in the view of the Government this is for the welfare of the society as a whole.", "It is also the purpose of the Act to confer malik maqbuza status on occupancy tenants and improve their present position and to vest management of village affairs and cultivation in a democratic village body.", "It is too late in the day to contend that reform in this directions is not for general public benefit.", "Under the provisions of this Act compensation can in no case work out into a mere nothing.", "On the other hand, in every case some amount of compensation is payable and in the majority of cases it is also not inadequate", "It cannot at any rate be held that legislation which provides for the payment of a sum of Rs. 65,000 provides for no compensation. The amount of instalments, if payment is to be in instalments, is bound to be fixed by the rules made under the statute and in case the rules are so made that they amount to an abuse of the exercise of that power, they can always be challenged on that ground. The argument that the Act is bad inasmuch as it delegates essential legislative power to the executive is negatived for the reasons given in the Bihar case.", "In sub-clause (2) (a) the definition is in these terms - The expression estate shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area, and shall also include any jagir, inam or muafi or other similar grant. Section 2 (3) of Act II of 1917, C.", "The impugned Act in this situation qua the acquisition on the eighty malguzari villages cannot be questioned on the ground that it contravenes the provisions of article 31(2) of the Constitution or any of the other provisions of Part III. The applicability of article 31(4) is not limited to estates and its provisions save the law in its entirety. This petition is accordingly dismissed but in the circumstances I make no order as to costs.", "Their significance is vital, not formal it is to be gathered not simply by taking the words and a dictionary, but by considering their origin and the line of their growth, and contended that if the Constitution of India was constructed in the light of these observations, then despite the express provisions of article 31(2) it would be found that there is something pervading it which makes the obligations to pay real compensation a necessary incident of the compulsory acquisition of property. It was said that right to compensation is implied in entry 36 List II of the Seventh Schedule and that article 31(2) does not confer the right but merely protects it. Mr. Bindra merely tried to annotate the arguments of Mr. Das but with no better result.", "The dictum of Holmes C.J. has no application to the construction of a Constitution which has in express terms made the payment of compensation obligatory for compulsory acquisition of property, which again in express terms by an amendment of it, has deprived persons affected by the impugned Act of this right.", "The passage, however read in its entirety, negatives the contention. It may be mentioned that under powers of compulsory acquisition a number of properties have been nationalized in England and other countries.", "Lastly, it was urged that the legislation in question was not enacted bona fide inasmuch as in 1946 the legislature having passed a resolution to end zamindaries, proceeded to enact laws with the purpose of defeating the constitutional guarantees regarding payment of compensation by various devices.", "As a first step in this direction the revenue was enhanced in order to reduce the gross income of the zamindars, then other Acts mentioned in the earlier part of the main judgment were enacted with the same end in view. In my opinion this argument is void of force.", "It was within the competence of the Government in exercise of its governmental power to enhanced land revenue, to withdraw exemption of land revenue, wherever those had been granted, and to enact other laws of a similar character.", "There is no evidence whatsoever that all these enactments were enacted with a fraudulent design of defeating the provisions of payment of compensation contained in the Constitution. The Constitution had not even come into force by the time that most of these statutes were enacted.", "The petition is therefore dismissed.", "my opinion, the argument is based on a fallacy.", "As already stated, the purpose of the Act is to bring about reforms in the land tenure system of the State by establishing direct contact between the tillers of the soil and the Government."], "rank4": ["By an agreement of merger made between the rules of States and the Dominion of in India dated the 15th December 1947, certain territories which at one time were under the Indian States Agency and were held by these rulers were integrated with the Dominion. The intergration actually took place on the 1st January, 1948. \nOn the 1st August, 1949, the States were merged in the Madhya Pradesh. There were in all 106 estates in Madhya Pradesh as defined in section 2 (3) of Act I of 1951 and held by zamindars. Most of the lands are owned by malguzars of mahals in the status of Malkan cabza. The land system prevailing in Madhya Pradesh is malguzari (except in certain areas where the ryotwari system is in vogue), the malguzar being an intermediary between the State and the tiller.", "The Act is divided into eleven chapters and three schedules. Chapter II deals with the vesting of proprietary rights in the State and states the consequences of the vesting. Section 3 is in these terms - Save as other wise provided in this Act, on and from a date to be specified by a notification by the State Government in this behalf all proprietary rights in an estate, mahal alienated village or alienated land, as the case may be, in the area specified in the notification vesting in a proprietor of such estate, mahal, alienated village, alienated land, or in a person having interest in such proprietary right through the proprietor, shall pass from such proprietor or such other person to and vest in the State for the purposes of the State free of all encumbrances \n Section 4 provides that after the publication of the notification under Section 3, all rights titles and interest vesting in the proprietor or any person having interest in such proprietary right through the proprietor in such area including land (cultivable or barren), grass land, scrub jungle, forest trees fishes, wells, tanks ponds water-channels, ferries, pathways, villages sites, hats bazars and meals and in all subsoil including rights if any in mines and minerals, whether being worked or not, shall cease and be vested in the State for purposes of the State free of all encumbrances but that the proprietor shall continue to retain the possession of his homestead, home-farm land, and in the Central Provisions, also of land brought under cultivation by him after the agricultural year 1948-49 but before the date of vesting.", "Absolute occupancy tenants and occupancy tenants can also acquire malik - makbuza rights. Provision is made for reservation of grazing lands and for the collection of land revenue. Similar provisions are made in Chapter VII in respect of management and tenures of land in the merged territories. Chapter VIII deals with management and tenures of lands in Berar. Separate provision has been made for the determination of compensation payable to lessees of mines and minerals.", "The siwai income from jalkar, bankar, etc. and from village forests is calculated at two times the siwai income recorded in the settlement made in 1923. This is Act was passed in 1951. The siwai income recorded in the year 1923 is appreciably less than the actual income of the properties from these sources in 1951.", "Total 1,35,000 Deductions permissible under the Act are the following - \n Revenue 45,000 \n Income-tax on 30 years average 66,600 \n Cost of management 21,000 Total ------- 1,32,600 Net income 2,400 \n Ten times net income would be Rs. 24,000 but as the net income cannot be reduced below five per cent. of the gross income which comes to Rs. 6500, compensation payable is Rs. 65,000 while the yearly income of the petitioner was in the neighbourhood of Rs. 5,65,000 and the market value of his property is 25 lakhs.", "It was urged that the authentic report of the proceedings of the Assembly was conclusive on the point, that the Bill was not put to the Assembly by means of a question and was not voted upon, and hence it could not be said to have been passed by the legislature. It was said that even if there was no open opposition to the passing of the Bill, it was possible that if it was put to the Assembly, it might have rejected it.", "The motion before the House that the Bill be passed. The Speaker could not possibly have appended a certificate on a Bill that it was passed by the House if it had not been so passed.", "There are no grounds whatever for doubting the correctness of his certificate.", "The Legislature of Madhya Pradesh consists of the Governor and the Legislative Assembly. It was said that even if the Bill was passed by the Legislative Assembly, it was not assented to by the Governor but was straightway sent to the President and that without the assent of the Governor the Bill could not become law despite the fact that it was assented to by the President and it was pointed out that sub-clause (3) of article 31 of the Constitution speaks of law being reserved for the consideration of President and not merely a Bill.", "Somayya pressed the point that the President could not perform both his functions under article 200 and article 31(4) concerning this Bill at one and the same time, that first the procedure laid down in article 200 for the passing of the Bill in to law should been followed, i.e. the Governor should have either assented to the Bill or should have reserved it for the consideration of the President and if it was so reserved, the President should then have given his assent and the Bill would then become law, that after the Bill had become law, the Governor should again have reserved this Bill for the consideration of the President as required by the provisions of article 31(3) in order to make it effective law against the provision of article 31(2) and that if the President then gave his assent, the law so assented to could not be called in question in a court of law. \n It was said that only in case where this double procedure is followed that it could be said that the President had satisfied himself that the law did not contravene the provisions of article 31(2).", "Next it was contended that the obligation to pay compensation was implicit in the legislative power contained in entry 36 of List II and that the Act was unconstitutional as it had provided for acquisition of zamindaris without payment of compensation, the provisions relating to it being illusory.", "The next argument of Mr. Somayya that the Act is a fraud on the Constitution in that in legislating under entry 42 of List III, it has legislated for non-payment of compensation has also to be repelled, for the reasons given in the Bihar case.", "Mr. Somayya contended that payment of Rs. 65,000 as compensation to his client for property worth twenty-five lakhs of rupees was purely illusory. \n The assessment of value by the petitioner cannot be taken at its full value.", "A point was raised that the constitutional amendments in articles 31-A and 31-B could not affect the petitioners guaranteed rights contained in Part III of the Constitution in so far as the eighty malguzari villages were concerned, because those mahals did not fall within, the ambit of the word estate as defined in article 31-A.", "P. Land Revenue Act, defines the expression estate thus - an estate as declared by the State Government. The learned Advocate - General conceded that these villages are not within the ambit of this definition but he contended that they are within the scope of the definition of the expression given in article 31-A, as mahals in Central Provisions are local equivalents of the expression estate, though not so declared by the Act.", "There is nothing on the record to support this contention. The contention that those eighty mahals are not an estateand are thus excluded from the reach of article 31-A does not, however very much advances the petitioners case, because the hurdles created in his way by articles 31-B and 31(4) stand in spite of the circumstances that article 31-A has no application. It was contended that article 31-B was merely illustrative of the rule stated in article 31-A and if article 31-A had no application, that article also should be left out of consideration", "Petition No. 317 of 1951. Mr. Bindra, who appeared for the petitioner placed reliance on the observations of Holmes C.J. in Communications Assns. v. Douds (339 U.S. 382, 384), viz., that the provisions of the Constitution are not mathematical formulas having their essence in their form they are orgnic living institutions transplanted from English soil.", "One further point taken by Mr. Bindra was that nationalization of land is a separate head of legislation and that acquisition in general does not fall within the scope of entry 36 List II of the Seventh Schedule.", "Stephens Commentaries on the Laws of England, Vol.", "III, p. 541", "Article 362 is in these terms - In the exercise of the power of Parliament or of the legislature of a State to make laws or in the exercise of the executive power of the Union or of a State due regard shall be had to the guarantee or assurance given under any such covenant or agreement as is referred to in clause (1) of article 291 with respect to the personal rights, privileges and dignities of the Ruler of an Indian State. Article 363 takes away the jurisdiction of the courts regarding disputes arising out of treaties agreements, covenants, engagements, sanads etc.", "Mr. Swami Vehemently argued that the Government has by this Act become a super- zamindar, that there is no public purpose behind the Act, that there is no change in the existing order of things, that the Act has achieved nothing new, the tenants remain as they were, the malikan cabza were also already in existence, that acquisition of that status by occupancy tenants was possible under existing statutes and that they had also the power of transfer of their holdings."], "rank5": ["Land is also held on a variety of subordinate tenures by absolute occupancy tenants, occupancy tenants, ryots, thikedars, mafidars ilaqadars etc. Land revenue in Madhya Pradesh was last assessed under the Central Provinces Land Revenue Act, II of 1917. The estate holders pay land revenue on the lands comprised in the estates at a concession rate. The payment is technically called tekoli In 1939 there was an ad hoc increase in the amount of tekoli by the Central Provinces Revision of Land Revenue Estates Act, I of 1939. On the 3rd September 1946 the Central Provinces and Bear Legislative Assembly passed a resolution for the elimination of intermediaries between the State and the peasant. Soon after passing of this resolution several laws were enacted, it is said with a view to achieve this result, the impugned Act being the last of the series.", "In 1947, the Central Provinces Land Revenue Estates Act, XXV of 1947, was enacted. The revenue assessment, viz., tekoli, on the estates was, we are told enhanced, in some places from thirty to fifty per cent, of the full jama and in others from forty to sixty per cent. \nIn the same year was enacted the Central Provinces Land Revenue Revision Mahals Act, XXVI of 1947. The land assessment on malguzari villages was it is alleged, raised to 75 per cent. from 45 to 50 per cent. of malguzari assets. This was done without recourse to a settlement. In 1948 came the Central Provinces and Berar Revocation of Exemptions Act, XXXVII of 1948, making persons exempted from payment of land revenue liable for it.", "On the 11th October, 1949, the impugned Act was introduced in the Madhya Pradesh Assembly. It was referred to a Select Committee on the 15th October, 1949 the Select Committee reported on the 9th March, 1950, the report was published on the 17th March, 1950, and was taken into consideration on the 29th March, 1950, by the Assembly.", "Against the constitutionality of this Act a number of petitioners were made in the High Court of Nagpur but they were all dismissed by that court on the 9th April, while this petition along with some others was pending in this Court.", "The siwai income from jalkar, bankar, etc. and from village forests is calculated at two times the siwai income recorded in the settlement made in 1923. This is Act was passed in 1951. The siwai income recorded in the year 1923 is appreciably less than the actual income of the properties from these sources in 1951. Similarly the income from consent money has to be calculated by taking the average income for ten years preceding the date of vesting and not the actual income as in the case of rent realized during the previous agricultural year.", "Reference was made to the decision of the Privy Council in King Emperor v. Sibnath Banerjee ((1945) L.R. 72 I.A. 241 1945 F.C.R. 195), on the construction of sub-sections (1) and (2) of section 2 of the Defence of India Act.", "The material portion of section 2 considered in that case runs thus - \n (1). The Central Government may, be notification in the official gazette, make such rules as appear to it to be necessary or expedient for securing the defence of Birth India, the Public safety, the maintenance of public order or the efficient prosecution of war, or for maintaining supplies and services essential to the life of the community. (2) without prejudice to the generality of the powers conferred by sub-section (1), the rule may provide for, or may, empower any authority to make orders providing for all any of the following matters, namely \n Their Lordships made the following observations about the meaning to be given to the language of sub-section (2) -- the function of sub - section (2) is merely an illustrative one the rule-making, power is conferred by sub-section (1), and the rules which are referred to in the opening sentence of sub-section (2) are the rules which are authorised by, and made under, sub-section (1) the provisions of sub-section (2) are not restrictive of sub-section (1), as indeed is expressly stated by the words without prejudice to the generality of the power conferred by sub-section (1). Article 31-B is in these terms - \n Without prejudice to the generality of the provisions continued in article in article 31-A none, of the Acts and Regulations specified in the Ninth Schedule nor any of the provisions thereof shall be deemed to be void on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges any of the rights conferred by, any provisions of this Part, and notwithstanding any judgment, decree or order of the court or tribunal to the contrary, each of the said Acts and Regulations shall, subject to the power of any competent Legislature to repeal or amend it, continue in force."], "label": "REJECTED"}, "expert_5": {"rank1": ["The certificate of the Speaker is conclusive on the point that the Bill was passed by the legislature (Vide Craies Statute Law, 4th Edn., p. 36).", "In my opinion the contention raised that the Bill was not passed into law fails and must be rejected.", "This argument, in my opinion, has not much force having regard to the terms and scope of article 200.", "The Presidents assent therefore to the Bill attracts the application of articles 31-A and 31-B to it and deprives persons affected by it of the rights guaranteed in Part III of the Constitution.", "This Bill was pending at the commencement of the Constitution, it was reserved for the consideration of the president and the President gave his assent to it. The conditions for the application of article 31(4) thus stand fulfilled.", "The impugned Act in this situation qua the acquisition on the eighty malguzari villages cannot be questioned on the ground that it contravenes the provisions of article 31(2) of the Constitution or any of the other provisions of Part III.", "Mukherjea, J. \n I agree with my Lord the Chief Justice that these petitions should be dismissed.", "I am not impressed by the argument founded on the fine distinction sought to be made between an irregularity of procedure and on omission to take a particular step in the procedure. Such an omission in my opinion is nothing more than an irregularity of procedure. In my judgment this ground of attack on the validity of the Act is not well-founded and must be rejected.", "I do not think that what is referred to as law in article 31(3) is necessarily hat had already become a law before receiving the assent of the President.", "In my judgment article 31(3) on its true interpretation, does not require that the Governor must first assent to the Bill passed by the Assembly so as to convert it into a law and then reserve that law for the consideration of the President.", "In my opinion there is no substance in the second objection which must, therefore, be over ruled."], "rank2": ["The Speaker could not possibly have appended a certificate on a Bill that it was passed by the House if it had not been so passed.", "The Governor being empowered to reserve the Bill for the consideration of the President and this having been done, it was for the President either to assent to the Bill or to withhold his assent.", "The President having given his assent, the Bill must be held to have been passed into law.", "Moreover, the compensation provided for in the impugned Act cannot be dubbed as illusory.", "The applicability of article 31(4) is not limited to estates and its provisions save the law in its entirety.", "It is true that by the covenant of merger the properties of the petitioner became his private properties as distinguished from properties of the State but in respect of them he is no better position than any other owner possessing private property.", "Article 362 does not prohibit the acquisition of properties declared as private properties by the covenant of merger and does not guarantee their perpetual existence.", "The next of the Bill as it emerged through, the House was printed on 29th April, 1950, and Speaker signed a copy of the Printed Bill on 5th May, 1950, and certified that it had been passed by the House and forwarded it to the Governor.", "the original printed Act produced before us clearly shows that on 5th May 1950, the Speaker certified that the Bill had been passed by the Assembly.", "or he may declare that he reserves the Bill for the consideration of the President in which case the president will adopt the procedure laid down in article 201.", "Under that article the President shall declare either that he assents to the Bill in which case the Bill will become law or that he withholds assent therefrom, in which case the Bill falls through unless the procedure indicated in the proviso is followed.", "Suffice it to say that for reasons stated in my judgments in the Bihar appeals I repeal these heads of objections.", "In any event the Act cannot, for reasons stated by me in my judgment in the Bihar appeals, be questioned on the ground of absence of public purpose or of compensation."], "rank3": ["The legislation clearly falls within entry 36 of List II of the Seventh Schedule of the Constitution. The Madhya Pradesh Legislature had therefore undoubted competence to enact it.", "As already pointed out, the proceedings were signed by the Speaker on the 1st October, 1950, while the certificate that the Bill was passed was recorded by him on the original Bill when it was submitted to the President for his assent on the 10th May, 1950.", "There are no grounds whatever for doubting the correctness of his certificate.", "The Governor under that article could assent to a Bill or could reserve it for the consideration of the President at his option.", "It would be a meaningless formality for the President to give his assent to the same Bill twice over. I cannot see why the President cannot perform both the duties entrusted to him by articles 200 and 31(3) and (4) at one the same time.", "This contention fails for the reasons given in my judgment in the Bihar case.", "The purpose behind the Act is to establish direct contact between tillers of the soil and the Government and to eliminate the intermediaries, as in the view of the Government this is for the welfare of the society as a whole.", "It cannot at any rate be held that legislation which provides for the payment of a sum of Rs. 65,000 provides for no compensation.", "The expression estate shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area, and shall also include any jagir, inam or muafi or other similar grant.", "Section 2 (3) of Act II of 1917, C. P. Land Revenue Act, defines the expression estate thus - an estate as declared by the State Government.", "The guarantee contained in the articles is of a limited extent only. It assures that the Rules properties declared as their private properties will not be claimed as State properties. \n The guarantee has no greater scope than this. That guarantee has been fully respected by the impugned statue as it treats treats those properties is their private properties and seeks to acquire them on that assumption.", "As already stated, the purpose of the Act is to bring about reforms in the land tenure system of the State by establishing direct contact between the tillers of the soil and the Government.", "The Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act 1950 (Act I of 1951) having on January 22, 1951), received the assent of the President of India a Notification was published in the Madhya Pradesh Gazette of January 27, 1951, fixing March 31, 1951, as the date of vesting of all propriety rights in the State under section 3 of the Act.", "By an endorsement on that copy of the Printed Bill the Governor reserved the Bill for the assent of the President and the President, on 22nd January, 1951, signified his assent by endorsing his signature at the foot of that copy of the Printed Bill.", "It is after all, a matter for the Speaker to declare the result, The authentication by the Speaker on the printed Act that the Bill was passed involves such a declaration having been duly made.", "It appears that new rules were framed and actually came into force on 8th September 1950, New rule 148 does not reproduce sub-rule (2) of old rule 115 After the new rules came into force it was no longer the duty of the Speaker to confirm the proceedings at all. Therefore the purported confirmation of the proceedings by the Speaker on 1st October 1950, cannot be given any legal validity and the argument founded on authentication under defunct rule 115 (2) must lose all its force.", "The procedure to be followed after a Bill is passed by the State Assembly is laid down in article 200. Under that article, the Governor can do one of three things, namely he may declare that he assents to it, in which case the Bill becomes a law, or he may declare that he with holds assent therefrom in which case the Bill falls through unless the procedure indicated in the proviso is followed", "In the latter event happening, the argument of the learned counsel for the petitioners will require that what has become a law by the assent of the President will, in order to be effective, have to be again reserved for the consideration of the President, a curious conclusion I should be loath to reach unless I am compelled to do so.", "I see no improper delegation of legislative power at all. In my opinion all these heads of objections must be rejected.", "Article 31-B is neither illustrative of nor dependant on article 31-A.", "It does not extend to personal property which is different from personal rights. Further this article does not import any legal obligation but is an assurance only."], "rank4": ["On the 5th April, 1950, the member in charge of the Bill moved as follows - \n Speaker Sir, I now move that the Central Provinces Berar Abolition of Proprietary Rights (Estates, Mahals Alienated Lands) Bill, 1949 (No. 64 of 1949) as considered by the House be passed into law. The Honble the Speaker said Motion moved that the Central Provisions Berar Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Bill 1949 (No. 64 of 1949) as considered by the House be passed into law, \n A number of speeches were made at the third reading stage.", "there was no opposition whatsoever to the passing of the Bill.", "The original Bill that was submitted to the President for his assent was printed on the 29th April, 1950, and it bears on it the certificate of the Speaker dated the 10th May, 1950, stating that the Bill was duly passed by the legislature on the 5th April, 1950.", "This certificate was signed by the Speaker a considerable time ahead of his signing the proceedings. The Act, as already stated, received the assent of the President on the 22nd January, 1951, and was published in the Madhya Pradesh Gazette on the 26th January, 1951, as Madhya Pradesh Act I of 1951", "The main purpose of the Act is to bring the actual tillers of the soil in direct contract with the State by the elimination of intermediary holders.", "the Act aims at converting malguzari into ryotwari land system.", "It does not seem to have been intended that the Governor should give his assent to the Bill and make it a full-fledged law and then reserve it for the Presidents consideration so that it may have effect.", "He is not disabled under the Constitution from applying his mind to such a Bill once and for all to see whether it has to be passed into law and whether it fulfils the requirements of article 31(2).", "In this context the word Legislature means the House or Houses of Legislature and does not include the Governor with in its ambit.", "Article 31(4) means that if any Bill contravening the provisions of clause (2) of article 31 is passed by the House or Houses of Legislature but is reserved for he consideration of the President and receives his assent, then it shall become law, not open to any objection on the ground of such contravention.", "All that can be said is that it is grossly inadequate and it is not the equivalent of the value of the property acquired, but this issue is not justiciable in view of the provisions of article 31(4).", "The amount of instalments, if payment is to be in instalments, is bound to be fixed by the rules made under the statute and in case the rules are so made that they amount to an abuse of the exercise of that power, they can always be challenged on that ground.", "The argument that the Act is bad inasmuch as it delegates essential legislative power to the executive is negatived for the reasons given in the Bihar case.", "Article 31-B specifically validates certain Acts mentioned in the schedule despite the provisions of article 31-A and is not illustrative of article 31A but stands independent of it.", "It was within the competence of the Government in exercise of its governmental power to enhanced land revenue, to withdraw exemption of land revenue, wherever those had been granted, and to enact other laws of a similar character. There is no evidence whatsoever that all these enactments were enacted with a fraudulent design of defeating the provisions of payment of compensation contained in the Constitution. The Constitution had not even come into force by the time that most of these statutes were enacted.", "The Bill was introduced in the Madhya Pradesh Assembly on 11th October, 1949. It was referred to a Select Committee on 15th October 1949. The Select Committee made its Report on 9th March, 1950, which was presented to the Assembly on 29th March, 1950. The Assembly considered the Bill in the light of the Report between that date and 5th April 1950, during which period the amendments proposed by the Selected Committee were moved and disposed of. It appears from the Official Proceeding of the Madhya Pradesh Legislative Assembly of 5th April, 1950 that the after the last amendment had put to the House and accepted, the Honble Minister for Education (Sri P. S. Deshmukh) moved that the Bill be passed into law and and delivered a short speech inviting the members to finally pass the Bill. \n The Speaker then read out the motion. Then followed speeches by 11 speakers congratulating the Government and some of the members who took an active part in carrying, through this important measure of land reform and relief to the tillers of the soil. Nobody put forward any reasoned amendment and the trend of the speeches shows that the House accepted the Bill.", "Therefore, as a statement of a fact more reliance must be placed on the certification of the Bill than on the confirmation of the proceedings and it will not be unreasonable to hold that the omission of any mention of the question having been put to and carried by the Assembly was an accidental slip or omission.", "Further the speeches delivered by the eleven speakers clearly indicate that the stage there was no opposition the Bill. Therefore, putting the question at the end of the third reading of the Bill would have been at best a mere formality.", "Finally, the irregularity of procedure, if any, is expressly cured by article 212.", "The words has received his assent clearly imply and point to an accomplished fact and the clause read as a whole does not grammatically exclude a law that eventually become a law by having had received the assent to the President.", "The Provisions of the impugned Act have been analysed and summarised by Mahajan J. in the judgment just delivered by him and it is not necessary for me to recapitulate the same.", "To say that the Ruler is the power of certain properties is not to say that those properties shall in no circumstances be acquired by the State."], "rank5": ["On the 5th April, 1950, the Madhya Pradesh Legislative Assembly enacted an Act called the Madhya Pradesh Abolition of Proprietary Right Act. The Act received the assent of the President of India on the 22nd January, 1951, and was published in the Madhya Pradesh Gazette on the 26th January, 1951, as Act I of 1951. By a notification in a gazette extraordinary issued on the 27th January, 1951, the Madhya Pradesh Government fixed 31st March 1951, as the date of vesting of the estates under section 3 of the Act.", "On the 11th October, 1949, the impugned Act was introduced in the Madhya Pradesh Assembly. It was referred to a Select Committee on the 15th October, 1949 the Select Committee reported on the 9th March, 1950, the report was published on the 17th March, 1950, and was taken into consideration on the 29th March, 1950, by the Assembly.", "The preamble of the Act is in these terms - An Act to provide for the acquisition of the rights of proprietors in estates, mahals, alienated villages and alienated lands in Madhya Pradesh and to make provision for other matters connected there with.", "The provisions of the Act in respect of payment of compensation, though they do not in any way provide for an equivalent in money of the property taken and in that sense may not be adequate cannot be called illusory.", "If any Bill pending at the commencement of this Constitution in the Legislature of a State has, after it has been passed by such Legislature been reversed for the consideration of the President and has received his assent, them notwithstanding anything in this Constitution, the law so assented to shall not be called in question in any court on the ground that it contravenes the provisions of clause (2).", "It is also the purpose of the Act to confer malik maqbuza status on occupancy tenants and improve their present position and to vest management of village affairs and cultivation in a democratic village body.", "the hurdles created in his way by articles 31-B and 31(4) stand in spite of the circumstances that article 31-A has no application.", "The dictum of Holmes C.J. has no application to the construction of a Constitution which has in express terms made the payment of compensation obligatory for compulsory acquisition of property, which again in express terms by an amendment of it, has deprived persons affected by the impugned Act of this right.", "It only shows that the House passed on to discuss another Bill, namely the Madhya Pradesh State Aid to Industries (Amendment) Bill, 1950.", "There being a presumption of regularity attached to all official business the onus is undoubtedly on the petitioners to allege and prove that the procedure prescribed by the rules was not followed. There is no evidence on affidavit by anybody who was present at the meeting of the Assembly held on 5th April, 1950, as to be what actually happened on that date. The petitioners rely only on the absence in the Official Report of proceedings of any mention of the question being put to or carried by the Assembly.", "The question before us is whether as a matter of fact the Bill had duly passed according to the rules.", "In British Parliamentary practice the Speakers authentication is taken as conclusive (See Cries on Statute Law, 4th Ed., p. 36).", "Article 200 does not contemplate a second reservation by the Governor.", "the word law has been used to mean what at the time of dispute purpose to be or is asserted to be a law. The language of article 31(4) also supports this interpretation.", "I have already pointed out that article 200 does not contemplate a second reservation which will be necessary if initially the Governor instead of himself assenting to the Bill had reserved it for the consideration of the President.", "It is true that section 9 of the Acts does not specially indicate when the instalments will began or what the amount of each instalments will be but the Section clearly contemplates that these details should be worked out by rules to be framed under section 91 of the Act. Further under section 10 the State Government is bound to direct payment of an interim compensation amounting to one-tenth of the estimated amount of compensation if the whole amount is not paid within a period of six months from the date of vesting of the property in the State.", "The fact that his personal properties are sought to be acquired on payment of compensation clearly recognises his title just as the titles of other proprietors are recognised."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1952_60", "text": "CIVIL APPELLATE JURISDICTION Civil - Appeal No. 89 of 1952. Appeal by special leave from the Judgment dated June 27, 1951, of the Labour Appellate Tribunal of India at Calcutta in Appeals Nos. 94 and 142 of 1950 arising out of the Award of the Second Industrial Tribunal, Madras (published in the Fort St. George Gazette, Madras, dated October 3, (1950). C. Chatterjee (S. N. Mukherjee, with him) for the appellant. C. C. Anthoni Pillai (President, Madras Labour Union) for the respondents. 1952. December 2. The Judgment of the Court Was delivered by MAHAJAN J. MAHAJAN J.-This is an appeal by special leave from a decision dated 27th June, 1951, of the Labour Appellate Tribunal of India at Calcutta in appeals Nos. 94 and 142 of 1950, arising out of the award of the Second Industrial Tribunal, Madras. \nThe relevant facts and circumstances giving rise to the appeal are as follows On 1st November, 1948, 859 night shift operatives of the carding and spinning department of the Carnatic Mills stopped work, some at 4 p.m., some at 4- 30 p.m. and some at 5 p.m. The stoppage ended at 8 p.m. in both the departments. By 10 p.m, the strike ended completely. The apparent cause for the strike was that the management of the Mills had expressed its inability to comply with the request of the workers to declare the forenoon of the 1st November, 1948, as a holiday for solar eclipse. \nOn the 3rd November, 1948, the management put up a notice that the stoppage of work on the 1st November amounted to an illegal strike and a break in service within the meaning of the Factories Act (XXV of 1934) and that the management had decided that the workers who had participated in the said strike would not be entitled to holidays with pay as provided by the Act. \nThis position was not accepted by the Madras Labour Union. The Madras Government by an order dated the 11th July, 1949, made under section 10(1) (c) of the Industrial Disputes Act (XIV of 1947), referred this dispute along with certain other disputes to the Industrial Tribunal, Madras. The adjudicator gave the award which was published in the Gazette on 12th October, 1950. By his award the adjudicator found that there could be little doubt that the stoppage of work by the night shift workers on the night of the last November,, 1948, was a strike, that it was an illegal strike, since the textile industry is notified as a public utility industry and there could be no legal strike without a proper issue of notice in the terms prescribed by the Industrial Disputes Act. \nNo such notice had been given. In view of this finding he upheld the view of the management that the continuity of service of the workers was broken by the interruption caused by the illegal strike and that as a consequence the workers who participated in such strike were not entitled to annual holidays with pay under section 49-B (1) of the Factories Act. He, however, considered that the total deprivation of leave with pay ordered by the management was a severe punishment and on the assumption that he had power to scrutinize the exercise of the discretion by the management in awarding punishment, reduced the punishment by 50 per cent and held that the workers would be deprived of only half their holidays with pay. The decision of the management was varied to this extent. The Mills as well as the-Union appealed against this decision to the Labour Appellate Tribunal. That Tribunal upheld the contention of the Mills that the adjudicator had no power to interfere with and revise the, discretion of the management exercised by it under section 49-B (1). It also upheld the contention of the Union that what happened on the night of the 1st November did not amount to a strike and did not cause any interruption in the workers service. This is what the Tribunal said- It would be absurd to hold that non-permitted absence from work even for half an hour or less in the course of a working day would be regarded as interruption of service of a workman for the purpose of the said section. \nWe are inclined to hold that the stoppage of Work for the period for about 2 to 4 hours in the circumstances of the case is not to be regarded as a strike so as to amount to a break in the continuity of service of the workman concerned. In the result the appeal of the Union on this point was allowed and it was ordered that holidays at full rates as provided for in section 49-A of the Factories Act will have to be calculated in respect of the operatives concerned on the footing that there was no break in the continuity of their service by the stoppage of work on 1st November, 1948. In this appeal it was contended on behalf of the Mills that on a proper construction of section 49-B (1) of the Factories Act (XXV of 1934) the management was right in its decision that the continuity of service was broken by the interruption caused by the illegal strike and that the workers were not entitled to annual holidays with pay under the said section inasmuch as they would not have completed a period of twelve months continuous service in the factory, and that the non-permitted absence as a result of concerted refusal to work even for 2 to 4 hours in the course of a working day amounts to an illegal strike and consequently an interruption of service of a workman for the purpose of section 49-B. In our judgment, this contention is well founded. \nSection 49-B provides- Every worker who has completed a period of twelve months continuous service in a factory shall be allowed, during the subsequent period of twelve months, holidays for a period of ten, or, if a child, fourteen Consecutive days, inclusive of the day or days, if any, on which he is entitled to a holiday under subsection (1) of section 35 Explanation.-A worker shall be deemed to have completed a period of twelve months continuous service in a factory notwithstanding any interruption in service during those twelve months brought about by sickness, accident or authorized leave not exceeding ninety days in the aggregate for all three or by a lookout, or by a strike which is not an illegal strike, or by intermittent periods of involuntary unemployment not exceeding thirty days It is clear that the benefit of this section is not avail- able in cases where the interruption in service is brought about by an illegal strike. Section 2 q ) of the Industrial, Disputes Act (Act XIV of 1947) defines strike as meaning- a cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal, or a refusal under a common understanding, of any number of persons who are or have been so employed to continue to work or to accept employment. \nThe adjudicator found on the evidence and circumstances of the case that there was concert and combination of the workers in stopping and refusing resume work on the night of the 1st November He observed that the fact that a very large number of leave applications was put in for various reasons pointed to the concerted action and that the appli- cation given by the workers and their representatives also indicated that they were acting in combination both in striking and refusing to go back to work on the ground that they were entitled to leave for the night shift whenever a half a days leave was granted to the day shift workers. \nHe further hold that the refusal of the workers to resume work in spite of the attempts made by the officers and their own Madras Labour Union representatives indicated that they were not as a body prepared to resume work unless their demand was conceded. In our opinion, the conclusion reached by the adjudicator was clearly right and the conclusion cannot be avoided that the workers were acting in concert. That being so, the action of the workers on the night of the 1st November clearly fell within the definition of the expression strike in section 2(q) of the Industrial Disputes Act. We have not been able to appreciate the view expressed by the Appellate Tribunal that stoppage of work for a period of two to four hours and such non-permitted absence from work cannot be regarded as strike. Before the adjudicator the only point raised by the Union was that it was a spontaneous and lightning strike but it was not said by them that stoppage of work did not fall within the definition of strike as given in the Act. It cannot be disputed -that there was a cessation of work by a body of persons employed in the Mills and that they were acting in combination and their refusal to go back to work was concerted. All the necessary ingredients,. therefore, of the definition exist in the present case and the stoppage of work on 1st November, 1948, amounted to a strike. \nIt was not a case of an individual workers failure to turn up for work. It was a concerted action on the part of a large number of workers. The Appellate Tribunal was thus in error in not regarding it as a strike and it had no discretion not to regard what in law was a strike as not amounting to a strike. If it cannot be denied that the stoppage of work on 1st November, 1948, amounted to a strike, then it was certainly an illegal strike because no notice had been given to the management, the Mills being a public utility industry. It was contended by the President of the Union, who argued the case on behalf of the workers, that the Factories Act had no application to this case, because by a notification of the Government of Madras dated 23rd August, 1946, the Buckingham an Carnatic Mills had been exempted from the provisions of Chapter IV-A of the Act and the provisions of sections 49-A and 49-B were not therefore attracted to it and that no substantial question of law in respect to the construction of the section fell to be decided by this Court and that being so, this Court should not entertain this appeal under article 136 of the Constitution. This contention has no validity. The Mills were granted exemption from the provisions of Chapter IV-A of the Factories Act because their leave rules were in accordance with the provisions of Chapter IV-A of the Factories Act. These rules being in similar terms, the decision of the matter depends on the construction of the rules and this in- volves a substantial question of law. \nReliance was next placed on section 49-A of the Factories Act which provides that the provisions of the new Act would not operate to the prejudice of any rights which the workers were entitled to under the earlier rules and it was argued that under the leave rules of the Mills which prevailed prior to the coming into force of the Factories Act, the workers were entitled to privilege leave and there was no provision in those rules similar to the one that has been made in section 49-B or in the new rules and that the Mills had no right to deprive them of leave by reason of the strike. \nThis contention cannot be sustained because section 49-A (2) of the Factories Act has no application to the case of the Carnatic Mills in view of the notification dated 23rd August, 1946. Lastly, it was urged that the stoppage of work on 1st November, 1948, was not a concerted action -on the part of the workers and that several workers in their own individual capacity wanted leave on that date. In our opinion, in view of the facts and circumstances detailed in the adjudicators award this contention cannot be seriously considered. We concur in the view of the facts taken by the adjudicator that the action of the 859 workers on the night of 1st November, 1948, fell within the definition of the word strike as given in section 2(q) of the Industrial Disputes Act and it was an illegal strike and the workers thus lost the benefit of holidays that they would have otherwise got under the rules. The learned counsel for the appellant undertook on behalf of the management ex gratia that it would condone the default of the workers on 1st November, 1948, and the cessation of work on that night would not be treated as depriving them of the holidays under the rules and we appreciate -the spirit in which this undertaking was given and hope that the workers would also take it in that spirit.\nDECISION ??", "expert_1": {"rank1": ["In this appeal it was contended on behalf of the Mills that on a proper construction of section 49-B (1) of the Factories Act (XXV of 1934) the management was right in its decision that the continuity of service was broken by the interruption caused by the illegal strike and that the workers were not entitled to annual holidays with pay under the said section inasmuch as they would not have completed a period of twelve months continuous service in the factory, and that the non-permitted absence as a result of concerted refusal to work even for 2 to 4 hours in the course of a working day amounts to an illegal strike and consequently an interruption of service of a workman for the purpose of section 49-B.", "In our judgment, this contention is well founded.", "He further hold that the refusal of the workers to resume work in spite of the attempts made by the officers and their own Madras Labour Union representatives indicated that they were not as a body prepared to resume work unless their demand was conceded. In our opinion, the conclusion reached by the adjudicator was clearly right and the conclusion cannot be avoided that the workers were acting in concert. That being so, the action of the workers on the night of the 1st November clearly fell within the definition of the expression strike in section 2(q) of the Industrial Disputes Act.", "The Appellate Tribunal was thus in error in not regarding it as a strike and it had no discretion not to regard what in law was a strike as not amounting to a strike. If it cannot be denied that the stoppage of work on 1st November, 1948, amounted to a strike, then it was certainly an illegal strike because no notice had been given to the management, the Mills being a public utility industry.", "We concur in the view of the facts taken by the adjudicator that the action of the 859 workers on the night of 1st November, 1948, fell within the definition of the word strike as given in section 2(q) of the Industrial Disputes Act and it was an illegal strike and the workers thus lost the benefit of holidays that they would have otherwise got under the rules."], "rank2": ["We have not been able to appreciate the view expressed by the Appellate Tribunal that stoppage of work for a period of two to four hours and such non-permitted absence from work cannot be regarded as strike. Before the adjudicator the only point raised by the Union was that it was a spontaneous and lightning strike but it was not said by them that stoppage of work did not fall within the definition of strike as given in the Act. It cannot be disputed -that there was a cessation of work by a body of persons employed in the Mills and that they were acting in combination and their refusal to go back to work was concerted. All the necessary ingredients,. therefore, of the definition exist in the present case and the stoppage of work on 1st November, 1948, amounted to a strike. \nIt was not a case of an individual workers failure to turn up for work. It was a concerted action on the part of a large number of workers."], "rank3": ["It was contended by the President of the Union, who argued the case on behalf of the workers, that the Factories Act had no application to this case, because by a notification of the Government of Madras dated 23rd August, 1946, the Buckingham an Carnatic Mills had been exempted from the provisions of Chapter IV-A of the Act and the provisions of sections 49-A and 49-B were not therefore attracted to it and that no substantial question of law in respect to the construction of the section fell to be decided by this Court and that being so, this Court should not entertain this appeal under article 136 of the Constitution. This contention has no validity. The Mills were granted exemption from the provisions of Chapter IV-A of the Factories Act because their leave rules were in accordance with the provisions of Chapter IV-A of the Factories Act. These rules being in similar terms, the decision of the matter depends on the construction of the rules and this in- volves a substantial question of law. \nReliance was next placed on section 49-A of the Factories Act which provides that the provisions of the new Act would not operate to the prejudice of any rights which the workers were entitled to under the earlier rules and it was argued that under the leave rules of the Mills which prevailed prior to the coming into force of the Factories Act, the workers were entitled to privilege leave and there was no provision in those rules similar to the one that has been made in section 49-B or in the new rules and that the Mills had no right to deprive them of leave by reason of the strike. \nThis contention cannot be sustained because section 49-A (2) of the Factories Act has no application to the case of the Carnatic Mills in view of the notification dated 23rd August, 1946. Lastly, it was urged that the stoppage of work on 1st November, 1948, was not a concerted action -on the part of the workers and that several workers in their own individual capacity wanted leave on that date. In our opinion, in view of the facts and circumstances detailed in the adjudicators award this contention cannot be seriously considered."], "rank4": ["By his award the adjudicator found that there could be little doubt that the stoppage of work by the night shift workers on the night of the last November,, 1948, was a strike, that it was an illegal strike, since the textile industry is notified as a public utility industry and there could be no legal strike without a proper issue of notice in the terms prescribed by the Industrial Disputes Act. \nNo such notice had been given. In view of this finding he upheld the view of the management that the continuity of service of the workers was broken by the interruption caused by the illegal strike and that as a consequence the workers who participated in such strike were not entitled to annual holidays with pay under section 49-B (1) of the Factories Act.", "Section 49-B provides- Every worker who has completed a period of twelve months continuous service in a factory shall be allowed, during the subsequent period of twelve months, holidays for a period of ten, or, if a child, fourteen Consecutive days, inclusive of the day or days, if any, on which he is entitled to a holiday under subsection (1) of section 35 Explanation.-A worker shall be deemed to have completed a period of twelve months continuous service in a factory notwithstanding any interruption in service during those twelve months brought about by sickness, accident or authorized leave not exceeding ninety days in the aggregate for all three or by a lookout, or by a strike which is not an illegal strike, or by intermittent periods of involuntary unemployment not exceeding thirty days It is clear that the benefit of this section is not avail- able in cases where the interruption in service is brought about by an illegal strike. Section 2 q ) of the Industrial, Disputes Act (Act XIV of 1947) defines strike as meaning- a cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal, or a refusal under a common understanding, of any number of persons who are or have been so employed to continue to work or to accept employment. \nThe adjudicator found on the evidence and circumstances of the case that there was concert and combination of the workers in stopping and refusing resume work on the night of the 1st November He observed that the fact that a very large number of leave applications was put in for various reasons pointed to the concerted action and that the appli- cation given by the workers and their representatives also indicated that they were acting in combination both in striking and refusing to go back to work on the ground that they were entitled to leave for the night shift whenever a half a days leave was granted to the day shift workers."], "rank5": ["This is an appeal by special leave from a decision dated 27th June, 1951, of the Labour Appellate Tribunal of India at Calcutta in appeals Nos. 94 and 142 of 1950, arising out of the award of the Second Industrial Tribunal, Madras.", "On 1st November, 1948, 859 night shift operatives of the carding and spinning department of the Carnatic Mills stopped work, some at 4 p.m., some at 4- 30 p.m. and some at 5 p.m. The stoppage ended at 8 p.m. in both the departments. By 10 p.m, the strike ended completely. The apparent cause for the strike was that the management of the Mills had expressed its inability to comply with the request of the workers to declare the forenoon of the 1st November, 1948, as a holiday for solar eclipse. \nOn the 3rd November, 1948, the management put up a notice that the stoppage of work on the 1st November amounted to an illegal strike and a break in service within the meaning of the Factories Act (XXV of 1934) and that the management had decided that the workers who had participated in the said strike would not be entitled to holidays with pay as provided by the Act. \nThis position was not accepted by the Madras Labour Union.", "He, however, considered that the total deprivation of leave with pay ordered by the management was a severe punishment and on the assumption that he had power to scrutinize the exercise of the discretion by the management in awarding punishment, reduced the punishment by 50 per cent and held that the workers would be deprived of only half their holidays with pay. The decision of the management was varied to this extent. The Mills as well as the-Union appealed against this decision to the Labour Appellate Tribunal. That Tribunal upheld the contention of the Mills that the adjudicator had no power to interfere with and revise the, discretion of the management exercised by it under section 49-B (1). It also upheld the contention of the Union that what happened on the night of the 1st November did not amount to a strike and did not cause any interruption in the workers service. This is what the Tribunal said- It would be absurd to hold that non-permitted absence from work even for half an hour or less in the course of a working day would be regarded as interruption of service of a workman for the purpose of the said section. \nWe are inclined to hold that the stoppage of Work for the period for about 2 to 4 hours in the circumstances of the case is not to be regarded as a strike so as to amount to a break in the continuity of service of the workman concerned. In the result the appeal of the Union on this point was allowed and it was ordered that holidays at full rates as provided for in section 49-A of the Factories Act will have to be calculated in respect of the operatives concerned on the footing that there was no break in the continuity of their service by the stoppage of work on 1st November, 1948."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["All the necessary ingredients,. therefore, of the definition exist in the present case and the stoppage of work on 1st November, 1948, amounted to a strike. \nIt was not a case of an individual workers failure to turn up for work. It was a concerted action on the part of a large number of workers.", "If it cannot be denied that the stoppage of work on 1st November, 1948, amounted to a strike, then it was certainly an illegal strike because no notice had been given to the management, the Mills being a public utility industry.", "We concur in the view of the facts taken by the adjudicator that the action of the 859 workers on the night of 1st November, 1948, fell within the definition of the word strike as given in section 2(q) of the Industrial Disputes Act and it was an illegal strike and the workers thus lost the benefit of holidays that they would have otherwise got under the rules."], "rank2": ["The relevant facts and circumstances giving rise to the appeal are as follows On 1st November, 1948, 859 night shift operatives of the carding and spinning department of the Carnatic Mills stopped work, some at 4 p.m., some at 4- 30 p.m. and some at 5 p.m. The stoppage ended at 8 p.m. in both the departments. By 10 p.m, the strike ended completely.", "the management had decided that the workers who had participated in the said strike would not be entitled to holidays with pay as provided by the Act.", "a proper construction of section 49-B (1) of the Factories Act (XXV of 1934) the management was right in its decision that the continuity of service was broken by the interruption caused by the illegal strike and that the workers were not entitled to annual holidays with pay under the said section inasmuch as they would not have completed a period of twelve months continuous service in the factory, and that the non-permitted absence as a result of concerted refusal to work even for 2 to 4 hours in the course of a working day amounts to an illegal strike and consequently an interruption of service of a workman for the purpose of section 49-B.", "the Buckingham an Carnatic Mills had been exempted from the provisions of Chapter IV-A of the Act and the provisions of sections 49-A and 49-B were not therefore attracted to it and that no substantial question of law in respect to the construction of the section fell to be decided by this Court and that being so, this Court should not entertain this appeal under article 136 of the Constitution.", "The Mills were granted exemption from the provisions of Chapter IV-A of the Factories Act because their leave rules were in accordance with the provisions of Chapter IV-A of the Factories Act. These rules being in similar terms, the decision of the matter depends on the construction of the rules and this in- volves a substantial question of law."], "rank3": ["We are inclined to hold that the stoppage of Work for the period for about 2 to 4 hours in the circumstances of the case is not to be regarded as a strike so as to amount to a break in the continuity of service of the workman concerned."], "rank4": ["that there could be little doubt that the stoppage of work by the night shift workers on the night of the last November,, 1948, was a strike, that it was an illegal strike, since the textile industry is notified as a public utility industry and there could be no legal strike without a proper issue of notice in the terms prescribed by the Industrial Disputes Act. \nNo such notice had been given", "the total deprivation of leave with pay ordered by the management was a severe punishment and on the assumption that he had power to scrutinize the exercise of the discretion by the management in awarding punishment, reduced the punishment by 50 per cent and held that the workers would be deprived of only half their holidays with pay."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["In this appeal it was contended on behalf of the Mills that on a proper construction of section 49-B (1) of the Factories Act (XXV of 1934) the management was right in its decision that the continuity of service was broken by the interruption caused by the illegal strike and that the workers were not entitled to annual holidays with pay under the said section inasmuch as they would not have completed a period of twelve months continuous service in the factory, and that the non-permitted absence as a result of concerted refusal to work even for 2 to 4 hours in the course of a working day amounts to an illegal strike and consequently an interruption of service of a workman for the purpose of section 49-B. In our judgment, this contention is well founded", "The adjudicator found on the evidence and circumstances of the case that there was concert and combination of the workers in stopping and refusing resume work on the night of the 1st November He observed that the fact that a very large number of leave applications was put in for various reasons pointed to the concerted action and that the appli- cation given by the workers and their representatives also indicated that they were acting in combination both in striking and refusing to go back to work on the ground that they were entitled to leave for the night shift whenever a half a days leave was granted to the day shift workers. \nHe further hold that the refusal of the workers to resume work in spite of the attempts made by the officers and their own Madras Labour Union representatives indicated that they were not as a body prepared to resume work unless their demand was conceded", "In our opinion, the conclusion reached by the adjudicator was clearly right and the conclusion cannot be avoided that the workers were acting in concert.", "That being so, the action of the workers on the night of the 1st November clearly fell within the definition of the expression strike in section 2(q) of the Industrial Disputes Act.", "We have not been able to appreciate the view expressed by the Appellate Tribunal that stoppage of work for a period of two to four hours and such non-permitted absence from work cannot be regarded as strike. Before the adjudicator the only point raised by the Union was that it was a spontaneous and lightning strike but it was not said by them that stoppage of work did not fall within the definition of strike as given in the Act.", "It cannot be disputed -that there was a cessation of work by a body of persons employed in the Mills and that they were acting in combination and their refusal to go back to work was concerted.", "All the necessary ingredients,. therefore, of the definition exist in the present case and the stoppage of work on 1st November, 1948, amounted to a strike. \nIt was not a case of an individual workers failure to turn up for work.", "The Appellate Tribunal was thus in error in not regarding it as a strike and it had no discretion not to regard what in law was a strike as not amounting to a strike. If it cannot be denied that the stoppage of work on 1st November, 1948, amounted to a strike, then it was certainly an illegal strike because no notice had been given to the management, the Mills being a public utility industry", "it was urged that the stoppage of work on 1st November, 1948, was not a concerted action -on the part of the workers and that several workers in their own individual capacity wanted leave on that date. In our opinion, in view of the facts and circumstances detailed in the adjudicators award this contention cannot be seriously considered", "We concur in the view of the facts taken by the adjudicator that the action of the 859 workers on the night of 1st November, 1948, fell within the definition of the word strike as given in section 2(q) of the Industrial Disputes Act and it was an illegal strike and the workers thus lost the benefit of holidays that they would have otherwise got under the rules."], "rank2": ["By his award the adjudicator found that there could be little doubt that the stoppage of work by the night shift workers on the night of the last November,, 1948, was a strike, that it was an illegal strike, since the textile industry is notified as a public utility industry and there could be no legal strike without a proper issue of notice in the terms prescribed by the Industrial Disputes Act.", "No such notice had been given. In view of this finding he upheld the view of the management that the continuity of service of the workers was broken by the interruption caused by the illegal strike and that as a consequence the workers who participated in such strike were not entitled to annual holidays with pay under section 49-B (1) of the Factories Act", "He, however, considered that the total deprivation of leave with pay ordered by the management was a severe punishment and on the assumption that he had power to scrutinize the exercise of the discretion by the management in awarding punishment, reduced the punishment by 50 per cent and held that the workers would be deprived of only half their holidays with pay. The decision of the management was varied to this extent", "That Tribunal upheld the contention of the Mills that the adjudicator had no power to interfere with and revise the, discretion of the management exercised by it under section 49-B (1). It also upheld the contention of the Union that what happened on the night of the 1st November did not amount to a strike and did not cause any interruption in the workers service.", "In the result the appeal of the Union on this point was allowed and it was ordered that holidays at full rates as provided for in section 49-A of the Factories Act will have to be calculated in respect of the operatives concerned on the footing that there was no break in the continuity of their service by the stoppage of work on 1st November, 1948", "Section 49-B provides- Every worker who has completed a period of twelve months continuous service in a factory shall be allowed, during the subsequent period of twelve months, holidays for a period of ten, or, if a child, fourteen Consecutive days, inclusive of the day or days, if any, on which he is entitled to a holiday under subsection (1) of section 35 Explanation.", "-A worker shall be deemed to have completed a period of twelve months continuous service in a factory notwithstanding any interruption in service during those twelve months brought about by sickness, accident or authorized leave not exceeding ninety days in the aggregate for all three or by a lookout, or by a strike which is not an illegal strike, or by intermittent periods of involuntary unemployment not exceeding thirty days It is clear that the benefit of this section is not avail- able in cases where the interruption in service is brought about by an illegal strike. Section 2 q ) of the Industrial, Disputes Act (Act XIV of 1947) defines strike as meaning- a cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal, or a refusal under a common understanding, of any number of persons who are or have been so employed to continue to work or to accept employment.", "The Mills were granted exemption from the provisions of Chapter IV-A of the Factories Act because their leave rules were in accordance with the provisions of Chapter IV-A of the Factories Act", "These rules being in similar terms, the decision of the matter depends on the construction of the rules and this in- volves a substantial question of law.", "section 49-A (2) of the Factories Act has no application to the case of the Carnatic Mills in view of the notification dated 23rd August, 1946"], "rank3": ["On 1st November, 1948, 859 night shift operatives of the carding and spinning department of the Carnatic Mills stopped work, some at 4 p.m., some at 4- 30 p.m. and some at 5 p.m", "The stoppage ended at 8 p.m. in both the departments. By 10 p.m, the strike ended completely", "The apparent cause for the strike was that the management of the Mills had expressed its inability to comply with the request of the workers to declare the forenoon of the 1st November, 1948, as a holiday for solar eclipse", "On the 3rd November, 1948, the management put up a notice that the stoppage of work on the 1st November amounted to an illegal strike and a break in service within the meaning of the Factories Act (XXV of 1934) and that the management had decided that the workers who had participated in the said strike would not be entitled to holidays with pay as provided by the Act. \nThis position was not accepted by the Madras Labour Union.", "The Madras Government by an order dated the 11th July, 1949, made under section 10(1) (c) of the Industrial Disputes Act (XIV of 1947), referred this dispute along with certain other disputes to the Industrial Tribunal, Madras", "The Mills as well as the-Union appealed against this decision to the Labour Appellate Tribunal"], "label": "ACCEPTED"}, "expert_4": {"rank1": ["-This is an appeal by special leave from a decision dated 27th June, 1951, of the Labour Appellate Tribunal of India at Calcutta in appeals Nos. 94 and 142 of 1950, arising out of the award of the Second Industrial Tribunal, Madras.", "The Appellate Tribunal was thus in error in not regarding it as a strike and it had no discretion not to regard what in law was a strike as not amounting to a strike.", "We concur in the view of the facts taken by the adjudicator that the action of the 859 workers on the night of 1st November, 1948, fell within the definition of the word strike as given in section 2(q) of the Industrial Disputes Act and it was an illegal strike and the workers thus lost the benefit of holidays that they would have otherwise got under the rules."], "rank2": ["In the result the appeal of the Union on this point was allowed and it was ordered that holidays at full rates as provided for in section 49-A of the Factories Act will have to be calculated in respect of the operatives concerned on the footing that there was no break in the continuity of their service by the stoppage of work on 1st November, 1948.", "In our opinion, the conclusion reached by the adjudicator was clearly right and the conclusion cannot be avoided that the workers were acting in concert.", "That being so, the action of the workers on the night of the 1st November clearly fell within the definition of the expression strike in section 2(q) of the Industrial Disputes Act.", "All the necessary ingredients,. therefore, of the definition exist in the present case and the stoppage of work on 1st November, 1948, amounted to a strike.", "If it cannot be denied that the stoppage of work on 1st November, 1948, amounted to a strike, then it was certainly an illegal strike because no notice had been given to the management, the Mills being a public utility industry."], "rank3": ["The relevant facts and circumstances giving rise to the appeal are as follows On 1st November, 1948, 859 night shift operatives of the carding and spinning department of the Carnatic Mills stopped work, some at 4 p.m., some at 4- 30 p.m. and some at 5 p.m.", "The stoppage ended at 8 p.m. in both the departments. By 10 p.m, the strike ended completely.", "The apparent cause for the strike was that the management of the Mills had expressed its inability to comply with the request of the workers to declare the forenoon of the 1st November, 1948, as a holiday for solar eclipse.", "On the 3rd November, 1948, the management put up a notice that the stoppage of work on the 1st November amounted to an illegal strike and a break in service within the meaning of the Factories Act (XXV of 1934) and that the management had decided that the workers who had participated in the said strike would not be entitled to holidays with pay as provided by the Act.", "This position was not accepted by the Madras Labour Union.", "By his award the adjudicator found that there could be little doubt that the stoppage of work by the night shift workers on the night of the last November,, 1948, was a strike, that it was an illegal strike, since the textile industry is notified as a public utility industry and there could be no legal strike without a proper issue of notice in the terms prescribed by the Industrial Disputes Act.", "No such notice had been given.", "In view of this finding he upheld the view of the management that the continuity of service of the workers was broken by the interruption caused by the illegal strike and that as a consequence the workers who participated in such strike were not entitled to annual holidays with pay under section 49-B (1) of the Factories Act.", "He, however, considered that the total deprivation of leave with pay ordered by the management was a severe punishment and on the assumption that he had power to scrutinize the exercise of the discretion by the management in awarding punishment, reduced the punishment by 50 per cent and held that the workers would be deprived of only half their holidays with pay.", "The decision of the management was varied to this extent.", "That Tribunal upheld the contention of the Mills that the adjudicator had no power to interfere with and revise the, discretion of the management exercised by it under section 49-B (1).", "It also upheld the contention of the Union that what happened on the night of the 1st November did not amount to a strike and did not cause any interruption in the workers service.", "This is what the Tribunal said- It would be absurd to hold that non-permitted absence from work even for half an hour or less in the course of a working day would be regarded as interruption of service of a workman for the purpose of the said section.", "We are inclined to hold that the stoppage of Work for the period for about 2 to 4 hours in the circumstances of the case is not to be regarded as a strike so as to amount to a break in the continuity of service of the workman concerned.", "In this appeal it was contended on behalf of the Mills that on a proper construction of section 49-B (1) of the Factories Act (XXV of 1934) the management was right in its decision that the continuity of service was broken by the interruption caused by the illegal strike and that the workers were not entitled to annual holidays with pay under the said section inasmuch as they would not have completed a period of twelve months continuous service in the factory, and that the non-permitted absence as a result of concerted refusal to work even for 2 to 4 hours in the course of a working day amounts to an illegal strike and consequently an interruption of service of a workman for the purpose of section 49-B.", "In our judgment, this contention is well founded.", "Section 49-B provides- Every worker who has completed a period of twelve months continuous service in a factory shall be allowed, during the subsequent period of twelve months, holidays for a period of ten, or, if a child, fourteen Consecutive days, inclusive of the day or days, if any, on which he is entitled to a holiday under subsection (1) of section 35 Explanation.", "A worker shall be deemed to have completed a period of twelve months continuous service in a factory notwithstanding any interruption in service during those twelve months brought about by sickness, accident or authorized leave not exceeding ninety days in the aggregate for all three or by a lookout, or by a strike which is not an illegal strike, or by intermittent periods of involuntary unemployment not exceeding thirty days It is clear that the benefit of this section is not avail- able in cases where the interruption in service is brought about by an illegal strike.", "Section 2 q ) of the Industrial, Disputes Act (Act XIV of 1947) defines strike as meaning- a cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal, or a refusal under a common understanding, of any number of persons who are or have been so employed to continue to work or to accept employment.", "We have not been able to appreciate the view expressed by the Appellate Tribunal that stoppage of work for a period of two to four hours and such non-permitted absence from work cannot be regarded as strike.", "Before the adjudicator the only point raised by the Union was that it was a spontaneous and lightning strike but it was not said by them that stoppage of work did not fall within the definition of strike as given in the Act.", "It cannot be disputed -that there was a cessation of work by a body of persons employed in the Mills and that they were acting in combination and their refusal to go back to work was concerted.", "It was not a case of an individual workers failure to turn up for work.", "It was a concerted action on the part of a large number of workers.", "It was contended by the President of the Union, who argued the case on behalf of the workers, that the Factories Act had no application to this case, because by a notification of the Government of Madras dated 23rd August, 1946, the Buckingham an Carnatic Mills had been exempted from the provisions of Chapter IV-A of the Act and the provisions of sections 49-A and 49-B were not therefore attracted to it and that no substantial question of law in respect to the construction of the section fell to be decided by this Court and that being so, this Court should not entertain this appeal under article 136 of the Constitution.", "This contention has no validity.", "The Mills were granted exemption from the provisions of Chapter IV-A of the Factories Act because their leave rules were in accordance with the provisions of Chapter IV-A of the Factories Act.", "These rules being in similar terms, the decision of the matter depends on the construction of the rules and this in- volves a substantial question of law.", "Reliance was next placed on section 49-A of the Factories Act which provides that the provisions of the new Act would not operate to the prejudice of any rights which the workers were entitled to under the earlier rules and it was argued that under the leave rules of the Mills which prevailed prior to the coming into force of the Factories Act, the workers were entitled to privilege leave and there was no provision in those rules similar to the one that has been made in section 49-B or in the new rules and that the Mills had no right to deprive them of leave by reason of the strike.", "This contention cannot be sustained because section 49-A (2) of the Factories Act has no application to the case of the Carnatic Mills in view of the notification dated 23rd August, 1946."], "rank4": ["The Madras Government by an order dated the 11th July, 1949, made under section 10(1) (c) of the Industrial Disputes Act (XIV of 1947), referred this dispute along with certain other disputes to the Industrial Tribunal, Madras.", "The adjudicator gave the award which was published in the Gazette on 12th October, 1950.", "The Mills as well as the-Union appealed against this decision to the Labour Appellate Tribunal.", "The adjudicator found on the evidence and circumstances of the case that there was concert and combination of the workers in stopping and refusing resume work on the night of the 1st November He observed that the fact that a very large number of leave applications was put in for various reasons pointed to the concerted action and that the appli- cation given by the workers and their representatives also indicated that they were acting in combination both in striking and refusing to go back to work on the ground that they were entitled to leave for the night shift whenever a half a days leave was granted to the day shift workers.", "He further hold that the refusal of the workers to resume work in spite of the attempts made by the officers and their own Madras Labour Union representatives indicated that they were not as a body prepared to resume work unless their demand was conceded.", "Lastly, it was urged that the stoppage of work on 1st November, 1948, was not a concerted action -on the part of the workers and that several workers in their own individual capacity wanted leave on that date.", "In our opinion, in view of the facts and circumstances detailed in the adjudicators award this contention cannot be seriously considered."], "rank5": ["The learned counsel for the appellant undertook on behalf of the management ex gratia that it would condone the default of the workers on 1st November, 1948, and the cessation of work on that night would not be treated as depriving them of the holidays under the rules and we appreciate -the spirit in which this undertaking was given and hope that the workers would also take it in that spirit."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["In our opinion, the conclusion reached by the adjudicator was clearly right and the conclusion cannot be avoided that the workers were acting in concert. That being so, the action of the workers on the night of the 1st November clearly fell within the definition of the expression strike in section 2(q) of the Industrial Disputes Act.", "It cannot be disputed -that there was a cessation of work by a body of persons employed in the Mills and that they were acting in combination and their refusal to go back to work was concerted.", "It was not a case of an individual workers failure to turn up for work. It was a concerted action on the part of a large number of workers.", "If it cannot be denied that the stoppage of work on 1st November, 1948, amounted to a strike, then it was certainly an illegal strike because no notice had been given to the management, the Mills being a public utility industry.", "We concur in the view of the facts taken by the adjudicator that the action of the 859 workers on the night of 1st November, 1948, fell within the definition of the word strike as given in section 2(q) of the Industrial Disputes Act and it was an illegal strike and the workers thus lost the benefit of holidays that they would have otherwise got under the rules."], "rank2": ["a very large number of leave applications was put in for various reasons pointed to the concerted action and that the appli- cation given by the workers and their representatives also indicated that they were acting in combination both in striking and refusing to go back to work on the ground that they were entitled to leave for the night shift whenever a half a days leave was granted to the day shift workers.", "it was not said by them that stoppage of work did not fall within the definition of strike as given in the Act."], "rank3": ["acting in combination, or a concerted refusal, or a refusal under a common understanding", "The adjudicator found on the evidence and circumstances of the case that there was concert and combination of the workers in stopping and refusing resume work on the night of the 1st November", "He further hold that the refusal of the workers to resume work in spite of the attempts made by the officers and their own Madras Labour Union representatives indicated that they were not as a body prepared to resume work unless their demand was conceded.", "section 49-A (2) of the Factories Act has no application to the case of the Carnatic Mills in view of the notification dated 23rd August, 1946."], "rank4": ["or by a strike which is not an illegal strike", "It is clear that the benefit of this section is not avail- able in cases where the interruption in service is brought about by an illegal strike.", "Section 2 q ) of the Industrial, Disputes Act (Act XIV of 1947) defines strike as meaning- a cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal, or a refusal under a common understanding, of any number of persons who are or have been so employed to continue to work or to accept employment.", "The Mills were granted exemption from the provisions of Chapter IV-A of the Factories Act because their leave rules were in accordance with the provisions of Chapter IV-A of the Factories Act. These rules being in similar terms, the decision of the matter depends on the construction of the rules and this in- volves a substantial question of law."], "rank5": ["Section 49-B provides- Every worker who has completed a period of twelve months continuous service in a factory shall be allowed, during the subsequent period of twelve months, holidays for a period of ten, or, if a child, fourteen Consecutive days, inclusive of the day or days, if any, on which he is entitled to a holiday under subsection (1) of section 35", "A worker shall be deemed to have completed a period of twelve months continuous service in a factory notwithstanding any interruption in service during those twelve months brought about by sickness, accident or authorized leave not exceeding ninety days in the aggregate for all three or by a lookout, or by a strike which is not an illegal strike, or by intermittent periods of involuntary unemployment not exceeding thirty days"], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1952_75", "text": "Bose, J. The plaintiff appeals. The suit relates to a Saranjam estate in the State of Bombay. The plaintiff claims to be the sole Saranjamdar and seeks certain declarations and other reliefs appropriate to such a claim. The first and second defendants are members of the plaintiffs family while the third defendant is the State of Bombay (Province of Bombay at the date of the suit). The only question is whether the suit is barred by section 4 (a) of Bombay Act X of 1876 (Bombay Revenue Jurisdiction Act). The following genealogical tree will show the relationship between the parties Bhujangrao Appasaheb (British grantee) \n Daulatrao I (died 24-7-1864) ----------------------------------------------------------------- \n Bhujangrao I Malojirao Yeshwantrao alias (died 1881) Annasaheb \n (widow) Krishnabai Daulatrao III Bhujangrao II Daulatrao II (Def. 1) (Def. 2) (died 8-5-1931) \n Bhujangrao III \n The facts are as follows. A common ancestor of the present parties was given the Gajendragad estate as a Saranjam some time before the advent of the British. When they arrived on the scene they decided, as far as possible, to continue such Saranjams, jagirs and inams as had been granted by the earlier rulers, and accordingly they framed rules under Schedule B. Rule 10 of Bombay Act XI of 1852 (The Bombay Rent Free Estates Act 1852) to regulate the mode of recognition and the succession and conditions of tenure to Saranjams, which are analogous to jagirs. In compliance with this, the common ancestor shown at the head of the genealogical tree set out above was recognised by the British Government as the Saranjamdar of the Gajendragad estate. He may for convenience be termed the British Grantee. The Register Ex. P-53 shows that the estate consisted of villages. We do not know the date of the British recognition but the nature of the tenure is described as follows - \n Continuable to all male legitimate descendants of the holder at the time of British conquest, viz., Bhujangrao Appasaheb, the first British Grantee, son of Bahirojirao Ghorpade. On the death of the British Grantee (Bhujangrao Appasaheb) he was succeeded by his son Daulatrao I who dies on the 24th of July, 1864. This Daulatrao I left three sons, bhujangrao I, Yeshwantrao and Malojirao. In the year 1866 Bhujangrao I and his brother Yeshwantrao alias Annasaheb sued Malojirao for possession of this Saranjam. A question of impartibility was raised but the Bombay High Court declared that the property in British India was partible. They further declared that Bhujangrao I was the head of the family and as such was entitled to a special assignment which was not to exceed a quarter share, for the expenses and duties which might devolve on him by virtue of his position, and that after this had been set aside each of the three brothers was entitled to an equal one-third share in the landed property in India. This judgment is reported in 5 Bom. H. C. R. 161. The duties enumerated at page 170 included, the keeping up of armed retainers for the fort of Gajendragad, and for the improvement of that village, which was the chief seat of this branch of the Ghorpade family, and also to enable him to distribute on ceremonial occasions the customary presents to the junior members of the family. the judgment is dated the 12th of October, 1868. As a consequence a division of the property was effected. Malojirao separated himself from his brothers and was allotted seven villages. The other two brothers continued joint and took the remainder. But this was only with respect to property situate in British India. The parties also had property in the State of Kolhapur. That was left undivided. Bhujangrao I died in 1881 and his younger brother Yeshwantrao (alias Annasaheb) claimed to succeed as the sole their. The Political Department of the Government of India refused to recognise this claim and permitted Bhujangrao Is widow Krishnabai to adopt a boy from the family and recognised him as the heir in respect of that portion of the estate which lay within the Principality of Kolhapur. This was on the 3rd of February 1882. The Bombay Government followed a similar course regarding the property in British India. On the 26th of April, 1882, they passed a Resolution embodying the following decision \n The adoption was to be recognised and the adapted son was to occupy the same position as his adoptive father, that is to say, he was to get one-third of the property plus the assignment given to him as head of the family. Malojirao who had already taken his share of the estate was to continue in possession. Yeshwantrao (alias Annasaheb) was given the option of remaining joint with the adopted boy or separating. Finally, the Resolution concluded - \n The two brothers will hold their respective shares as their private property in virtue of the decree of the High Court and the Jahagir will henceforth be restricted to the portion awarded by the High Court to Bhujangrao which the adopted son will now inherit. It should however be clearly understood that the decision of the High Court in not to be held as a precedent and that no partition of the Jahagir Estate to be continued to the adopted son will ever be allowed. This position was emphasised by Government in the same year on the 22nd August, 1882. Krishnabai who had been allowed by Government to adopt Daulatrao II, asked that her husbands one-third share in the estate be also treated as private property in the same way as the shares of the other brothers. This prayer was refused and Government stated \n It should be plainly under that Government allow the adoption to be made only in consideration of Bhujangrao one share as well as the portion assigned to him as head of the family being continued to the adopted son as indivisible Jahagir Estate descending in the line of male heirs in the order of primogeniture and subject to no terms whatsoever as to the enjoyment of the same by Krishnabai during her lifetime. The position was re-examined by Government in 1891 and its decision was embodied in the following resolution dated the 17th of March, 1891 \n It appears to Government that the whole Gajendragad Estate is Saranjam continuable as here in the fullest sense of the word as interpreted by the Court of Directors in paragraph 9 of their Despatch No. 27 dated 12th December, 1855. It is continuable to all male legitimate descendants of the holder at the time of the British conquest and should Government ever sanction an adoption the terms of sanction would be those applicable to Saranjamdars. The property should be dealt with like other Saranjams in the Political Department. In the year 1901 the adopted son Daulatrao II sued Yashwantraos son Bhujangrao II for partition. It will be remembered that in the litigation of 1866, which ended in the Bombay High Courts judgment reported in 5 Bom. H. C. R. 161, Malojirao alone separated and the other two brothers continued joint. The litigation of 1901 put an end to that position. The High Courts judgment dated the 12th of March, 1908, makes it clear that as Government was not a party to that litigation its rights against either or both of the parties were not affected. But as between the parties inter se they were bound by the previous decision and so the adopted sun was entitled to partition and separate possession of such properties as might fall to his share. After this decision was given the two partitioned the property between themselves amicably. In or about the year 1930 a Record of Rights was introduced in fourteen of the villages in the Gajendragad Jahagir and a dispute arise again between the three branches of the family. The District Deputy Collector, after inspecting the records, found that the name of the Khatedar Saranjamdar alone has found place in the village Inam register, in the Saranjam list and the land alienation register. while in the other village records the various members of the family were entered according to the actual wahivat or enjoyment. After due consideration he thought that the interest of Government and the Saranjamdar would be sufficiently safeguarded by allowing the same position to continue. He ordered the entries to be made accordingly. The order also discloses that the matter had been referred to the Legal Remembrancer to the Bombay Government. In the meanwhile, on the 5th of May, 1898, a set of Rules framed under Schedule B, Rule 10, of the Bombay Rent Free Estates Act of 1852 were drawn up and published in the Bombay Gazette. These Rules were republished, probably with some modification, in the Gazette of 8th July, 1901. The portions applicable here were as follows - \n Saranjams shall ordinarily be continued in accordance with the decision already passed by Government in each case. II. A Saranjam which was decided to be hereditarily continuable shall ordinarily descend to the eldest male representative, in the order of primogeniture, of the senior branch of the family descended from the first British Grantee or any of his brothers who were undivided in interest. But Government reserve to themselves their rights for sufficient reason to direct the continuance of the Saranjam to any other member of the said family, or as an act of grace, to a person adopted into the same family with the sanction of Government. Every Saranjam shall be held as a life estate. It shall be formally resumed on the death of the holder and in cases in which it is capable of further continuance it shall be made over to the next holder as a fresh grant from Government unencumbered by any debts, or charges, save such as may be specially imposed by Government itself. VI. No Saranjam shall be capable of sub-division. VII. Every Saranjamdar shall be responsible for making a suitable provision for the maintenance of (certain members of the family enumerated in the Rule). IX. If an order passed by Government under Rule VII is not carried out, Government may, whatever the reason may be, direct the Saranjam, or a portion of it, to be resumed Provision for the members of the Suranjamdars family entitled to maintenance shall then be made by Government out of the revenues of the Saranjam so resumed. After the District Deputy Collectors orders were passed on the 20th of May, 1930, Daulatrao II died on the 8th of May, 1931, and the matter was again taken up by Government. This time it passed the following Resolution on the 7th of June, 1932. The Resolution was headed Resumption and regrant of the Gajendragad Saranjam standing at No. 91 of the Saranjam List. It reads - \n Resolution - The Governor-in-Council is pleased to direct that the Gajendragad Saranjam should be formally resumed and regranted to Bhujangrao Daulatrao Ghorpade eldest sun of the deceased Saranjamdar Sardar Daulatrao Bhujangrao Ghorpade and that it should be entered in his sole name in the accounts of the Collector of Dharwar with effect from the date of the death of the last holder. The Collector should take steps to place the Saranjamdar in possession of the villages of the Saranjam estate which were in possession of the deceased Saranjamdar. The Governor-in-Council agrees with the Commissioner, Southern Division, that the assignments held by the Bhaubands as potgi holders should be continued to them as at present. The Bhujangrao mentioned in the Resolution is the plaintiff who is shown as Bhujangrao III in the genealogical tree. The defendants were evidently aggrieved by this, for they filed Suit No. 23 of 1934 against the present plaintiff and the Secretary of State for India in Council praying inter alia that the properties, in that suit, viz., the villages allotted to their shares, were their independent and private properties and in case they were held to be Saranjam properties, they be declared as independent Saranjams, separate, and distinct from the one held by the present plaintiff. This suit was withdrawn with liberty to bring a fresh suit on the same cause of action against the present plaintiff but not against the Secretary of State for India in Council. According to defendants I and 2, this was pursuant to an arrangement between the Government and themselves that Government would issue a fresh Resolution in terms of the earlier Resolution dated the 17th of March, 1891. This was done. On the 25th of February, 1936, Government passed the following Resolution - \n Resolution-After careful consideration the Governor-in-Council is pleased to confirm the decision in Government, Resolution (Political Department) No. 1769 dated the 17th of March, 1891, and to declare that the whole of the Gajendragad Estate shall be continuable as an inalienable and impartible Saranjam on the conditions stated in the said Resolution. Having regard, however, to the manner in which different portions of the estate have been held by different branches of the family, the Governor-in-Council, in modification of the orders contained in Government esolution No. 8969 dated the 7th June, 1932, is pleased to direct that the portions of the said estate held by Sardar Bhujangrao Daulatrao Ghorpade, Daulatrao Malojirao Ghorpade and Bhujangrao Yeshwantrao Ghorpade, respectively, shall henceforth be entered in the Revenue Records as de facto shares in the said estate held by the said persons as representatives, respectively, of three branches of the Ghorpade family. Each of the said de facto shares shall be continuable hereditarily as such as if it were a separate Saranjam estate in accordance with the rules made for the continuance of Saranjams by the Governor-in-Council in exercise of the powers referred to in the rules framed under the Bombay Rent Free Estates Act, 1852, and section 2 (3) of the Bombay Summary Settlement Act (VII of 1863) and such special orders as the Governor-in-Council may make in regard to the Gajendragad Estate as a whole or in regard to the said share. The recognition of the aforesaid shares and their entry in the Revenue Records as separate shares shall not be deemed to amount to a recognition of the estate of Gajendragad as in any manner partible or alienable and shall not in any way affect the right of Government to treat the said estate as an entire impartible and inalienable Saranjam estate. The Governor-in-Council further directs that the aforesaid shares shall in no case be capable of sub-division and shall not in any way be alienated or encumbered except in accordance with the rules and orders referred to above \n The present suit is an attack on the action of Government in passing this Resolution. The first and second defendants are the present representatives of the other branches of the family and the third defendant is the Province of Bombay (now the State of Bombay). The plaint states - \n Government can have an jurisdiction to deprive the plaintiff at any rate during his lifetime of the full benefit of all the rights and privileges appertaining to the holder of a Saranjam. The Order of Government of the 8th February, 1930 is, therefore, ultra vires and in no way binding on the present plaintiff \n Defendants 1 and 2, therefore, are not entitled to any right or privileges claimable by the holder of a Saranjam which according to the G. K. is continuable as an inalienable and impartible Saranjam, such as for example in the matter of appointment of the village officers in any of the 27 villages appertaining to the Gajendragad Saranjam. The cause of action arose in April 1938 and the resolution and the entry being ultra vires is not binding \n As this is a suit claiming for relief primarily against defendants 1 and 2 defendant 3 is made a party to the suit in order to enable Government (defendant 3) to give proper effect to the decision of Government of the 17th March, 1891 and of 7th June, 1932, as against defendants 1 and 2 who have no right to the position which they claim \n The reliefs prayed for are - \n That it be declared that defendants 1 and 2 have no right to go behind the order of the Government as per Resolution No. 8969 of 7th June, 1932, under which plaintiff is entitled to be recognised as the sole Saranjamdar in the Revenue Records and that the assignments held by defendants 1 and 2 are held by them as mere potgi holders. That in consequence of his position of a sole Saranjamdar the plaintiff alone at any rate during his lifetime has the sole right to the rights and privileges appertaining to the post of a sole Saranjamdar to wit, to be consulted in the appointment of the village officers in all the villages appertaining to the Saranjam estate, but assigned to defendants 1 and 2 for potgi \n Defendants 1 and 2 be restrained from doing any acts or taking any steps in contravention of the aforesaid right of the plaintiff. That it be declared that defendant 3 (Government) have no right to change the Resolution No. 8969 of 7th June, 1932, and at any rate during the lifetime of the plaintiff. The first Court dismissed the plaintiffs claim on the merits holding that Government had the right to amend its Resolution in the way it did. The lower appellate Court also dismissed the suit on three grounds (1) that the two previous decisions of 1868 and 1908 operate as res judicata, (2) that the impugned Resolution is intra vires and (3) that section 4 (a) and (d) of the Revenue Jurisdiction Act bars the jurisdiction of the Court. In second appeal the High Court only considered the question of jurisdiction and, agreeing, with the lower appellate Court on the point, dismissed the appeal but it granted the plaintiff leave no appeal to this Court. The only question we have to consider is the one of jurisdiction. Section 4 of the Bombay Revenue Jurisdiction Act, 1876 (Bombay Act X of 1876), runs - \n Subject to the exceptions hereinafter appearing, no Civil Court shall exercise jurisdiction as to - \n (a) claims against the Crown relating to lands held as Saranjam \n It was strenuously contended that this is not a claim against the Crown but one against the first and second defendants. That in my opinion is an idle contention in view of paragraphs 9 and 12 of the plaint and reliefs (a) and (d). In any event, Mr. Somayya was asked whether he would strike out the third defendant and those portions of the plaint which sought relief against it. He said he was not prepared to do so. I cannot see how a plaintiff can insist on retaining a person against whom he claims no relief as a party. I am clear that this is a suit against the Crown within the meaning of section 4 (a). The next question is whether, assuming that to be the case, it is also one relating to lands held as Saranjam. So far as the reliefs sought against Government are concerned, that is clearly the case. Paragraph 9 of the plaint challenges Governments jurisdiction to deprive the plaintiff of the full benefit of all rights and privileges appertaining to the holder of a Saranjam. these rights cannot exist apart from the lands which form part of the Saranjam estate and the implication of the prayer is that Government has, for example, no right to resume the Saranjam either under Rule V on the death of the last Saranjamdar or under Rule IX during his lifetime. (It is to be observed that a resumption under Rule IX can only be of the land because the rule directs that when the Saranjam is resumed Government itself shall make provisions for the maintenance of those entitled to it out of the revenues of the Saranjam so resumed. These revenues can only come out of the land. Relief (d) in the prayer clause seeks a declaration that Government has to right to change Resolution No. 8969 dated the 7th of June, 1932. That Resolution directly relates to the land because it directs that the Gajendragad Saranjam he resumed and the Collector is directed to take steps to place the Saranjamdar in possession of the village of the Saranjam estate etc. It is impossible to contend that this is not a claim relating to lands held as Saranjam. It was next argued that if that be the case the claim against Government can be dismissed and the plaintiff can at least be given the reliefs claimed against the other two defendants. These, it was contended, do not relate to land and in any event are not claims against the Crown. In my opinion this is not a suit in which the rights claimed against the other defendants can be divorced from the claim against Government and considered separately. That is evident enough from paragraph 10 of the plaint. In paragraph 9 the power of Government to deprive the plaintiff of the rights he claims is challenged and in paragraph 10 the plaintiff explains that therefore the first and second defendants are not entitled to any of the rights and privileges of the Saranjamdar. One of those rights, as we have been from Rules VII and IX, is to take the revenues of the entire estate in order that he might fulfil his obligation regarding the payment of maintenance to certain members of the family and if the defendants claim to hold their lands under the orders of Government and the plaintiff insists on retaining Government as a party in order that it may be bound by the decree he wants against the other defendants it is obvious that his claim against these defendants cannot be separated from his claim against the Government. In any event, if the claim against Government is to be ignored it can only be on the basis that its orders cannot be challenged and if the orders stand it is evident that the plaintiff can have no hope of success because both sides hold their respective properties on the basis of those orders. There are two decisions of the Bombay High Court which have taken this view. Basalingappagouda v. The Secretary of State for India (28 Bom. L.R. 651) was a Watan case Government had recognised the second defendant as the Watandar. Plaintiff sued Government and the second defendant and sought a declaration and injunction. On being faced with the dilemma that the suit against Government did not lie because of section 4 (a) (3) of the Bombay Revenue Jurisdiction Act of 1876, he asked the Court, as here to leave the Government out of consideration and decree his claim against the second defendant alone. The learned Judges held that that would amount to striking out the main relief sought against both the defendants and would change the character of the suit and added that as long as the Secretary of State is a party to the suit, such a declaration could not be granted. In the other case, Basangauda v. The Secretary of State (32 Bom. L.R. 1370) Beaumont C.J. and Baker J. took the same view. They said - \n Mr. Gumaste, who appears for the appellant, says that his claim is not a claim against the Government but in that case be ought to strike out the Government. He is not prepared to strike out the Government because if he does they will not be bound by these proceedings and will follow the decision of their revenue tribunals. Therefore, he wants to make the Government a party in order that they may be bound. But, if they remain a party, it seems to me that there is a claim against them relating to property appertaining to the office of an hereditary officer, although no doubt it is quite true that the appellant does not desire to get any order against the Government as to the way in which the property should be dealt with or anything of the sort, and he only wants a declaration as to his title which will bind Government. They held that the jurisdiction of the courts was ousted. It was next contended, on the strength of a decision of the Judicial Committee of the Privy Council reported in Province of Bombay v. Hormusji Manekji (74 I.A. 103) that the courts have jurisdiction to decide whether Government acted in excess of its powers and that that question must be decided first. In my opinion, this decision does not apply here. Their Lordships were dealing with a case falling under section 4 (b) of the Bombay Revenue Jurisdiction Act of 1876. That provides that - \n no Civil Court shall exercise jurisdiction as to \n (b) objections to the amount or incidence of any assessment of land revenue authorised by the Provincial Government. As pointed out by Strangman K. C. on behalf of the plaintiff respondent, authorised must mean duly authorised and in that particular case the impugned assessment would not be duly authorised if the Government Resolution of 11-4-1930 purporting to treat the agreement relied on by the respondent as cancelled and authorising the levy of the full assessment was ultra vires under section 211 of the Land Revenue Code. Thus, before the exclusion of the Civil Courts jurisdiction under section 4 (b) could come into play, the Court had to determine the issue of ultra vires. Consequently, their Lordships held that that question was outside the scope of the bar. But the position here is different. We are concerned here with section 4 (a) under that no question about an authorised act of Government arises. The section is general and bars all claims against the Crown relating to lands held as Saranjam. That is to say, even if the Government act is relation to such lands was ultra vires, a claim impugning the validity of such an act would fall within the scope of the exclusion in clause (a) provided it relates to such land. There is a difference of opinion in the Bombay High Court as to whether section 4 is attracted if the only relief sought against Government is a declaration. One set of decision holds that that does not amount to a claim against Government. Dattatraya Vishwanath v. The Secretary of State for India I.L.R. 1948 Bom. 809 at 820 is typical of that view.\n DECISION ??", "expert_1": {"rank1": ["But the position here is different. We are concerned here with section 4 (a) under that no question about an authorised act of Government arises. The section is general and bars all claims against the Crown relating to lands held as Saranjam. That is to say, even if the Government act is relation to such lands was ultra vires, a claim impugning the validity of such an act would fall within the scope of the exclusion in clause (a) provided it relates to such land."], "rank2": ["The only question we have to consider is the one of jurisdiction. Section 4 of the Bombay Revenue Jurisdiction Act, 1876 (Bombay Act X of 1876), runs - \n Subject to the exceptions hereinafter appearing, no Civil Court shall exercise jurisdiction as to - \n (a) claims against the Crown relating to lands held as Saranjam \n It was strenuously contended that this is not a claim against the Crown but one against the first and second defendants. That in my opinion is an idle contention in view of paragraphs 9 and 12 of the plaint and reliefs (a) and (d). In any event, Mr. Somayya was asked whether he would strike out the third defendant and those portions of the plaint which sought relief against it. He said he was not prepared to do so. I cannot see how a plaintiff can insist on retaining a person against whom he claims no relief as a party. I am clear that this is a suit against the Crown within the meaning of section 4 (a).", "The next question is whether, assuming that to be the case, it is also one relating to lands held as Saranjam. So far as the reliefs sought against Government are concerned, that is clearly the case.", "In my opinion this is not a suit in which the rights claimed against the other defendants can be divorced from the claim against Government and considered separately.", "In any event, if the claim against Government is to be ignored it can only be on the basis that its orders cannot be challenged and if the orders stand it is evident that the plaintiff can have no hope of success because both sides hold their respective properties on the basis of those orders."], "rank3": ["The first Court dismissed the plaintiffs claim on the merits holding that Government had the right to amend its Resolution in the way it did. The lower appellate Court also dismissed the suit on three grounds (1) that the two previous decisions of 1868 and 1908 operate as res judicata, (2) that the impugned Resolution is intra vires and (3) that section 4 (a) and (d) of the Revenue Jurisdiction Act bars the jurisdiction of the Court. In second appeal the High Court only considered the question of jurisdiction and, agreeing, with the lower appellate Court on the point, dismissed the appeal but it granted the plaintiff leave no appeal to this Court.", "The only question we have to consider is the one of jurisdiction. Section 4 of the Bombay Revenue Jurisdiction Act, 1876 (Bombay Act X of 1876), runs - \n Subject to the exceptions hereinafter appearing, no Civil Court shall exercise jurisdiction as to - \n (a) claims against the Crown relating to lands held as Saranjam \n It was strenuously contended that this is not a claim against the Crown but one against the first and second defendants. That in my opinion is an idle contention in view of paragraphs 9 and 12 of the plaint and reliefs (a) and (d).", "In any event, if the claim against Government is to be ignored it can only be on the basis that its orders cannot be challenged and if the orders stand it is evident that the plaintiff can have no hope of success because both sides hold their respective properties on the basis of those orders.", "It was next contended, on the strength of a decision of the Judicial Committee of the Privy Council reported in Province of Bombay v. Hormusji Manekji (74 I.A. 103) that the courts have jurisdiction to decide whether Government acted in excess of its powers and that that question must be decided first. In my opinion, this decision does not apply here."], "rank4": ["The only question is whether the suit is barred by section 4 (a) of Bombay Act X of 1876 (Bombay Revenue Jurisdiction Act).", "Every Saranjam shall be held as a life estate. It shall be formally resumed on the death of the holder and in cases in which it is capable of further continuance it shall be made over to the next holder as a fresh grant from Government unencumbered by any debts, or charges, save such as may be specially imposed by Government itself.", "The defendants were evidently aggrieved by this, for they filed Suit No. 23 of 1934 against the present plaintiff and the Secretary of State for India in Council praying inter alia that the properties, in that suit, viz., the villages allotted to their shares, were their independent and private properties and in case they were held to be Saranjam properties, they be declared as independent Saranjams, separate, and distinct from the one held by the present plaintiff. This suit was withdrawn with liberty to bring a fresh suit on the same cause of action against the present plaintiff but not against the Secretary of State for India in Council. According to defendants I and 2, this was pursuant to an arrangement between the Government and themselves that Government would issue a fresh Resolution in terms of the earlier Resolution dated the 17th of March, 1891. This was done."], "label": "REJECTED"}, "expert_2": {"rank1": ["We are concerned here with section 4 (a) under that no question about an authorised act of Government arises. The section is general and bars all claims against the Crown relating to lands held as Saranjam. That is to say, even if the Government act is relation to such lands was ultra vires, a claim impugning the validity of such an act would fall within the scope of the exclusion in clause (a) provided it relates to such land."], "rank2": ["The only question is whether the suit is barred by section 4 (a) of Bombay Act X of 1876 (Bombay Revenue Jurisdiction Act).", "I am clear that this is a suit against the Crown within the meaning of section 4 (a).", "These revenues can only come out of the land. Relief (d) in the prayer clause seeks a declaration that Government has to right to change Resolution No. 8969 dated the 7th of June, 1932. That Resolution directly relates to the land because it directs that the Gajendragad Saranjam he resumed and the Collector is directed to take steps to place the Saranjamdar in possession of the village of the Saranjam estate etc. It is impossible to contend that this is not a claim relating to lands held as Saranjam.", "if they remain a party, it seems to me that there is a claim against them relating to property appertaining to the office of an hereditary officer, although no doubt it is quite true that the appellant does not desire to get any order against the Government as to the way in which the property should be dealt with or anything of the sort, and he only wants a declaration as to his title which will bind Government. They held that the jurisdiction of the courts was ousted."], "rank3": ["On the 26th of April, 1882, they passed a Resolution embodying the following decision \n The adoption was to be recognised and the adapted son was to occupy the same position as his adoptive father, that is to say, he was to get one-third of the property plus the assignment given to him as head of the family. Malojirao who had already taken his share of the estate was to continue in possession. Yeshwantrao (alias Annasaheb) was given the option of remaining joint with the adopted boy or separating. Finally, the Resolution concluded - \n The two brothers will hold their respective shares as their private property in virtue of the decree of the High Court and the Jahagir will henceforth be restricted to the portion awarded by the High Court to Bhujangrao which the adopted son will now inherit.", "A Saranjam which was decided to be hereditarily continuable shall ordinarily descend to the eldest male representative, in the order of primogeniture, of the senior branch of the family descended from the first British Grantee or any of his brothers who were undivided in interest. But Government reserve to themselves their rights for sufficient reason to direct the continuance of the Saranjam to any other member of the said family, or as an act of grace, to a person adopted into the same family with the sanction of Government.", "Each of the said de facto shares shall be continuable hereditarily as such as if it were a separate Saranjam estate in accordance with the rules made for the continuance of Saranjams by the Governor-in-Council in exercise of the powers referred to in the rules framed under the Bombay Rent Free Estates Act, 1852, and section 2 (3) of the Bombay Summary Settlement Act (VII of 1863) and such special orders as the Governor-in-Council may make in regard to the Gajendragad Estate as a whole or in regard to the said share. The recognition of the aforesaid shares and their entry in the Revenue Records as separate shares shall not be deemed to amount to a recognition of the estate of Gajendragad as in any manner partible or alienable and shall not in any way affect the right of Government to treat the said estate as an entire impartible and inalienable Saranjam estate", "The first and second defendants are the present representatives of the other branches of the family and the third defendant is the Province of Bombay (now the State of Bombay). The plaint states - \n Government can have an jurisdiction to deprive the plaintiff at any rate during his lifetime of the full benefit of all the rights and privileges appertaining to the holder of a Saranjam.", "The Order of Government of the 8th February, 1930 is, therefore, ultra vires and in no way binding on the present plaintiff \n Defendants 1 and 2, therefore, are not entitled to any right or privileges claimable by the holder of a Saranjam which according to the G.", "Section 4 of the Bombay Revenue Jurisdiction Act, 1876 (Bombay Act X of 1876), runs - \n Subject to the exceptions hereinafter appearing, no Civil Court shall exercise jurisdiction as to - \n (a) claims against the Crown relating to lands held as Saranjam \n It was strenuously contended that this is not a claim against the Crown but one against the first and second defendants.", "Paragraph 9 of the plaint challenges Governments jurisdiction to deprive the plaintiff of the full benefit of all rights and privileges appertaining to the holder of a Saranjam. these rights cannot exist apart from the lands which form part of the Saranjam estate and the implication of the prayer is that Government has, for example, no right to resume the Saranjam either under Rule V on the death of the last Saranjamdar or under Rule IX during his lifetime.", "One of those rights, as we have been from Rules VII and IX, is to take the revenues of the entire estate in order that he might fulfil his obligation regarding the payment of maintenance to certain members of the family and if the defendants claim to hold their lands under the orders of Government and the plaintiff insists on retaining Government as a party in order that it may be bound by the decree he wants against the other defendants it is obvious that his claim against these defendants cannot be separated from his claim against the Government. In any event, if the claim against Government is to be ignored it can only be on the basis that its orders cannot be challenged and if the orders stand it is evident that the plaintiff can have no hope of success because both sides hold their respective properties on the basis of those orders.", "Mr. Gumaste, who appears for the appellant, says that his claim is not a claim against the Government but in that case be ought to strike out the Government. He is not prepared to strike out the Government because if he does they will not be bound by these proceedings and will follow the decision of their revenue tribunals. Therefore, he wants to make the Government a party in order that they may be bound."], "rank4": ["They further declared that Bhujangrao I was the head of the family and as such was entitled to a special assignment which was not to exceed a quarter share, for the expenses and duties which might devolve on him by virtue of his position, and that after this had been set aside each of the three brothers was entitled to an equal one-third share in the landed property in India.", "Krishnabai who had been allowed by Government to adopt Daulatrao II, asked that her husbands one-third share in the estate be also treated as private property in the same way as the shares of the other brothers. This prayer was refused and Government stated \n It should be plainly under that Government allow the adoption to be made only in consideration of Bhujangrao one share as well as the portion assigned to him as head of the family being continued to the adopted son as indivisible Jahagir Estate descending in the line of male heirs in the order of primogeniture and subject to no terms whatsoever as to the enjoyment of the same by Krishnabai during her lifetime. The position was re-examined by Government in 1891 and its decision was embodied in the following resolution dated the 17th of March, 1891 \n It appears to Government that the whole Gajendragad Estate is Saranjam continuable as here in the fullest sense of the word as interpreted by the Court of Directors in paragraph 9 of their Despatch No. 27 dated 12th December, 1855. It is continuable to all male legitimate descendants of the holder at the time of the British conquest and should Government ever sanction an adoption the terms of sanction would be those applicable to Saranjamdars.", "Government passed the following Resolution - \n Resolution-After careful consideration the Governor-in-Council is pleased to confirm the decision in Government, Resolution (Political Department) No. 1769 dated the 17th of March, 1891, and to declare that the whole of the Gajendragad Estate shall be continuable as an inalienable and impartible Saranjam on the conditions stated in the said Resolution. Having regard, however, to the manner in which different portions of the estate have been held by different branches of the family, the Governor-in-Council, in modification of the orders contained in Government esolution No. 8969 dated the 7th June, 1932, is pleased to direct that the portions of the said estate held by Sardar Bhujangrao Daulatrao Ghorpade, Daulatrao Malojirao Ghorpade and Bhujangrao Yeshwantrao Ghorpade, respectively, shall henceforth be entered in the Revenue Records as de facto shares in the said estate held by the said persons as representatives, respectively, of three branches of the Ghorpade family.", "That in consequence of his position of a sole Saranjamdar the plaintiff alone at any rate during his lifetime has the sole right to the rights and privileges appertaining to the post of a sole Saranjamdar to wit, to be consulted in the appointment of the village officers in all the villages appertaining to the Saranjam estate, but assigned to defendants 1 and 2 for potgi \n Defendants 1 and 2 be restrained from doing any acts or taking any steps in contravention of the aforesaid right of the plaintiff."], "label": "REJECTED"}, "expert_3": {"rank1": ["The plaintiff appeals. The suit relates to a Saranjam estate in the State of Bombay.", "The only question is whether the suit is barred by section 4 (a) of Bombay Act X of 1876 (Bombay Revenue Jurisdiction Act).", "The only question we have to consider is the one of jurisdiction. Section 4 of the Bombay Revenue Jurisdiction Act, 1876 (Bombay Act X of 1876), runs - \n Subject to the exceptions hereinafter appearing, no Civil Court shall exercise jurisdiction as to - \n (a) claims against the Crown relating to lands held as Saranjam \n It was strenuously contended that this is not a claim against the Crown but one against the first and second defendants. That in my opinion is an idle contention in view of paragraphs 9 and 12 of the plaint and reliefs (a) and (d).", "I cannot see how a plaintiff can insist on retaining a person against whom he claims no relief as a party. I am clear that this is a suit against the Crown within the meaning of section 4 (a)", "The next question is whether, assuming that to be the case, it is also one relating to lands held as Saranjam. So far as the reliefs sought against Government are concerned, that is clearly the case", "Relief (d) in the prayer clause seeks a declaration that Government has to right to change Resolution No. 8969 dated the 7th of June, 1932. That Resolution directly relates to the land because it directs that the Gajendragad Saranjam he resumed and the Collector is directed to take steps to place the Saranjamdar in possession of the village of the Saranjam estate etc.", "It is impossible to contend that this is not a claim relating to lands held as Saranjam.", "In my opinion this is not a suit in which the rights claimed against the other defendants can be divorced from the claim against Government and considered separately. That is evident enough from paragraph 10 of the plaint. In paragraph 9 the power of Government to deprive the plaintiff of the rights he claims is challenged and in paragraph 10 the plaintiff explains that therefore the first and second defendants are not entitled to any of the rights and privileges of the Saranjamdar. One of those rights, as we have been from Rules VII and IX, is to take the revenues of the entire estate in order that he might fulfil his obligation regarding the payment of maintenance to certain members of the family and if the defendants claim to hold their lands under the orders of Government and the plaintiff insists on retaining Government as a party in order that it may be bound by the decree he wants against the other defendants it is obvious that his claim against these defendants cannot be separated from his claim against the Government. In any event, if the claim against Government is to be ignored it can only be on the basis that its orders cannot be challenged and if the orders stand it is evident that the plaintiff can have no hope of success because both sides hold their respective properties on the basis of those orders", "We are concerned here with section 4 (a) under that no question about an authorised act of Government arises. The section is general and bars all claims against the Crown relating to lands held as Saranjam. That is to say, even if the Government act is relation to such lands was ultra vires, a claim impugning the validity of such an act would fall within the scope of the exclusion in clause (a) provided it relates to such land.", "There is a difference of opinion in the Bombay High Court as to whether section 4 is attracted if the only relief sought against Government is a declaration. One set of decision holds that that does not amount to a claim against Government."], "rank2": ["accordingly they framed rules under Schedule B. Rule 10 of Bombay Act XI of 1852 (The Bombay Rent Free Estates Act 1852) to regulate the mode of recognition and the succession and conditions of tenure to Saranjams, which are analogous to jagirs.", "In compliance with this, the common ancestor shown at the head of the genealogical tree set out above was recognised by the British Government as the Saranjamdar of the Gajendragad estate.", "Krishnabai who had been allowed by Government to adopt Daulatrao II, asked that her husbands one-third share in the estate be also treated as private property in the same way as the shares of the other brothers.", "This prayer was refused and Government stated \n It should be plainly under that Government allow the adoption to be made only in consideration of Bhujangrao one share as well as the portion assigned to him as head of the family being continued to the adopted son as indivisible Jahagir Estate descending in the line of male heirs in the order of primogeniture and subject to no terms whatsoever as to the enjoyment of the same by Krishnabai during her lifetime. The position was re-examined by Government in 1891 and its decision was embodied in the following resolution dated the 17th of March, 1891 \n It appears to Government that the whole Gajendragad Estate is Saranjam continuable as here in the fullest sense of the word as interpreted by the Court of Directors in paragraph 9 of their Despatch No. 27 dated 12th December, 1855.", "It is continuable to all male legitimate descendants of the holder at the time of the British conquest and should Government ever sanction an adoption the terms of sanction would be those applicable to Saranjamdars", "The High Courts judgment dated the 12th of March, 1908, makes it clear that as Government was not a party to that litigation its rights against either or both of the parties were not affected. But as between the parties inter se they were bound by the previous decision and so the adopted sun was entitled to partition and separate possession of such properties as might fall to his share. After this decision was given the two partitioned the property between themselves amicably", "In the meanwhile, on the 5th of May, 1898, a set of Rules framed under Schedule B, Rule 10, of the Bombay Rent Free Estates Act of 1852 were drawn up and published in the Bombay Gazette.", "The portions applicable here were as follows - \n Saranjams shall ordinarily be continued in accordance with the decision already passed by Government in each case", "A Saranjam which was decided to be hereditarily continuable shall ordinarily descend to the eldest male representative, in the order of primogeniture, of the senior branch of the family descended from the first British Grantee or any of his brothers who were undivided in interest", "But Government reserve to themselves their rights for sufficient reason to direct the continuance of the Saranjam to any other member of the said family, or as an act of grace, to a person adopted into the same family with the sanction of Government. Every Saranjam shall be held as a life estate", "It shall be formally resumed on the death of the holder and in cases in which it is capable of further continuance it shall be made over to the next holder as a fresh grant from Government unencumbered by any debts, or charges, save such as may be specially imposed by Government itself.", "It reads - \n Resolution - The Governor-in-Council is pleased to direct that the Gajendragad Saranjam should be formally resumed and regranted to Bhujangrao Daulatrao Ghorpade eldest sun of the deceased Saranjamdar Sardar Daulatrao Bhujangrao Ghorpade and that it should be entered in his sole name in the accounts of the Collector of Dharwar with effect from the date of the death of the last holder. The Collector should take steps to place the Saranjamdar in possession of the villages of the Saranjam estate which were in possession of the deceased Saranjamdar.", "The Bhujangrao mentioned in the Resolution is the plaintiff who is shown as Bhujangrao III in the genealogical tree. The defendants were evidently aggrieved by this, for they filed Suit No. 23 of 1934 against the present plaintiff and the Secretary of State for India in Council praying inter alia that the properties, in that suit, viz., the villages allotted to their shares, were their independent and private properties and in case they were held to be Saranjam properties, they be declared as independent Saranjams, separate, and distinct from the one held by the present plaintiff", "On the 25th of February, 1936, Government passed the following Resolution - \n Resolution-After careful consideration the Governor-in-Council is pleased to confirm the decision in Government, Resolution (Political Department) No. 1769 dated the 17th of March, 1891, and to declare that the whole of the Gajendragad Estate shall be continuable as an inalienable and impartible Saranjam on the conditions stated in the said Resolution. Having regard, however, to the manner in which different portions of the estate have been held by different branches of the family, the Governor-in-Council, in modification of the orders contained in Government esolution No. 8969 dated the 7th June, 1932, is pleased to direct that the portions of the said estate held by Sardar Bhujangrao Daulatrao Ghorpade, Daulatrao Malojirao Ghorpade and Bhujangrao Yeshwantrao Ghorpade, respectively, shall henceforth be entered in the Revenue Records as de facto shares in the said estate held by the said persons as representatives, respectively, of three branches of the Ghorpade family.", "Each of the said de facto shares shall be continuable hereditarily as such as if it were a separate Saranjam estate in accordance with the rules made for the continuance of Saranjams by the Governor-in-Council in exercise of the powers referred to in the rules framed under the Bombay Rent Free Estates Act, 1852, and section 2 (3) of the Bombay Summary Settlement Act (VII of 1863) and such special orders as the Governor-in-Council may make in regard to the Gajendragad Estate as a whole or in regard to the said share", "The recognition of the aforesaid shares and their entry in the Revenue Records as separate shares shall not be deemed to amount to a recognition of the estate of Gajendragad as in any manner partible or alienable and shall not in any way affect the right of Government to treat the said estate as an entire impartible and inalienable Saranjam estate. The Governor-in-Council further directs that the aforesaid shares shall in no case be capable of sub-division and shall not in any way be alienated or encumbered except in accordance with the rules and orders referred to above \n The present suit is an attack on the action of Government in passing this Resolution.", "The plaint states - \n Government can have an jurisdiction to deprive the plaintiff at any rate during his lifetime of the full benefit of all the rights and privileges appertaining to the holder of a Saranjam. The Order of Government of the 8th February, 1930 is, therefore, ultra vires and in no way binding on the present plaintiff \n Defendants 1 and 2, therefore, are not entitled to any right or privileges claimable by the holder of a Saranjam which according to the G.", "K. is continuable as an inalienable and impartible Saranjam, such as for example in the matter of appointment of the village officers in any of the 27 villages appertaining to the Gajendragad Saranjam", "The first Court dismissed the plaintiffs claim on the merits holding that Government had the right to amend its Resolution in the way it did.", "The lower appellate Court also dismissed the suit on three grounds (1) that the two previous decisions of 1868 and 1908 operate as res judicata, (2) that the impugned Resolution is intra vires and (3) that section 4 (a) and (d) of the Revenue Jurisdiction Act bars the jurisdiction of the Court. In second appeal the High Court only considered the question of jurisdiction and, agreeing, with the lower appellate Court on the point, dismissed the appeal but it granted the plaintiff leave no appeal to this Court.", "Paragraph 9 of the plaint challenges Governments jurisdiction to deprive the plaintiff of the full benefit of all rights and privileges appertaining to the holder of a Saranjam. these rights cannot exist apart from the lands which form part of the Saranjam estate and the implication of the prayer is that Government has, for example, no right to resume the Saranjam either under Rule V on the death of the last Saranjamdar or under Rule IX during his lifetime. (It is to be observed that a resumption under Rule IX can only be of the land because the rule directs that when the Saranjam is resumed Government itself shall make provisions for the maintenance of those entitled to it out of the revenues of the Saranjam so resumed. These revenues can only come out of the land", "On being faced with the dilemma that the suit against Government did not lie because of section 4 (a) (3) of the Bombay Revenue Jurisdiction Act of 1876, he asked the Court, as here to leave the Government out of consideration and decree his claim against the second defendant alone. The learned Judges held that that would amount to striking out the main relief sought against both the defendants and would change the character of the suit and added that as long as the Secretary of State is a party to the suit, such a declaration could not be granted", "Mr. Gumaste, who appears for the appellant, says that his claim is not a claim against the Government but in that case be ought to strike out the Government. He is not prepared to strike out the Government because if he does they will not be bound by these proceedings and will follow the decision of their revenue tribunals. Therefore, he wants to make the Government a party in order that they may be bound. But, if they remain a party, it seems to me that there is a claim against them relating to property appertaining to the office of an hereditary officer, although no doubt it is quite true that the appellant does not desire to get any order against the Government as to the way in which the property should be dealt with or anything of the sort, and he only wants a declaration as to his title which will bind Government.", "They held that the jurisdiction of the courts was ousted."], "rank3": ["The plaintiff claims to be the sole Saranjamdar and seeks certain declarations and other reliefs appropriate to such a claim", "The first and second defendants are members of the plaintiffs family while the third defendant is the State of Bombay (Province of Bombay at the date of the suit)", "The following genealogical tree will show the relationship between the parties Bhujangrao Appasaheb (British grantee) \n Daulatrao I (died 24-7-1864) ----------------------------------------------------------------- \n Bhujangrao I Malojirao Yeshwantrao alias (died 1881) Annasaheb \n (widow) Krishnabai Daulatrao III Bhujangrao II Daulatrao II (Def. 1) (Def. 2) (died 8-5-1931) \n Bhujangrao III", "A common ancestor of the present parties was given the Gajendragad estate as a Saranjam some time before the advent of the British.", "When they arrived on the scene they decided, as far as possible, to continue such Saranjams, jagirs and inams as had been granted by the earlier rulers", "He may for convenience be termed the British Grantee", "The Register Ex. P-53 shows that the estate consisted of villages", "We do not know the date of the British recognition but the nature of the tenure is described as follows - \n Continuable to all male legitimate descendants of the holder at the time of British conquest, viz., Bhujangrao Appasaheb, the first British Grantee, son of Bahirojirao Ghorpade", "On the death of the British Grantee (Bhujangrao Appasaheb) he was succeeded by his son Daulatrao I who dies on the 24th of July, 1864. This Daulatrao I left three sons, bhujangrao I, Yeshwantrao and Malojirao", "In the year 1866 Bhujangrao I and his brother Yeshwantrao alias Annasaheb sued Malojirao for possession of this Saranjam", "They further declared that Bhujangrao I was the head of the family and as such was entitled to a special assignment which was not to exceed a quarter share, for the expenses and duties which might devolve on him by virtue of his position, and that after this had been set aside each of the three brothers was entitled to an equal one-third share in the landed property in India.", "As a consequence a division of the property was effected. Malojirao separated himself from his brothers and was allotted seven villages. The other two brothers continued joint and took the remainder. But this was only with respect to property situate in British India", "The parties also had property in the State of Kolhapur", "That was left undivided", "Bhujangrao I died in 1881 and his younger brother Yeshwantrao (alias Annasaheb) claimed to succeed as the sole their. The Political Department of the Government of India refused to recognise this claim and permitted Bhujangrao Is widow Krishnabai to adopt a boy from the family and recognised him as the heir in respect of that portion of the estate which lay within the Principality of Kolhapur.", "This was on the 3rd of February 1882", "The Bombay Government followed a similar course regarding the property in British India. On the 26th of April, 1882, they passed a Resolution embodying the following decision \n The adoption was to be recognised and the adapted son was to occupy the same position as his adoptive father, that is to say, he was to get one-third of the property plus the assignment given to him as head of the family", "Malojirao who had already taken his share of the estate was to continue in possession.", "Yeshwantrao (alias Annasaheb) was given the option of remaining joint with the adopted boy or separating. Finally, the Resolution concluded - \n The two brothers will hold their respective shares as their private property in virtue of the decree of the High Court and the Jahagir will henceforth be restricted to the portion awarded by the High Court to Bhujangrao which the adopted son will now inherit", "It should however be clearly understood that the decision of the High Court in not to be held as a precedent and that no partition of the Jahagir Estate to be continued to the adopted son will ever be allowed", "The property should be dealt with like other Saranjams in the Political Department. In the year 1901 the adopted son Daulatrao II sued Yashwantraos son Bhujangrao II for partition.", "In or about the year 1930 a Record of Rights was introduced in fourteen of the villages in the Gajendragad Jahagir and a dispute arise again between the three branches of the family. The District Deputy Collector, after inspecting the records, found that the name of the Khatedar Saranjamdar alone has found place in the village Inam register, in the Saranjam list and the land alienation register. while in the other village records the various members of the family were entered according to the actual wahivat or enjoyment.", "After due consideration he thought that the interest of Government and the Saranjamdar would be sufficiently safeguarded by allowing the same position to continue", "He ordered the entries to be made accordingly. The order also discloses that the matter had been referred to the Legal Remembrancer to the Bombay Government", "After the District Deputy Collectors orders were passed on the 20th of May, 1930, Daulatrao II died on the 8th of May, 1931, and the matter was again taken up by Government. This time it passed the following Resolution on the 7th of June, 1932. The Resolution was headed Resumption and regrant of the Gajendragad Saranjam standing at No. 91 of the Saranjam List.", "This suit was withdrawn with liberty to bring a fresh suit on the same cause of action against the present plaintiff but not against the Secretary of State for India in Council. According to defendants I and 2, this was pursuant to an arrangement between the Government and themselves that Government would issue a fresh Resolution in terms of the earlier Resolution dated the 17th of March, 1891. This was done."], "label": "REJECTED"}, "expert_4": {"rank1": ["The plaintiff appeals.", "The only question is whether the suit is barred by section 4 (a) of Bombay Act X of 1876 (Bombay Revenue Jurisdiction Act).", "The only question we have to consider is the one of jurisdiction."], "rank2": ["The suit relates to a Saranjam estate in the State of Bombay.", "The next question is whether, assuming that to be the case, it is also one relating to lands held as Saranjam."], "rank3": ["The plaintiff claims to be the sole Saranjamdar and seeks certain declarations and other reliefs appropriate to such a claim.", "The first and second defendants are members of the plaintiffs family while the third defendant is the State of Bombay (Province of Bombay at the date of the suit).", "He may for convenience be termed the British Grantee.", "It is continuable to all male legitimate descendants of the holder at the time of the British conquest and should Government ever sanction an adoption the terms of sanction would be those applicable to Saranjamdars.", "The property should be dealt with like other Saranjams in the Political Department.", "Section 4 of the Bombay Revenue Jurisdiction Act, 1876 (Bombay Act X of 1876), runs - \n Subject to the exceptions hereinafter appearing, no Civil Court shall exercise jurisdiction as to - \n (a) claims against the Crown relating to lands held as Saranjam \n It was strenuously contended that this is not a claim against the Crown but one against the first and second defendants.", "That in my opinion is an idle contention in view of paragraphs 9 and 12 of the plaint and reliefs (a) and (d).", "I cannot see how a plaintiff can insist on retaining a person against whom he claims no relief as a party. I am clear that this is a suit against the Crown within the meaning of section 4 (a).", "So far as the reliefs sought against Government are concerned, that is clearly the case.", "Paragraph 9 of the plaint challenges Governments jurisdiction to deprive the plaintiff of the full benefit of all rights and privileges appertaining to the holder of a Saranjam. these rights cannot exist apart from the lands which form part of the Saranjam estate and the implication of the prayer is that Government has, for example, no right to resume the Saranjam either under Rule V on the death of the last Saranjamdar or under Rule IX during his lifetime.", "(It is to be observed that a resumption under Rule IX can only be of the land because the rule directs that when the Saranjam is resumed Government itself shall make provisions for the maintenance of those entitled to it out of the revenues of the Saranjam so resumed.", "These revenues can only come out of the land.", "It is impossible to contend that this is not a claim relating to lands held as Saranjam.", "In my opinion this is not a suit in which the rights claimed against the other defendants can be divorced from the claim against Government and considered separately.", "In my opinion, this decision does not apply here.", "But the position here is different. We are concerned here with section 4 (a) under that no question about an authorised act of Government arises.", "The section is general and bars all claims against the Crown relating to lands held as Saranjam.", "That is to say, even if the Government act is relation to such lands was ultra vires, a claim impugning the validity of such an act would fall within the scope of the exclusion in clause (a) provided it relates to such land."], "rank4": ["The following genealogical tree will show the relationship between the parties Bhujangrao Appasaheb (British grantee) \n Daulatrao I (died 24-7-1864) ----------------------------------------------------------------- \n Bhujangrao I Malojirao Yeshwantrao alias (died 1881) Annasaheb \n (widow) Krishnabai Daulatrao III Bhujangrao II Daulatrao II (Def. 1) (Def. 2) (died 8-5-1931) \n Bhujangrao III", "The facts are as follows. A common ancestor of the present parties was given the Gajendragad estate as a Saranjam some time before the advent of the British.", "When they arrived on the scene they decided, as far as possible, to continue such Saranjams, jagirs and inams as had been granted by the earlier rulers, and accordingly they framed rules under Schedule B.", "Rule 10 of Bombay Act XI of 1852 (The Bombay Rent Free Estates Act 1852) to regulate the mode of recognition and the succession and conditions of tenure to Saranjams, which are analogous to jagirs.", "In compliance with this, the common ancestor shown at the head of the genealogical tree set out above was recognised by the British Government as the Saranjamdar of the Gajendragad estate.", "We do not know the date of the British recognition but the nature of the tenure is described as follows - \n Continuable to all male legitimate descendants of the holder at the time of British conquest, viz., Bhujangrao Appasaheb, the first British Grantee, son of Bahirojirao Ghorpade.", "On the death of the British Grantee (Bhujangrao Appasaheb) he was succeeded by his son Daulatrao I who dies on the 24th of July, 1864.", "This Daulatrao I left three sons, bhujangrao I, Yeshwantrao and Malojirao.", "In the year 1866 Bhujangrao I and his brother Yeshwantrao alias Annasaheb sued Malojirao for possession of this Saranjam.", "A question of impartibility was raised but the Bombay High Court declared that the property in British India was partible.", "They further declared that Bhujangrao I was the head of the family and as such was entitled to a special assignment which was not to exceed a quarter share, for the expenses and duties which might devolve on him by virtue of his position, and that after this had been set aside each of the three brothers was entitled to an equal one-third share in the landed property in India.", "These Rules were republished, probably with some modification, in the Gazette of 8th July, 1901. The portions applicable here were as follows - \n Saranjams shall ordinarily be continued in accordance with the decision already passed by Government in each case. II. A Saranjam which was decided to be hereditarily continuable shall ordinarily descend to the eldest male representative, in the order of primogeniture, of the senior branch of the family descended from the first British Grantee or any of his brothers who were undivided in interest. But Government reserve to themselves their rights for sufficient reason to direct the continuance of the Saranjam to any other member of the said family, or as an act of grace, to a person adopted into the same family with the sanction of Government. Every Saranjam shall be held as a life estate. It shall be formally resumed on the death of the holder and in cases in which it is capable of further continuance it shall be made over to the next holder as a fresh grant from Government unencumbered by any debts, or charges, save such as may be specially imposed by Government itself. VI. No Saranjam shall be capable of sub-division. VII. Every Saranjamdar shall be responsible for making a suitable provision for the maintenance of (certain members of the family enumerated in the Rule). IX. If an order passed by Government under Rule VII is not carried out, Government may, whatever the reason may be, direct the Saranjam, or a portion of it, to be resumed Provision for the members of the Suranjamdars family entitled to maintenance shall then be made by Government out of the revenues of the Saranjam so resumed.", "The Bhujangrao mentioned in the Resolution is the plaintiff who is shown as Bhujangrao III in the genealogical tree.", "K. is continuable as an inalienable and impartible Saranjam, such as for example in the matter of appointment of the village officers in any of the 27 villages appertaining to the Gajendragad Saranjam.", "The first Court dismissed the plaintiffs claim on the merits holding that Government had the right to amend its Resolution in the way it did.", "The lower appellate Court also dismissed the suit on three grounds (1) that the two previous decisions of 1868 and 1908 operate as res judicata, (2) that the impugned Resolution is intra vires and (3) that section 4 (a) and (d) of the Revenue Jurisdiction Act bars the jurisdiction of the Court.", "In second appeal the High Court only considered the question of jurisdiction and, agreeing, with the lower appellate Court on the point, dismissed the appeal but it granted the plaintiff leave no appeal to this Court.", "Relief (d) in the prayer clause seeks a declaration that Government has to right to change Resolution No. 8969 dated the 7th of June, 1932.", "That Resolution directly relates to the land because it directs that the Gajendragad Saranjam he resumed and the Collector is directed to take steps to place the Saranjamdar in possession of the village of the Saranjam estate etc.", "It was next argued that if that be the case the claim against Government can be dismissed and the plaintiff can at least be given the reliefs claimed against the other two defendants.", "These, it was contended, do not relate to land and in any event are not claims against the Crown", "That is evident enough from paragraph 10 of the plaint. In paragraph 9 the power of Government to deprive the plaintiff of the rights he claims is challenged and in paragraph 10 the plaintiff explains that therefore the first and second defendants are not entitled to any of the rights and privileges of the Saranjamdar.", "One of those rights, as we have been from Rules VII and IX, is to take the revenues of the entire estate in order that he might fulfil his obligation regarding the payment of maintenance to certain members of the family and if the defendants claim to hold their lands under the orders of Government and the plaintiff insists on retaining Government as a party in order that it may be bound by the decree he wants against the other defendants it is obvious that his claim against these defendants cannot be separated from his claim against the Government.", "In any event, if the claim against Government is to be ignored it can only be on the basis that its orders cannot be challenged and if the orders stand it is evident that the plaintiff can have no hope of success because both sides hold their respective properties on the basis of those orders.", "It was next contended, on the strength of a decision of the Judicial Committee of the Privy Council reported in Province of Bombay v. Hormusji Manekji (74 I.A. 103) that the courts have jurisdiction to decide whether Government acted in excess of its powers and that that question must be decided first.", "There is a difference of opinion in the Bombay High Court as to whether section 4 is attracted if the only relief sought against Government is a declaration.", "One set of decision holds that that does not amount to a claim against Government. Dattatraya Vishwanath v.", "The Secretary of State for India I.L.R. 1948 Bom. 809 at 820 is typical of that view."], "rank5": ["The Register Ex. P-53 shows that the estate consisted of villages.", "Malojirao separated himself from his brothers and was allotted seven villages.", "The other two brothers continued joint and took the remainder.", "But this was only with respect to property situate in British India. The parties also had property in the State of Kolhapur. That was left undivided.", "On the 26th of April, 1882, they passed a Resolution embodying the following decision \n The adoption was to be recognised and the adapted son was to occupy the same position as his adoptive father, that is to say, he was to get one-third of the property plus the assignment given to him as head of the family.", "Malojirao who had already taken his share of the estate was to continue in possession.", "Yeshwantrao (alias Annasaheb) was given the option of remaining joint with the adopted boy or separating.", "Finally, the Resolution concluded - \n The two brothers will hold their respective shares as their private property in virtue of the decree of the High Court and the Jahagir will henceforth be restricted to the portion awarded by the High Court to Bhujangrao which the adopted son will now inherit.", "It should however be clearly understood that the decision of the High Court in not to be held as a precedent and that no partition of the Jahagir Estate to be continued to the adopted son will ever be allowed.", "This position was emphasised by Government in the same year on the 22nd August, 1882.", "The District Deputy Collector, after inspecting the records, found that the name of the Khatedar Saranjamdar alone has found place in the village Inam register, in the Saranjam list and the land alienation register. while in the other village records the various members of the family were entered according to the actual wahivat or enjoyment. After due consideration he thought that the interest of Government and the Saranjamdar would be sufficiently safeguarded by allowing the same position to continue. He ordered the entries to be made accordingly. The order also discloses that the matter had been referred to the Legal Remembrancer to the Bombay Government. In the meanwhile, on the 5th of May, 1898, a set of Rules framed under Schedule B, Rule 10, of the Bombay Rent Free Estates Act of 1852 were drawn up and published in the Bombay Gazette.", "The portions applicable here were as follows - \n Saranjams shall ordinarily be continued in accordance with the decision already passed by Government in each case.", "II. A Saranjam which was decided to be hereditarily continuable shall ordinarily descend to the eldest male representative, in the order of primogeniture, of the senior branch of the family descended from the first British Grantee or any of his brothers who were undivided in interest.", "But Government reserve to themselves their rights for sufficient reason to direct the continuance of the Saranjam to any other member of the said family, or as an act of grace, to a person adopted into the same family with the sanction of Government.", "Every Saranjam shall be held as a life estate.", "It shall be formally resumed on the death of the holder and in cases in which it is capable of further continuance it shall be made over to the next holder as a fresh grant from Government unencumbered by any debts, or charges, save such as may be specially imposed by Government itself.", "VI. No Saranjam shall be capable of sub-division.", "VII.", "Every Saranjamdar shall be responsible for making a suitable provision for the maintenance of (certain members of the family enumerated in the Rule).", "IX. If an order passed by Government under Rule VII is not carried out, Government may, whatever the reason may be, direct the Saranjam, or a portion of it, to be resumed Provision for the members of the Suranjamdars family entitled to maintenance shall then be made by Government out of the revenues of the Saranjam so resumed.", "After the District Deputy Collectors orders were passed on the 20th of May, 1930, Daulatrao II died on the 8th of May, 1931, and the matter was again taken up by Government.", "This time it passed the following Resolution on the 7th of June, 1932. The Resolution was headed Resumption and regrant of the Gajendragad Saranjam standing at No. 91 of the Saranjam List. It reads - \n Resolution - The Governor-in-Council is pleased to direct that the Gajendragad Saranjam should be formally resumed and regranted to Bhujangrao Daulatrao Ghorpade eldest sun of the deceased Saranjamdar Sardar Daulatrao Bhujangrao Ghorpade and that it should be entered in his sole name in the accounts of the Collector of Dharwar with effect from the date of the death of the last holder. The Collector should take steps to place the Saranjamdar in possession of the villages of the Saranjam estate which were in possession of the deceased Saranjamdar. The Governor-in-Council agrees with the Commissioner, Southern Division, that the assignments held by the Bhaubands as potgi holders should be continued to them as at present.", "The defendants were evidently aggrieved by this, for they filed Suit No. 23 of 1934 against the present plaintiff and the Secretary of State for India in Council praying inter alia that the properties, in that suit, viz., the villages allotted to their shares, were their independent and private properties and in case they were held to be Saranjam properties, they be declared as independent Saranjams, separate, and distinct from the one held by the present plaintiff.", "On the 25th of February, 1936, Government passed the following Resolution - \n Resolution-After careful consideration the Governor-in-Council is pleased to confirm the decision in Government, Resolution (Political Department) No. 1769 dated the 17th of March, 1891, and to declare that the whole of the Gajendragad Estate shall be continuable as an inalienable and impartible Saranjam on the conditions stated in the said Resolution.", "Having regard, however, to the manner in which different portions of the estate have been held by different branches of the family, the Governor-in-Council, in modification of the orders contained in Government esolution No. 8969 dated the 7th June, 1932, is pleased to direct that the portions of the said estate held by Sardar Bhujangrao Daulatrao Ghorpade, Daulatrao Malojirao Ghorpade and Bhujangrao Yeshwantrao Ghorpade, respectively, shall henceforth be entered in the Revenue Records as de facto shares in the said estate held by the said persons as representatives, respectively, of three branches of the Ghorpade family.", "Each of the said de facto shares shall be continuable hereditarily as such as if it were a separate Saranjam estate in accordance with the rules made for the continuance of Saranjams by the Governor-in-Council in exercise of the powers referred to in the rules framed under the Bombay Rent Free Estates Act, 1852, and section 2 (3) of the Bombay Summary Settlement Act (VII of 1863) and such special orders as the Governor-in-Council may make in regard to the Gajendragad Estate as a whole or in regard to the said share.", "The recognition of the aforesaid shares and their entry in the Revenue Records as separate shares shall not be deemed to amount to a recognition of the estate of Gajendragad as in any manner partible or alienable and shall not in any way affect the right of Government to treat the said estate as an entire impartible and inalienable Saranjam estate.", "The Governor-in-Council further directs that the aforesaid shares shall in no case be capable of sub-division and shall not in any way be alienated or encumbered except in accordance with the rules and orders referred to above \n The present suit is an attack on the action of Government in passing this Resolution.", "The first and second defendants are the present representatives of the other branches of the family and the third defendant is the Province of Bombay (now the State of Bombay).", "The plaint states - \n Government can have an jurisdiction to deprive the plaintiff at any rate during his lifetime of the full benefit of all the rights and privileges appertaining to the holder of a Saranjam.", "The Order of Government of the 8th February, 1930 is, therefore, ultra vires and in no way binding on the present plaintiff \n Defendants 1 and 2, therefore, are not entitled to any right or privileges claimable by the holder of a Saranjam which according to the G.", "The cause of action arose in April 1938 and the resolution and the entry being ultra vires is not binding \n As this is a suit claiming for relief primarily against defendants 1 and 2 defendant 3 is made a party to the suit in order to enable Government (defendant 3) to give proper effect to the decision of Government of the 17th March, 1891 and of 7th June, 1932, as against defendants 1 and 2 who have no right to the position which they claim \n The reliefs prayed for are - \n That it be declared that defendants 1 and 2 have no right to go behind the order of the Government as per Resolution No. 8969 of 7th June, 1932, under which plaintiff is entitled to be recognised as the sole Saranjamdar in the Revenue Records and that the assignments held by defendants 1 and 2 are held by them as mere potgi holders.", "That in consequence of his position of a sole Saranjamdar the plaintiff alone at any rate during his lifetime has the sole right to the rights and privileges appertaining to the post of a sole Saranjamdar to wit, to be consulted in the appointment of the village officers in all the villages appertaining to the Saranjam estate, but assigned to defendants 1 and 2 for potgi \n Defendants 1 and 2 be restrained from doing any acts or taking any steps in contravention of the aforesaid right of the plaintiff.", "That it be declared that defendant 3 (Government) have no right to change the Resolution No. 8969 of 7th June, 1932, and at any rate during the lifetime of the plaintiff.", "In any event, Mr.", "Somayya was asked whether he would strike out the third defendant and those portions of the plaint which sought relief against it.", "He said he was not prepared to do so.", "There are two decisions of the Bombay High Court which have taken this view. Basalingappagouda v. The Secretary of State for India (28 Bom.", "L.R. 651) was a Watan case Government had recognised the second defendant as the Watandar.", "The learned Judges held that that would amount to striking out the main relief sought against both the defendants and would change the character of the suit and added that as long as the Secretary of State is a party to the suit, such a declaration could not be granted.", "In the other case, Basangauda v. The Secretary of State (32 Bom.", "Beaumont C.J. and Baker J. took the same view.", "They held that the jurisdiction of the courts was ousted.", "Their Lordships were dealing with a case falling under section 4 (b) of the Bombay Revenue Jurisdiction Act of 1876. That provides that - \n no Civil Court shall exercise jurisdiction as to \n (b) objections to the amount or incidence of any assessment of land revenue authorised by the Provincial Government.", "Thus, before the exclusion of the Civil Courts jurisdiction under section 4 (b) could come into play, the Court had to determine the issue of ultra vires.", "Consequently, their Lordships held that that question was outside the scope of the bar."], "label": "REJECTED"}, "expert_5": {"rank1": ["no Civil Court shall exercise jurisdiction as to - \n (a) claims against the Crown relating to lands held as Saranjam", "I am clear that this is a suit against the Crown within the meaning of section 4 (a).", "So far as the reliefs sought against Government are concerned, that is clearly the case.", "It is impossible to contend that this is not a claim relating to lands held as Saranjam."], "rank2": ["In any event, Mr. Somayya was asked whether he would strike out the third defendant and those portions of the plaint which sought relief against it. He said he was not prepared to do so. I cannot see how a plaintiff can insist on retaining a person against whom he claims no relief as a party.", "this is not a suit in which the rights claimed against the other defendants can be divorced from the claim against Government and considered separately.", "the plaintiff insists on retaining Government as a party in order that it may be bound by the decree he wants against the other defendants it is obvious that his claim against these defendants cannot be separated from his claim against the Government.", "The section is general and bars all claims against the Crown relating to lands held as Saranjam. That is to say, even if the Government act is relation to such lands was ultra vires, a claim impugning the validity of such an act would fall within the scope of the exclusion in clause (a) provided it relates to such land."], "rank3": ["Paragraph 9 of the plaint challenges Governments jurisdiction to deprive the plaintiff of the full benefit of all rights and privileges appertaining to the holder of a Saranjam. these rights cannot exist apart from the lands which form part of the Saranjam estate and the implication of the prayer is that Government has, for example, no right to resume the Saranjam either under Rule V on the death of the last Saranjamdar or under Rule IX during his lifetime.", "In paragraph 9 the power of Government to deprive the plaintiff of the rights he claims is challenged and in paragraph 10 the plaintiff explains that therefore the first and second defendants are not entitled to any of the rights and privileges of the Saranjamdar.", "In any event, if the claim against Government is to be ignored it can only be on the basis that its orders cannot be challenged and if the orders stand it is evident that the plaintiff can have no hope of success because both sides hold their respective properties on the basis of those orders.", "We are concerned here with section 4 (a) under that no question about an authorised act of Government arises."], "rank4": ["The suit relates to a Saranjam estate in the State of Bombay.", "Every Saranjamdar shall be responsible for making a suitable provision for the maintenance of (certain members of the family enumerated in the Rule).", "If an order passed by Government under Rule VII is not carried out, Government may, whatever the reason may be, direct the Saranjam, or a portion of it, to be resumed Provision for the members of the Suranjamdars family entitled to maintenance shall then be made by Government out of the revenues of the Saranjam so resumed.", "Government can have an jurisdiction to deprive the plaintiff at any rate during his lifetime of the full benefit of all the rights and privileges appertaining to the holder of a Saranjam.", "The Order of Government of the 8th February, 1930 is, therefore, ultra vires and in no way binding on the present plaintiff \n Defendants 1 and 2, therefore, are not entitled to any right or privileges claimable by the holder of a Saranjam which according to the G. K. is continuable as an inalienable and impartible Saranjam, such as for example in the matter of appointment of the village officers in any of the 27 villages appertaining to the Gajendragad Saranjam", "That in my opinion is an idle contention in view of paragraphs 9 and 12 of the plaint and reliefs (a) and (d).", "It is to be observed that a resumption under Rule IX can only be of the land because the rule directs that when the Saranjam is resumed Government itself shall make provisions for the maintenance of those entitled to it out of the revenues of the Saranjam so resumed. These revenues can only come out of the land.", "Relief (d) in the prayer clause seeks a declaration that Government has to right to change Resolution No. 8969 dated the 7th of June, 1932.", "That Resolution directly relates to the land because it directs that the Gajendragad Saranjam he resumed and the Collector is directed to take steps to place the Saranjamdar in possession of the village of the Saranjam estate etc.", "One of those rights, as we have been from Rules VII and IX, is to take the revenues of the entire estate in order that he might fulfil his obligation regarding the payment of maintenance to certain members of the family", "There are two decisions of the Bombay High Court which have taken this view.", "Basalingappagouda v. The Secretary of State for India (28 Bom. L.R. 651)", "Basangauda v. The Secretary of State"], "rank5": ["The Governor-in-Council is pleased to direct that the Gajendragad Saranjam should be formally resumed and regranted to Bhujangrao Daulatrao Ghorpade eldest sun of the deceased Saranjamdar Sardar Daulatrao Bhujangrao Ghorpade and that it should be entered in his sole name in the accounts of the Collector of Dharwar with effect from the date of the death of the last holder.", "plaintiff is entitled to be recognised as the sole Saranjamdar in the Revenue Records and that the assignments held by defendants 1 and 2 are held by them as mere potgi holders.", "That in consequence of his position of a sole Saranjamdar the plaintiff alone at any rate during his lifetime has the sole right to the rights and privileges appertaining to the post of a sole Saranjamdar to wit, to be consulted in the appointment of the village officers in all the villages appertaining to the Saranjam estate, but assigned to defendants 1 and 2 for potgi", "The learned Judges held that that would amount to striking out the main relief sought against both the defendants and would change the character of the suit and added that as long as the Secretary of State is a party to the suit, such a declaration could not be granted.", "He is not prepared to strike out the Government because if he does they will not be bound by these proceedings and will follow the decision of their revenue tribunals. Therefore, he wants to make the Government a party in order that they may be bound. But, if they remain a party, it seems to me that there is a claim against them relating to property appertaining to the office of an hereditary officer, although no doubt it is quite true that the appellant does not desire to get any order against the Government as to the way in which the property should be dealt with or anything of the sort, and he only wants a declaration as to his title which will bind Government. They held that the jurisdiction of the courts was ousted."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1953_14", "text": "CIVIL APPELLATE JURISDICTION Civil Appeal No. 182 of 1952. Appeal by special leave from the Judgment and Order dated 2nd August, 1951, of the High Court of Judicature at Nagpur in Miscellaneous Petition No. 187 of 1950 under arts. 226 and 227 of the Constitution. C. Chatterjee (R. M. Hajarnavis, with him) for the appellant. Ganapathy Iyer for the State of Madhya Pradesh. 1953. February 23. The Judgment of the Court was delivered by DAS J. On the 28th November, 1947, the appellant Hoosein Kasam Dada (India) Ltd., (hereinafter referred to as the assessee) submited to the Sales Tax Officer, Akola, a Sales Tax return in Form IV for the first quarter. Notice in Form XI calling upon the assessee to produce evidence in support of the said return having been issued by the Sales Tax Officer, the assessee produced his account books. Not being satisfied by the inspection of the account books as to the correctness of the return and being of opinion that the taxable turnover exceeded rupees two lacs the Sales Tax Officer submitted the case to the Assistant Commissioner of Sales Tax, Amravati, for assessment, On the 25th January, 1949, the Assistant Commissioner issued a fresh notice in Form XI under section 11 and fixed the case for disposal on the 5th February, 1949. After various adjournments and proceedings to which it is not necessary to refer, the hearing commenced on the 9th June, 1949, when an agent of the assessee appeared with books of account of the Akola Branch. \nEventually after various further proceedings the Assistant Commissioner on the 8th April, 1950, assessed the assessee, to the best of his judgment, in the sum of Rs. 58,657140 and a copy of the order in Form XIV was sent to the assessee. Being aggrieved by the order of assessment the assessee on the 10th May, 1950, preferred an appeal to the Sales Tax Commissioner, Madhya Pradesh, under section 22(l) of the Central Provinces and Berar Sales Tax Act, 1947 (hereinafter referred to as the Act). The appeal not having been accompanied by any proof of the payment of the tax in respect of which the appeal had been preferred, the authorities, after giving the assessee several adjournments, declined to admit the appeal. \nThe assessee moved the Board of Revenue, Madhya Pradesh, by a revision application against the order of the Sales Tax Commissioner contending that his appeal was not governed by the proviso to section 22(l) of the Act as amended on the 25th November, 1949, by the Central Provinces and Berar Sales Tax (Second Amendment) Act (Act LVII of 1949) but was governed by the proviso to section 22(l) of the Act as it stood when the assessment proceedings were started, i.e., before the said amendment. The Board of Revenue took the view that as the order of assessment was made after the amendment of the section and the appeal was filed thereafter such appeal must be governed by the provisions of law as it existed at the time the appeal was actually filed and that the law as it existed before the filing of the appeal could not apply to the case. The assessee thereupon moved the High Court of Madhya Pradesh under articles 226 and 227 of the Constitution of India praying, amongst other things, for a writ of mandamus or an appropriate order directing the Sales Tax Commissioner to admit and hear the appeal without demanding payment of the amount of sales tax assessed by the Assistant Commissioner of Sales Tax. The High Court dismissed the application on the 2nd August, 1951. The assessee applied to the High Court for leave to appeal to this Court which was also dismissed by the High Court on the 14th March, 1952. \nThe assessee thereupon applied to this Court for special leave to appeal on the 12th May, 1952. This Court granted special leave to appeal, but such leave was, by the order granting such leave, limited to the question of the effect of the amendment to section 22 of the Act on the petitioners appeal to the Sales Tax Commissioner, Madhya Pradesh. This Court took the view that the other questions sought to be raised by the assessee would have to be decided by the Sales Tax Commissioner in case the appeal succeeded. The appeal has now come up for final disposal before us and in this appeal we are concerned only with the limited question of the effect of the amendment to section 22 of the Act. Section 22(l) of the Act was originally expressed in the following terms - 22. (1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order Provided that no appeal against an order of assessment, with or without penalty, shall be entertained by the said authority unless it is satisfied that such amount of tax or penalty or both as the appellant may admit to be due from him, has been paid. \nThe relevant portion of section 22 as amended runs as follows-- 22. (1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order Provided that no appeal against an order of assessment, with or without penalty shall be admitted by the said authority unless such appeal is accompanied by a satisfactory proof of the payment of the tax, with penalty, if any, in respect of which the appeal has been preferred. It is clear from the language used in the proviso to section 22 (1) as it stood prior to the amendment that an aggrieved assessee had only to pay such amount of tax as he might admit to be due from him, whereas under the proviso to section 22(l) as amended the appeal has to be accompanied by satisfactory proof of payment of the tax in respect of which the appeal had been preferred. The contention of the present assessee is that as the amendment has not been made retrospective its right of appeal under the original section 22(l) remains unaffected and that accordingly as it does not admit anything to be due it was not liable to deposit any sum along with its appeal and the Commissioner was bound to admit its appeal and had no jurisdiction or power to reject it on the ground that it had not been accompanied by any proof of payment of the tax assessed against the appellant as required under the amended proviso and the Board of Revenue and the High Court were in error in not directing the Commissioner to admit the appeal. \nThat the amendment has placed a substantial restriction on the assessees right of appeal cannot be disputed, for the amended section requires the payment of the entire assessed amount as a condition precedent to the admission of its appeal. The question is whether the imposition of such a restriction by amendment of the section can affect the assessees right of appeal from a decision in proceedings which commenced prior to such amendment and which right of appeal was free from such restriction under the section asit stood at the time of the commencement of the proceedings. The question was answered in the negative by the Judicial Committee in Colonial. Sugar Refining Co., Ltd. v. Irving(1). In that case the Collector of Customs acting under an Act called the Excise Tariff Act, 1902, required the appellants to pay pound 20,100 excise duty on 6,700 tons of sugar. The appellants disputed the claim. So they deposited L.R. 1905 A.C. 369. the money with the Collector and then brought the action by issuing a writ on the 25th October, 1902. A special case having been stated for the opinion of the Supreme Court, that Court on the 4th September, 1903, gave judgment for the Collector. \nIn the meantime the Judiciary Act, 1903, was passed and received Royal assent on the 25th August, 1903, that is to say about 10 days before the judgment was delivered. By section 39(2) of that Act the right of appeal from the Supreme Court to the Privy Council given by the Order in Council of 1860 was taken away and the only appeal therefrom was directed to lie to the High Court of Australia. The appellants having with the leave of the Supreme Court filed an appeal to the Privy Council the respondents filed a petition taking the preliminary point that no appeal lay to the Privy Council and praying that the appeal be dismissed. in dismissing that application Lord Macnaghten who delivered the judgment of the Privy Council said- As regards the general principles applicable to the case there was no controversy. On the one hand, it was not disputed that if the matter in question be a matter of procedure only, the petition is well founded. \nOn the other hand, if it be more than a matter of procedure, if it touches a right in existence at the passing of the Act,- it was conceded that, in accordance with a long line of authorities extending from the time of Lord Coke to the present day, the appellants would be entitled to succeed. The Judicary Act is not retrospective by express enactment or by necessary intendment. And therefore the only question is, was the appeal to His Majesty in Council a right vested in the appellants at the date of the passing of the Act, or was it a mere matter of procedure ? It seems to their Lordships that the question does not admit of doubt. To deprive a suitor in a pending action of an appeal to a superior tribunal which belonged to him as of right is a very different thing from regulating procedure. In princi- ple, their Lordships see no difference between abolishing an appeal altogether and transferring the appeal to a new tribunal. In either case there is an interference with existing rights contrary to the well-known general principle that statutes are not to be held to act retrospectively unless a clear intention to that effect is manifested. The principle of the above decision was applied by Jenkins \n J. in Nana bin Aba v. Sheku bin Andu (1) and by the Privy Council itself in Delhi Cloth and General Mills Co. Ltd. v. Income-tax Commissioner, Delhi(). A Full Bench of the Lahore High Court adopted it in Kirpa Singh v. Rasaldar Ajaipal Singh (3). It was there regarded as settled that the right of appeal was not a mere matter of procedure but was a vested right which inhered in a party from the com mencement of the action in the Court of first instance and such right could not be taken away except by an express provision or by necessary implication. In Sardar Ali v. Dalimuddin (4), the suit out of which the appeal arose was filed in the Munsiff s Court at Alipore on the 7th October, 1920. The suit having been dismissed on the 17th July, 1924, the plaintiffs appealed to the Court of the District Judge but the appeal was dismissed. The plaintiffs then preferred a second appeal to the High Court on the 4th October, 1926. \n That second appeal was heard by a Single Judge and was dismissed on the 4th April, 1928. In the meantime Clause 15 of the Letters Patent was amended on the 14th January 1928 so as to provide that no further appeal should lie from the decision of a Single Judge sitting in second appeal unless the Judge certified that the case was a fit one for appeal. In this case the learned Judge who dismissed the second appeal on the 4th April, 1928, declined to give any certificate of fitness. The plaintiffs on the 30th April, 1928, filed an appeal on the strength of clause 15 of the Letters Patent as it stood before the amendment. The contention of the appellants was that the amended clause could not be applied to that appeal, for to do so would be to apply it retrospectively and to impair and indeed to defeat a substantive right which was in existence (1) (1908) I.L.R. 32 Bom. 337. (3) A. I. R 1928 Lah. 627. (2) (1927) L.R. 54 I.A. 421 I.L.R. 9 Lah. 284. (4) (1929) \n L.R. 56 Cal. 5I2. prior to the date of the amendment. The apppllants claimed that on the 7th October, 1920, when the suit was filed they had vested in them by the existing law a substantive right to a Letters Patent appeal from the decision of a Single Judge and that an intention to interfere with it, to clog it with a new condition or to impair or imperil it could not be presumed unless it was clearly manifested by express words or necessary intendment. In giving effect to the contentions of the appellants Rankin C.J. observed at p. 518- Now, the reasoning of the Judicial Committee in The Colonial Sugar Refining Companys case is a conclusive authority to show that rights of appeal are not matters of procedure, and that the right to enter the superior court is for the present purpose deemed to arise to a litigant before any decision has been given by the inferior court. If the latter proposition be accepted, I can see no intermediate point at which to resist the conclusion that the right arises at the date of the suit. \n It was held that the new clause could not be given retrospective effect and accordingly the date of pre- sentation of the second appeal to the High Court was not the date which determined the applicability of the amended clause of the Letters Patent and that the date of the institution of the suit was the determining factor. As against the last mentioned decision of the Calcutta High Court Sri Ganapathy Aiyar, appearing for the respondent, refers us to the decision of a Bench of the Bombay High Court in the case of Badruddin Abdul Rahim v. Sitaram Vinayak Apte (1), where it was held that the amendment of clause 15 of the Letters Patent operated retrospectively. That case followed an earlier decision of the same High Court in Fram Bomanji v. Hormasji Barjorji (2). The decision in the old case proceeded upon two grounds, namely, (1) that the question was one of procedure and (2) that sec- (1) (1928) I.L R. 52 Bom. 753 A.I.R. (1928) Bom. 371. (2) (1866) Bom. H.C. (O.C.J.) 49. tion 2 of the New Letters Patent of 1865 gave retrospective operation to the Letters Patent by making it applicable to all pending suits. In so far as the first ground is concerned it clearly runs counter to the decision of the Privy Council in Colonial Sugar Refining Co. Ltd. v. Irving (supra) and must be taken as overruled as Fawcett J. himself acknowledged at page 756. As regards the second ground it is inapplicable to the case before us and it is not necessary to express any opinion as to the. soundness and validity of that ground. It may be mentioned here that in Shaikh Hasan Abdul Karim v. King Emperor (1) another Bench of the same High Court expressly dissented from the decision in Badruddin Abdul Rahim v. Sitaram Vinayak Apte (supra). \n The principle laid down in the Colonial Sugar Refining Co.s case (supra) was followed by a Special Bench of Madras in In re Vasudeva Samiar (2). A Full Bench of the Allahabad High Court in Ram Singha v. Shankar Dayal (3) fell into line and held that the earlier decision on this point of that Court in Zamin Ali Khan v. Genda (4) stood overruled by the Privy Council decision in the Colonial Sugar Refining Co.s case. A Full Bench of Nagpur High Court in Radhakisan v. Shridar (5 ) has also taken the same view. The Punjab High Court has also adopted the same line in Gordhan Das v. The Governor General in Council (1). The case of Nagendra Nath Bose v. Mon Mohan Singha Roy (7) is indeed very much to the point. In that case the plaintiffs instituted a suit for rent valued at Rs. 1,30615 and obtained a decree. In execution of that decree the defaulting tenure was sold on the 20th November, 1928, for Rs. 1,600. On the 19th December, 1928, an application was made, under Order XXI, rule 90 of the Code of Civil Procedure, by the present petitioner, who was one of the judgment-debtors, \n I.L.R (1945) Bom. 17. A I.R. (1929) Mad 381 56 M.L.J 369. (3) (1928) I.L.R. 50 All. 965 A.I.R. (1928) All. 437. (4) (1904) I.L.R. 26 All. 375. A.I.R. (1950) Nag. 177. A.I.R, (1952) Punjab 103 (F.B. ), (7) (1930) 34 C.W.N. 1009. for setting aside the sale. That. application having been dismissed for default of his appearance the petitioner preferred an appeal to the District Judge of Hoogly who refused to admit the appeal on the ground that the amount recoverable in execution of the decree had not been deposited as required by the proviso to section 174, clause (c), of the Bengal Tenancy Act as amended by an amending Act in 1928. The contention of the petitioner was that the amended provision which came into force on the 21st February, 1929, could not affect the right of appeal from a decision on an application made on the 19th December, 1928, for setting aside the sale. Mitter J. said at page 1011- We think the contention of the petitioner is wellfounded and must prevail. \n That a right of appeal is a substantive right cannot now be seriously disputed. It is not a mere matter of procedure. Prior to the amendment of 1928 there was an appeal against an order refusing to set aside a sale (for that is the effect also where the application to set aside the sale is dismissed for default) under the provisions of Order 43, rule (1), of the Code of Civil Procedure. That right was unhampered by any restriction of the kind now imposed by section 174(5), Proviso. The Court was bound to admit the appeal whether appellant deposited the amount recoverable in execution of the decree or not. By requiring such deposit as a condition precedent to the admission of the appeal, a new restriction has been put on the right of appeal, the, admission of which is now hedged in with a condition. There can be no doubt that the right of appeal has been affected by the new provision and in the absence of an express enactment this amendment cannot apply to proceedings pending at the date when the new amendment came into force. It is true that the appeal was filed after the Act came into force, but that circumstance is immaterial--for the date to be looked into for this purpose is the date of the original proceeding which eventually culminated in the appeal. The, above decisions quite firmly establish and our decisions in Janardan Reddy v. The State (1) and in Ganpat Rai v. Agarwal Chamber of Commerce Ltd. (2) uphold the principle that a right of appeal is not merely a matter of procedure. It is matter of substantive right. This right of appeal from the decision of an .inferior tribunal to a superior tribunal becomes vested in a party when proceedings are first initiated in, and before a decision is given by, the inferior court. \n In the language of Jenkins C.J. in Nana bin Aba v. Shaik bin Andu (supra) to disturb an existing right of appeal is not a mere alteration in procedure. Such a vested right cannot be taken away except by express enactment or necessary intendment. An intention to interfere with or to impair or imperil such a vested right cannot be presumed unless such intention be clearly manifested by express words or necessary implication. Sri Ganapathy Aiyar urges that the language of section 22(1) as amended clearly makes the section ret. rospective. The new proviso, it is pointed out, peremptorily requires the authority not to admit the appeal unless it be accompanied by a satisfactory proof of the payment of the tax in respect of which the appeal is preferred and this duty the authority must discharge at the time the appeal is actually preferred before him. The argument is that after the amendment the authority has no option in the matter and he has no jurisdiction to admit any appeal unless the assessed tax be deposited. It follows, therefore, by necessary implication, according to the learned Advocate, that the amended provision applies to an appeal from an assessment order made before the date of amendment as well as to an appeal from an order made after that date. A similar argument was urged before the Calcutta Special Bench in Sardar Ali v. Dalimuddin (supra), namely, that after the amendment the court had no authority to entertain an appeal without a certificate from the Single Judge. (1) 1950 S.C.R. 941. (2) (1952) S.C.J. 564. Rankin C.J. repelled this argument with the remark at page 520- Unless the contrary can be shown, the provision which takes away jurisdiction is itself subject to the implied saving of the litigants right. \n In our view the above observation is apposite and applies to the case before us. The true implication of the above observation as of the decisions in the other cases referred to above is that the pre-existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment. The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. As the old law continues to exist for the purpose of supporting the pre- existing right of appeal that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right. The argument that the authority has no option or jurisdiction to admit the appeal unless it be accompanied by the deposit of the assessed tax as required by the amended proviso to section 22(1) of the Act overlooks the fact of existence of the old law for the purpose of supporting the pre-existing right and really amounts to begging the question. The new proviso is wholly inapplicable in such a situation and the jurisdiction of the authority has to be exercised under the old law which so continues to exist. The argument of Sri Ganapathy lyer on this point, therefore, cannot be accepted. The learned Advocate urges that the requirment as to the deposit of the amount of the assessed costs does not affect the right of appeal itself which still remains intact, but only introduces a new matter of procedure. \n He contends that this case is quite different from the case of Sardar Ali v. Dalmuddin (supra), for in this case it is entirely in the power of the appellant to deposit the tax if he chooses to do so whereas it was not within the power of the appellant in that case to secure a certificate from the learned Single Judge who disposed of the second appeal. In the first place the onerous condition may in a given case prevent the exercise of the right of appeal, for the assessee may not be in a position to find the necessary money in time. Further this argument cannot prevail in view of the decision of the Calcutta High Court in Nagendra Nath Bose v. Mon Mohan Singha (supra). No cogent argument has been adduced before us to show that that decision is not correct. There can be no doubt that the new requirement touches the substantive right of appeal vested in the appellant. Nor can it be overlooked that such a requirement is calculated to interfere with or fetter, if not to impair or imperil, the substantive right. The right that the amended section gives is certainly less than the right which was available before. \n A provision which is calculated to deprive the appellant of the unfettered right of appeal cannot be regarded as a mere alteration in procedure. Indeed the new requirement cannot be said merely to regulate the exercise of the appellants pre-existing right but in truth whittles down the right itself and cannot be regarded as a mere rule of procedure. Finally, Sri Ganapathy lyer faintly urges that until actual assessment there can be no lis and, therefore, no right of appeal can accrue before that event. There are two answers to this plea. Whenever there is a proposition by one party and an opposition to that proposition by another a lis arises. \n It may be conceded, though not deciding it, that when the assessee files his return a lis may not immediately arise, for under section 11 (1) the authority may accept the return as correct and complete. But if the authority is not satisfied as to the correctness of the return and calls for evidence, surely a controversy arises involving a proposition by the assessee and an opposition by the State. The circumstance that the authority who raises the dispute is himself the judge can make no difference, for the authority raises the dispute in the interest of the State and in so acting only represents the State. \n It 1000 will appear from the dates given above that in this case the lis in the sense explained above arose before the date of amendment of the section. Further, even if the lis is to be taken as arising only on the date of assessment, there was a possibility of such a lis arising as soon as proceedings started with the filing of the return or, at any rate, when the authority called for evidence and started the hearing and the right of appeal must be taken to have been in existence even at those dates. For the purposes of the accrual of the right of appeal the critical and relevant date is the date of initiation of the proceedings and not the decision itself.\n DECISION ??", "expert_1": {"rank1": ["Unless the contrary can be shown, the provision which takes away jurisdiction is itself subject to the implied saving of the litigants right. \n In our view the above observation is apposite and applies to the case before us. The true implication of the above observation as of the decisions in the other cases referred to above is that the pre-existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment. The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. As the old law continues to exist for the purpose of supporting the pre- existing right of appeal that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right. The argument that the authority has no option or jurisdiction to admit the appeal unless it be accompanied by the deposit of the assessed tax as required by the amended proviso to section 22(1) of the Act overlooks the fact of existence of the old law for the purpose of supporting the pre-existing right and really amounts to begging the question. The new proviso is wholly inapplicable in such a situation and the jurisdiction of the authority has to be exercised under the old law which so continues to exist. The argument of Sri Ganapathy lyer on this point, therefore, cannot be accepted.", "In the first place the onerous condition may in a given case prevent the exercise of the right of appeal, for the assessee may not be in a position to find the necessary money in time. Further this argument cannot prevail in view of the decision of the Calcutta High Court in Nagendra Nath Bose v. Mon Mohan Singha (supra). No cogent argument has been adduced before us to show that that decision is not correct. There can be no doubt that the new requirement touches the substantive right of appeal vested in the appellant. Nor can it be overlooked that such a requirement is calculated to interfere with or fetter, if not to impair or imperil, the substantive right. The right that the amended section gives is certainly less than the right which was available before. \n A provision which is calculated to deprive the appellant of the unfettered right of appeal cannot be regarded as a mere alteration in procedure. Indeed the new requirement cannot be said merely to regulate the exercise of the appellants pre-existing right but in truth whittles down the right itself and cannot be regarded as a mere rule of procedure. Finally, Sri Ganapathy lyer faintly urges that until actual assessment there can be no lis and, therefore, no right of appeal can accrue before that event. There are two answers to this plea. Whenever there is a proposition by one party and an opposition to that proposition by another a lis arises. \n It may be conceded, though not deciding it, that when the assessee files his return a lis may not immediately arise, for under section 11 (1) the authority may accept the return as correct and complete. But if the authority is not satisfied as to the correctness of the return and calls for evidence, surely a controversy arises involving a proposition by the assessee and an opposition by the State. The circumstance that the authority who raises the dispute is himself the judge can make no difference, for the authority raises the dispute in the interest of the State and in so acting only represents the State. \n It 1000 will appear from the dates given above that in this case the lis in the sense explained above arose before the date of amendment of the section. Further, even if the lis is to be taken as arising only on the date of assessment, there was a possibility of such a lis arising as soon as proceedings started with the filing of the return or, at any rate, when the authority called for evidence and started the hearing and the right of appeal must be taken to have been in existence even at those dates. For the purposes of the accrual of the right of appeal the critical and relevant date is the date of initiation of the proceedings and not the decision itself."], "rank2": ["In so far as the first ground is concerned it clearly runs counter to the decision of the Privy Council in Colonial Sugar Refining Co. Ltd. v. Irving (supra) and must be taken as overruled as Fawcett J. himself acknowledged at page 756. As regards the second ground it is inapplicable to the case before us and it is not necessary to express any opinion as to the. soundness and validity of that ground.", "The case of Nagendra Nath Bose v. Mon Mohan Singha Roy (7) is indeed very much to the point.", "That. application having been dismissed for default of his appearance the petitioner preferred an appeal to the District Judge of Hoogly who refused to admit the appeal on the ground that the amount recoverable in execution of the decree had not been deposited as required by the proviso to section 174, clause (c), of the Bengal Tenancy Act as amended by an amending Act in 1928. The contention of the petitioner was that the amended provision which came into force on the 21st February, 1929, could not affect the right of", "appeal from a decision on an application made on the 19th December, 1928, for setting aside the sale. Mitter J. said at page", "We think the contention of the petitioner is wellfounded and must prevail. \n That a right of appeal is a substantive right cannot now be seriously disputed. It is not a mere matter of procedure.", "There can be no doubt that the right of appeal has been affected by the new provision and in the absence of an express enactment this amendment cannot apply to proceedings pending at the date when the new amendment came into force. It is true that the appeal was filed after the Act came into force, but that circumstance is immaterial--for the date to be looked into for this purpose is the date of the original proceeding which eventually culminated in the appeal.", "The, above decisions quite firmly establish and our decisions in Janardan Reddy v. The State (1) and in Ganpat Rai v. Agarwal Chamber of Commerce Ltd. (2) uphold the principle that a right of appeal is not merely a matter of procedure. It is matter of substantive right. This right of appeal from the decision of an .inferior tribunal to a superior tribunal becomes vested in a party when proceedings are first initiated in, and before a decision is given by, the inferior court. \n In the language of Jenkins C.J. in Nana bin Aba v. Shaik bin Andu (supra) to disturb an existing right of appeal is not a mere alteration in procedure. Such a vested right cannot be taken away except by express enactment or necessary intendment. An intention to interfere with or to impair or imperil such a vested right cannot be presumed unless such intention be clearly manifested by express words or necessary implication."], "rank3": ["The question is whether the imposition of such a restriction by amendment of the section can affect the assessees right of appeal from a decision in proceedings which commenced prior to such amendment and which right of appeal was free from such restriction under the section asit stood at the time of the commencement of the proceedings. The question was answered in the negative by the Judicial Committee in Colonial. Sugar Refining Co., Ltd. v. Irving(1).", "And therefore the only question is, was the appeal to His Majesty in Council a right vested in the appellants at the date of the passing of the Act, or was it a mere matter of procedure ? It seems to their Lordships that the question does not admit of doubt. To deprive a suitor in a pending action of an appeal to a superior tribunal which belonged to him as of right is a very different thing from regulating procedure.", "In princi- ple, their Lordships see no difference between abolishing an appeal altogether and transferring the appeal to a new tribunal. In either case there is an interference with existing rights contrary to the well-known general principle that statutes are not to be held to act retrospectively unless a clear intention to that effect is manifested. The principle of the above decision was applied by Jenkins \n J. in Nana bin Aba v. Sheku bin Andu (1) and by the Privy Council itself in Delhi Cloth and General Mills Co. Ltd. v. Income-tax Commissioner, Delhi().", "It was there regarded as settled that the right of appeal was not a mere matter of procedure but was a vested right which inhered in a party from the com mencement of the action in the Court of first instance and such right could not be taken away except by an express provision or by necessary implication.", "Now, the reasoning of the Judicial Committee in The Colonial Sugar Refining Companys case is a conclusive authority to show that rights of appeal are not matters of procedure, and that the right to enter the superior court is for the present purpose deemed to arise to a litigant before any decision has been given by the inferior court. If the latter proposition be accepted, I can see no intermediate point at which to resist the conclusion that the right arises at the date of the suit. \n It was held that the new clause could not be given retrospective effect and accordingly the date of pre- sentation of the second appeal to the High Court was not the date which determined the applicability of the amended clause of the Letters Patent and that the date of the institution of the suit was the determining factor."], "rank4": ["Eventually after various further proceedings the Assistant Commissioner on the 8th April, 1950, assessed the assessee, to the best of his judgment, in the sum of Rs. 58,657140 and a copy of the order in Form XIV was sent to the assessee. Being aggrieved by the order of assessment the assessee on the 10th May, 1950, preferred an appeal to the Sales Tax Commissioner, Madhya Pradesh, under section 22(l) of the Central Provinces and Berar Sales Tax Act, 1947 (hereinafter referred to as the Act). The appeal not having been accompanied by any proof of the payment of the tax in respect of which the appeal had been preferred, the authorities, after giving the assessee several adjournments, declined to admit the appeal. \nThe assessee moved the Board of Revenue, Madhya Pradesh, by a revision application against the order of the Sales Tax Commissioner contending that his appeal was not governed by the proviso to section 22(l) of the Act as amended on the 25th November, 1949, by the Central Provinces and Berar Sales Tax (Second Amendment) Act (Act LVII of 1949) but was governed by the proviso to section 22(l) of the Act as it stood when the assessment proceedings were started, i.e., before the said amendment.", "The Board of Revenue took the view that as the order of assessment was made after the amendment of the section and the appeal was filed thereafter such appeal must be governed by the provisions of law as it existed at the time the appeal was actually filed and that the law as it existed before the filing of the appeal could not apply to the case.", "The assessee thereupon moved the High Court of Madhya Pradesh under articles 226 and 227 of the Constitution of India praying, amongst other things, for a writ of mandamus or an appropriate order directing the Sales Tax Commissioner to admit and hear the appeal without demanding payment of the amount of sales tax assessed by the Assistant Commissioner of Sales Tax. The High Court dismissed the application on the 2nd August, 1951. The assessee applied to the High Court for leave to appeal to this Court which was also dismissed by the High Court on the 14th March, 1952. \nThe assessee thereupon applied to this Court for special leave to appeal on the 12th May, 1952. This Court granted special leave to appeal, but such leave was, by the order granting such leave, limited to the question of the effect of the amendment to section 22 of the Act on the petitioners appeal to the Sales Tax Commissioner, Madhya Pradesh. This Court took the view that the other questions sought to be raised by the assessee would have to be decided by the Sales Tax Commissioner in case the appeal succeeded. The appeal has now come up for final disposal before us and in this appeal we are concerned only with the limited question of the effect of the amendment to section 22 of the Act.", "It is clear from the language used in the proviso to section 22 (1) as it stood prior to the amendment that an aggrieved assessee had only to pay such amount of tax as he might admit to be due from him, whereas under the proviso to section 22(l) as amended the appeal has to be accompanied by satisfactory proof of payment of the tax in respect of which the appeal had been preferred.", "The contention of the present assessee is that as the amendment has not been made retrospective its right of appeal under the original section 22(l) remains unaffected and that accordingly as it does not admit anything to be due it was not liable to deposit any sum along with its appeal and the Commissioner was bound to admit its appeal and had no jurisdiction or power to reject it on the ground that it had not been accompanied by any proof of payment of the tax assessed against the appellant as required under the amended proviso and the Board of Revenue and the High Court were in error in not directing the Commissioner to admit the appeal. \nThat the amendment has placed a substantial restriction on the assessees right of appeal cannot be disputed, for the amended section requires the payment of the entire assessed amount as a condition precedent to the admission of its appeal."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["It was held that the new clause could not be given retrospective effect and accordingly the date of pre- sentation of the second appeal to the High Court was not the date which determined the applicability of the amended clause of the Letters Patent and that the date of the institution of the suit was the determining factor.", "application having been dismissed for default of his appearance the petitioner preferred an appeal to the District Judge of Hoogly who refused to admit the appeal on the ground that the amount recoverable in execution of the decree had not been deposited as required by the proviso to section 174, clause (c), of the Bengal Tenancy Act as amended by an amending Act in 1928.", "The contention of the petitioner was that the amended provision which came into force on the 21st February, 1929, could not affect the right of appeal from a decision on an application made on the 19th December, 1928, for setting aside the sale.", "That a right of appeal is a substantive right cannot now be seriously disputed. It is not a mere matter of procedure.", "It is true that the appeal was filed after the Act came into force, but that circumstance is immaterial--for the date to be looked into for this purpose is the date of the original proceeding which eventually culminated in the appeal.", "Ganpat Rai v. Agarwal Chamber of Commerce Ltd. (2) uphold the principle that a right of appeal is not merely a matter of procedure. It is matter of substantive right. This right of appeal from the decision of an .inferior tribunal to a superior tribunal becomes vested in a party when proceedings are first initiated in, and before a decision is given by, the inferior court.", "Unless the contrary can be shown, the provision which takes away jurisdiction is itself subject to the implied saving of the litigants right.", "the pre-existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment.", "The argument that the authority has no option or jurisdiction to admit the appeal unless it be accompanied by the deposit of the assessed tax as required by the amended proviso to section 22(1) of the Act overlooks the fact of existence of the old law for the purpose of supporting the pre-existing right and really amounts to begging the question. The new proviso is wholly inapplicable in such a situation and the jurisdiction of the authority has to be exercised under the old law which so continues to exist.", "For the purposes of the accrual of the right of appeal the critical and relevant date is the date of initiation of the proceedings and not the decision itself."], "rank2": ["Being aggrieved by the order of assessment the assessee on the 10th May, 1950, preferred an appeal to the Sales Tax Commissioner, Madhya Pradesh, under section 22(l) of the Central Provinces and Berar Sales Tax Act, 1947 (hereinafter referred to as the Act). The appeal not having been accompanied by any proof of the payment of the tax in respect of which the appeal had been preferred, the authorities, after giving the assessee several adjournments, declined to admit the appeal.", "The Board of Revenue took the view that as the order of assessment was made after the amendment of the section and the appeal was filed thereafter such appeal must be governed by the provisions of law as it existed at the time the appeal was actually filed and that the law as it existed before the filing of the appeal could not apply to the case.", "limited to the question of the effect of the amendment to section 22 of the Act on the petitioners appeal to the Sales Tax Commissioner, Madhya Pradesh.", "It is clear from the language used in the proviso to section 22 (1) as it stood prior to the amendment that an aggrieved assessee had only to pay such amount of tax as he might admit to be due from him, whereas under the proviso to section 22(l) as amended the appeal has to be accompanied by satisfactory proof of payment of the tax in respect of which the appeal had been preferred. The contention of the present assessee is that as the amendment has not been made retrospective its right of appeal under the original section 22(l) remains unaffected and that accordingly as it does not admit anything to be due it was not liable to deposit any sum along with its appeal and the Commissioner was bound to admit its appeal and had no jurisdiction or power to reject it on the ground that it had not been accompanied by any proof of payment of the tax assessed against the appellant as required under the amended proviso and the Board of Revenue and the High Court were in error in not directing the Commissioner to admit the appeal.", "Sardar Ali v. Dalimuddin", "The contention of the appellants was that the amended clause could not be applied to that appeal, for to do so would be to apply it retrospectively and to impair and indeed to defeat a substantive right which was in existence (1) (1908) I.L.R. 32 Bom. 337. (3) A. I. R 1928 Lah. 627. (2) (1927) L.R. 54 I.A. 421 I.L.R. 9 Lah. 284. (4) (1929) \n L.R. 56 Cal. 5I2. prior to the date of the amendment.", "the reasoning of the Judicial Committee in The Colonial Sugar Refining Companys case is a conclusive authority to show that rights of appeal are not matters of procedure, and that the right to enter the superior court is for the present purpose deemed to arise to a litigant before any decision has been given by the inferior court.", "the requirment as to the deposit of the amount of the assessed costs does not affect the right of appeal itself which still remains intact, but only introduces a new matter of procedure", "the onerous condition may in a given case prevent the exercise of the right of appeal, for the assessee may not be in a position to find the necessary money in time.", "Indeed the new requirement cannot be said merely to regulate the exercise of the appellants pre-existing right but in truth whittles down the right itself and cannot be regarded as a mere rule of procedure."], "rank3": ["The question is whether the imposition of such a restriction by amendment of the section can affect the assessees right of appeal from a decision in proceedings which commenced prior to such amendment and which right of appeal was free from such restriction under the section asit stood at the time of the commencement of the proceedings.", "It was there regarded as settled that the right of appeal was not a mere matter of procedure but was a vested right which inhered in a party from the com mencement of the action in the Court of first instance and such right could not be taken away except by an express provision or by necessary implication.", "Sri Ganapathy Aiyar urges that the language of section 22(1) as amended clearly makes the section ret. rospective. The new proviso, it is pointed out, peremptorily requires the authority not to admit the appeal unless it be accompanied by a satisfactory proof of the payment of the tax in respect of which the appeal is preferred and this duty the authority must discharge at the time the appeal is actually preferred before him. The argument is that after the amendment the authority has no option in the matter and he has no jurisdiction to admit any appeal unless the assessed tax be deposited. It follows, therefore, by necessary implication, according to the learned Advocate, that the amended provision applies to an appeal from an assessment order made before the date of amendment as well as to an appeal from an order made after that date.", "even if the lis is to be taken as arising only on the date of assessment, there was a possibility of such a lis arising as soon as proceedings started with the filing of the return or, at any rate, when the authority called for evidence and started the hearing and the right of appeal must be taken to have been in existence even at those dates."], "rank4": ["The appellants having with the leave of the Supreme Court filed an appeal to the Privy Council the respondents filed a petition taking the preliminary point that no appeal lay to the Privy Council and praying that the appeal be dismissed. in dismissing that application Lord Macnaghten who delivered the judgment of the Privy Council said- As regards the general principles applicable to the case there was no controversy.", "In princi- ple, their Lordships see no difference between abolishing an appeal altogether and transferring the appeal to a new tribunal.", "Prior to the amendment of 1928 there was an appeal against an order refusing to set aside a sale (for that is the effect also where the application to set aside the sale is dismissed for default) under the provisions of Order 43, rule (1), of the Code of Civil Procedure. That right was unhampered by any restriction of the kind now imposed by section 174(5), Proviso.", "By requiring such deposit as a condition precedent to the admission of the appeal, a new restriction has been put on the right of appeal, the, admission of which is now hedged in with a condition. There can be no doubt that the right of appeal has been affected by the new provision and in the absence of an express enactment this amendment cannot apply to proceedings pending at the date when the new amendment came into force."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["It is clear from the language used in the proviso to section 22 (1) as it stood prior to the amendment that an aggrieved assessee had only to pay such amount of tax as he might admit to be due from him, whereas under the proviso to section 22(l) as amended the appeal has to be accompanied by satisfactory proof of payment of the tax in respect of which the appeal had been preferred.", "That the amendment has placed a substantial restriction on the assessees right of appeal cannot be disputed, for the amended section requires the payment of the entire assessed amount as a condition precedent to the admission of its appeal. The question is whether the imposition of such a restriction by amendment of the section can affect the assessees right of appeal from a decision in proceedings which commenced prior to such amendment and which right of appeal was free from such restriction under the section asit stood at the time of the commencement of the proceedings.", "The question was answered in the negative by the Judicial Committee in Colonial. Sugar Refining Co., Ltd. v. Irving", "To deprive a suitor in a pending action of an appeal to a superior tribunal which belonged to him as of right is a very different thing from regulating procedure. In princi- ple, their Lordships see no difference between abolishing an appeal altogether and transferring the appeal to a new tribunal. In either case there is an interference with existing rights contrary to the well-known general principle that statutes are not to be held to act retrospectively unless a clear intention to that effect is manifested", "The, above decisions quite firmly establish and our decisions in Janardan Reddy v. The State (1) and in Ganpat Rai v. Agarwal Chamber of Commerce Ltd. (2) uphold the principle that a right of appeal is not merely a matter of procedure. It is matter of substantive right. This right of appeal from the decision of an .inferior tribunal to a superior tribunal becomes vested in a party when proceedings are first initiated in, and before a decision is given by, the inferior court", "to disturb an existing right of appeal is not a mere alteration in procedure. Such a vested right cannot be taken away except by express enactment or necessary intendment. An intention to interfere with or to impair or imperil such a vested right cannot be presumed unless such intention be clearly manifested by express words or necessary implication", "Unless the contrary can be shown, the provision which takes away jurisdiction is itself subject to the implied saving of the litigants right.", "In our view the above observation is apposite and applies to the case before us. The true implication of the above observation as of the decisions in the other cases referred to above is that the pre-existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment. The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. As the old law continues to exist for the purpose of supporting the pre- existing right of appeal that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right.", "The argument that the authority has no option or jurisdiction to admit the appeal unless it be accompanied by the deposit of the assessed tax as required by the amended proviso to section 22(1) of the Act overlooks the fact of existence of the old law for the purpose of supporting the pre-existing right and really amounts to begging the question", "The new proviso is wholly inapplicable in such a situation and the jurisdiction of the authority has to be exercised under the old law which so continues to exist", "In the first place the onerous condition may in a given case prevent the exercise of the right of appeal, for the assessee may not be in a position to find the necessary money in time. Further this argument cannot prevail in view of the decision of the Calcutta High Court in Nagendra Nath Bose v. Mon Mohan Singha (supra). No cogent argument has been adduced before us to show that that decision is not correct. There can be no doubt that the new requirement touches the substantive right of appeal vested in the appellant", "Nor can it be overlooked that such a requirement is calculated to interfere with or fetter, if not to impair or imperil, the substantive right. The right that the amended section gives is certainly less than the right which was available before. \n A provision which is calculated to deprive the appellant of the unfettered right of appeal cannot be regarded as a mere alteration in procedure. Indeed the new requirement cannot be said merely to regulate the exercise of the appellants pre-existing right but in truth whittles down the right itself and cannot be regarded as a mere rule of procedure.", "Whenever there is a proposition by one party and an opposition to that proposition by another a lis arises. \n It may be conceded, though not deciding it, that when the assessee files his return a lis may not immediately arise, for under section 11 (1) the authority may accept the return as correct and complete. But if the authority is not satisfied as to the correctness of the return and calls for evidence, surely a controversy arises involving a proposition by the assessee and an opposition by the State. The circumstance that the authority who raises the dispute is himself the judge can make no difference, for the authority raises the dispute in the interest of the State and in so acting only represents the State", "will appear from the dates given above that in this case the lis in the sense explained above arose before the date of amendment of the section", "Further, even if the lis is to be taken as arising only on the date of assessment, there was a possibility of such a lis arising as soon as proceedings started with the filing of the return or, at any rate, when the authority called for evidence and started the hearing and the right of appeal must be taken to have been in existence even at those dates. For the purposes of the accrual of the right of appeal the critical and relevant date is the date of initiation of the proceedings and not the decision itself."], "rank2": ["This Court granted special leave to appeal, but such leave was, by the order granting such leave, limited to the question of the effect of the amendment to section 22 of the Act on the petitioners appeal to the Sales Tax Commissioner, Madhya Pradesh", "Section 22(l) of the Act was originally expressed in the following terms - 22. (1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order Provided that no appeal against an order of assessment, with or without penalty, shall be entertained by the said authority unless it is satisfied that such amount of tax or penalty or both as the appellant may admit to be due from him, has been paid. \nThe relevant portion of section 22 as amended runs as follows-- 22. (1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order Provided that no appeal against an order of assessment, with or without penalty shall be admitted by the said authority unless such appeal is accompanied by a satisfactory proof of the payment of the tax, with penalty, if any, in respect of which the appeal has been preferred.", "A Full Bench of the Lahore High Court adopted it in Kirpa Singh v. Rasaldar Ajaipal Singh (3). It was there regarded as settled that the right of appeal was not a mere matter of procedure but was a vested right which inhered in a party from the com mencement of the action in the Court of first instance and such right could not be taken away except by an express provision or by necessary implication", "the reasoning of the Judicial Committee in The Colonial Sugar Refining Companys case is a conclusive authority to show that rights of appeal are not matters of procedure, and that the right to enter the superior court is for the present purpose deemed to arise to a litigant before any decision has been given by the inferior court.", "If the latter proposition be accepted, I can see no intermediate point at which to resist the conclusion that the right arises at the date of the suit. \n It was held that the new clause could not be given retrospective effect and accordingly the date of pre- sentation of the second appeal to the High Court was not the date which determined the applicability of the amended clause of the Letters Patent and that the date of the institution of the suit was the determining factor", "The principle laid down in the Colonial Sugar Refining Co.s case (supra) was followed by a Special Bench of Madras in In re Vasudeva Samiar (2). A Full Bench of the Allahabad High Court in Ram Singha v. Shankar Dayal (3) fell into line and held that the earlier decision on this point of that Court in Zamin Ali Khan v. Genda (4) stood overruled by the Privy Council decision in the Colonial Sugar Refining Co.s case", "A Full Bench of Nagpur High Court in Radhakisan v. Shridar (5 ) has also taken the same view. The Punjab High Court has also adopted the same line in Gordhan Das v. The Governor General in Council (1). The case of Nagendra Nath Bose v. Mon Mohan Singha Roy (7) is indeed very much to the point.", "That a right of appeal is a substantive right cannot now be seriously disputed. It is not a mere matter of procedure. Prior to the amendment of 1928 there was an appeal against an order refusing to set aside a sale (for that is the effect also where the application to set aside the sale is dismissed for default) under the provisions of Order 43, rule (1), of the Code of Civil Procedure. That right was unhampered by any restriction of the kind now imposed by section 174(5), Proviso. The Court was bound to admit the appeal whether appellant deposited the amount recoverable in execution of the decree or not", "By requiring such deposit as a condition precedent to the admission of the appeal, a new restriction has been put on the right of appeal, the, admission of which is now hedged in with a condition. There can be no doubt that the right of appeal has been affected by the new provision and in the absence of an express enactment this amendment cannot apply to proceedings pending at the date when the new amendment came into force. It is true that the appeal was filed after the Act came into force, but that circumstance is immaterial--for the date to be looked into for this purpose is the date of the original proceeding which eventually culminated in the appeal."], "rank3": ["On the 28th November, 1947, the appellant Hoosein Kasam Dada (India) Ltd., (hereinafter referred to as the assessee) submited to the Sales Tax Officer, Akola, a Sales Tax return in Form IV for the first quarter", "Notice in Form XI calling upon the assessee to produce evidence in support of the said return having been issued by the Sales Tax Officer, the assessee produced his account books. Not being satisfied by the inspection of the account books as to the correctness of the return and being of opinion that the taxable turnover exceeded rupees two lacs the Sales Tax Officer submitted the case to the Assistant Commissioner of Sales Tax, Amravati, for assessment, On the 25th January, 1949, the Assistant Commissioner issued a fresh notice in Form XI under section 11 and fixed the case for disposal on the 5th February, 1949", "Eventually after various further proceedings the Assistant Commissioner on the 8th April, 1950, assessed the assessee, to the best of his judgment, in the sum of Rs. 58,657140 and a copy of the order in Form XIV was sent to the assessee.", "The assessee moved the Board of Revenue, Madhya Pradesh, by a revision application against the order of the Sales Tax Commissioner contending that his appeal was not governed by the proviso to section 22(l) of the Act as amended on the 25th November, 1949, by the Central Provinces and Berar Sales Tax (Second Amendment) Act (Act LVII of 1949) but was governed by the proviso to section 22(l) of the Act as it stood when the assessment proceedings were started, i.e., before the said amendment. The Board of Revenue took the view that as the order of assessment was made after the amendment of the section and the appeal was filed thereafter such appeal must be governed by the provisions of law as it existed at the time the appeal was actually filed and that the law as it existed before the filing of the appeal could not apply to the case", "The assessee thereupon moved the High Court of Madhya Pradesh under articles 226 and 227 of the Constitution of India praying, amongst other things, for a writ of mandamus or an appropriate order directing the Sales Tax Commissioner to admit and hear the appeal without demanding payment of the amount of sales tax assessed by the Assistant Commissioner of Sales Tax. The High Court dismissed the application on the 2nd August, 1951. The assessee applied to the High Court for leave to appeal to this Court which was also dismissed by the High Court on the 14th March, 1952."], "label": "ACCEPTED"}, "expert_4": {"rank1": ["The assessee moved the Board of Revenue, Madhya Pradesh, by a revision application against the order of the Sales Tax Commissioner contending that his appeal was not governed by the proviso to section 22(l) of the Act as amended on the 25th November, 1949, by the Central Provinces and Berar Sales Tax (Second Amendment) Act (Act LVII of 1949) but was governed by the proviso to section 22(l) of the Act as it stood when the assessment proceedings were started, i.e., before the said amendment.", "The Board of Revenue took the view that as the order of assessment was made after the amendment of the section and the appeal was filed thereafter such appeal must be governed by the provisions of law as it existed at the time the appeal was actually filed and that the law as it existed before the filing of the appeal could not apply to the case. The assessee thereupon moved the High Court of Madhya Pradesh under articles 226 and 227 of the Constitution of India praying, amongst other things, for a writ of mandamus or an appropriate order directing the Sales Tax Commissioner to admit and hear the appeal without demanding payment of the amount of sales tax assessed by the Assistant Commissioner of Sales Tax.", "The appeal has now come up for final disposal before us and in this appeal we are concerned only with the limited question of the effect of the amendment to section 22 of the Act.", "It is clear from the language used in the proviso to section 22 (1) as it stood prior to the amendment that an aggrieved assessee had only to pay such amount of tax as he might admit to be due from him, whereas under the proviso to section 22(l) as amended the appeal has to be accompanied by satisfactory proof of payment of the tax in respect of which the appeal had been preferred.", "The contention of the present assessee is that as the amendment has not been made retrospective its right of appeal under the original section 22(l) remains unaffected and that accordingly as it does not admit anything to be due it was not liable to deposit any sum along with its appeal and the Commissioner was bound to admit its appeal and had no jurisdiction or power to reject it on the ground that it had not been accompanied by any proof of payment of the tax assessed against the appellant as required under the amended proviso and the Board of Revenue and the High Court were in error in not directing the Commissioner to admit the appeal. \nThat the amendment has placed a substantial restriction on the assessees right of appeal cannot be disputed, for the amended section requires the payment of the entire assessed amount as a condition precedent to the admission of its appeal.", "In giving effect to the contentions of the appellants Rankin C.J. observed at p. 518- Now, the reasoning of the Judicial Committee in The Colonial Sugar Refining Companys case is a conclusive authority to show that rights of appeal are not matters of procedure, and that the right to enter the superior court is for the present purpose deemed to arise to a litigant before any decision has been given by the inferior court. If the latter proposition be accepted, I can see no intermediate point at which to resist the conclusion that the right arises at the date of the suit.", "There can be no doubt that the new requirement touches the substantive right of appeal vested in the appellant. Nor can it be overlooked that such a requirement is calculated to interfere with or fetter, if not to impair or imperil, the substantive right. The right that the amended section gives is certainly less than the right which was available before. \n A provision which is calculated to deprive the appellant of the unfettered right of appeal cannot be regarded as a mere alteration in procedure. Indeed the new requirement cannot be said merely to regulate the exercise of the appellants pre-existing right but in truth whittles down the right itself and cannot be regarded as a mere rule of procedure.", "There are two answers to this plea. Whenever there is a proposition by one party and an opposition to that proposition by another a lis arises. \n It may be conceded, though not deciding it, that when the assessee files his return a lis may not immediately arise, for under section 11 (1) the authority may accept the return as correct and complete. But if the authority is not satisfied as to the correctness of the return and calls for evidence, surely a controversy arises involving a proposition by the assessee and an opposition by the State. The circumstance that the authority who raises the dispute is himself the judge can make no difference, for the authority raises the dispute in the interest of the State and in so acting only represents the State. \n It 1000 will appear from the dates given above that in this case the lis in the sense explained above arose before the date of amendment of the section. Further, even if the lis is to be taken as arising only on the date of assessment, there was a possibility of such a lis arising as soon as proceedings started with the filing of the return or, at any rate, when the authority called for evidence and started the hearing and the right of appeal must be taken to have been in existence even at those dates. For the purposes of the accrual of the right of appeal the critical and relevant date is the date of initiation of the proceedings and not the decision itself."], "rank2": ["On the 28th November, 1947, the appellant Hoosein Kasam Dada (India) Ltd., (hereinafter referred to as the assessee) submited to the Sales Tax Officer, Akola, a Sales Tax return in Form IV for the first quarter.", "Not being satisfied by the inspection of the account books as to the correctness of the return and being of opinion that the taxable turnover exceeded rupees two lacs the Sales Tax Officer submitted the case to the Assistant Commissioner of Sales Tax, Amravati, for assessment, On the 25th January, 1949, the Assistant Commissioner issued a fresh notice in Form XI under section 11 and fixed the case for disposal on the 5th February, 1949.", "Eventually after various further proceedings the Assistant Commissioner on the 8th April, 1950, assessed the assessee, to the best of his judgment, in the sum of Rs. 58,657140 and a copy of the order in Form XIV was sent to the assessee.", "The appeal not having been accompanied by any proof of the payment of the tax in respect of which the appeal had been preferred, the authorities, after giving the assessee several adjournments, declined to admit the appeal.", "The question is whether the imposition of such a restriction by amendment of the section can affect the assessees right of appeal from a decision in proceedings which commenced prior to such amendment and which right of appeal was free from such restriction under the section asit stood at the time of the commencement of the proceedings.", "It was held that the new clause could not be given retrospective effect and accordingly the date of pre- sentation of the second appeal to the High Court was not the date which determined the applicability of the amended clause of the Letters Patent and that the date of the institution of the suit was the determining factor.", "The, above decisions quite firmly establish and our decisions in Janardan Reddy v. The State (1) and in Ganpat Rai v. Agarwal Chamber of Commerce Ltd. (2) uphold the principle that a right of appeal is not merely a matter of procedure. It is matter of substantive right.", "This right of appeal from the decision of an .inferior tribunal to a superior tribunal becomes vested in a party when proceedings are first initiated in, and before a decision is given by, the inferior court.", "In the language of Jenkins C.J. in Nana bin Aba v. Shaik bin Andu (supra) to disturb an existing right of appeal is not a mere alteration in procedure. Such a vested right cannot be taken away except by express enactment or necessary intendment. An intention to interfere with or to impair or imperil such a vested right cannot be presumed unless such intention be clearly manifested by express words or necessary implication.", "The true implication of the above observation as of the decisions in the other cases referred to above is that the pre-existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment. The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. As the old law continues to exist for the purpose of supporting the pre- existing right of appeal that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right. The argument that the authority has no option or jurisdiction to admit the appeal unless it be accompanied by the deposit of the assessed tax as required by the amended proviso to section 22(1) of the Act overlooks the fact of existence of the old law for the purpose of supporting the pre-existing right and really amounts to begging the question. The new proviso is wholly inapplicable in such a situation and the jurisdiction of the authority has to be exercised under the old law which so continues to exist."], "rank3": ["This Court granted special leave to appeal, but such leave was, by the order granting such leave, limited to the question of the effect of the amendment to section 22 of the Act on the petitioners appeal to the Sales Tax Commissioner, Madhya Pradesh. This Court took the view that the other questions sought to be raised by the assessee would have to be decided by the Sales Tax Commissioner in case the appeal succeeded.", "The relevant portion of section 22 as amended runs as follows-- 22. (1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order Provided that no appeal against an order of assessment, with or without penalty shall be admitted by the said authority unless such appeal is accompanied by a satisfactory proof of the payment of the tax, with penalty, if any, in respect of which the appeal has been preferred.", "And therefore the only question is, was the appeal to His Majesty in Council a right vested in the appellants at the date of the passing of the Act, or was it a mere matter of procedure ?", "It seems to their Lordships that the question does not admit of doubt. To deprive a suitor in a pending action of an appeal to a superior tribunal which belonged to him as of right is a very different thing from regulating procedure. In princi- ple, their Lordships see no difference between abolishing an appeal altogether and transferring the appeal to a new tribunal. In either case there is an interference with existing rights contrary to the well-known general principle that statutes are not to be held to act retrospectively unless a clear intention to that effect is manifested.", "The apppllants claimed that on the 7th October, 1920, when the suit was filed they had vested in them by the existing law a substantive right to a Letters Patent appeal from the decision of a Single Judge and that an intention to interfere with it, to clog it with a new condition or to impair or imperil it could not be presumed unless it was clearly manifested by express words or necessary intendment.", "In so far as the first ground is concerned it clearly runs counter to the decision of the Privy Council in Colonial Sugar Refining Co. Ltd. v. Irving (supra) and must be taken as overruled as Fawcett J", "The new proviso, it is pointed out, peremptorily requires the authority not to admit the appeal unless it be accompanied by a satisfactory proof of the payment of the tax in respect of which the appeal is preferred and this duty the authority must discharge at the time the appeal is actually preferred before him. The argument is that after the amendment the authority has no option in the matter and he has no jurisdiction to admit any appeal unless the assessed tax be deposited. It follows, therefore, by necessary implication, according to the learned Advocate, that the amended provision applies to an appeal from an assessment order made before the date of amendment as well as to an appeal from an order made after that date.", "In our view the above observation is apposite and applies to the case before us.", "The learned Advocate urges that the requirment as to the deposit of the amount of the assessed costs does not affect the right of appeal itself which still remains intact, but only introduces a new matter of procedure. \n He contends that this case is quite different from the case of Sardar Ali v. Dalmuddin (supra), for in this case it is entirely in the power of the appellant to deposit the tax if he chooses to do so whereas it was not within the power of the appellant in that case to secure a certificate from the learned Single Judge who disposed of the second appeal. In the first place the onerous condition may in a given case prevent the exercise of the right of appeal, for the assessee may not be in a position to find the necessary money in time. Further this argument cannot prevail in view of the decision of the Calcutta High Court in Nagendra Nath Bose v. Mon Mohan Singha (supra). No cogent argument has been adduced before us to show that that decision is not correct."], "rank4": ["Judicial Committee in Colonial. Sugar Refining Co., Ltd. v. Irving(1).", "Nana bin Aba v. Sheku bin Andu (1) and by the Privy Council itself in Delhi Cloth and General Mills Co. Ltd. v. Income-tax Commissioner, Delhi().", "Kirpa Singh v. Rasaldar Ajaipal Singh (3).", "It was there regarded as settled that the right of appeal was not a mere matter of procedure but was a vested right which inhered in a party from the com mencement of the action in the Court of first instance and such right could not be taken away except by an express provision or by necessary implication.", "Sardar Ali v. Dalimuddin (4)", "As against the last mentioned decision of the Calcutta High Court Sri Ganapathy Aiyar, appearing for the respondent, refers us to the decision of a Bench of the Bombay High Court in the case of Badruddin Abdul Rahim v. Sitaram Vinayak Apte (1), where it was held that the amendment of clause 15 of the Letters Patent operated retrospectively. That case followed an earlier decision of the same High Court in Fram Bomanji v. Hormasji Barjorji (2).", "The decision in the old case proceeded upon two grounds, namely, (1) that the question was one of procedure and (2) that sec- (1) (1928) I.L R. 52 Bom. 753 A.I.R. (1928) Bom. 371. (2) (1866) Bom. H.C. (O.C.J.) 49. tion 2 of the New Letters Patent of 1865 gave retrospective operation to the Letters Patent by making it applicable to all pending suits", "A similar argument was urged before the Calcutta Special Bench in Sardar Ali v. Dalimuddin (supra), namely, that after the amendment the court had no authority to entertain an appeal without a certificate from the Single Judge. (1) 1950 S.C.R. 941. (2) (1952) S.C.J. 564. Rankin C.J. repelled this argument with the remark at page 520- Unless the contrary can be shown, the provision which takes away jurisdiction is itself subject to the implied saving of the litigants right.", "Finally, Sri Ganapathy lyer faintly urges that until actual assessment there can be no lis and, therefore, no right of appeal can accrue before that event."], "rank5": ["As regards the second ground it is inapplicable to the case before us and it is not necessary to express any opinion as to the. soundness and validity of that ground. It may be mentioned here that in Shaikh Hasan Abdul Karim v. King Emperor (1) another Bench of the same High Court expressly dissented from the decision in Badruddin Abdul Rahim v. Sitaram Vinayak Apte (supra). \n The principle laid down in the Colonial Sugar Refining Co.s case (supra) was followed by a Special Bench of Madras in In re Vasudeva Samiar (2). A Full Bench of the Allahabad High Court in Ram Singha v. Shankar Dayal (3) fell into line and held that the earlier decision on this point of that Court in Zamin Ali Khan v. Genda (4) stood overruled by the Privy Council decision in the Colonial Sugar Refining Co.s case. A Full Bench of Nagpur High Court in Radhakisan v. Shridar (5 ) has also taken the same view. The Punjab High Court has also adopted the same line in Gordhan Das v. The Governor General in Council (1). The case of Nagendra Nath Bose v. Mon Mohan Singha Roy (7) is indeed very much to the point. In that case the plaintiffs instituted a suit for rent valued at Rs. 1,30615 and obtained a decree. In execution of that decree the defaulting tenure was sold on the 20th November, 1928, for Rs. 1,600. On the 19th December, 1928, an application was made, under Order XXI, rule 90 of the Code of Civil Procedure, by the present petitioner, who was one of the judgment-debtors, \n I.L.R (1945) Bom. 17. A I.R. (1929) Mad 381 56 M.L.J 369. (3) (1928) I.L.R. 50 All. 965 A.I.R. (1928) All. 437. (4) (1904) I.L.R. 26 All. 375. A.I.R. (1950) Nag. 177. A.I.R, (1952) Punjab 103 (F.B. ), (7) (1930) 34 C.W.N. 1009. for setting aside the sale."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["There can be no doubt that the right of appeal has been affected by the new provision and in the absence of an express enactment this amendment cannot apply to proceedings pending at the date when the new amendment came into force.", "the date to be looked into for this purpose is the date of the original proceeding which eventually culminated in the appeal.", "The new proviso is wholly inapplicable in such a situation and the jurisdiction of the authority has to be exercised under the old law which so continues to exist.", "There can be no doubt that the new requirement touches the substantive right of appeal vested in the appellant.", "For the purposes of the accrual of the right of appeal the critical and relevant date is the date of initiation of the proceedings and not the decision itself."], "rank2": ["That the amendment has placed a substantial restriction on the assessees right of appeal cannot be disputed, for the amended section requires the payment of the entire assessed amount as a condition precedent to the admission of its appeal.", "This right of appeal from the decision of an .inferior tribunal to a superior tribunal becomes vested in a party when proceedings are first initiated in, and before a decision is given by, the inferior court.", "In our view the above observation is apposite and applies to the case before us.", "the pre-existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment.", "In the first place the onerous condition may in a given case prevent the exercise of the right of appeal, for the assessee may not be in a position to find the necessary money in time.", "Nor can it be overlooked that such a requirement is calculated to interfere with or fetter, if not to impair or imperil, the substantive right.", "A provision which is calculated to deprive the appellant of the unfettered right of appeal cannot be regarded as a mere alteration in procedure.", "Indeed the new requirement cannot be said merely to regulate the exercise of the appellants pre-existing right but in truth whittles down the right itself and cannot be regarded as a mere rule of procedure."], "rank3": ["The question was answered in the negative by the Judicial Committee in Colonial. Sugar Refining Co., Ltd. v. Irving(1).", "To deprive a suitor in a pending action of an appeal to a superior tribunal which belonged to him as of right is a very different thing from regulating procedure. In princi- ple, their Lordships see no difference between abolishing an appeal altogether and transferring the appeal to a new tribunal. In either case there is an interference with existing rights contrary to the well-known general principle that statutes are not to be held to act retrospectively unless a clear intention to that effect is manifested.", "The principle of the above decision was applied by Jenkins \n J. in Nana bin Aba v. Sheku bin Andu (1) and by the Privy Council itself in Delhi Cloth and General Mills Co. Ltd. v. Income-tax Commissioner, Delhi().", "The, above decisions quite firmly establish and our decisions in Janardan Reddy v. The State (1) and in Ganpat Rai v. Agarwal Chamber of Commerce Ltd. (2) uphold the principle that a right of appeal is not merely a matter of procedure. It is matter of substantive right.", "Such a vested right cannot be taken away except by express enactment or necessary intendment.", "An intention to interfere with or to impair or imperil such a vested right cannot be presumed unless such intention be clearly manifested by express words or necessary implication.", "The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right.", "Further this argument cannot prevail in view of the decision of the Calcutta High Court in Nagendra Nath Bose v. Mon Mohan Singha (supra).", "The right that the amended section gives is certainly less than the right which was available before.", "It 1000 will appear from the dates given above that in this case the lis in the sense explained above arose before the date of amendment of the section. Further, even if the lis is to be taken as arising only on the date of assessment, there was a possibility of such a lis arising as soon as proceedings started with the filing of the return or, at any rate, when the authority called for evidence and started the hearing and the right of appeal must be taken to have been in existence even at those dates"], "rank4": ["if it be more than a matter of procedure, if it touches a right in existence at the passing of the Act,- it was conceded that, in accordance with a long line of authorities extending from the time of Lord Coke to the present day, the appellants would be entitled to succeed.", "A Full Bench of the Lahore High Court adopted it in Kirpa Singh v. Rasaldar Ajaipal Singh (3).", "the right of appeal was not a mere matter of procedure but was a vested right which inhered in a party from the com mencement of the action in the Court of first instance and such right could not be taken away except by an express provision or by necessary implication.", "Sardar Ali v. Dalimuddin (4)", "Now, the reasoning of the Judicial Committee in The Colonial Sugar Refining Companys case is a conclusive authority to show that rights of appeal are not matters of procedure, and that the right to enter the superior court is for the present purpose deemed to arise to a litigant before any decision has been given by the inferior court.", "In so far as the first ground is concerned it clearly runs counter to the decision of the Privy Council in Colonial Sugar Refining Co. Ltd. v. Irving (supra) and must be taken as overruled as Fawcett J. himself acknowledged at page 756.", "The principle laid down in the Colonial Sugar Refining Co.s case (supra) was followed by a Special Bench of Madras in In re Vasudeva Samiar (2).", "A Full Bench of the Allahabad High Court in Ram Singha v. Shankar Dayal (3) fell into line and held that the earlier decision on this point of that Court in Zamin Ali Khan v. Genda (4) stood overruled by the Privy Council decision in the Colonial Sugar Refining Co.s case.", "A Full Bench of Nagpur High Court in Radhakisan v. Shridar (5 ) has also taken the same view.", "The Punjab High Court has also adopted the same line in Gordhan Das v. The Governor General in Council (1).", "The case of Nagendra Nath Bose v. Mon Mohan Singha Roy (7) is indeed very much to the point.", "That a right of appeal is a substantive right cannot now be seriously disputed. It is not a mere matter of procedure.", "By requiring such deposit as a condition precedent to the admission of the appeal, a new restriction has been put on the right of appeal, the, admission of which is now hedged in with a condition.", "In the language of Jenkins C.J. in Nana bin Aba v. Shaik bin Andu (supra) to disturb an existing right of appeal is not a mere alteration in procedure.", "As the old law continues to exist for the purpose of supporting the pre- existing right of appeal that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right.", "No cogent argument has been adduced before us to show that that decision is not correct.", "Whenever there is a proposition by one party and an opposition to that proposition by another a lis arises. \n It may be conceded, though not deciding it, that when the assessee files his return a lis may not immediately arise, for under section 11 (1) the authority may accept the return as correct and complete. But if the authority is not satisfied as to the correctness of the return and calls for evidence, surely a controversy arises involving a proposition by the assessee and an opposition by the State. The circumstance that the authority who raises the dispute is himself the judge can make no difference, for the authority raises the dispute in the interest of the State and in so acting only represents the State."], "rank5": ["22. (1) Any dealer aggrieved by an order under this Act may, in the prescribed manner, appeal to the prescribed authority against the order Provided that no appeal against an order of assessment, with or without penalty, shall be entertained by the said authority unless it is satisfied that such amount of tax or penalty or both as the appellant may admit to be due from him, has been paid.", "It is clear from the language used in the proviso to section 22 (1) as it stood prior to the amendment that an aggrieved assessee had only to pay such amount of tax as he might admit to be due from him, whereas under the proviso to section 22(l) as amended the appeal has to be accompanied by satisfactory proof of payment of the tax in respect of which the appeal had been preferred.", "It was held that the new clause could not be given retrospective effect and accordingly the date of pre- sentation of the second appeal to the High Court was not the date which determined the applicability of the amended clause of the Letters Patent and that the date of the institution of the suit was the determining factor.", "As regards the second ground it is inapplicable to the case before us and it is not necessary to express any opinion as to the. soundness and validity of that ground.", "in Shaikh Hasan Abdul Karim v. King Emperor (1) another Bench of the same High Court expressly dissented from the decision in Badruddin Abdul Rahim v. Sitaram Vinayak Apte (supra).", "A similar argument was urged before the Calcutta Special Bench in Sardar Ali v. Dalimuddin (supra), namely, that after the amendment the court had no authority to entertain an appeal without a certificate from the Single Judge. (1) 1950 S.C.R. 941. (2) (1952) S.C.J. 564. Rankin C.J. repelled this argument with the remark at page 520- Unless the contrary can be shown, the provision which takes away jurisdiction is itself subject to the implied saving of the litigants right."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1953_26", "text": "CIVIL APPELLATE JURISDICTION Civil Appeal No. 204 of 1952. Appeal under article 132 (1) of the Constitution of India from the Judgment and Order dated 11th December, 1952, of the High Court of Judicature at Bombay (Chagla C.J. and Dixit J.) in Miscellaneous Application No. 289 of 1952. The material facts are stated in the judgment. P. Amin, Advocate-General of Bombay, (Ill. M. Desai and G. N. Joshi, with him) for the appellants. M. Seervai and J. B. Dadachanji for the res- pondents. 1074 \n C. Setalvad, Attorney-General for India, (Porus \n Mehta, with him) for the Union of India. Lal Narain Sinha for the State of Bihar. K. T. Chari, Advocate-General of Madras, (A. Kuppuswami, with him) for the State of Madras. R. Somnatha Iyer, Advocate-General of Mysore, (R. Ganapathy Iyer, with him) for the State of Mysore. Sen for the State of West Bengal. L. Misra, Advocate-General of Uttar Pradesh, \n B. Asthana, with him) for the State of Uttar Pradesh. M. Sikri, Advocate-General of Punjab, (M. L. Sethi, with him) for the State of Punjab. N. Subrahmanya Iyer, Advocate-General of Travancore-Cochin State, (M. R. Krishita Pillai, with him) for the State of Travancore-Cochin. 1953. March 30. The judgment of Patanjali Sastri C. J., Mukherjea and Ghulain Hasan JJ. was delivered by Patanjali Sastri C. J. Vivian Bose and Bhagwati JJ. delivered separate judgments. PATANJALI SASTRI C. J.-This is an appeal from the judgment and order of the High Court of Judicature at Bombay declaring the Bombay Sales Tax Act, 1952, (Act XXIV of 1952), ultra vires the State Legislature and issuing a writ in the nature of mandamus against the State of Bombay and the Collector of Sales Tax, Bombay, appellants herein, directing them to forbear and desist from enforcing the provisions of the said Act against the respondents who are dealers in motor cars in Bombay. \n The Legislature of the State of Bombay enacted the Bombay Sales Tax Act, 1952, (hereinafter referred to as ,the Act) and it was brought into force on October 9, 1952, by notification issued under section 1 (3) of the Act, except sections 5, 9, 10 and 47 which came into operation on November 1, 1952, as notified under section 2 (3). On, the same day the rules made by the State Government in exercise of the power conferred by section 45 of the Act also came into force. 1075 On November 3, 1952, the respondents 1 to 6, who are companies incorporated under the Indian Companies Act, 1913, and respondent No. 7, a partnership firm, all of whom are carrying on business in Bombay of buying and selling motor cars, presented a petition to the High Court under article 226 of the Constitution challenging the validity of the Act on the ground that it is ultra vires the State Legislature, inasmuch as it purported to tax sales arid purchases of goods regardless of the restrictions imposed on State legislative power by article 286 of the Constitution. It was also alleged that the provisions of the Act were discriminatory in their effect and, therefore, void under article 14 read with article 13 of the Constitution. The respondents accordingly prayed for the issue of a writ in the nature of mandamus against the appellants preventing them from enforcing the provisions of the Act against the respondents. \n A further ground of attack was added by amendment of the petition to the effect that the Act being wholly ultra vires and void, the provisions requiring dealers to apply for registration in some cases and to obtain a licence in some others as a condition of carrying on their business, infringed the fundamental rights of the respondents under article 19 (1) (g) of the Constitution. In the affidavit filed in answer the appellants traversed the allegations in the petition and contended, inter alia, that the Act was a complete code and provided for special machinery for dealing with all questions arising under it, including questions of constitutionality, and, therefore, the petition was not maintainable, that the present ease was not an appropriate one for the issue of a writ under article 226 as the validity of the imposition of a tax was questioned, that no assessment proceedings having been initiated against the respondents and no demand notice having been issued, the respondents had no cause of action, and that, properly construed, the Act and the Rules did not contravene article 286 or any other provisions of the Constitution and did not infringe any fundamental right of the respondents, 1076 The petition was heard by a Division Bench of the High Court consisting of Chagla C. J. and Dixit J. Chagla C. J., who delivered the judgment, Dixit J. concurring, overruled the preliminary objection disdistinguishing the decisions cited in support thereof by pointing out that the principle that a court would not issue a prerogative writ when an adequate alternative remedy was available could not apply where, as here, a party came to the court with an allegation that his fundamental rights had been infringed and sought relief under article 226. \n The learned Judges however thought, in view of the conclusion they had come to on the question of competency of the State Legislature to pass the Act, it was not necessary to consider the challenge that has been made to the Act under articles 14 and 19 and expressed no opinion on the alleged infringement of the respondents fundamental rights. On the merits, the learned Judges held that the definition of sale in the Act was so wide as to include the three categories of sale exempted by article 286 from the imposition of sales tax by the States, and, as the definition governed the charging sections 5 and 10, the Act must be taken to impose the tax on such sales also in contravention of article 286. The Act must, therefore, be declared wholly void, it being impossible to sever any specific offending provision so as to save the rest of the Act, as the definition pervades the whole Act and the whole scheme of the Act is bound up with the definition of sale. The learned Judges rejected the argument that the Act and the Rules must be read together to see whether the State has made a law imposing a tax in contravention of article 286, remarking that if the Act itself is bad,, the rules, made under it cannot have any greater efficacy. Nor was the Government, which was authorised to make rules for carrying out the purpose of the Act, under an obligation to exclude the exempted sales. The rules, too, did not exclude all the three categories of exempted sales but only two of them, and even such exclusion was hedged 1077 In view of the importance of the issues involved, notice of the appeal was issued to the AdvocatesGeneral of States under Order XLI, Rule 1, and many of them intervened and appeared before us. The Attorney-General of India, to whom notice was also sent, intervened on behalf of the Union of India. We have thus had the assistance of a full argument dealing with all aspects of the case. \n The Advocate-General of Bombay, appearing on behalf of the appellants, took strong exception to the manner in which the learned Judges below disposed of the objection to the maintainability of the petition. He complained that, having entertained the petition on the ground that infringement of fundamental rights was alleged, and that the remedy under article 226 was, therefore, appropriate, the learned Judges issued a writ without finding that any fundamental right had in fact been infringed. Learned counsel for the State of West Bengal also represented that parties in that State frequently got petitions under article 226 admitted by alleging violation of some fundamental right, and the court sometimes issued the writ asked for without insisting on the allegation being substantiated. We are of opinion that it is always desirable, when relief under article 226 is sought on allegations of infringement of fundamental rights, that the court should satisfy itself that such allegations are well founded before proceeding further with the matter. In the present case, however, the appellants can have no grievance, as the respondents allegation of infringement of their fundamental right under article 19 (1) (g) was based on their contention that the Act was ultra vires the State Legislature, and that contention having been accepted, by the Court below, there would clearly be an unauthorised restriction on the respondents right to carry on their trade, registration and licence being required only to facilitate collection of the tax imposed. \n As Mr. Seervai for the respondents rightly submitted, the fact that the Court below left the question undecided, though the point was concluded by the 1078 decision of this Court in Mohammad Yasin v. The Town Area Committee, Jalalbad (1), which was brought to the notice of the learned Judges, was not the fault of the respondents and gave no real cause for complaint. Before considering whether the appellant State has made a law imposing, or authorising the imposition of, a tax on sales or purchases of goods in disregard of constitutional restrictions on its legislative power in that behalf, it is necessary to ascertain the scope of such power and the nature and extent of the restrictions placed upon it by article 286. The power is conferred by article 246 (3) read with entry 54 of List 11 of the Seventh Schedule to the Constitution. The Legislature of any State has, under these provisions, the exclusive power to make laws for such State or any part thereof with respect to taxes on the sale or purchase of goods other than newspapers. The expression for such State or any part thereof cannot, in our view, be taken to import into entry 54 the restriction that the sale or purchase referred to must take place within the territory of that State. All that it means is that the laws which a State is empowered to make must be for the purposes of that State. \n As pointed out by the Privy Council in the Wallace Brothers case (2) in dealing with the competency of the Indian Legislature to impose tax on the income arising abroad to a non-resident foreign company, the constitutional validity of the relevant statutory provisions did not turn on the possession by the legislature of extra-territorial powers but on the existence of a sufficient territorial connection between the taxing State and what it seeks to tax. In the case of sales-tax it is not necessary that the sale or purchase should take place within the territorial limits of the State in the sense that all the ingredients of a sale like the agreement to sell, the passing of title, delivery of the goods, etc., should have a territorial connection with the State. Broadly speaking, local activities of buying or selling carried on in the State in relation to local goods would be a sufficient basis to sustain the taxing power of the State, provided of course, such (1) 1952 S.C.R. 572. (2) 1948 S.C.R. I 1079 activities ultimately resulted in a concluded sale or purchase to be taxed. In exercise of the legislative power conferred upon them in substantially similar terms by the Government of India Act, 1935, the Provincial Legislatures enacted sales-tax laws for their respective Provinces, acting on the principle of territorial nexus referred to above that is to say, they picked out one or more of the ingredients constituting a sale and made them the basis of their sales-tax legislation. Assam and Bengal made among other things the actual existence of the goods in the Province at the time of the contract of sale the test of taxability. \n In Bihar the pro- duction or manufacture of the goods in the Province was made an additional ground. A net of the widest range perhaps was laid in Central Provinces and Bert where it was sufficient if the goods were actually found in the Province at any time after the contract of sale or purchase in respect thereof was made. Whether the territorial nexus put forward as the basis of the taxing power in each case would be sustained as sufficient was a matter of doubt not having been tested in a court of law. And such claims to taxing power led to multiple taxation of the same transaction by different Provinces and cumulation of the burden falling ultimately on the consuming public. This situation posed to the Constitution makers the problem of restricting the taxing power on sales or purchases involving inter-State elements, and alleviating the tax burden on the consumer. At the same time they were evidently anxious to maintain the State power of imposing non-discriminatory taxes on goods imported from other States, while upholding the economic unity of India by providing for the freedom of inter-State trade and commerce. In their attempt to harmonise and achieve these somewhat conflicting objectives they enacted articles 286, 301 an 304. These articles read as follows 286. (1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place- 1080 (a) outside the State or (b) in the course of the import of the goods into, nor export of the goods out of, the territory of India. Explanation.-For the purposes of sub-clause (a), a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State. Except in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter-State trade or commerce Provided that the President may by order direct that any tax on the sale or purchase of goods which was being lawfully levied by the Government of any State immediately before the commencement of this Constitution shall, notwithstanding that the imposition of such tax is contrary to the provisions of this clause, continue to be levied until the thirty-first day of March, 1951. \n No law made by the Legislature of a State im- posing, or authorising the imposition of, a tax on the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community shall have effect unless it has been reserved for the consideration of the President and has received his assent. 301, Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free. Notwithstanding anything in article 301 or article 303, the Legislature of a State may by law- (a) impose on goods imported from other States any tax to which similar goods manufactured or 1081 produced in that State are subject, so, however, as not to discriminate between goods so imported and goods,, so manufactured or produced and (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President. It will be seen that the principle of freedom of inter- State trade and commerce declared in article 301 is expressly subordinated to the State power of taxing goods imported from sister States, provided only no discrimination is made in favour of similar goods of local origin. Thus the States in India have full power of imposing what in American State legislation is -called the use tax, gross receipts tax, etc. not to speak of the familiar property tax, subject only to the condition that such tax is imposed on all goods of the same kind produced or manufactured in the taxing State, although such taxation is undoubtedly calculated to fetter inter-State trade and commerce. In other words, the commercial unity of India is made to give way before the State-power of imposing any non-dis- criminatory tax on goods imported from sister States. Having thus provided for the freedom of inter-State trade and commerce subject to the important qualification mentioned above, the authors of the Constitution had to devise a formula of restrictions to be imposed on the State- power of taxing sales or purchases involving inter-State elements which would avoid the doubts and difficulties arising out of the imposition of sales-tax on the same transaction by several Provincial Legislatures in the country before the commencement of the Constitution. This they did by enacting clause (1) (a) with the Explanation and clause (2) of article 286. Clause (1) (a) prohibits the taxation of all sales or purchases which take place outside the State, 1082 but a localised sale is a troublesome concept, for, a sale is a composite transaction involving as it does several elements such as agreement to sell, transfer of ownership, payment of the price, delivery of the goods and. so forth, which may take place at different places. How, then, is it to be determined whether a particular sale or purchase took place within or outside the State ? \n It is difficult to say that any one of the ingredients mentioned above is more essential to a sale or purchase than the others. To solve the difficulty an easily applicable test for determining what is an outside sale had to be formulated, and that is what, in our opinion, the Explanation was intended to do. It provides by means of a legal fiction that the State in which the goods sold or purchased are actually delivered for consumption therein is the State in which the sale or purchase is to be considered to have taken place, notwithstanding the property in such goods passed in another State. Why an outside sale or purchase is explained by defining what is an inside sale, and why actual delivery and consumption in the State are made the determining factors in locating a sale or purchase will presently appear. The test of sufficient territorial nexus was thus replaced by a simpler and more easily workable test Are the goods actually delivered in the taxing State, as a direct result of a sale or purchase, for the purpose of consumption therein ? Then, such sale or purchase shall be deemed to have taken place in that State and outside all other States. The latter States are prohibited from taxing the sale or purchase the former alone is left free to do so. Multiple taxation of the same transaction by different States is also thus avoided. It is, however, argued on behalf of Bombay that the Explanation does not say that the State of delivery is the only State in which the sale or purchase shall be deemed to have taken place. \n If that was the intention, it would have been easy to say so. On the other hand, the non-obstante clause in the Explanation is said to indicate that, apart from cases covered by the legal fiction, the passing of property in the goods is to determine the place of sale. Thus, both the State of delivery 1083 and the State in which the property in the goods sold passes are, it is claimed, empowered to tax. We are unable to accept this view. It is really not necessary in the context to use the word only in the way suggested, for, when the Explanation says that a sale or purchase shall be deemed to have taken place in a particular State, it follows that it shall be deemed also to have taken place outside the other States. Nor can the non-obstante clause be understood as implying that, under the general law relating to the sale of goods, the passing of the property in the goods is the determining factor in locating a sale or purchase. Neither the Sale of Goods Act nor the common law relating to the sale of goods has anything to say as to what the situs of a sale is, though certain rules have been laid down for ascertaining the intention of the contracting parties as to when or under what conditions the property in the goods is to pass to the buyer. \n That question often raises ticklish problems for lawyers and courts, and to make the passing of title the determining factor in the location of a sale or purchase would be to replace old uncertainties and difficulties connected with the nexus basis with new ones. Nor would the hardship of multiple taxation be obviated if two States were still free to impose tax on the same tran- saction. In our opinion, the non-obstante clause was inserted in the Explanation simply with a view to make it clear beyond all possible doubt that it was immaterial where the property in the goods passed, as it might otherwise be regarded as indicative of the place of sale. It is also to be noted in this connection that, on the construction suggested by the Advocate-General of Bombay, namely, that the Explanation was not intended to deprive the State in which the property in the goods passed of its taxing power, but only to exclude the sales or purchases of the kind described in the Explanation from the operation of clause (1) (a) which prohibits taxation of outside sales or purchases, the Explanation would operate, not as an explanation, but as an exception or a proviso to that clause. It 1084 may be that the description of a provision cannot be decisive of its true meaning or interpretation which must depend on the words used therein, but, when two interpretations are sought to be put upon a provision, that which fits the description which the legislature has chosen to apply to it is, according to sound canons of construction, to be adopted provided, of course, it is consistent with the language employed, in preference to the one which attributes to the provision a different effect from what it should have according to its description by the legislature. \n It was then said that the formula of delivery for consumption within a State could only cover the com- paratively few cases of sales or purchases taking place directly between the consumers in the delivery State and dealers in other States, and inter-State sales or purchases between dealers in either State, which must be larger in number and volume, would still be outside the scope of the Explanation, which could not, therefore, have been intended to empower only one State, namely, the delivery State, to tax all inter-State sales or purchases. We see no force in this objection. It is to be noted that the Explanation does not say that the consumption should be by the purchaser himself. Nor do the words as a direct result have reference to consumption. They qualify actual delivery . \n The expression for the purpose of consumption in that State must, in our opinion, be understood as having reference not merely to the individual importer or purchaser but as contemplating distribution eventually to consumers in general within the State. Thus all buyers within the State of delivery from out-of-State sellers, except those buying for re-export out of the State, would be within the scope of-the Explanation and liable to be taxed by the State on their inter-State transactions. It should be remembered here that the Explanation deals only with interState sales. or purchases and not with purely local or domestic transactions. That these are subject to the taxing power of the State has never been questioned. We are therefore of opinion that article 286 (1) (a) read with the Explanation prohibits taxation of sales 1085 or purchases involving inter-State elements by all States except the State in which the goods are delivered for the purpose of consumption therein in the wider sense explained above. The latter State is left free to tax such sales or purchases, which power it derives not by virtue of the Explanation but under article 246 (3) read with entry 54 of List II. We will now consider the effect of article 286(2) on the taxability of inter-State sales or purchases of the kind envisaged by the Explanation to clause (1) (a). As both the Explanation and clause (2) deal only with inter-State transactions, it may appear at first blush that whatever taxing power the Explanation may have reserved to the state of delivery is nullified by clause (2), at any rate until Parliament chooses to lift the ban under the power reserved to it by the opening words of clause (2). As one way of avoiding this result I it was suggested by the Advocate- Gneral of Bombay that the expression inter-State trade and commerce in clause (2) may be construed as meaning dealings between a trader in one State and a trader in another, so that the clause would be applicable only to sales or purchases in the course of dealings between such traders. The ban under clause (2) could not in that view, affect the taxability of a sale by a trader in one State to a consumer or user in another. We cannot agree with this restrictive interpretation of the expression inter-State trade and commerce. The sale by a trader in one State to a user in another would be a sale in the course of inter-State trade according to the natural meaning of those words, and we can see no reason for importing the restriction that the transaction should be one between two traders only. \n This is, however, not to say that the ban under clause (2) extends to the taxing power which the delivery State is left free, under the Explanation, to exercise. We are of opinion that the operation of clause (2) stands excluded as a result of the legal fiction enacted in the explanation, and the State in which the goods are actually delivered for consumption can impose tax on inter-State sales or purchases. The effect of the 1086 Explanation in regard to inter-State dealings is, in our view, to invest what, in truth, is an inter-State transac- tion with an intrastate character in relation to the State of delivery, and clause (2) can, therefore, have no application. It is true that the legal fiction is to operate for the purposes of sub-clause (a) of clause (1), but that means merely that the Explanation is designed to explain the meaning of the expression outside the State in clause (1) (a). When once, however, it is determined with the aid of the fictional test that a particular sale or purchase has taken place within the taxing State, it follows, as a corollary, that the transaction loses its inter-State character and falls outside the purview of clause (2), not because the definition in the Explanation is used for the purpose of clause (2), but because such sale or purchase becomes in the eye of the law a purely local transaction. \n It is said that even though all the essential ingredients of a sale took place within one State and the sale was, in that sense, a purely intrastate transaction, it might involve transport of the goods across the State- boundary, and that would be sufficient to bring it within the scope of clause (2). We find it difficult to appreciate this argument. As already stated, the Explanation envisages sales or purchases under which out-of-State goods are imported into the State. That is the essential element which makes such a transaction inter-State in character, and if it is turned into an intrastate transaction by the operation of the legal fiction which blots out from view the inter-State element , it is not logical to say that the transaction, though now become local and domestic in the eye of the law, still retains its inter-State character. The statutory fiction completely masks the inter-State character of the sale or purchase which, as a collateral result of such making, falls outside the scope of clause (2). It is said that, on this view, clause (2) would become practically redundant, as clause (1) (a) read with the explanation as construed by us would itself preclude taxation by other States of inter-State sales or purchases of the kind referred to in the explanation. As 1087 We have already pointed out, the Explanation does not cover cases of inter-State sales or purchases under which the goods are imported into the State for reexport to other States and possibly other categories of sales or purchases which do not satisfy all the requirements of the explanation. Whether such transactions are sufficiently numerous for the Constitution to take note of is a matter of opinion and it cannot have much bearing on the question of construction. \n On the other hand there are, in our judgment, cogent considerations which tend to support the view we have expressed above that clause (2) was not intended to affect the power of the delivery State to tax inter-State sales or purchases of the kind mentioned in the Explanation. As we have seen, in our Constitution the principle of freedom of inter-State trade and commerce is made to give way before the State-power of imposing non-discriminatory taxes on goods imported from other States. Now, article 286(2) is but one phase of the protection accorded to interState trade and commerce from the fettering power of State taxation. \n As article 286 deals with restrictions on the power of the States to impose tax on the sale or purchase of goods, the Constitution makers evidently thought that it should contain also a specific provision safeguarding sales or purchases of an inter-State character against the taxing power of the States. It is however, reasonable to suppose that this particular form of protection to inter-State trade and commerce provided in article 286(2) was not intended to have a wider operation than what is contemplated in Part XIII which declares the general principle of freedom of inter-State commerce and defines the measure of constitutional protection it should enjoy. If such protection is intended to give way before the State-power of taxing goods imported from sister States, subject only to the condition against discrimination, it is legitimate to suppose that the ban under article 286(2) should not operate so as to nullify that power. True, article 304 (a) deals with the restrictions as to imposition of tax on goods, while article 1088 deals with the restrictions as to imposition of tax on sales or purchases of goods. But this distinc tion loses its practical importance in the case of sales-tax imposed by the delivery State under the conditions mentioned in the Explanation, for, if we look behind the labels at the substance of the matter, it becomes clear that a tax on sales or purchases imposed by the State in which the goods are delivered for consumption, in the sense already explained, is, in economic effect practically indistinguishable from a tax on the consumption or use of the goods. The words in which the goods have actually been delivered ensure that the goods have come into the State, and the expression for the purpose of consumption in the State shows that, though the tax is formally laid on sales, its incidence is aimed at the consumers in the State. Discussing the true nature of a duty of excise and a tax on the sale of goods, Gwyer C. J. observed in the Central Provinces and Berar Sales Tax case (1) It is common ground that the Court is entitled to look at the real substance of the Act imposing it, at what it does and not merely at what it says, in order to ascertain the true nature of the tax. Since writers on political economy are agreed that taxes on the sale of commodities are simply taxes on the commodities themselves, it is possible to regard a tax on the retail sale of motor spirit -and lubricants as a tax on those commodities. Therefore, sales-tax, the incidence of which is really directed against the consumer, is, in substance, a tax on the goods imposed, no doubt, on the occasion of the sale as a taxable event. \n It will now be seen why the Explanation insists on actual delivery of the goods in the State and their consumption in the State, and why an outside sale or purchase is explained by defining what is an inside sale. The object clearly is to assimilate the conditions, under which the delivery State is left free to tax inter-State sales or purchases, to those under which a State is empowered to impose tax on goods imported into the State from other States under article 304 (a). If then, a non-discriminatory use or consumption tax imposed under (1) 1939 F.C.R. 18, 42. 1089 article 304 on goods imported from other States does not infringe the freedom of inter-State commerce declared by article 301, parity of reason and policy requires that a tax on sales or purchases imposed by the State in which the goods are actually delivered for consumption in the State should not be regarded as violative of the ban under article 286 (2), and that is what the statutory fiction enacted in the Explanation was, in our judgment, designed to achieve by divesting the sale or purchase of the kind referred. to in the Explanation of its inter-State character in relation to the State of delivery. \n There is another important consideration which strongly supports the view we have indicated above, namely article 286 (2) does not affect the taxation of such sale or purchase by the State of delivery. If both the exporting State and the delivery State were entitled, notwithstanding article 286(2), to tax the inter-State sale or purchase, as suggested by the Advocate-General of Bombay, it would mean that the transaction is subjected to double taxation as compared with a sale by a local dealer which pays only one tax. It is precisely this type of discriminatory burden which the principle of freedom of inter-State commerce seeks to avoid, for, it places inter-State trade at a disadvantage in competition with local trade. \n On the other hand, if neither State could tax such sale or purchase as is referred to in the explanation, until Parliament lifted the ban, as the Advocate-General of Madras was inclined to think, the result would be that consumers could get out-of-State goods more cheaply than local goods, and local dealers would suffer competitive disadvantage as compared with outside dealers. Does the principle of freedom of inter-State commerce require that a State should foster such commerce to the detriment of domestic trade ? It is one thing to avoid impeding inter-State commerce by imposing discriminatory burdens upon it which internal trade does not have to bear, but quite another to place local products and local business at a disadvantage in competition with outside goods and dealers. It would be 1090 a curious perversion of the principle of freedom of inter-State commerce to drive local custom across the border to outside dealers, and that, in our opinion, could not have been contemplated. The view which we have expressed above avoids either anomaly and would place local trade and interstate trade on an equal footing. The delivery State would tax both local and out-of-State goods equally without discrimination against either and that, we think, is the only measure of protection which article 286 could reasonably be supposed to accord to interState sales or purchases, when it is construed in the light of articles 301 and 304. The question next arises as to whether the, Act contravenes all or any of the restrictions imposed by article 286. It is the respondents case that the sales and purchases made by them in Bombay, in the course of their business, include all the three categories excluded from the scope of State- taxation by article 286, and the Act seeking to bring all of them within its scheme of taxation is bad. It is, therefore, necessary to make a brief survey of the main provisions of the Act and of the rules made thereunder, in order to see whether the respondents complaint is well- founded, and, if so, whether the whole or any part of the Act is to be declared unconstitutional and void. The Act provides for levy of two kinds of taxes, called the general tax and the special tax, by the two charging sections 5 and 10 respectively. Dealer is defined in section 2 (7) as a person who carries on the business of selling goods in the State of Bombay whether for commission, remuneration or otherwise and includes a State Government which carries on such business and any society, club or association which sells goods to its members. The Expla- nation (2) to this definition provides that the manager or agent of a dealer who resides outside the State of Bombay and carries on the business of selling goods in the State of Bombay shall, in respect of such business, be deemed to be a dealer for the purpose of the Act. Sale is defined by section 2 (14) with all 1091 its grammatical variations and cognate expressions as meaning any transfer of property in goods for cash or deferred payment or other valuable consideration and includes any supply by a society, a club, or an association to its members on payment of price or of fees or subscriptions but does not include a mortgage, hypothecation, charge or pledge. The words buy and purchase are to be construed accordingly. \n There are two Explanations attached to this definition of which the second, which is obviously based on the Explanation to clause (1) (a) of article, 286, provides that the sale of any goods which have actually been delivered in the State of Bombay as a direct result of such sale for the purpose of consumption in the said State, shall be deemed, for the purposes of this Act, to have taken place in the said State, irrespective of the fact that the property in the goods has, by reason of such sale, passed in another State. Turnover is defined by section 2(21) as the aggregate of the amounts of sale price received and receivable by a dealer in respect of any sale of goods made during a given period after deducting the amount, if any, refunded by the dealer to a purchaser in respect of any goods purchased and returned by the purchaser within the prescribed period. Section 5 imposes the general tax on every dealer whose turnover in respect of sales within the State of Bombay during any of the three consecutive years immediately preceding the first day of April, 1952, has exceeded Rs. 30,000 or whose turnover in respect of such sales exceeds the said limit during the year commencing on the first day of April, 1952.\n The tax is to be levied on his taxable turnover in respect of sales of goods made on or after the appointed day, i.e., 1st November, 1952, at the rate of 3 pies in the rupee (section 6). By section 7 the taxable turnover is to be determined by first deducting from the turnover of the dealer in respect of all his sales of goods during any period of his liability to pay the general tax, his turnover during that period, in respect of (a) sales of any goods declared from time to time as tax-free under section 8 and(b) ,,such other sales as may be prescribed, No dealer 1092 liable to pay the general tax shall carry on business as a dealer unless he has applied for registration (section 9). \n A more or less similar scheme is provided for the levy of a special tax on the sale of certain special goods specified in Schedule II. By section 10 every dealer whose turnover in respect of sales of special goods made within the State of Bombay has exceeded Rs. 5,000 during the year ended 31st March, 1952, or exceeds the said limit during the year commencing from 1st April, 1952, is charged with a special tax at the rate specified in Schedule 11 on his taxable turnover in respect of the sales of special goods made on or after the appointed day, i.e., 1st November, 1952. By section II the taxable turnover is to be determined by first deducting, from the turnover of the dealer in respect of his sales of special goods during any period of his liability, his turnover in respect of (a) sales of special goods purchased by him, on or after the appointed day at a place in the State of Bombay from a dealer holding a licence under section 12 and (b) such other sales as may be prescribed. Every dealer liable to pay the special tax is required to obtain a licence as a condition of his carrying on his business (section 12).\n Then follow certain pro- visions for returns, assessment, payment and recovery of tax. Section 18 imposes a purchase tax at the rate of 3 pies in the rupee on the purchases of such goods as may be notified by the State Government from time to time which have been despatched or brought from any -place in India outside the State of Bombay or are delivered as a direct result of a sale to a buyer in, the State of Bombay for consumption therein, and also an additional tax if the goods are special goods. Section 21 (2) prohibits any person selling goods from collecting from the purchaser any amount by way of tax unless he is a registered dealer or a licensed dealer and is liable to pay the tax under this Act in respect of such sale. Chapter VI contains provisions for production of accounts, supply of information and cancellation of registration or licence. \n Chapter VII deals with proceedings including appeals 1093 and revision and the determination of certain questions of law by reference to the High Court. Section 45 empowers the State Government to make rules for carrying out the purposes of this Act. In particular, such rules may prescribe, among other things, the other sales, turnover in respect of which may be deducted from a dealers turnover in computing his taxable turnover as defined in section 7 and in section 11 sub-section (2) (e). In exercise of the powers conferred by this section, the State Government made and published rules called the Bombay Sales Tax Rules, 1952, which were brought into force on the same day on which the charging sections 5 and 10 of the Act were also brought into force, namely, November 1, 1952. Of these, Rules 5(1) and 6(1) are important, and they provide for the deduction of the following sales in calculating taxable turnover under section 7 (general tax) and section 11 (special tax) (1) sales which take place (a) in the course of the import of the goods into or export of the goods out of the territory of India or (b) in the course of inter-State trade or commerce. It is to be noted that these are the excluded categories of sales or purchases under article 286 (1) (b) and (2) respectively. \n Rule 5(2) (1) requires, as a condition of the aforesaid deductions, that the goods should be consigned by certain specified modes of transport. Clause (v) lays down a rule of presumption to be acted upon in the absence of evidence of actual consignment of the goods within three months of the sale, that the sale has not taken place in the course of export or of inter- State trade as the case may be. It is not necessary to refer to the provisions of the other rules. Now, it will be seen from the provisions summarised above that the Act does not in terms exclude from its purview the sales or purchases taking place outside the State of Bombay while it does include, by Explanation (2) to the definition of sale, the sales or purchases under which the delivery and consumption take place in Bombay which, by virtue of the Explanation to article 286(1)(a), are to be regarded as local 1094 sales or purchases. On the construction we have placed upon that Explanation, sales or purchases effected in Bombay in respect of goods in Bombay but delivered for consumption outside Bombay are not taxable in Bombay. \n Now, the respondents complain that the latter category of sales or purchases thus held not to be taxable are not expressly excluded by the Act which, therefore, contravenes article 286 (1)(a). No doubt, there is no provision in the Act excluding in express terms sales of the kind referred to above, but neither is there any provision purporting to impose tax on such sales or purchases. On the other hand, the two charging sections of the Act, section 5 and section 10, purport, in express terms, to impose the tax on all sales made within the State of Bombay, and section 18, which lays the tax on purchases, is limited in its operation to purchases of goods delivered to a buyer in the State of Bombay for consumption therein, that is to say, to purchases which unquestionably are taxable by Bombay according to both parties. The charging sections cannot, therefore, be taken to cover the class of sales or purchases which, on our construction of the Explanation, are to be regarded as taking place outside the State of Bombay. \n We see no force, therefore, in the argument that the Act contravenes the provisions of article 286(1)(a) by purporting to charge sales or purchases excluded by that article from State- taxation. As regards the other two categories of sales or purchases excluded by article 286(1)(b) and (2), it is true that the Act taken by itself does not provide for their exclusion. But, as pointed out already, rules 5 and 6, which deal respectively with deduction of certain sales in calculating the taxable turnover under sections 7 and 11 exclude these two categories in express terms, and these rules were brought into force simultaneously with the charging sections 5 and 10 on November 1, 1952. \n The position, therefore, was that, on the date -when the general tax and the special tax became leviable under the Act, sales or purchases of the kind described under article 286(1) (b) and (2) stood in fact excluded from taxation, and the State of 1095 Bombay cannot be considered to have made a law imposing or authorising the imposition of a tax on sales or purchases excluded under the aforesaid clauses of article 286. The Act and the rules having been brought into operation simultaneously, there is no obvious reason why the rules framed in exercise of the power delegated by the Legislature should not be regarded as part of the law made by the State. See observations at page 862 in the Delhi Laws Act case(1). \n The position might be different if the rules had come into operation sometime later than the charging sections of the Act, for, in that case, it is arguable that if the legislation, without excluding the two classes of sales or purchases, was beyond the competence of the Legislature at the date when it was passed, the exclusion subsequently effected by the rules cannot validate such legislation. But, as already stated, that is not the position here, and the learned Judges below fell into an error by overlooking this crucial fact when they say If the Legislature had no competence on the date the law was passed, the rules subsequently framed cannot confer competence on the Legislature. Even so, it was contended, the exclusion of the sales covered by clause (1)(b) and clause (2) of article 286 was hedged round with conditions and qualifications which neither the Legislature nor the rule-making authority was competent to impose on the exclusion and, therefore, such rules, even if read as part of the Act, could not cure the constitutional transgression. The conditions and qualifications complained of are mostly found to relate to mere matters of proof, e.g., rule 5(2), Explanation (2), which insists on the production of a certificate from an appropriate authority, before a motor vehicle, despatched to a place outside the State of Bombay by road and driven by its own power, could be exempted as an article sold in the course of interState trade. No objection can reasonably be raised if the taxing authority insists on certain modes of proof being adduced before a claim to exclusion can be allowed. Objection was also taken to clause (1) of (1) 1951 S.C.R. 747. 1096 sub-rule (2) of rule 5 as imposing an unauthorised limi- tation upon the exemption of sales and purchases allowed by rule 5(1), that is to say, while rule 5(1)(1) (allows the deduction of the sales covered by clause (1) (b) and (2) of article 286 in calculating taxable turnover, sub-rule (2) (1) of the same rule provides that, in order to claim such deduction the goods shall be consigned only through a railway, shipping or aircraft company or country boat registered for carrying cargo or public motor transport service or by registered post. \n It is said that there is no reason why sales of goods despatched by other modes of transport should not also be deducted from the taxable turnover, because article 286 (2) in exempting sales in the course of inter-State trade, makes no distinction between modes of transport by which the goods are despatched. This limitation, it was claimed, was beyond the competence of the rule-making authority. The argument is not without force, and it must be held that rule 5(2)(1) is ultra vires the rule-making authority and therefore void. But it is clearly severable from rule 5(1)(1). The restriction regarding the mode of transport of the goods sold or purchased in the course of inter-State trade, to which alone sub-rule (2)(1) relates, can be ignored and the exemption under rule 5(1)(1) may well be allowed to stand. Finally, Mr. Seervai attempted to make out that the provisions of the charging sections 5 and 10 fixing Rs. 30,000 and Rs. 5,000 as the minimum taxable turnover for general tax and special tax respectively were discriminatory and void under article 14 read with article 13 of the Constitution, and he gave us several tables of figures showing how the imposition of the tax actually works out in practice in hypothetical cases. \n It is unnecessary to go into. the details of these cases which have been worked out in figures, for it must be conceded that the general effect of fixing these minimum limits must necessarily be to enable traders whose taxable turnover is below those limits to sell their goods at lower prices to their customers than dealers whose turnover exceeded 1097 those limits, for the latter have to add the sales-tax to the prices of their goods. But no discrimination is involved in this classification which is perfectly reason-, able when it is borne in mind that the State may not consider it administratively worthwhile to tax sales by small traders who have no organisational facilities for collecting the tax from their buyers and turn it over to the Government. Each State must, in imposing a tax of this nature, fix its own limits below which it does not consider it administratively feasible or worthwhile to impose the tax. It is idle to suggest that any discrimination is involved in such classification. Apart from the considerations set forth above which tend to support the constitutional validity of the Act, it was broadly contended before us that taxing statutes imposing tax on subjects divisible in their nature which do not exclude in express terms subjects exempted by the Constitution, should not, for that reason, be declared wholly ultra vires and void, for, in such cases, it is always feasible to separate taxes levied on authorised subjects from those levied on exempted subjects and to exclude the latter in the assessment of the tax. In such cases, it is claimed, the statute itself should be allowed to stand, the taxing authority being prevented by injunction from imposing the tax on subjects exempted by the Constitution. Our attention was called to certain American cases where this principle has been consistently followed (see Bowman v. Continental Company(1), where all the pre- vious cases are collected). In the present case the tax is imposed, in ultimate analysis, on receipts from individual sales or purchases of goods effected during the accounting period, and it is therefore possible to separate at the assessment the receipts derived from exempted sales or purchases and allow the State to enforce the statute with respect to the constitutionally taxable subjects, it being assumed that the State intends naturally to keep what it could lawfully tax, even where it purports to authorize the taxation of what is constitutionally exempt. The principle, as it (1) 256 U.S. 642 65 L. Ed. 1098 is tersely put in the American case, is that severability in such cases includes separability in enforcement. \n Our attention was drawn to the decision of the Privy Council in Punjab Province v. Daulat Singh and Others(1) as condemnatory of this principle. The case is however, clearly distinguishable. Their Lordships were dealing with a Provincial enactment providing for the avoidance of benami transactions as therein specified and the question was whether it was ultra vires the Legislature as contravening section 298(1) of the Government of India Act, 1935, which forbade the prohibition, inter alia, of disposition of property by an Indian subject on certain grounds which included descent. It was found that in some cases the impugned enactment would operate as a prohibition on the ground of descent alone. The Federal Court(1) by majority expressed the view that the Act could not, for that reason, be invalidated as a whole but that the circumstances in which its provisions would be inoperative must be limited to cases where the statute actually operated in contravention of the constitutional inhibition. \n Disagreeing with this view their Lordships made the following observations which were strongly relied on before us The majority of the Federal Court appear to have contemplated another form of severability, namely, by a classification of the particular cases on which the impugned Act may happen to operate, involving an inquiry into the circumstances of each individual case. \n There are no words in the Act capable of being so construed, and such a course would in effect involve an amendment of the Act by the court, a course which is beyond the competency of the court, as has long been well established. The subject of the constitutional prohibition was single and indivisible, namely, disposition of property on grounds only of (among other things) descent and if, in its actual operation, the impugned statute was found to transgress the constitutional mandate, the whole Act had to be held void as the words used (1) 1946 F.C.R. 1. (2) 1942 F.C.R. 67. 1099 covered both what was constitutionally permissible and what was not. The same principle was applied by this court in the Cross Roads case(1). It was, indeed, applied also in Bowmans case(1) with respect to the licence tax imposed generally on the entire business conducted including inter- State commerce as well as domestic business, but was not applied, as stated above, with respect to excise tax which was laid on every gallon of gasolene sold and was thus divisible in its nature. It is a sound rule to extend severability to include separability in enforcement in such cases, and we are of opinion that the principle should be applied in dealing with taxing statutes in this country, We accordingly set aside the declaration made by the court below and quash the writ issued by it except in regard to rule 5 (2) (1). An injunction shall, however, issue restraining the appellants from imposing or authorising the imposition of a tax on sales and purchases which are exempted from taxation by article 286 as interpreted above. Each party will bear its own costs throughout. BOSE J.-I have had the advantage of reading the judgments of my Lord the Chief Justice and my learned brother Bhagwati. I regret I am unable to agree with either. The range of disagreement is not large but unfortunately it vitally affects the result. \n I agree with the construction which my Lord has placed upon entry No. 54 of List II. I also agree that the object of the Explanation is to fix the locus of a sale or purchase by means of a fiction, but with respect I cannot agree with my brother Bhagwati that the non-obstante clause enunciates the general law on this point. I know of no general law which fixes the Situs of a sale, not even the Sale of Goods Act. What the general law does is to determine the place where the property passes in the absence of a special agree- ment, but the place where the property passes is not necessarily the place where the sale takes place, nor (1) 1950 S.C.R. 594 (2) 256 U.S. 642, 1100 has that ever been regarded as the determining factor. What, in my opinion, happened was this. Before the passing of the Constitution, different States (or Provinces as they then were) claimed the right to tax the same transaction for a variety of reasons which have been pointed out by my Lord the Chief Justice. The result was that the price of certain commodities became inordinately high. \n Take, for example, the case of steel rails manufactured by the Tata Iron and Steel Works at Tatanagar and purchased by the Government of India for its railways. The Central Government found itself called upon to pay a sale or purchase tax to different States on a single transaction of purchase. I am not sure how many times over it had to pay but on the notions then current it was open to Bihar to claim the right to tax because the goods were manufactured there, to Bengal because the transaction of sale took place at Calcutta where the head offices of the company were, to a third Province because the goods were delivered there and to a fourth because they were found there. It hardly matters whether all or any of this would have stood scrutiny in a court of law because the fact remains that various States were actually taxing the one transaction of sale on the nexus theory. and a real danger existed of more and more of them coming in to claim a share of the spoils. It seems to me that the Constitution makers considered this detrimental to the development and exercise of trade and commerce and so determined to put a stop to the practice but at the same time left Parliament a discretion to restore a part of the status quo if and when it should think it safe and desirable to do so. The narrowing of the powers was accomplished by stating in article 286 that no State can impose a tax on a sale or purchase which takes place outside the State, by stating that it cannot tax a sale or purchase in the course of import or export and by prohibiting taxes on sales and purchases which take place in the course of inter-State trade or commerce unless Parliament chooses to lift the ban. Reading these together 1101 in a simple and straightforward way it seems clear to me that the idea was to permit States to tax only what I might call intra-state sales and purchases, at, any rate, to begin with. \n But in legal enactments simplicity of language seldom evokes clarity of thought. So long as the ban imposed by clause (2) remains, there is no difficulty because when parts of a sale take place in different States the transaction is inter-State and no tax can be imposed. On the other hand, when all the ingredients are intrastate clause (2) is not attracted. Complications only arise when the ban is lifted. The Constitution makers had before them the existing practice of the States based on the nexus theory, and so it became necessary to define just where a sale takes place in order to carry out the main theme that only intra-astate sales can be taxed. The difficulty is apparent when one begins to split a sale into its component parts and analyse them. When this is done, a sale is found to consist of a number of ingredients which can be said to be essential in the sense that if any one of them is missing there is no sale. \n The following are some of them (1) the existence of goods which form the subject-matter of the sale, (2) the bargain or contract which, when executed, will result in the passing of the property in the goods for a price, (3) the payment, or promise of payment, of a price, (4) the passing of the title. When all take place in one State, there is no diffi- culty. The situs of the sale is the place in which all the ingredients are brought into being. But when one or more ingredients take place in different States, what criterion is one to employ ? It is impossible to say that any of these ingredients is more essential than any other because the result is always the same the moment you take one away. There is then no sale. Therefore, one either has to adopt the ultra logical view and hold that the only State which can tax is the one in which all the ingredients take place and that no State can tax when a single ingredient 1102 takes place elsewhere, or resort to the old view and hold that every State in which any single ingredient -takes place can tax. The only alternative to these extremes is to make an arbitrary selection or to introduce a fiction. \n The Constitution chose the latter course and enacted the Explanation. I have deemed it proper to refer to the then existing practice regarding taxation because in construing a statute it is legitimate to take into account existting laws and the manner in which they were acted upon and enforced. See Gwyer C. J. in In re The Central Provinces and Berar Act No. XIV of 1938(1) and Croft v. Dunphy(2). I think this rule is even more appropriate in the case of the Constitution because the Constitution itself continues in force all laws which were in existence at the date when it came into being except those which are inconsistent with itself. I am with respect unable to agree that article 286 (2) is to be interpreted in the light of article 304 (a). In my opinion, the two articles deal with different things. Article 286 is concerned with sales and purchases, while article 304 relates to goods imported from other States. The stress in the one case is on the transaction of sale or purchase in the other, on the goods themselves and on the act of import. Article 286 is related to Entry No. 54 of List II and to Entries 41 and 42 in List I. Article 304(a) to Entries 26 and 27 of List II read with Entry 33 in List III and to Entries 51, 52 and 56 of List II. The distinc- tion is, I think, clear when it is realised that (apart from the Explanation) a sale or a purchase can be taxed even though the goods are never actually delivered and even if they never reach the taxing State, for the right is to tax the sale or purchase and that is something quite independent of actual delivery. The goods might be destroyed by flood or fire before there is any chance of actual delivery. They might, as in the case of the steel rails purchased by the (1) 1939 F.C.R. 18 at 53. (2) 1933 A.C. 156 at 165. 1103 Government of India, be delivered in a totally different State, but the tax could still be levied if there was no Explanation to stop it. I find it difficult to see how,,, article 286(2) could ever come into effective play if article 304 is applied to sales and purchases which take place in the course of inter-State trade or commerce. -A I do not think the change in language, a tax on the sale or purchase of any goods in the one case and a tax on goods imported from other States was accidental, nor do I think we will be justified in ignoring the fact that the two are placed in different parts of the Constitution. I therefore prefer to hold that articles 286 and 304 deal with different things and to construe article 286 without reference to 304. In this I agree with my brother Bhagwati. Coming back to the Explanation, its object is, I think, to resolve the difficulty regarding the situs of a sale. The Constitution having decided that the only State which can tax a sale or a purchase is the State in which the transaction takes place, and having before it the conflict of views regarding nexus and Situs, resolved the problem by introducing the fiction embodied in the Explanation. The purpose of the Explanation is, in my view, to explain what is not outside the State and therefore what is inside. \n With respect I cannot agree that the Explanation is really an exception, and I do not think the non-obstante clause means that under the general lay the lace where the property passes was regarded as the place where the sale takes place, for that in itself would be a fiction. There is no such law. In my opinion all it means is that there was a school of thought which regarded that as the crucial element on the nexus view and that the Constitution has negatived that idea. I am also unable to agree that the Explanation governs clause (2) of article 286, for it limits itself in express terms to sub-clause (a) of clause (1). It says that is an Explanation for the purposes of sub-clause (a). In view of that I do not feet justified in carrying it over to clause (2) and holding that it governs there as well. In my judgment, the only purpose of the 1104 Explanation is to explain where the situ8 of a sale is. clause (2) has a different object. Its purposes to prohibit taxation on sales and purchases which take place in the course of inter-State trade or commerce. If the Explanation is carried over to clause (2) it must, in my judgment, be equally applicable to subclause (b) of clause (1). As I understand the argument, the reasoning is this. The Explanation turns an inter-State sale into an intra-state sale by means of a fiction. \n Having served its purpose it follows as a corollary that there is no inter- State transaction left and so clause (2) is not called into play. In my opinion, by parity of reasoning, if the sale is intra- state and cannot now be regarded as external to the State, it equally cannot be said to take place in the course of export or import in a case of that kind, for export and import predicate the movement of goods across a boundary just as surely as inter-State trade and commerce. But such a contention would militate against our decision in The State of Travancore-Cochin Others v. The Bombay Co. Ltd.(1). This line of reasoning does not appeal to me for another reason also. It concentrates on the situs of the sale and does not give sufficient weight to the words in the course of . When we apply a fiction all we do is to assume that the situation created by the fiction is true. Therefore, the same consequences must flow from the fiction as would have flown head the facts supposed to be true been the actual facts from the start. Now, even when the situs of a sale is in truth and in fact inside a State, with no essential ingredient taking place outside nevertheless if it takes place in the course of inter-State trade and commerce, it -will be hit by clause (2) just as surely as it is hit by sub-clause (b) when it takes place in the course of export or import. When we examine clause (2) and sub-clause (b), it is not enough, in my judgment, to see where the. sale took place. \n we have also to see (1) 1952 S.C.R. 1112. whether it was in the course of inter-state trade and commerce in the one case, or in the course of export or import in the other, for the stream of inter-State trade and commerce, as also that of export and import, will catch up in its vortex all sales which take place in its course wherever the situs of the sale may be. All that the Explanation does is to shift the sutis from point A or B or C in the stream to a point X, also in the stream. It does not lift the sale out of the stream in those cases where it forms part of the stream. I have also another criticism to meet. The Explanation can only come into play when the transaction is in truth and in fact inter-State, and the argument runs that if clause (2) is to ban taxation in every such case, the Explanation becomes useless. The answer to that is two-fold. Clause (2) has a proviso. Under it the President is empowered to direct the continuation for a period of a tax which was being lawfully levied at the date of the Constitution even though the transaction is of an inter- State character and we find that in some of the cases which have come before us that was done the moment the Constitution came into force. Therefore, the Explanation operated from the start on that kind of case. But of course that means that the empowering can only be in favour of the State in which the, goods are actually delivered for the purpose of consumption in that State as a direct result of a purchase or sale effected for that purpose. It will be noticed that the proviso is limited to cases in which the imposition of the tax would be contrary to this clause, that is clause (2) and not to the Explanation to clause (1)(a). \n In the second place, Parliament is empowered to lift the ban imposed by clause (2). So long as the ban exists there is no need for the Explanation, for the explanation only covers sales or purchases which are inter-State. But the moment the ban is lifted, the difficulties I have mentioned above arise and have to be met. I am clear that the Constitution makers envisaged this and resolved the doubts in the manner 1106 I have indicated nor can I see anything inconsistent or illogical in this. The-basic idea is to prohibit taxation in the case of inter-State trade and commerce unless and until the ban under clause (2) is lifted - and always in the case of exports and ,imports and when the ban is lifted, the Explanation is there to settle a matter of considerable controversy regarding the situs of a sale. It is true it makes an arbitrary selection but then almost any selection would have to be arbitrary and this is as good as any other. The question how ever arises what is to happen to clause (1)(a) while the ban lasts if the Explanation is to be ignored during that period ? How is the situs of a sale to be determined in the difficult class of cases which arose before the Constitution and which, in my view, occasioned the ban. \n My answer is that class of case can only arise in the course of inter-State trade and commerce, for the moment any one of the essential ingredients of a sale occurs in a State different from the taxing State and the goods are contracted to move across a boundary, you get a sale in the course of inter-State trade and commerce. Therefore, the problem about situs does not arise. Sales and purchases which are in truth and in fact intrastate (and the bulk of sales and purchases in the States are of that character) can of course be taxed. The ban does not apply and there is no need to call in aid the Explanation, for I repeat that the Explanation is limited to cases which in truth and in fact take place in the course of inter-State trade and commerce. On the view I take the need for the Explanation only arises when the ban is lifted. I now come to matters of greater detail What do the words for the purpose of consumption mean? This is best understood by reference to a concrete case A, a dealer in Bombay, actually delivers goods to B, a dealer in Madras, for the purpose of sale by B, the Madras dealer, to purchasers C, D and E in Madras. Can either the sale by A to B or the purchase by B 1107 from A be taxed? In my view, it cannot, for B is in my judgment, as much a consumer as C, D and E. It is true the word can be used in a wide as well as a narrow sense but I see no reason to restrict its meaning in the present case. What after all does consumption mean? In its economic sense it is just the use which a purchaser chooses to make of the goods purchased for his own purposes. He does not have to destroy them nor does he have to diminish their value or utility.\n A man who purchases a valuable piece of sculpture or painting for preservation in a national museum does not destroy it nor does he use it himself except for the purposes of presenting it to the museum. But he is a consumer. In the same way, a man who purchases goods for use in his business so that his business can be carried on by the constant feeding of a stream uses the goods and therefore consumes them even though he does not keep them himself. This of course means that a dealer who purchases from another dealer outside the State is a consumer and can be taxed if the ban is lifted even if he purchases for reexport outside the State. But when he re-exports, his sale to the outside consumer cannot be taxed if the Explanation is attracted. I cannot agree that goods cannot be consumed more than once. it all depends on how you view the matter. Little fishes swallow smaller fishes and are in turn eaten by fishes larger than themselves. In the end, the smallest of the series is consumed by the biggest. Consider the case of a curio dealer who collects antiques for the purposes of sale. The older they are and the more they have been used, the more valuable they become, but that would not prevent them from being consumed over again when a collector buys them for display in his house. Broadly speaking, the object here is to stop multiple taxation on any single act of sale or purchase made in the course of inter-state trade and commerce. \n I would therefore construe consumption to mean the usual use made of an article for the purposes of trade and commerce. When dealer buys from dealer that is consumption 1108 for the purposes of the purchaser dealers trade when an ultimate purchaser buys from a retailer, that is also consumption for his purposes. Therefore, in my judgment, neither the sale by A to B in the illustration put nor the purchase by B from A can be taxed so long as the ban under clause (2) remains. But the sales by t to C, D and E can each be taxed by the State of Madras as they are intra-state sales. If this is found to work hardship on the States in practice, then Parliament, which has been given the power to regulate inter-State trade and commerce under Entry 42 of List 1, can step in and lift the ban. In that event, the Explanation comes into play and Madras can tax both transactions but Bombay cannot. On the other hand, if A, the Bombay dealer, sells direct to the consumers C, D and E in Madras and actually delivers the goods to them for the purpose of consumption in Madras, neither State can tax unless the ban is lifted, and then Madras alone will be able to tax. Next, what do the words actually been delivered mean? In the normal course, a dealer in Bombay, who sends goods either to a dealer or consumer in Madras, would put them on a train or send them by a public or a private carrier. The cases in which a dealer would take them himself to Madras and hand them over in person or send one of his own men there would be exceptional. In the former class of case, the carrier would normally be regarded as the agent of the Madras purchaser and the result would be that delivery would in that event be deemed to be delivery in Bombay and that would give Bombay the right to tax and not Madras. See Badische Anilin Und Soda Fabrik v. Basle Chemiral Works, Bindschedler (1), Badische Anilin Und Soda Fabrik v. Hickson (2). But such a construction would make the Explanation useless. I think that is the reason why the words actually and consumption have been used. \n If the normal rule were to apply, there would be no need for the word actual, as delivery to the carrier in Bombay would of course (1) 1898 A.C. 200. (2) 1906 A.C. 419. 1109 be actual in the sense that it would be physical and not notional. I think therefore that the words actually delivered and as a direct result of the sale or purchase for the purpose of consumption in the State have been used to signify that in such a case the carrier must be regarded as the agent of the Bombay seller. So far as the words in the course of in clause (2) are concerned, the course we have to consider is the course of the inter-State trade and commerce. In my opinion, the inter-State character of the course ends when the goods reach the first consumer in the taxing State. When he in turn sells to the ultimate consumer in that State, a different course begins, namely the course of intra-state trade. It is necessary to draw this distinction because inter-State trade and commerce is a matter for the Centre, intra-state for that of the States. We have therefore to determine where the inter-State course ends and the intra-state course begins. I think the point at which I have drawn the line is logical and convenient. I do not think the same considerations will apply in the next set of cases where we are dealing with the TravancoreCochin law relating to export and import. But it is not necessary to explain why in this case. It was contended in argument that the view I take of the ban on inter-State trade and commerce imposed by clause (2) would place the local dealer at a disadvantage. But that would only arise in one class of case and I cannot see how inequality of this kind can be avoided in every case even on my Lord the Chief Justices view. There are bound to be some in. equalities, whichever view is taken. Consider these concrete cases. We have A, a dealer in Bombay, B, a dealer in Madras, and C, a consumer also in Madras. If A sells directly to C in such a way as to satisfy the Explanation, then. assuming always that the ban is still in existence, this sale is not taxable on my view. But if B in Madras sells to C in, Madras, it is. Of course, B is then at a disadvantage vis-a-vis A. But so is A vis-a- vis B with regard to 1110 consumers in Bombay. \n Consequently the tendency of ,the consumer in one State to buy from a cheaper market in the other evens up in the long run. But that apart, what happens on my Lord the Chief Justices view? A very large volume of the feasibly taxable trade in this country, if not the bulk of it, at any rate in most States, is in the hands of retail dealers resident in the various States. They obtain their wares from wholesale importers or large dealers in other States. In the illustration I have put above, if B in Madras gets his goods from A in Bombay, then, on the learned Chief Justices view, B pays a purchase tax on his purchase from A and again a sales tax on his sale to the consumer C. The consumer is therefore saddled with a double tax. But if C, still in Madras, purchases direct from A in Bombay, there is only one tax in the transaction on my Lords view. That still gives A an advantage over B. Therefore, there is a large class of cases in which the local dealer is at a disadvantage even on the other view. The only class of case in which the local dealer is not at a disadvantage on my Lords view, and is on mine, is when the goods are manufactured locally. In that event, B, the manufacturer in Madras, pays no initial sales tax. He only pays when he sells to the consumer C in Madras. If the goods can also be manufactured locally in Bombay, then the dealer A in Bombay does have a theoretical advantage over the dealer B in Madras. But if the goods cannot also be manufactured in Bombay, the advantage disappears, for A then pays an initial tax on his purchase from the outside State. I do not think considerations of this kind should influence the construction of these articles because, in the first place, some inequalities are inevitable and, in the next, the disadvantage is more theoretical than practical. For example, a wholesale importer, who also chooses to sell retail in the State of import, has a theoretical advantage over retailers who have to buy 1111 through him. But that did not prevent this Court from holding in The State of Travancore -Cochin Others v. The Bombay Co. Ltd.(1) that the sale which occasioned his import is free of tax. So here. \n I do not think this consideration should weigh. But apart from this, the matter is, I think, largely theoretical save perhaps in a few exceptional cases. In this class of case, the trade usually adjusts its own differences by allowing the local dealer a discount in fact, in the case of many commodities, local dealers have to give an undertaking not to sell below a certain price in order to maintain a steady price level over the local market and avoid cut throat competition. That is how most of the large motor agencies work, and the same applies to radios and petrol and kerosene oil. The price the ultimate consumer pays is the same wherever he purchases in a given area. Also the type of consumer who will take the trouble to buy in a cheaper foreign market with all the annoyances of delay, transport, octroi and other import restrictions, is small. Most people prefer to pay the extra price and save themselves endless trouble. I now come to the impugned legislation-the Bombay Sales Tax Act (No. XXIV of 1952). As mine is a dissenting view which will not affect the result, I will content myself with very briefly indicating why I consider the Act, or at any rate the relevant provisions in it, ultra vires, and to begin with I will ignore the rules altogether and consider what would happen if the rules were not there at all or had been brought into existence after the Act. The taxing sections 5 and 10 empower a levy of tax on all sales made within the State of Bombay when the turnover reaches a certain figure. This would include sales made in the course of inter-State trade and commerce, sales made in the course of export and import and sales falling within the Explanation made to consumers in outside States. As I have explained above, the mere fact that a sale is made in the State (1) 1952 S.C.R. 1112, 1112 of Bombay will not prevent it from being a sale effected in the course of inter-state trade or commerce or in the course of export or import. \n Even when the whole transaction of sale is constituted in Bombay in the sense that every essential ingredient necessary to constitute a sale takes place there, (that is to say, even when the Explanation is not called into play), the sale would, given other considerations, be in the course of export or import or in the course of inter-State trade or commerce. An illustration will make my point clear. A, a Bombay dealer, sells goods to B, a dealer in Madras, for consumption in Madras. I will assume that delivery is made to B himself in Bombay and that he carries the goods across in person. If that is the normal way in which trade and commerce in that particular line of goods flows across the boundary, then that would, in my opinion, be a sale in the course of inter-State trade and commerce despite the facts, including delivery, mentioned above. Ordinarily, goods of this nature are delivered to a carrier but that makes my point all the stronger. \n So long as the ban imposed by clause (2) remains the situs of the sale and the place of delivery are not material provided the sale is caught up in the vortex of inter-State trade and commerce. Similar considerations apply in the case of exports and imports. On this view, the preamble to the Act and the short title which limit the ambit of the law to the levy of tax on sales and purchases of goods in the State of Bombay, do not serve to save the Act, nor do the definitions of the words sale , dealer and turnover . Actually, Explanation (2) to the definition of sale directly offends clause (2) of article 286. It embodies almost word for word every provision of the Explanation to article 286(1)(a). That would be unobjectionable if the ban imposed by clause (2) had been lifted by Parliament. But as it has not been lifted, the provision is ultra vires on the view which I take of the Constitution. 1113 The Act came into force on 9th October, 1952, with the exception of the taxing sections. The rules were published in the Gazette on 29th October, 1952, and together with the taxing sections, came into effect simultaneously on 1st November, 1952. It was argued that the rules save the Act in the following way. Under sections 7 and 11 a dealer is entitled to deduct from his taxable turnover sales which are from. time to time declared to be tax-free under section 8 and such other sales as may be prescribed. It is said that the rules have excluded all sales which offend the Constitution, therefore under the law (by which is meant the Act and the rules read together), which came into being on 1st November, 1952, no sale exempted by the Constitution can be taxed. It follows that the law which is sought to be impugned is intra vires. I need not examine the rules for this purpose. \n I will assume without deciding that they do exclude all sales which are exempt under the Constitution, nevertheless I am not prepared to agree that rules can save an Act. Rules are made by a subordinate authority which is not the Legislature and I cannot agree that the validity of an Act of a competent Legislature can be made to depend upon what some subordinate authority chooses to do or not to do. The rules were not passed by the Legislature and in theory the parti- cular shape they took was not even in contemplation. Say the rules were to be amended tomorrow by striking out these saving clauses, which would be ultra vires, the Act or the rules ? It would be impossible to hold that the rules are ultra vires the Act, for they would not in the event I am contemplating travel one whit beyond the Act. It is the Act which would be bad. And if the Act is held to be ultra vires in an event like that, would it be competent to the rule-making authority to come to the rescue of the Legislature and rehabilitate the Act by re-enacting the rules which it had deleted a few days before ? \n It would, in my judgment, be no more competent for a rule-making authority to do that than it would have been competent for it to validate this Act if the rules had been brought into 1114 being even one day after sections 5 and 10 came into force. I can understand this court saving to a petitioner You are not yet hurt by this Act nor is there any immediate likelihood of your being hurt and until. that happens we are not going to entertain your petition, for we are not here to examine hypothetical situations which may never arise. But that sort of objection cannot lie in this case for the reasons my Lord the Chief Justice has given. We are therefore called upon to determine the validity of the Act and in doing so we must, in my opinion, ignore the rules. I have now to consider two more points. One is about severability and the other is whether a taxing statute is to be treated differently from other laws. On the question of severability, I cannot see how the good can be separated from the bad in this case even if the Explanation to section 2 (14) be expunged unless the Constitution be read as part of the Act and we are to read into the Act some such provision as follows Notwithstanding anything which is said in any part of this Act, all sales which the State is prohibited to tax under the Constitution are excluded from the scope of this Act. But, in my opinion, judges are not entitled to rewrite an Act. Offending provisions can be struck out but if we do that the whole Act goes because the defect here is that all sales are permitted to be taxed provided they are within the State of Bombay, and the rulemaking authority is not restricted to taxation which is constitutionally permissible. On the contrary, section 45 says that the Government may make rules for carrying out the purposes of the Act and one of the purposes is to tax all sales which the State Government wishes to tax. \n The other matter is based on the American view which treats taxing statutes differently from others and holds that in a taxing statute one looks to the 1115 individual item of taxation and not to the generality of the powers. With all respect to the American Judges who hold that view, I would prefer not to make exceptions. When the question is whether an Act of the Legislature is ultra vires, the same principles should govern throughout. I would therefore hold that the Bombay Sales Tax Act, 1952 (Bombay Act No. XXIV of 1952) is ultra vires the Constitution of India. BHAGWATI J.-I had the benefit of reading the judgment just delivered by my Lord the Chief Justice. While agreeing in the main with the conclusions reached therein I am however unable to subscribe to the reasoning as also the construction put upon the Explanation to article 286(1) (a). \n I wish to place on record therefore my points of disagreement and the reasons for the same. The power given to a State Legislature to tax the sales or purchases of goods is derived from article 246 (3) read with Entry 54 of List II of the Seventh Schedule of the Constitution. That power has got to be widely construed and it would embrace the power to tax the sales or purchases of goods by reason of a sufficient territorial connection between the taxing State and what it seeks to tax. This was also the position which obtained before the Constitution and was responsible for double or multiple taxation of the same transaction by different States. The Constitution makers therefore thought it fit to impose restrictions on the imposition by the States of taxes on the sales or purchases of goods by enacting article 286. These restrictions were threefold -(1) no tax could be imposed on the sale or purchase of goods where such sale or purchase took place outside the State, (2) no tax could be imposed on the sale or purchase of goods where such sale or purchase took place in the course of the import of goods into or the export of the goods out of the territory of India, and (3) no tax could be imposed on the sale or purchase of any goods where such sale or purchase took place in the course of inter-State trade or 1116 commerce except in so far as Parliament might by law otherwise provide. These were the three categories of sales or purchases which came within the ban imposed by article \n The phraseology used in the article laid particular stress on the fact that the sale or purchase should take place so as to fall within one or the other of these categories. The intention was that the sale or purchase should take place, i.e., should be completed either outside the State or in the course of import or export or in the course of interState trade or commerce. Whereas before the Constitution the taxing power could be exercised by reason of a sufficient territorial connection involving either one or more of the ingredients of a sale in the shape of agreement to sell, the payment of price, transfer of ownership, delivery of goods etc the completion of a transaction of sale or purchase by the transfer of ownership or the passing of the property in the goods was enacted to be the sole criterion for taxability in article 286. The sales or purchases could be divided into two broad categories-(1) sales or purchases which take place inside the State and (2) sales or purchases which take place outside the State and those which took place outside the State were certainly outside the taxing powers of the State. In regard to the sales or purchases which took place inside the State, the sales or purchases which took place in the course of import or export and in the course of inter-State trade or commerce were also brought within the ban leaving the taxing power of the State unfettered in regard to the other sales or purchases which took place inside the State. \n The restrictions which were thus imposed on the taxing power of the State confined themselves to sales or purchases which took place outside the State and those sales or purchases which took place inside the State but took place in the course of import or export and in the course of inter-State trade or commerce. Once the transfer of ownership or the passing of the property in the goods was accepted as the sole criterion of taxability it was not necessary at all to define what was a sale or purchase which took place 1117 inside the State. Whether a sale or purchase took place inside the State could be determined by applying the general law relating to the sale of goods and ascertaining where the transfer of ownership took place or the property in the goods passed. It was only when the transfer of ownership took place or the property in the goods passed that the sale or purchase was completed and the sale or purchase took place and the situs or the location of the sale or purchase was in the place where the transfer of ownership took place or the property in the goods passed under the general law relating to the sale of goods. See Badische Aniline Und Soda Fabrick v. Basle Chemical Works, Bind Schedler(1) and Badische Aniline Und Soda Fabrick v. Hickson (2) The situs or location of the sale or purchase therefore assumed an importance under article 286 and the Constitution makers had before them not only the legislative practice prevailing in the various States before the Constitution but also the concept of sale as defined in the Indian Sale of Goods Act. They therefore incorporated in article 286 the notion of a sale or purchase taking place, i.e., being completed, by the transfer of ownership or the passing of property in the goods under the general law relating to sale of goods and enacted that those sales or purchases which took place outside the State or which even though they took place inside the State took place in the course of the import or export or in the course of inter-State trade or commerce should come within the ban imposed therein. The Constitution makers however took count of the fact that even though the property in the goods by reason of the sale or purchase passed in a particular State the goods might as a direct result of such sale or purchase be delivered in another State for the purpose of consumption in that State. They wanted to give the delivery State in that event the power to tax such sale or purchase and therefore introduced by the Explanation to article 286 (1)(a) a legal fiction by which (1) 1898 A. C. 200. (2) 1906 A. C. 419. 1118 the sale or purchase in that event was deemed to have taken place in the delivery State. \n What otherwise would have been a sale or purchase which took place outside the State within the meaning of article 286 (1) (a) was thus by legal fiction deemed to have taken place inside the delivery State, thus assimilating the position to a sale or purchase which took place inside the delivery State enabling the delivery State to tax the sale or purchase in question. This legal fiction was thus introduced not for defining what was a sale or purchase which took place inside the State as distinct from a sale or purchase which took place outside the State. The purpose of the enactment of the Explanation was not to provide a definition of a sale or purchase which took place inside the State. That was determined under the general law relating to the sale of goods by ascertaining where the transfer of ownership took place or the property in the goods passed, which was in another State and not the delivery State. What was a sale or purchase which took place outside the State was by reason of the Explanation and the legal fiction enacted therein deemed to be a sale or purchase which took place inside the State so as to enable the delivery State to tax the sale or purchase in question. The sale or purchase transactions which are covered by the Explanation are moreover of a limited character, viz., those in which as a direct result of such sale or purchase the goods have actually been delivered in the delivery State for the purposes of consumption in that State. \n They do not comprise all the transactions of sale or purchase which take place inside the State because besides those there are a large number of transactions of sale or purchase which take place inside the State and in which no element of inter- State trade or commerce enters the transaction. The transactions of sale or purchase which take place between dealers and dealers and dealers and customers all within the State are really comprised in the category of transactions of sale or purchase which take place inside the State and these transactions do not at all fall within the purview of the Explanation. It would be surprising 1119 to find a definition of a transaction of sale or purchase which takes place inside the State given in the manner in which it is alleged to have been done in the Explanation covering only those transactions of sale or purchase in which the goods have actually been delivered in the delivery State as a direct result of such sale or purchase for the purpose of consumption in that State. A definition, if at all it has any significance, should cover all the transactions which come within that particular category and cannot be enacted in the form of a legal fiction in the manner it has been done in the Explanation. It is no definition at all. It has no reference to facts but it merely enacts a legal fiction under which a sale which under the general law relating to sale of goods is completed outside the State by the transfer of ownership or the passing of the property in the goods in another State is deemed to have taken place inside the delivery State because of the goods having been actually delivered as a direct result of such sale or purchase for the purpose of consump- tion in the delivery State. What is otherwise a sale or purchase which takes place outside the State is thus deemed to have taken place inside the delivery State and that is the only purpose of the enactment of the Explanation. The contention of the Attorney-General and Shri Seervai that the purpose of the enactment of the Explanation was to define what was a sale or purchase which took place inside the State is therefore unsound. The non-obstante clause really takes count of the fact that under the general law relating to the sale of goods the property in the goods by reason of such sale or purchase would pass in another State and that the situs or location of the sale would accordingly be therefore in another State. Notwithstanding that fact the Explanation enacts the legal fiction that the particular transaction of sale or purchase is deemed to have taken place within the delivery State. The non-obstante clause has not been incorporated in the Explanation with a view to emphasise the particular aspect of the passing of 1120 property in the goods and negativing the same because that was one of the ingredients which had been considered as important territorial connection between the taxing State and what it sought to tax. \n Besides this ingredient there were various other ingredients which had been similarly considered sufficient territorial connections and to consider that the ingredient of the passing of property in the goods was the only ingredient which was considered important to be mentioned in the non-obstante clause is to ignore the facts and do violence to the whole conception underlying the incorporation of the non-obstante clause in the Explanation. It would be a more natural way of reading the non-obstante clause to read into it an intention to state what according to the Constitution makers was the basic idea of fixing the situs or the location of the sale or purchase in the place where the transfer of ownership took place or the property in the goods passed and to indicate that notwithstanding that fact a sale or purchase which fell within the category mentioned in the Explanation was none, the, less to be deemed to have taken place inside the delivery State. \n If the Explanation to article 286(1) (a) is construed in the manner indicated above it follows that notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State the sale shall be deemed to have taken place in the delivery State and the delivery State would be entitled to tax the sale or purchase. That does not however mean that it is only the delivery State which will be entitled to tax the sale or purchase. Under the general law relating to the sale of goods the property in the goods having by reason of such sale or purchase passed in another State that State will no doubt be entitled to tax the sale or purchase as having taken place inside the State. That position will continue to obtain in spite of the fact that by the enactment of the legal fiction in the Explanation such sale or purchase will be deemed to have taken 1121 place inside the delivery State. The object of the Explanation is not and could not be to take away the right which the State in which the property in the goods passed had to tax the sale or purchase which took place inside that State. The object and purpose of the Explanation could only to be to deem such purchase or sale by reason of the legal fiction to have taken place in the delivery State so as to enable the delivery State also to tax the sale or purchase in question. The object of article 286 is to impose restrictions on the imposition of tax on sale or purchase of goods and the only restriction which has been imposed in connection with the sales or purchases which take place in this manner is that a State shall not impose a tax on the sale or purchase of goods where such sale or purchase takes place outside the State. That is a general ban which has been imposed by article 286(1) (a) and what the Explanation seeks to do is to lift the ban to the extent of the transactions of sale or purchase covered by the Explanation and enable the delivery State also to tax such purchases or sales. It is no doubt true that in the Explanation the word only has not been used nor has the word also been used and we have to gather the purpose of the enactment of the Explanation from the words of the Explanation itself. In order to arrive at a conclusion whether the object and purpose of the Explanation was to enable the delivery State to tax such sales or purchases either in addition to the State in which the property in the goods had passed or in substitution thereof one has got to bear in mind the basic idea that a State would normally be entitled to tax a sale or purchase where such sale or purchase took place inside the State except in cases covered by article 286(1) (b) and article 286(2). If that power of the State to tax the sale or purchase where such sale or purchase took place inside the State was in any manner whatever sought to be taken away it could only be taken away by an express enactment in that behalf as in article 286 (1)(b) and article 286 (2) and not by the backdoor as it were by enacting a legal fiction as it has been done 1122 in the Explanation. The two book cases illustration which was submitted before the court by Shri Seervai in the course of his arguments is a very specious one. Merely because a book is by a legal fiction deemed to be in the book case B it does not necessarily cease to exist in the book case A. \n As a matter of physical fact it is in the book case A. It continues in the book case A and the physical fact of its existence in the book case A can never be obliterated. The legal fiction only operates to treat it as if it were in the book case B and to involve all the consequences of its being in the book case B. The two positions are not mutually exclusive. They can co-exist side by side and the legal consequences of the actual fact of the book being in the book case A can be worked out simultaneously with the legal consequences of the notional existence of the book in the book case B by reason of the operation of the legal fiction. If this position is borne in mind it is clear that not only would the State in which the property in the goods passed continue to be entitled to tax the sale or purchase because of such sale or purchase having taken place inside the State, but the delivery State would also be entitled to tax such sale or purchase by reason of the operation of the legal fiction in so far as the goods have actually been delivered as a direct result of such sale or purchase in the delivery State for the ,purpose of consumption in that State. According to the position as discussed above both the States would thus be entitled to tax such sales or purchases. Before I proceed to discuss the effect of article 286 (2) on the taxing powers of both the States it is necessary to consider what is the exact type of sale or purchase which is covered by the Explanation. That sale or purchase has to be one as a direct result of which the goods have actually been delivered in the delivery State for the purpose of consumption in that State. It is not every transaction which results in the goods being delivered across the border that comes within this category. \n It is only a transaction of sale or purchase directly results in the delivery of goods 1123 for the purpose of consumption in the delivery State that comes within the category of transactions covered by the Explanation. A dealer in the delivery State purchasing from a dealer in the State where the property in the goods passes by reason of such sale or purchase cannot be said to have purchased the goods for the purpose of consumption in the delivery State because the obvious purpose for which he purchases the goods is for dealing with those goods in the ordinary course of trade and not for consuming the same. A dealer who deals with the goods after purchasing the same does not consume the goods. He deals with or disposes of the same in the ordinary course of trade and he is a dealer or a trader in those goods. He is not a consumer of those goods. The word consumption has been thus defined in Websters New International Dictionary, Vol.1 , page 483- Consumption.-(3) Economics.The use of (economic) goods resulting in the diminution or destruction of their utilities opposed to production. Consumption may consist in the active use of goods in such a manner as to accomplish their direct and immediate destruction, as in eating food, wearing clothes, or burning fuel or it may consist in the mere keeping, and enjoying the presence or prospect of, a thing, which is destroyed only by the gradual processes of natural decay, as in the maintenance of a picture gallery. Generally, it may be said that consumption means using things, and production means adapting them for use. In the Oxford New English Dictionary, Vol. 11, page 888, consumption is defined as \n The action or fact of consuming or destroying destruction (7) Pol. Econ. The destructive employment or utilisation of the products of industry. Delivery of goods for the purpose of consumption in the delivery State therefore means the delivery for the purpose of using by the consumer and it has no application to the case of a dealer purchasing the 1124 goods across the border for dealing with or disposing of the same in the ordinary course of trade. The Explanation therefore covers only those cases where as -a direct result of the sale or purchase goods are delivered for consumption in the delivery State by the consumer and it is only that limited class of transactions which are covered by the Explanation and which are liable to tax by the delivery State. I do not accept the contention that the words for the purpose of consumption must be understood in a com- prehensive sense as having reference both to immediate and ultimate consumption within the State and excluding only resale out of the State. In my opinion they have reference only to immediate consumption within the State and no further. If the matters stood thus and there was no further provision to be considered the position would be that in a transaction of sale or purchase covered by the Explanation construed as above both the State in which the property in the goods passed and the delivery State would be entitled to tax such sale or purchase, the former by reason of the property in the goods having passed inside that State and the latter by reason of the goods having been delivered as a direct result of such sale or purchase for the purpose of consumption in that State. We have however got to take count of article 286 (2). The transaction of ,such sale or purchase even though it be as between a dealer in the one State and the consumer in the delivery State is nonetheless a transaction in the course of inter-State trade or commerce. I do not agree with the contention of the Advocate-General of Bombay that article 286(2) should be interpreted as applying to the cases of transactions of sale or purchase taking place between dealers and dealers only and not as applying to the cases of transactions of sale or purchase taking place between dealers on the one hand and consumers on the. other. \n Whether a transaction of sale or purchase takes place between a dealer on the one hand and a dealer on the other or between a dealer on the one hand and a consumer on the other in the respective 1125 States all these transactions are in the course of inter- State trade or commerce and therefore hit by article 286(2) and the transactions which are covered by the Explanation to article 286 (1)(a) would also be accordingly hit by the ban imposed under article 286 (2). So far as the State in which the property in the goods has passed is concerned it could certainly not tax the sale or purchase in question because the transaction of sale or purchase so far as the particular State is concerned takes place in the course of inter-State trade or commerce and could not be subjected to the imposition of tax except in so far as Parliament might by law otherwise provide. So far however as the delivery State is concerned the Explanation empowers the delivery State to tax such transaction and if article 286(2) be construed as imposing a ban on the taxation of such sale or purchase it will be tantamount to the giving of the right to tax by one hand and the taking away of it by another. It was contended and rightly so by the AdvocateGeneral of Bombay that if the transactions which are covered by the Explanation to article 286(1) (a) were thus hit by article 286(2) in the absence of a provision otherwise enacted by Parliament the Explanation to article 286(1) (a) would be rendered nugatory and the Constitution makers could not be held to have contemplated such a possibility at the very inception of the Constitution leaving it to the Parliament by having recourse to the provision contained in article 286 (2) to remedy such a state of affairs. Such a possibility could not be contemplated and an effort should therefore be made in so far as it was reasonably possible to do so to reconcile the provisions of the Explanation to article 286(1) (a) and article 286(2). It is a well-known rule of the interpretation of statutes that a particular enactment is not repealed by a general enactment in the same statute. (Beal on the Cardinal Rules of Legal Interpretation, 3rd Edition, Part VII, Section IX, page 516). Reliance is 1126 placed in support of the above proposition on the following observations of Best C. J. in Churchill v. Crease(1). The rule is, that where a general intention is expressed, and the Act expresses also a particular intention incompatible with the general intention, the particular intention is to be considered in the nature of an exception. \n To the same effect also are the observations of Quain J. in Dryden v. Overseers of Putney (2) quoted at page 426 of the same work- It may be laid down as a rule for the construction of statutes, that where a special provision and a general provision are inserted which cover the same subjectmatter, a case falling within the words of the special provision must be governed thereby and not by the terms of the general provision. (See also Craies on Statute Law, 5th Edition (1952) at p. 205 Maxwell on the Interpretation of Statutes 9th Edition. (1946) at p. 176 and Crawford on the Construction of Statutes (Interpretation of Laws) 1940 Edition, Ch. XVIII Construction of Statutes at p.265 section 167). \n It therefore follows that the general provision which is enacted in article 286 (2) against the imposition of tax on the sale or purchase of goods in the course of inter-State trade or commerce should give way to the special provision which is enacted in the Explanation to article 286 (1) (a) enabling the delivery State to tax such sale or purchase in the limited class of cases covered by the Explanation, transactions ,covered by the Explanation being thus lifted out of the category of transactions, in the course of inter- State trade or commerce covered by article 286 (2) and assimilated to transactions of sale or purchase which take place inside the State thus acquiring an intraState character so far as the delivery State is concerned. \n It was suggested that this result could also be achieved by having resort to the principles which have been enunciated in articles 301 and 304 of the Constitution (1) (1828) 5 Bing, 177 at p. 180. (2) (1876) 1 Ex. D. 232 at P 426, 1127 which are included in Part XIII under the captionTrade, commerce and intercourse within the territory of India. Even though these provisions of the Constitution may by analogy support the conclusion that a transaction in the course of inter-State trade or commerce is thus lifted out of that category and assimilated to a transaction of sale or purchase which takes place inside the State the analogy must stop there and cannot be worked any further. One cannot construe the provisions of article 286 with reference to the provisions of article 304 (a) as is sought to be done. Article 286 and article 304 (a) refer to different states of affairs. Whereas article 286 provides restrictions on the imposition of taxes on purchase or sale of goods, article 304 (a) gives the State Legislature power to impose on goods imported from other States any tax to which similar goods manufactured or produced in that State are subject so however as not to discriminate between goods so imported and goods so manufactured or produced. Whereas article 286 refers to taxes on sales or purchases of goods, article 304 (a) refers to tax on imported goods. The two concepts are thus entirely different. \n The only argument which was addressed before us on articles 301 and 304 of the Constitution was by the Government Pleader of Patina who referred to these provisions in order to substantiate his point that only one State, viz., the delivery State, should tax the sales or purchases covered by the Explanantion and argued what the results would be if it was held that both the States could tax or neither of them could tax such sale or purchase. This aspect was however not stressed or presented during the course of the arguments and I would prefer not to express any opinion on the scope or meaning of article 304. \n I would therefore base my, construction of the Explanation to article 286 (1)(a) and article 286 (2) on the rule as to the interpretation of statutes which I have referred to above, lifting the transaction of sale or purchase covered by the Explanation to article 286(1) (a) out of the category of the transactions in the course of inter-State trade or commerce and assimilating it to 1128 a transaction of sale or purchase which takes place inside the delivery State thus investing it with the character of an intrastate sale qua the delivery State. The result therefore is that the delivery State only would be entitled to tax the transaction of sale or purchase covered by the Explanation. Such transaction would be a transaction of sale or purchase where as a direct result of such sale or purchase the goods are delivered in the delivery State for the purpose of consumption in that State i.e., where the transaction is between a dealer in the State in which the property in the goods passes and a consumer in the delivery State. \n The State in which the property in the goods passes would not be able to tax such sale or purchase in the absence of a provision enacted by law by Parliament within the meaning of article 286(2). Once that ban is lifted by the appropriate legislation enacted by the Parliament the State in which the property in the goods passes would also be entitled to tax such sale or purchase but not otherwise. Save as above, I agree with the conclusions reached by my Lord the Chief Justice in the judgment just delivered. I agree that the Bombay Sales Tax Act, 1952, and the rules made, thereunder except Rule 5(2)(1) do not contravene the provisions of article 286, that Rule 5(2)(1) is clearly severable and can be ignored, that there is no substance in the contention of Shri Seervai that there is a violation of the fundamental rights guaranteed under article 14 and that the taxation statutes should be construed in a manner so as to allow the statute itself to stand, the taxing authority being prevented by injunction from imposing the tax on subjects excluded by the Constitution from the purview of taxation by the State. \n In the result the declaration Made by the court below will be set aside, the writ issued by it will be quashed and the State of Bombay will be prohibited from imposing or authorising the imposition of a tax on sales or purchases which according to the interpretation put above on article 286 are excluded from the purview 1129 of taxation by the State of Bombay.\n DECISION ??", "expert_1": {"rank1": ["An injunction shall, however, issue restraining the appellants from imposing or authorising the imposition of a tax on sales and purchases which are exempted from taxation by article 286 as interpreted above. Each party will bear its own costs throughout."], "rank2": ["We are of opinion that it is always desirable, when relief under article 226 is sought on allegations of infringement of fundamental rights, that the court should satisfy itself that such allegations are well founded before proceeding further with the matter. In the present case, however, the appellants can have no grievance, as the respondents allegation of infringement of their fundamental right under article 19 (1) (g) was based on their contention that the Act was ultra vires the State Legislature, and that contention having been accepted, by the Court below, there would clearly be an unauthorised restriction on the respondents right to carry on their trade, registration and licence being required only to facilitate collection of the tax imposed. \n As Mr. Seervai for the respondents rightly submitted, the fact that the Court below left the question undecided, though the point was concluded by the 1078 decision of this Court in Mohammad Yasin v. The Town Area Committee, Jalalbad (1), which was brought to the notice of the learned Judges, was not the fault of the respondents and gave no real cause for complaint.", "It will be seen that the principle of freedom of inter- State trade and commerce declared in article 301 is expressly subordinated to the State power of taxing goods imported from sister States, provided only no discrimination is made in favour of similar goods of local origin. Thus the States in India have full power of imposing what in American State legislation is -called the use tax, gross receipts tax, etc. not to speak of the familiar property tax, subject only to the condition that such tax is imposed on all goods of the same kind produced or manufactured in the taxing State, although such taxation is undoubtedly calculated to fetter inter-State trade and commerce. In other words, the commercial unity of India is made to give way before the State-power of imposing any non-dis- criminatory tax on goods imported from sister States.", "We are unable to accept this view. It is really not necessary in the context to use the word only in the way suggested, for, when the Explanation says that a sale or purchase shall be deemed to have taken place in a particular State, it follows that it shall be deemed also to have taken place outside the other States. Nor can the non-obstante clause be understood as implying that, under the general law relating to the sale of goods, the passing of the property in the goods is the determining factor in locating a sale or purchase. Neither the Sale of Goods Act nor the common law relating to the sale of goods has anything to say as to what the situs of a sale is, though certain rules have been laid down for ascertaining the intention of the contracting parties as to when or under what conditions the property in the goods is to pass to the buyer. \n That question often raises ticklish problems for lawyers and courts, and to make the passing of title the determining factor in the location of a sale or purchase would be to replace old uncertainties and difficulties connected with the nexus basis with new ones. Nor would the hardship of multiple taxation be obviated if two States were still free to impose tax on the same tran- saction. In our opinion, the non-obstante clause was inserted in the Explanation simply with a view to make it clear beyond all possible doubt that it was immaterial where the property in the goods passed, as it might otherwise be regarded as indicative of the place of sale. It is also to be noted in this connection that, on the construction suggested by the Advocate-General of Bombay, namely, that the Explanation was not intended to deprive the State in which the property in the goods passed of its taxing power, but only to exclude the sales or purchases of the kind described in the Explanation from the operation of clause (1) (a) which prohibits taxation of outside sales or purchases, the Explanation would operate, not as an explanation, but as an exception or a proviso to that clause. It 1084 may be that the description of a provision cannot be decisive of its true meaning or interpretation which must depend on the words used therein, but, when two interpretations are sought to be put upon a provision, that which fits the description which the legislature has chosen to apply to it is, according to sound canons of construction, to be adopted provided, of course, it is consistent with the language employed, in preference to the one which attributes to the provision a different effect from what it should have according to its description by the legislature.", "We see no force in this objection. It is to be noted that the Explanation does not say that the consumption should be by the purchaser himself. Nor do the words as a direct result have reference to consumption. They qualify actual delivery . \n The expression for the purpose of consumption in that State must, in our opinion, be understood as having reference not merely to the individual importer or purchaser but as contemplating distribution eventually to consumers in general within the State. Thus all buyers within the State of delivery from out-of-State sellers, except those buying for re-export out of the State, would be within the scope of-the Explanation and liable to be taxed by the State on their inter-State transactions. It should be remembered here that the Explanation deals only with interState sales. or purchases and not with purely local or domestic transactions. That these are subject to the taxing power of the State has never been questioned. We are therefore of opinion that article 286 (1) (a) read with the Explanation prohibits taxation of sales 1085 or purchases involving inter-State elements by all States except the State in which the goods are delivered for the purpose of consumption therein in the wider sense explained above. The latter State is left free to tax such sales or purchases, which power it derives not by virtue of the Explanation but under article 246 (3) read with entry 54 of List II.", "As both the Explanation and clause (2) deal only with inter-State transactions, it may appear at first blush that whatever taxing power the Explanation may have reserved to the state of delivery is nullified by clause (2), at any rate until Parliament chooses to lift the ban under the power reserved to it by the opening words of clause (2). As one way of avoiding this result I it was suggested by the Advocate- Gneral of Bombay that the expression inter-State trade and commerce in clause (2) may be construed as meaning dealings between a trader in one State and a trader in another, so that the clause would be applicable only to sales or purchases in the course of dealings between such traders. The ban under clause (2) could not in that view, affect the taxability of a sale by a trader in one State to a consumer or user in another. We cannot agree with this restrictive interpretation of the expression inter-State trade and commerce. The sale by a trader in one State to a user in another would be a sale in the course of inter-State trade according to the natural meaning of those words, and we can see no reason for importing the restriction that the transaction should be one between two traders only. \n This is, however, not to say that the ban under clause (2) extends to the taxing power which the delivery State is left free, under the Explanation, to exercise. We are of opinion that the operation of clause (2) stands excluded as a result of the legal fiction enacted in the explanation, and the State in which the goods are actually delivered for consumption can impose tax on inter-State sales or purchases. The effect of the 1086 Explanation in regard to inter-State dealings is, in our view, to invest what, in truth, is an inter-State transac- tion with an intrastate character in relation to the State of delivery, and clause (2) can, therefore, have no application. It is true that the legal fiction is to operate for the purposes of sub-clause (a) of clause (1), but that means merely that the Explanation is designed to explain the meaning of the expression outside the State in clause (1) (a). When once, however, it is determined with the aid of the fictional test that a particular sale or purchase has taken place within the taxing State, it follows, as a corollary, that the transaction loses its inter-State character and falls outside the purview of clause (2), not because the definition in the Explanation is used for the purpose of clause (2), but because such sale or purchase becomes in the eye of the law a purely local transaction.", "The delivery State would tax both local and out-of-State goods equally without discrimination against either and that, we think, is the only measure of protection which article 286 could reasonably be supposed to accord to interState sales or purchases, when it is construed in the light of articles 301 and 304.", "The majority of the Federal Court appear to have contemplated another form of severability, namely, by a classification of the particular cases on which the impugned Act may happen to operate, involving an inquiry into the circumstances of each individual case. \n There are no words in the Act capable of being so construed, and such a course would in effect involve an amendment of the Act by the court, a course which is beyond the competency of the court, as has long been well established. The subject of the constitutional prohibition was single and indivisible, namely, disposition of property on grounds only of (among other things) descent and if, in its actual operation, the impugned statute was found to transgress the constitutional mandate, the whole Act had to be held void as the words used (1) 1946 F.C.R. 1. (2) 1942 F.C.R. 67. 1099 covered both what was constitutionally permissible and what was not. The same principle was applied by this court in the Cross Roads case(1). It was, indeed, applied also in Bowmans case(1) with respect to the licence tax imposed generally on the entire business conducted including inter- State commerce as well as domestic business, but was not applied, as stated above, with respect to excise tax which was laid on every gallon of gasolene sold and was thus divisible in its nature. It is a sound rule to extend severability to include separability in enforcement in such cases, and we are of opinion that the principle should be applied in dealing with taxing statutes in this country, We accordingly set aside the declaration made by the court below and quash the writ issued by it except in regard to rule 5 (2) (1)."], "rank3": ["The Advocate-General of Bombay, appearing on behalf of the appellants, took strong exception to the manner in which the learned Judges below disposed of the objection to the maintainability of the petition. He complained that, having entertained the petition on the ground that infringement of fundamental rights was alleged, and that the remedy under article 226 was, therefore, appropriate, the learned Judges issued a writ without finding that any fundamental right had in fact been infringed. Learned counsel for the State of West Bengal also represented that parties in that State frequently got petitions under article 226 admitted by alleging violation of some fundamental right, and the court sometimes issued the writ asked for without insisting on the allegation being substantiated.", "Before considering whether the appellant State has made a law imposing, or authorising the imposition of, a tax on sales or purchases of goods in disregard of constitutional restrictions on its legislative power in that behalf, it is necessary to ascertain the scope of such power and the nature and extent of the restrictions placed upon it by article 286. The power is conferred by article 246 (3) read with entry 54 of List 11 of the Seventh Schedule to the Constitution. The Legislature of any State has, under these provisions, the exclusive power to make laws for such State or any part thereof with respect to taxes on the sale or purchase of goods other than newspapers. The expression for such State or any part thereof cannot, in our view, be taken to import into entry 54 the restriction that the sale or purchase referred to must take place within the territory of that State. All that it means is that the laws which a State is empowered to make must be for the purposes of that State. \n As pointed out by the Privy Council in the Wallace Brothers case (2) in dealing with the competency of the Indian Legislature to impose tax on the income arising abroad to a non-resident foreign company, the constitutional validity of the relevant statutory provisions did not turn on the possession by the legislature of extra-territorial powers but on the existence of a sufficient territorial connection between the taxing State and what it seeks to tax. In the case of sales-tax it is not necessary that the sale or purchase should take place within the territorial limits of the State in the sense that all the ingredients of a sale like the agreement to sell, the passing of title, delivery of the goods, etc., should have a territorial connection with the State. Broadly speaking, local activities of buying or selling carried on in the State in relation to local goods would be a sufficient basis to sustain the taxing power of the State, provided of course, such (1) 1952 S.C.R. 572. (2) 1948 S.C.R. I 1079 activities ultimately resulted in a concluded sale or purchase to be taxed.", "In exercise of the legislative power conferred upon them in substantially similar terms by the Government of India Act, 1935, the Provincial Legislatures enacted sales-tax laws for their respective Provinces, acting on the principle of territorial nexus referred to above that is to say, they picked out one or more of the ingredients constituting a sale and made them the basis of their sales-tax legislation. Assam and Bengal made among other things the actual existence of the goods in the Province at the time of the contract of sale the test of taxability. \n In Bihar the pro- duction or manufacture of the goods in the Province was made an additional ground. A net of the widest range perhaps was laid in Central Provinces and Bert where it was sufficient if the goods were actually found in the Province at any time after the contract of sale or purchase in respect thereof was made. Whether the territorial nexus put forward as the basis of the taxing power in each case would be sustained as sufficient was a matter of doubt not having been tested in a court of law. And such claims to taxing power led to multiple taxation of the same transaction by different Provinces and cumulation of the burden falling ultimately on the consuming public. This situation posed to the Constitution makers the problem of restricting the taxing power on sales or purchases involving inter-State elements, and alleviating the tax burden on the consumer. At the same time they were evidently anxious to maintain the State power of imposing non-discriminatory taxes on goods imported from other States, while upholding the economic unity of India by providing for the freedom of inter-State trade and commerce. In their attempt to harmonise and achieve these somewhat conflicting objectives they enacted articles 286, 301 an 304.", "Having thus provided for the freedom of inter-State trade and commerce subject to the important qualification mentioned above, the authors of the Constitution had to devise a formula of restrictions to be imposed on the State- power of taxing sales or purchases involving inter-State elements which would avoid the doubts and difficulties arising out of the imposition of sales-tax on the same transaction by several Provincial Legislatures in the country before the commencement of the Constitution. This they did by enacting clause (1) (a) with the Explanation and clause (2) of article 286. Clause (1) (a) prohibits the taxation of all sales or purchases which take place outside the State, 1082 but a localised sale is a troublesome concept, for, a sale is a composite transaction involving as it does several elements such as agreement to sell, transfer of ownership, payment of the price, delivery of the goods and. so forth, which may take place at different places. How, then, is it to be determined whether a particular sale or purchase took place within or outside the State ? \n It is difficult to say that any one of the ingredients mentioned above is more essential to a sale or purchase than the others. To solve the difficulty an easily applicable test for determining what is an outside sale had to be formulated, and that is what, in our opinion, the Explanation was intended to do. It provides by means of a legal fiction that the State in which the goods sold or purchased are actually delivered for consumption therein is the State in which the sale or purchase is to be considered to have taken place, notwithstanding the property in such goods passed in another State. Why an outside sale or purchase is explained by defining what is an inside sale, and why actual delivery and consumption in the State are made the determining factors in locating a sale or purchase will presently appear. The test of sufficient territorial nexus was thus replaced by a simpler and more easily workable test Are the goods actually delivered in the taxing State, as a direct result of a sale or purchase, for the purpose of consumption therein ? Then, such sale or purchase shall be deemed to have taken place in that State and outside all other States. The latter States are prohibited from taxing the sale or purchase the former alone is left free to do so. Multiple taxation of the same transaction by different States is also thus avoided. It is, however, argued on behalf of Bombay that the Explanation does not say that the State of delivery is the only State in which the sale or purchase shall be deemed to have taken place. \n If that was the intention, it would have been easy to say so. On the other hand, the non-obstante clause in the Explanation is said to indicate that, apart from cases covered by the legal fiction, the passing of property in the goods is to determine the place of sale. Thus, both the State of delivery 1083 and the State in which the property in the goods sold passes are, it is claimed, empowered to tax.", "It is said that even though all the essential ingredients of a sale took place within one State and the sale was, in that sense, a purely intrastate transaction, it might involve transport of the goods across the State- boundary, and that would be sufficient to bring it within the scope of clause (2). We find it difficult to appreciate this argument. As already stated, the Explanation envisages sales or purchases under which out-of-State goods are imported into the State. That is the essential element which makes such a transaction inter-State in character, and if it is turned into an intrastate transaction by the operation of the legal fiction which blots out from view the inter-State element , it is not logical to say that the transaction, though now become local and domestic in the eye of the law, still retains its inter-State character. The statutory fiction completely masks the inter-State character of the sale or purchase which, as a collateral result of such making, falls outside the scope of clause (2). It is said that, on this view, clause (2) would become practically redundant, as clause (1) (a) read with the explanation as construed by us would itself preclude taxation by other States of inter-State sales or purchases of the kind referred to in the explanation. As 1087 We have already pointed out, the Explanation does not cover cases of inter-State sales or purchases under which the goods are imported into the State for reexport to other States and possibly other categories of sales or purchases which do not satisfy all the requirements of the explanation. Whether such transactions are sufficiently numerous for the Constitution to take note of is a matter of opinion and it cannot have much bearing on the question of construction. \n On the other hand there are, in our judgment, cogent considerations which tend to support the view we have expressed above that clause (2) was not intended to affect the power of the delivery State to tax inter-State sales or purchases of the kind mentioned in the Explanation. As we have seen, in our Constitution the principle of freedom of inter-State trade and commerce is made to give way before the State-power of imposing non-discriminatory taxes on goods imported from other States. Now, article 286(2) is but one phase of the protection accorded to interState trade and commerce from the fettering power of State taxation. \n As article 286 deals with restrictions on the power of the States to impose tax on the sale or purchase of goods, the Constitution makers evidently thought that it should contain also a specific provision safeguarding sales or purchases of an inter-State character against the taxing power of the States. It is however, reasonable to suppose that this particular form of protection to inter-State trade and commerce provided in article 286(2) was not intended to have a wider operation than what is contemplated in Part XIII which declares the general principle of freedom of inter-State commerce and defines the measure of constitutional protection it should enjoy. If such protection is intended to give way before the State-power of taxing goods imported from sister States, subject only to the condition against discrimination, it is legitimate to suppose that the ban under article 286(2) should not operate so as to nullify that power. True, article 304 (a) deals with the restrictions as to imposition of tax on goods, while article 1088 deals with the restrictions as to imposition of tax on sales or purchases of goods.", "But this distinc tion loses its practical importance in the case of sales-tax imposed by the delivery State under the conditions mentioned in the Explanation, for, if we look behind the labels at the substance of the matter, it becomes clear that a tax on sales or purchases imposed by the State in which the goods are delivered for consumption, in the sense already explained, is, in economic effect practically indistinguishable from a tax on the consumption or use of the goods. The words in which the goods have actually been delivered ensure that the goods have come into the State, and the expression for the purpose of consumption in the State shows that, though the tax is formally laid on sales, its incidence is aimed at the consumers in the State.", "Since writers on political economy are agreed that taxes on the sale of commodities are simply taxes on the commodities themselves, it is possible to regard a tax on the retail sale of motor spirit -and lubricants as a tax on those commodities. Therefore, sales-tax, the incidence of which is really directed against the consumer, is, in substance, a tax on the goods imposed, no doubt, on the occasion of the sale as a taxable event.", "The object clearly is to assimilate the conditions, under which the delivery State is left free to tax inter-State sales or purchases, to those under which a State is empowered to impose tax on goods imported into the State from other States under article 304 (a). If then, a non-discriminatory use or consumption tax imposed under (1) 1939 F.C.R. 18, 42. 1089 article 304 on goods imported from other States does not infringe the freedom of inter-State commerce declared by article 301, parity of reason and policy requires that a tax on sales or purchases imposed by the State in which the goods are actually delivered for consumption in the State should not be regarded as violative of the ban under article 286 (2), and that is what the statutory fiction enacted in the Explanation was, in our judgment, designed to achieve by divesting the sale or purchase of the kind referred. to in the Explanation of its inter-State character in relation to the State of delivery.", "There is another important consideration which strongly supports the view we have indicated above, namely article 286 (2) does not affect the taxation of such sale or purchase by the State of delivery. If both the exporting State and the delivery State were entitled, notwithstanding article 286(2), to tax the inter-State sale or purchase, as suggested by the Advocate-General of Bombay, it would mean that the transaction is subjected to double taxation as compared with a sale by a local dealer which pays only one tax. It is precisely this type of discriminatory burden which the principle of freedom of inter-State commerce seeks to avoid, for, it places inter-State trade at a disadvantage in competition with local trade.", "It is one thing to avoid impeding inter-State commerce by imposing discriminatory burdens upon it which internal trade does not have to bear, but quite another to place local products and local business at a disadvantage in competition with outside goods and dealers. It would be 1090 a curious perversion of the principle of freedom of inter-State commerce to drive local custom across the border to outside dealers, and that, in our opinion, could not have been contemplated. The view which we have expressed above avoids either anomaly and would place local trade and interstate trade on an equal footing.", "The question next arises as to whether the, Act contravenes all or any of the restrictions imposed by article 286. It is the respondents case that the sales and purchases made by them in Bombay, in the course of their business, include all the three categories excluded from the scope of State- taxation by article 286, and the Act seeking to bring all of them within its scheme of taxation is bad.", "It is to be noted that these are the excluded categories of sales or purchases under article 286 (1) (b) and (2) respectively.", "Now, it will be seen from the provisions summarised above that the Act does not in terms exclude from its purview the sales or purchases taking place outside the State of Bombay while it does include, by Explanation (2) to the definition of sale, the sales or purchases under which the delivery and consumption take place in Bombay which, by virtue of the Explanation to article 286(1)(a), are to be regarded as local 1094 sales or purchases. On the construction we have placed upon that Explanation, sales or purchases effected in Bombay in respect of goods in Bombay but delivered for consumption outside Bombay are not taxable in Bombay.", "The charging sections cannot, therefore, be taken to cover the class of sales or purchases which, on our construction of the Explanation, are to be regarded as taking place outside the State of Bombay. \n We see no force, therefore, in the argument that the Act contravenes the provisions of article 286(1)(a) by purporting to charge sales or purchases excluded by that article from State- taxation.", "The argument is not without force, and it must be held that rule 5(2)(1) is ultra vires the rule-making authority and therefore void. But it is clearly severable from rule 5(1)(1). The restriction regarding the mode of transport of the goods sold or purchased in the course of inter-State trade, to which alone sub-rule (2)(1) relates, can be ignored and the exemption under rule 5(1)(1) may well be allowed to stand.", "Each State must, in imposing a tax of this nature, fix its own limits below which it does not consider it administratively feasible or worthwhile to impose the tax. It is idle to suggest that any discrimination is involved in such classification."], "rank4": ["This is an appeal from the judgment and order of the High Court of Judicature at Bombay declaring the Bombay Sales Tax Act, 1952, (Act XXIV of 1952), ultra vires the State Legislature and issuing a writ in the nature of mandamus against the State of Bombay and the Collector of Sales Tax, Bombay, appellants herein, directing them to forbear and desist from enforcing the provisions of the said Act against the respondents who are dealers in motor cars in Bombay. \n The Legislature of the State of Bombay enacted the Bombay Sales Tax Act, 1952, (hereinafter referred to as ,the Act) and it was brought into force on October 9, 1952, by notification issued under section 1 (3) of the Act, except sections 5, 9, 10 and 47 which came into operation on November 1, 1952, as notified under section 2 (3). On, the same day the rules made by the State Government in exercise of the power conferred by section 45 of the Act also came into force. 1075 On November 3, 1952, the respondents 1 to 6, who are companies incorporated under the Indian Companies Act, 1913, and respondent No. 7, a partnership firm, all of whom are carrying on business in Bombay of buying and selling motor cars, presented a petition to the High Court under article 226 of the Constitution challenging the validity of the Act on the ground that it is ultra vires the State Legislature, inasmuch as it purported to tax sales arid purchases of goods regardless of the restrictions imposed on State legislative power by article 286 of the Constitution. It was also alleged that the provisions of the Act were discriminatory in their effect and, therefore, void under article 14 read with article 13 of the Constitution. The respondents accordingly prayed for the issue of a writ in the nature of mandamus against the appellants preventing them from enforcing the provisions of the Act against the respondents. \n A further ground of attack was added by amendment of the petition to the effect that the Act being wholly ultra vires and void, the provisions requiring dealers to apply for registration in some cases and to obtain a licence in some others as a condition of carrying on their business, infringed the fundamental rights of the respondents under article 19 (1) (g) of the Constitution. In the affidavit filed in answer the appellants traversed the allegations in the petition and contended, inter alia, that the Act was a complete code and provided for special machinery for dealing with all questions arising under it, including questions of constitutionality, and, therefore, the petition was not maintainable, that the present ease was not an appropriate one for the issue of a writ under article 226 as the validity of the imposition of a tax was questioned, that no assessment proceedings having been initiated against the respondents and no demand notice having been issued, the respondents had no cause of action, and that, properly construed, the Act and the Rules did not contravene article 286 or any other provisions of the Constitution and did not infringe any fundamental right of the respondents", "overruled the preliminary objection disdistinguishing the decisions cited in support thereof by pointing out that the principle that a court would not issue a prerogative writ when an adequate alternative remedy was available could not apply where, as here, a party came to the court with an allegation that his fundamental rights had been infringed and sought relief under article 226. \n The learned Judges however thought, in view of the conclusion they had come to on the question of competency of the State Legislature to pass the Act, it was not necessary to consider the challenge that has been made to the Act under articles 14 and 19 and expressed no opinion on the alleged infringement of the respondents fundamental rights. On the merits, the learned Judges held that the definition of sale in the Act was so wide as to include the three categories of sale exempted by article 286 from the imposition of sales tax by the States, and, as the definition governed the charging sections 5 and 10, the Act must be taken to impose the tax on such sales also in contravention of article 286. The Act must, therefore, be declared wholly void, it being impossible to sever any specific offending provision so as to save the rest of the Act, as the definition pervades the whole Act and the whole scheme of the Act is bound up with the definition of sale. The learned Judges rejected the argument that the Act and the Rules must be read together to see whether the State has made a law imposing a tax in contravention of article 286, remarking that if the Act itself is bad,, the rules, made under it cannot have any greater efficacy. Nor was the Government, which was authorised to make rules for carrying out the purpose of the Act, under an obligation to exclude the exempted sales. The rules, too, did not exclude all the three categories of exempted sales but only two of them, and even such exclusion was hedged"], "label": "ACCEPTED"}, "expert_2": {"rank1": ["It is a sound rule to extend severability to include separability in enforcement in such cases, and we are of opinion that the principle should be applied in dealing with taxing statutes in this country, We accordingly set aside the declaration made by the court below and quash the writ issued by it except in regard to rule 5 (2) (1).", "I agree that the Bombay Sales Tax Act, 1952, and the rules made, thereunder except Rule 5(2)(1) do not contravene the provisions of article 286, that Rule 5(2)(1) is clearly severable and can be ignored, that there is no substance in the contention of Shri Seervai that there is a violation of the fundamental rights guaranteed under article 14 and that the taxation statutes should be construed in a manner so as to allow the statute itself to stand, the taxing authority being prevented by injunction from imposing the tax on subjects excluded by the Constitution from the purview of taxation by the State."], "rank2": ["This is an appeal from the judgment and order of the High Court of Judicature at Bombay declaring the Bombay Sales Tax Act, 1952, (Act XXIV of 1952), ultra vires the State Legislature and issuing a writ in the nature of mandamus against the State of Bombay and the Collector of Sales Tax, Bombay, appellants herein, directing them to forbear and desist from enforcing the provisions of the said Act against the respondents who are dealers in motor cars in Bombay.", "a petition to the High Court under article 226 of the Constitution challenging the validity of the Act on the ground that it is ultra vires the State Legislature, inasmuch as it purported to tax sales arid purchases of goods regardless of the restrictions imposed on State legislative power by article 286 of the Constitution. It was also alleged that the provisions of the Act were discriminatory in their effect and, therefore, void under article 14 read with article 13 of the Constitution.", "the Act being wholly ultra vires and void, the provisions requiring dealers to apply for registration in some cases and to obtain a licence in some others as a condition of carrying on their business, infringed the fundamental rights of the respondents under article 19 (1) (g) of the Constitution.", "the non-obstante clause was inserted in the Explanation simply with a view to make it clear beyond all possible doubt that it was immaterial where the property in the goods passed, as it might otherwise be regarded as indicative of the place of sale.", "If then, a non-discriminatory use or consumption tax imposed under (1) 1939 F.C.R. 18, 42. 1089 article 304 on goods imported from other States does not infringe the freedom of inter-State commerce declared by article 301, parity of reason and policy requires that a tax on sales or purchases imposed by the State in which the goods are actually delivered for consumption in the State should not be regarded as violative of the ban under article 286 (2), and that is what the statutory fiction enacted in the Explanation was, in our judgment, designed to achieve by divesting the sale or purchase of the kind referred. to in the Explanation of its inter-State character in relation to the State of delivery.", "Seervai attempted to make out that the provisions of the charging sections 5 and 10 fixing Rs. 30,000 and Rs. 5,000 as the minimum taxable turnover for general tax and special tax respectively were discriminatory and void under article 14 read with article 13 of the Constitution, and he gave us several tables of figures showing how the imposition of the tax actually works out in practice in hypothetical cases. \n It is unnecessary to go into. the details of these cases which have been worked out in figures, for it must be conceded that the general effect of fixing these minimum limits must necessarily be to enable traders whose taxable turnover is below those limits to sell their goods at lower prices to their customers than dealers whose turnover exceeded 1097 those limits, for the latter have to add the sales-tax to the prices of their goods. But no discrimination is involved in this classification which is perfectly reason-, able when it is borne in mind that the State may not consider it administratively worthwhile to tax sales by small traders who have no organisational facilities for collecting the tax from their buyers and turn it over to the Government.", "How is the situs of a sale to be determined in the difficult class of cases which arose before the Constitution and which, in my view, occasioned the ban. \n My answer is that class of case can only arise in the course of inter-State trade and commerce, for the moment any one of the essential ingredients of a sale occurs in a State different from the taxing State and the goods are contracted to move across a boundary, you get a sale in the course of inter-State trade and commerce. Therefore, the problem about situs does not arise. Sales and purchases which are in truth and in fact intrastate (and the bulk of sales and purchases in the States are of that character) can of course be taxed. The ban does not apply and there is no need to call in aid the Explanation, for I repeat that the Explanation is limited to cases which in truth and in fact take place in the course of inter-State trade and commerce.", "This legal fiction was thus introduced not for defining what was a sale or purchase which took place inside the State as distinct from a sale or purchase which took place outside the State. The purpose of the enactment of the Explanation was not to provide a definition of a sale or purchase which took place inside the State."], "rank3": ["In the present case, however, the appellants can have no grievance, as the respondents allegation of infringement of their fundamental right under article 19 (1) (g) was based on their contention that the Act was ultra vires the State Legislature, and that contention having been accepted, by the Court below, there would clearly be an unauthorised restriction on the respondents right to carry on their trade, registration and licence being required only to facilitate collection of the tax imposed. \n As Mr. Seervai for the respondents rightly submitted, the fact that the Court below left the question undecided, though the point was concluded by the 1078 decision of this Court in Mohammad Yasin v. The Town Area Committee, Jalalbad (1), which was brought to the notice of the learned Judges, was not the fault of the respondents and gave no real cause for complaint.", "It will be seen that the principle of freedom of inter- State trade and commerce declared in article 301 is expressly subordinated to the State power of taxing goods imported from sister States, provided only no discrimination is made in favour of similar goods of local origin. Thus the States in India have full power of imposing what in American State legislation is -called the use tax, gross receipts tax, etc. not to speak of the familiar property tax, subject only to the condition that such tax is imposed on all goods of the same kind produced or manufactured in the taxing State, although such taxation is undoubtedly calculated to fetter inter-State trade and commerce.", "the Explanation was intended to do. It provides by means of a legal fiction that the State in which the goods sold or purchased are actually delivered for consumption therein is the State in which the sale or purchase is to be considered to have taken place, notwithstanding the property in such goods passed in another State.", "The expression for the purpose of consumption in that State must, in our opinion, be understood as having reference not merely to the individual importer or purchaser but as contemplating distribution eventually to consumers in general within the State. Thus all buyers within the State of delivery from out-of-State sellers, except those buying for re-export out of the State, would be within the scope of-the Explanation and liable to be taxed by the State on their inter-State transactions. It should be remembered here that the Explanation deals only with interState sales. or purchases and not with purely local or domestic transactions. That these are subject to the taxing power of the State has never been questioned. We are therefore of opinion that article 286 (1) (a) read with the Explanation prohibits taxation of sales 1085 or purchases involving inter-State elements by all States except the State in which the goods are delivered for the purpose of consumption therein in the wider sense explained above.", "sales-tax, the incidence of which is really directed against the consumer, is, in substance, a tax on the goods imposed, no doubt, on the occasion of the sale as a taxable event. \n It will now be seen why the Explanation insists on actual delivery of the goods in the State and their consumption in the State, and why an outside sale or purchase is explained by defining what is an inside sale. The object clearly is to assimilate the conditions, under which the delivery State is left free to tax inter-State sales or purchases, to those under which a State is empowered to impose tax on goods imported into the State from other States under article 304 (a).", "It is the respondents case that the sales and purchases made by them in Bombay, in the course of their business, include all the three categories excluded from the scope of State- taxation by article 286, and the Act seeking to bring all of them within its scheme of taxation is bad.", "But, as already stated, that is not the position here, and the learned Judges below fell into an error by overlooking this crucial fact when they say If the Legislature had no competence on the date the law was passed, the rules subsequently framed cannot confer competence on the Legislature.", "it was broadly contended before us that taxing statutes imposing tax on subjects divisible in their nature which do not exclude in express terms subjects exempted by the Constitution, should not, for that reason, be declared wholly ultra vires and void, for, in such cases, it is always feasible to separate taxes levied on authorised subjects from those levied on exempted subjects and to exclude the latter in the assessment of the tax.", "on receipts from individual sales or purchases of goods effected during the accounting period, and it is therefore possible to separate at the assessment the receipts derived from exempted sales or purchases and allow the State to enforce the statute with respect to the constitutionally taxable subjects, it being assumed that the State intends naturally to keep what it could lawfully tax, even where it purports to authorize the taxation of what is constitutionally exempt. The principle, as it (1) 256 U.S. 642 65 L. Ed. 1098 is tersely put in the American case, is that severability in such cases includes separability in enforcement.", "It is impossible to say that any of these ingredients is more essential than any other because the result is always the same the moment you take one away. There is then no sale. Therefore, one either has to adopt the ultra logical view and hold that the only State which can tax is the one in which all the ingredients take place and that no State can tax when a single ingredient 1102 takes place elsewhere, or resort to the old view and hold that every State in which any single ingredient -takes place can tax. The only alternative to these extremes is to make an arbitrary selection or to introduce a fiction. \n The Constitution chose the latter course and enacted the Explanation. I have deemed it proper to refer to the then existing practice regarding taxation because in construing a statute it is legitimate to take into account existting laws and the manner in which they were acted upon and enforced.", "In my opinion all it means is that there was a school of thought which regarded that as the crucial element on the nexus view and that the Constitution has negatived that idea. I am also unable to agree that the Explanation governs clause (2) of article 286, for it limits itself in express terms to sub-clause (a) of clause (1). It says that is an Explanation for the purposes of sub-clause (a). In view of that I do not feet justified in carrying it over to clause (2) and holding that it governs there as well. In my judgment, the only purpose of the 1104 Explanation is to explain where the situ8 of a sale is. clause (2) has a different object. Its purposes to prohibit taxation on sales and purchases which take place in the course of inter-State trade or commerce. If the Explanation is carried over to clause (2) it must, in my judgment, be equally applicable to subclause (b) of clause (1).", "The-basic idea is to prohibit taxation in the case of inter-State trade and commerce unless and until the ban under clause (2) is lifted - and always in the case of exports and ,imports and when the ban is lifted, the Explanation is there to settle a matter of considerable controversy regarding the situs of a sale. It is true it makes an arbitrary selection but then almost any selection would have to be arbitrary and this is as good as any other.", "This is best understood by reference to a concrete case A, a dealer in Bombay, actually delivers goods to B, a dealer in Madras, for the purpose of sale by B, the Madras dealer, to purchasers C, D and E in Madras. Can either the sale by A to B or the purchase by B 1107 from A be taxed? In my view, it cannot, for B is in my judgment, as much a consumer as C, D and E.", "I would therefore construe consumption to mean the usual use made of an article for the purposes of trade and commerce. When dealer buys from dealer that is consumption 1108 for the purposes of the purchaser dealers trade when an ultimate purchaser buys from a retailer, that is also consumption for his purposes. Therefore, in my judgment, neither the sale by A to B in the illustration put nor the purchase by B from A can be taxed so long as the ban under clause (2) remains. But the sales by t to C, D and E can each be taxed by the State of Madras as they are intra-state sales. If this is found to work hardship on the States in practice, then Parliament, which has been given the power to regulate inter-State trade and commerce under Entry 42 of List 1, can step in and lift the ban. In that event, the Explanation comes into play and Madras can tax both transactions but Bombay cannot. On the other hand, if A, the Bombay dealer, sells direct to the consumers C, D and E in Madras and actually delivers the goods to them for the purpose of consumption in Madras, neither State can tax unless the ban is lifted, and then Madras alone will be able to tax.", "the mere fact that a sale is made in the State (1) 1952 S.C.R. 1112, 1112 of Bombay will not prevent it from being a sale effected in the course of inter-state trade or commerce or in the course of export or import. \n Even when the whole transaction of sale is constituted in Bombay in the sense that every essential ingredient necessary to constitute a sale takes place there, (that is to say, even when the Explanation is not called into play), the sale would, given other considerations, be in the course of export or import or in the course of inter-State trade or commerce.", "One is about severability and the other is whether a taxing statute is to be treated differently from other laws. On the question of severability, I cannot see how the good can be separated from the bad in this case even if the Explanation to section 2 (14) be expunged unless the Constitution be read as part of the Act and we are to read into the Act some such provision as follows Notwithstanding anything which is said in any part of this Act, all sales which the State is prohibited to tax under the Constitution are excluded from the scope of this Act.", "Offending provisions can be struck out but if we do that the whole Act goes because the defect here is that all sales are permitted to be taxed provided they are within the State of Bombay, and the rulemaking authority is not restricted to taxation which is constitutionally permissible.", "These restrictions were threefold -(1) no tax could be imposed on the sale or purchase of goods where such sale or purchase took place outside the State, (2) no tax could be imposed on the sale or purchase of goods where such sale or purchase took place in the course of the import of goods into or the export of the goods out of the territory of India, and (3) no tax could be imposed on the sale or purchase of any goods where such sale or purchase took place in the course of inter-State trade or 1116 commerce except in so far as Parliament might by law otherwise provide.", "Once the transfer of ownership or the passing of the property in the goods was accepted as the sole criterion of taxability it was not necessary at all to define what was a sale or purchase which took place 1117 inside the State. Whether a sale or purchase took place inside the State could be determined by applying the general law relating to the sale of goods and ascertaining where the transfer of ownership took place or the property in the goods passed. It was only when the transfer of ownership took place or the property in the goods passed that the sale or purchase was completed and the sale or purchase took place and the situs or the location of the sale or purchase was in the place where the transfer of ownership took place or the property in the goods passed under the general law relating to the sale of goods.", "I do not accept the contention that the words for the purpose of consumption must be understood in a com- prehensive sense as having reference both to immediate and ultimate consumption within the State and excluding only resale out of the State. In my opinion they have reference only to immediate consumption within the State and no further. If the matters stood thus and there was no further provision to be considered the position would be that in a transaction of sale or purchase covered by the Explanation construed as above both the State in which the property in the goods passed and the delivery State would be entitled to tax such sale or purchase, the former by reason of the property in the goods having passed inside that State and the latter by reason of the goods having been delivered as a direct result of such sale or purchase for the purpose of consumption in that State.", "I would therefore base my, construction of the Explanation to article 286 (1)(a) and article 286 (2) on the rule as to the interpretation of statutes which I have referred to above, lifting the transaction of sale or purchase covered by the Explanation to article 286(1) (a) out of the category of the transactions in the course of inter-State trade or commerce and assimilating it to 1128 a transaction of sale or purchase which takes place inside the delivery State thus investing it with the character of an intrastate sale qua the delivery State. The result therefore is that the delivery State only would be entitled to tax the transaction of sale or purchase covered by the Explanation. Such transaction would be a transaction of sale or purchase where as a direct result of such sale or purchase the goods are delivered in the delivery State for the purpose of consumption in that State i.e., where the transaction is between a dealer in the State in which the property in the goods passes and a consumer in the delivery State. \n The State in which the property in the goods passes would not be able to tax such sale or purchase in the absence of a provision enacted by law by Parliament within the meaning of article 286(2). Once that ban is lifted by the appropriate legislation enacted by the Parliament the State in which the property in the goods passes would also be entitled to tax such sale or purchase but not otherwise."], "rank4": ["The expression for such State or any part thereof cannot, in our view, be taken to import into entry 54 the restriction that the sale or purchase referred to must take place within the territory of that State. All that it means is that the laws which a State is empowered to make must be for the purposes of that State.", "the constitutional validity of the relevant statutory provisions did not turn on the possession by the legislature of extra-territorial powers but on the existence of a sufficient territorial connection between the taxing State and what it seeks to tax.", "the construction we have placed upon that Explanation, sales or purchases effected in Bombay in respect of goods in Bombay but delivered for consumption outside Bombay are not taxable in Bombay. \n Now, the respondents complain that the latter category of sales or purchases thus held not to be taxable are not expressly excluded by the Act which, therefore, contravenes article 286 (1)(a). No doubt, there is no provision in the Act excluding in express terms sales of the kind referred to above, but neither is there any provision purporting to impose tax on such sales or purchases. On the other hand, the two charging sections of the Act, section 5 and section 10, purport, in express terms, to impose the tax on all sales made within the State of Bombay, and section 18, which lays the tax on purchases, is limited in its operation to purchases of goods delivered to a buyer in the State of Bombay for consumption therein, that is to say, to purchases which unquestionably are taxable by Bombay according to both parties. The charging sections cannot, therefore, be taken to cover the class of sales or purchases which, on our construction of the Explanation, are to be regarded as taking place outside the State of Bombay.", "But, as pointed out already, rules 5 and 6, which deal respectively with deduction of certain sales in calculating the taxable turnover under sections 7 and 11 exclude these two categories in express terms, and these rules were brought into force simultaneously with the charging sections 5 and 10 on November 1, 1952. \n The position, therefore, was that, on the date -when the general tax and the special tax became leviable under the Act, sales or purchases of the kind described under article 286(1) (b) and (2) stood in fact excluded from taxation, and the State of 1095 Bombay cannot be considered to have made a law imposing or authorising the imposition of a tax on sales or purchases excluded under the aforesaid clauses of article 286.", "I find it difficult to see how,,, article 286(2) could ever come into effective play if article 304 is applied to sales and purchases which take place in the course of inter-State trade or commerce. -A I do not think the change in language, a tax on the sale or purchase of any goods in the one case and a tax on goods imported from other States was accidental, nor do I think we will be justified in ignoring the fact that the two are placed in different parts of the Constitution. I therefore prefer to hold that articles 286 and 304 deal with different things and to construe article 286 without reference to 304.", "The situs or location of the sale or purchase therefore assumed an importance under article 286 and the Constitution makers had before them not only the legislative practice prevailing in the various States before the Constitution but also the concept of sale as defined in the Indian Sale of Goods Act. They therefore incorporated in article 286 the notion of a sale or purchase taking place, i.e., being completed, by the transfer of ownership or the passing of property in the goods under the general law relating to sale of goods and enacted that those sales or purchases which took place outside the State or which even though they took place inside the State took place in the course of the import or export or in the course of inter-State trade or commerce should come within the ban imposed therein. The Constitution makers however took count of the fact that even though the property in the goods by reason of the sale or purchase passed in a particular State the goods might as a direct result of such sale or purchase be delivered in another State for the purpose of consumption in that State. They wanted to give the delivery State in that event the power to tax such sale or purchase and therefore introduced by the Explanation to article 286 (1)(a) a legal fiction by which (1) 1898 A. C. 200. (2) 1906 A. C. 419. 1118 the sale or purchase in that event was deemed to have taken place in the delivery State."], "rank5": ["the Explanation envisages sales or purchases under which out-of-State goods are imported into the State. That is the essential element which makes such a transaction inter-State in character, and if it is turned into an intrastate transaction by the operation of the legal fiction which blots out from view the inter-State element , it is not logical to say that the transaction, though now become local and domestic in the eye of the law, still retains its inter-State character. The statutory fiction completely masks the inter-State character of the sale or purchase which, as a collateral result of such making, falls outside the scope of clause (2). It is said that, on this view, clause (2) would become practically redundant, as clause (1) (a) read with the explanation as construed by us would itself preclude taxation by other States of inter-State sales or purchases of the kind referred to in the explanation.", "As article 286 deals with restrictions on the power of the States to impose tax on the sale or purchase of goods, the Constitution makers evidently thought that it should contain also a specific provision safeguarding sales or purchases of an inter-State character against the taxing power of the States. It is however, reasonable to suppose that this particular form of protection to inter-State trade and commerce provided in article 286(2) was not intended to have a wider operation than what is contemplated in Part XIII which declares the general principle of freedom of inter-State commerce and defines the measure of constitutional protection it should enjoy. If such protection is intended to give way before the State-power of taxing goods imported from sister States, subject only to the condition against discrimination, it is legitimate to suppose that the ban under article 286(2) should not operate so as to nullify that power. True, article 304 (a) deals with the restrictions as to imposition of tax on goods, while article 1088 deals with the restrictions as to imposition of tax on sales or purchases of goods. But this distinc tion loses its practical importance in the case of sales-tax imposed by the delivery State under the conditions mentioned in the Explanation, for, if we look behind the labels at the substance of the matter, it becomes clear that a tax on sales or purchases imposed by the State in which the goods are delivered for consumption, in the sense already explained, is, in economic effect practically indistinguishable from a tax on the consumption or use of the goods.", "It would be a more natural way of reading the non-obstante clause to read into it an intention to state what according to the Constitution makers was the basic idea of fixing the situs or the location of the sale or purchase in the place where the transfer of ownership took place or the property in the goods passed and to indicate that notwithstanding that fact a sale or purchase which fell within the category mentioned in the Explanation was none, the, less to be deemed to have taken place inside the delivery State. \n If the Explanation to article 286(1) (a) is construed in the manner indicated above it follows that notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State the sale shall be deemed to have taken place in the delivery State and the delivery State would be entitled to tax the sale or purchase. That does not however mean that it is only the delivery State which will be entitled to tax the sale or purchase."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["We are of opinion that it is always desirable, when relief under article 226 is sought on allegations of infringement of fundamental rights, that the court should satisfy itself that such allegations are well founded before proceeding further with the matter. In the present case, however, the appellants can have no grievance, as the respondents allegation of infringement of their fundamental right under article 19 (1) (g) was based on their contention that the Act was ultra vires the State Legislature, and that contention having been accepted, by the Court below, there would clearly be an unauthorised restriction on the respondents right to carry on their trade, registration and licence being required only to facilitate collection of the tax imposed", "As Mr. Seervai for the respondents rightly submitted, the fact that the Court below left the question undecided, though the point was concluded by the 1078 decision of this Court in Mohammad Yasin v. The Town Area Committee, Jalalbad (1), which was brought to the notice of the learned Judges, was not the fault of the respondents and gave no real cause for complaint.", "it is necessary to ascertain the scope of such power and the nature and extent of the restrictions placed upon it by article 286.", "We are unable to accept this view. It is really not necessary in the context to use the word only in the way suggested, for, when the Explanation says that a sale or purchase shall be deemed to have taken place in a particular State, it follows that it shall be deemed also to have taken place outside the other States. Nor can the non-obstante clause be understood as implying that, under the general law relating to the sale of goods, the passing of the property in the goods is the determining factor in locating a sale or purchase. Neither the Sale of Goods Act nor the common law relating to the sale of goods has anything to say as to what the situs of a sale is, though certain rules have been laid down for ascertaining the intention of the contracting parties as to when or under what conditions the property in the goods is to pass to the buyer", "In our opinion, the non-obstante clause was inserted in the Explanation simply with a view to make it clear beyond all possible doubt that it was immaterial where the property in the goods passed, as it might otherwise be regarded as indicative of the place of sale. It is also to be noted in this connection that, on the construction suggested by the Advocate-General of Bombay, namely, that the Explanation was not intended to deprive the State in which the property in the goods passed of its taxing power, but only to exclude the sales or purchases of the kind described in the Explanation from the operation of clause (1) (a) which prohibits taxation of outside sales or purchases, the Explanation would operate, not as an explanation, but as an exception or a proviso to that clause. It 1084 may be that the description of a provision cannot be decisive of its true meaning or interpretation which must depend on the words used therein, but, when two interpretations are sought to be put upon a provision, that which fits the description which the legislature has chosen to apply to it is, according to sound canons of construction, to be adopted provided, of course, it is consistent with the language employed, in preference to the one which attributes to the provision a different effect from what it should have according to its description by the legislature", "It is to be noted that the Explanation does not say that the consumption should be by the purchaser himself. Nor do the words as a direct result have reference to consumption. They qualify actual delivery . \n The expression for the purpose of consumption in that State must, in our opinion, be understood as having reference not merely to the individual importer or purchaser but as contemplating distribution eventually to consumers in general within the State. Thus all buyers within the State of delivery from out-of-State sellers, except those buying for re-export out of the State, would be within the scope of-the Explanation and liable to be taxed by the State on their inter-State transactions.", "It should be remembered here that the Explanation deals only with interState sales. or purchases and not with purely local or domestic transactions. That these are subject to the taxing power of the State has never been questioned. We are therefore of opinion that article 286 (1) (a) read with the Explanation prohibits taxation of sales 1085 or purchases involving inter-State elements by all States except the State in which the goods are delivered for the purpose of consumption therein in the wider sense explained above. The latter State is left free to tax such sales or purchases, which power it derives not by virtue of the Explanation but under article 246 (3) read with entry 54 of List II", "We cannot agree with this restrictive interpretation of the expression inter-State trade and commerce. The sale by a trader in one State to a user in another would be a sale in the course of inter-State trade according to the natural meaning of those words, and we can see no reason for importing the restriction that the transaction should be one between two traders only. \n This is, however, not to say that the ban under clause (2) extends to the taxing power which the delivery State is left free, under the Explanation, to exercise. We are of opinion that the operation of clause (2) stands excluded as a result of the legal fiction enacted in the explanation, and the State in which the goods are actually delivered for consumption can impose tax on inter-State sales or purchases", "The effect of the 1086 Explanation in regard to inter-State dealings is, in our view, to invest what, in truth, is an inter-State transac- tion with an intrastate character in relation to the State of delivery, and clause (2) can, therefore, have no application. It is true that the legal fiction is to operate for the purposes of sub-clause (a) of clause (1), but that means merely that the Explanation is designed to explain the meaning of the expression outside the State in clause (1) (a). When once, however, it is determined with the aid of the fictional test that a particular sale or purchase has taken place within the taxing State, it follows, as a corollary, that the transaction loses its inter-State character and falls outside the purview of clause (2), not because the definition in the Explanation is used for the purpose of clause (2), but because such sale or purchase becomes in the eye of the law a purely local transaction", "the Explanation envisages sales or purchases under which out-of-State goods are imported into the State. That is the essential element which makes such a transaction inter-State in character, and if it is turned into an intrastate transaction by the operation of the legal fiction which blots out from view the inter-State element , it is not logical to say that the transaction, though now become local and domestic in the eye of the law, still retains its inter-State character. The statutory fiction completely masks the inter-State character of the sale or purchase which, as a collateral result of such making, falls outside the scope of clause (2)", "the Explanation does not cover cases of inter-State sales or purchases under which the goods are imported into the State for reexport to other States and possibly other categories of sales or purchases which do not satisfy all the requirements of the explanation.", "Whether such transactions are sufficiently numerous for the Constitution to take note of is a matter of opinion and it cannot have much bearing on the question of construction. \n On the other hand there are, in our judgment, cogent considerations which tend to support the view we have expressed above that clause (2) was not intended to affect the power of the delivery State to tax inter-State sales or purchases of the kind mentioned in the Explanation. As we have seen, in our Constitution the principle of freedom of inter-State trade and commerce is made to give way before the State-power of imposing non-discriminatory taxes on goods imported from other States. Now, article 286(2) is but one phase of the protection accorded to interState trade and commerce from the fettering power of State taxation.", "But this distinc tion loses its practical importance in the case of sales-tax imposed by the delivery State under the conditions mentioned in the Explanation, for, if we look behind the labels at the substance of the matter, it becomes clear that a tax on sales or purchases imposed by the State in which the goods are delivered for consumption, in the sense already explained, is, in economic effect practically indistinguishable from a tax on the consumption or use of the goods. The words in which the goods have actually been delivered ensure that the goods have come into the State, and the expression for the purpose of consumption in the State shows that, though the tax is formally laid on sales, its incidence is aimed at the consumers in the State", "Therefore, sales-tax, the incidence of which is really directed against the consumer, is, in substance, a tax on the goods imposed, no doubt, on the occasion of the sale as a taxable event. \n It will now be seen why the Explanation insists on actual delivery of the goods in the State and their consumption in the State, and why an outside sale or purchase is explained by defining what is an inside sale.", "The object clearly is to assimilate the conditions, under which the delivery State is left free to tax inter-State sales or purchases, to those under which a State is empowered to impose tax on goods imported into the State from other States under article 304 (a). If then, a non-discriminatory use or consumption tax imposed under (1) 1939 F.C.R. 18, 42. 1089 article 304 on goods imported from other States does not infringe the freedom of inter-State commerce declared by article 301, parity of reason and policy requires that a tax on sales or purchases imposed by the State in which the goods are actually delivered for consumption in the State should not be regarded as violative of the ban under article 286 (2), and that is what the statutory fiction enacted in the Explanation was, in our judgment, designed to achieve by divesting the sale or purchase of the kind referred. to in the Explanation of its inter-State character in relation to the State of delivery.", "The view which we have expressed above avoids either anomaly and would place local trade and interstate trade on an equal footing. The delivery State would tax both local and out-of-State goods equally without discrimination against either and that, we think, is the only measure of protection which article 286 could reasonably be supposed to accord to interState sales or purchases, when it is construed in the light of articles 301 and 304", "The question next arises as to whether the, Act contravenes all or any of the restrictions imposed by article 286.", "The charging sections cannot, therefore, be taken to cover the class of sales or purchases which, on our construction of the Explanation, are to be regarded as taking place outside the State of Bombay. \n We see no force, therefore, in the argument that the Act contravenes the provisions of article 286(1)(a) by purporting to charge sales or purchases excluded by that article from State- taxation", "As regards the other two categories of sales or purchases excluded by article 286(1)(b) and (2), it is true that the Act taken by itself does not provide for their exclusion. But, as pointed out already, rules 5 and 6, which deal respectively with deduction of certain sales in calculating the taxable turnover under sections 7 and 11 exclude these two categories in express terms, and these rules were brought into force simultaneously with the charging sections 5 and 10 on November 1, 1952. \n The position, therefore, was that, on the date -when the general tax and the special tax became leviable under the Act, sales or purchases of the kind described under article 286(1) (b) and (2) stood in fact excluded from taxation, and the State of 1095 Bombay cannot be considered to have made a law imposing or authorising the imposition of a tax on sales or purchases excluded under the aforesaid clauses of article 286", "The conditions and qualifications complained of are mostly found to relate to mere matters of proof, e.g., rule 5(2), Explanation (2), which insists on the production of a certificate from an appropriate authority, before a motor vehicle, despatched to a place outside the State of Bombay by road and driven by its own power, could be exempted as an article sold in the course of interState trade. No objection can reasonably be raised if the taxing authority insists on certain modes of proof being adduced before a claim to exclusion can be allowed.", "The argument is not without force, and it must be held that rule 5(2)(1) is ultra vires the rule-making authority and therefore void. But it is clearly severable from rule 5(1)(1). The restriction regarding the mode of transport of the goods sold or purchased in the course of inter-State trade, to which alone sub-rule (2)(1) relates, can be ignored and the exemption under rule 5(1)(1) may well be allowed to stand", "it must be conceded that the general effect of fixing these minimum limits must necessarily be to enable traders whose taxable turnover is below those limits to sell their goods at lower prices to their customers than dealers whose turnover exceeded 1097 those limits, for the latter have to add the sales-tax to the prices of their goods. But no discrimination is involved in this classification which is perfectly reason-, able when it is borne in mind that the State may not consider it administratively worthwhile to tax sales by small traders who have no organisational facilities for collecting the tax from their buyers and turn it over to the Government. Each State must, in imposing a tax of this nature, fix its own limits below which it does not consider it administratively feasible or worthwhile to impose the tax. It is idle to suggest that any discrimination is involved in such classification", "In the present case the tax is imposed, in ultimate analysis, on receipts from individual sales or purchases of goods effected during the accounting period, and it is therefore possible to separate at the assessment the receipts derived from exempted sales or purchases and allow the State to enforce the statute with respect to the constitutionally taxable subjects, it being assumed that the State intends naturally to keep what it could lawfully tax, even where it purports to authorize the taxation of what is constitutionally exempt.", "The case is however, clearly distinguishable. Their Lordships were dealing with a Provincial enactment providing for the avoidance of benami transactions as therein specified and the question was whether it was ultra vires the Legislature as contravening section 298(1) of the Government of India Act, 1935, which forbade the prohibition, inter alia, of disposition of property by an Indian subject on certain grounds which included descent. It was found that in some cases the impugned enactment would operate as a prohibition on the ground of descent alone. The Federal Court(1) by majority expressed the view that the Act could not, for that reason, be invalidated as a whole but that the circumstances in which its provisions would be inoperative must be limited to cases where the statute actually operated in contravention of the constitutional inhibition. \n Disagreeing with this view their Lordships made the following observations which were strongly relied on before us The majority of the Federal Court appear to have contemplated another form of severability, namely, by a classification of the particular cases on which the impugned Act may happen to operate, involving an inquiry into the circumstances of each individual case. \n There are no words in the Act capable of being so construed, and such a course would in effect involve an amendment of the Act by the court, a course which is beyond the competency of the court, as has long been well established.", "The subject of the constitutional prohibition was single and indivisible, namely, disposition of property on grounds only of (among other things) descent and if, in its actual operation, the impugned statute was found to transgress the constitutional mandate, the whole Act had to be held void as the words used (1) 1946 F.C.R. 1. (2) 1942 F.C.R. 67. 1099 covered both what was constitutionally permissible and what was not.", "It was, indeed, applied also in Bowmans case(1) with respect to the licence tax imposed generally on the entire business conducted including inter- State commerce as well as domestic business, but was not applied, as stated above, with respect to excise tax which was laid on every gallon of gasolene sold and was thus divisible in its nature. It is a sound rule to extend severability to include separability in enforcement in such cases, and we are of opinion that the principle should be applied in dealing with taxing statutes in this country, We accordingly set aside the declaration made by the court below and quash the writ issued by it except in regard to rule 5 (2) (1). An injunction shall, however, issue restraining the appellants from imposing or authorising the imposition of a tax on sales and purchases which are exempted from taxation by article 286 as interpreted above"], "rank2": ["This is an appeal from the judgment and order of the High Court of Judicature at Bombay declaring the Bombay Sales Tax Act, 1952, (Act XXIV of 1952), ultra vires the State Legislature and issuing a writ in the nature of mandamus against the State of Bombay and the Collector of Sales Tax, Bombay, appellants herein, directing them to forbear and desist from enforcing the provisions of the said Act against the respondents who are dealers in motor cars in Bombay", "The respondents accordingly prayed for the issue of a writ in the nature of mandamus against the appellants preventing them from enforcing the provisions of the Act against the respondents. \n A further ground of attack was added by amendment of the petition to the effect that the Act being wholly ultra vires and void, the provisions requiring dealers to apply for registration in some cases and to obtain a licence in some others as a condition of carrying on their business, infringed the fundamental rights of the respondents under article 19 (1) (g) of the Constitution.", "In the affidavit filed in answer the appellants traversed the allegations in the petition and contended, inter alia, that the Act was a complete code and provided for special machinery for dealing with all questions arising under it, including questions of constitutionality, and, therefore, the petition was not maintainable, that the present ease was not an appropriate one for the issue of a writ under article 226 as the validity of the imposition of a tax was questioned, that no assessment proceedings having been initiated against the respondents and no demand notice having been issued, the respondents had no cause of action, and that, properly construed, the Act and the Rules did not contravene article 286 or any other provisions of the Constitution and did not infringe any fundamental right of the respondents", "The petition was heard by a Division Bench of the High Court consisting of Chagla C. J. and Dixit J. Chagla C. J., who delivered the judgment, Dixit J. concurring, overruled the preliminary objection disdistinguishing the decisions cited in support thereof by pointing out that the principle that a court would not issue a prerogative writ when an adequate alternative remedy was available could not apply where, as here, a party came to the court with an allegation that his fundamental rights had been infringed and sought relief under article 226. \n The learned Judges however thought, in view of the conclusion they had come to on the question of competency of the State Legislature to pass the Act, it was not necessary to consider the challenge that has been made to the Act under articles 14 and 19 and expressed no opinion on the alleged infringement of the respondents fundamental rights", "On the merits, the learned Judges held that the definition of sale in the Act was so wide as to include the three categories of sale exempted by article 286 from the imposition of sales tax by the States, and, as the definition governed the charging sections 5 and 10, the Act must be taken to impose the tax on such sales also in contravention of article 286. The Act must, therefore, be declared wholly void, it being impossible to sever any specific offending provision so as to save the rest of the Act, as the definition pervades the whole Act and the whole scheme of the Act is bound up with the definition of sale. The learned Judges rejected the argument that the Act and the Rules must be read together to see whether the State has made a law imposing a tax in contravention of article 286, remarking that if the Act itself is bad,, the rules, made under it cannot have any greater efficacy.", "Nor was the Government, which was authorised to make rules for carrying out the purpose of the Act, under an obligation to exclude the exempted sales. The rules, too, did not exclude all the three categories of exempted sales but only two of them, and even such exclusion was hedged 1077 In view of the importance of the issues involved, notice of the appeal was issued to the AdvocatesGeneral of States under Order XLI, Rule 1, and many of them intervened and appeared before us", "The power is conferred by article 246 (3) read with entry 54 of List 11 of the Seventh Schedule to the Constitution. The Legislature of any State has, under these provisions, the exclusive power to make laws for such State or any part thereof with respect to taxes on the sale or purchase of goods other than newspapers. The expression for such State or any part thereof cannot, in our view, be taken to import into entry 54 the restriction that the sale or purchase referred to must take place within the territory of that State. All that it means is that the laws which a State is empowered to make must be for the purposes of that State", "As pointed out by the Privy Council in the Wallace Brothers case (2) in dealing with the competency of the Indian Legislature to impose tax on the income arising abroad to a non-resident foreign company, the constitutional validity of the relevant statutory provisions did not turn on the possession by the legislature of extra-territorial powers but on the existence of a sufficient territorial connection between the taxing State and what it seeks to tax", "In the case of sales-tax it is not necessary that the sale or purchase should take place within the territorial limits of the State in the sense that all the ingredients of a sale like the agreement to sell, the passing of title, delivery of the goods, etc., should have a territorial connection with the State. Broadly speaking, local activities of buying or selling carried on in the State in relation to local goods would be a sufficient basis to sustain the taxing power of the State, provided of course, such (1) 1952 S.C.R. 572. (2) 1948 S.C.R. I 1079 activities ultimately resulted in a concluded sale or purchase to be taxed. In exercise of the legislative power conferred upon them in substantially similar terms by the Government of India Act, 1935, the Provincial Legislatures enacted sales-tax laws for their respective Provinces, acting on the principle of territorial nexus referred to above that is to say, they picked out one or more of the ingredients constituting a sale and made them the basis of their sales-tax legislation.", "Whether the territorial nexus put forward as the basis of the taxing power in each case would be sustained as sufficient was a matter of doubt not having been tested in a court of law. And such claims to taxing power led to multiple taxation of the same transaction by different Provinces and cumulation of the burden falling ultimately on the consuming public", "This situation posed to the Constitution makers the problem of restricting the taxing power on sales or purchases involving inter-State elements, and alleviating the tax burden on the consumer. At the same time they were evidently anxious to maintain the State power of imposing non-discriminatory taxes on goods imported from other States, while upholding the economic unity of India by providing for the freedom of inter-State trade and commerce. In their attempt to harmonise and achieve these somewhat conflicting objectives they enacted articles 286, 301 an 304.", "It will be seen that the principle of freedom of inter- State trade and commerce declared in article 301 is expressly subordinated to the State power of taxing goods imported from sister States, provided only no discrimination is made in favour of similar goods of local origin. Thus the States in India have full power of imposing what in American State legislation is -called the use tax, gross receipts tax, etc. not to speak of the familiar property tax, subject only to the condition that such tax is imposed on all goods of the same kind produced or manufactured in the taxing State, although such taxation is undoubtedly calculated to fetter inter-State trade and commerce. In other words, the commercial unity of India is made to give way before the State-power of imposing any non-dis- criminatory tax on goods imported from sister States. Having thus provided for the freedom of inter-State trade and commerce subject to the important qualification mentioned above, the authors of the Constitution had to devise a formula of restrictions to be imposed on the State- power of taxing sales or purchases involving inter-State elements which would avoid the doubts and difficulties arising out of the imposition of sales-tax on the same transaction by several Provincial Legislatures in the country before the commencement of the Constitution", "This they did by enacting clause (1) (a) with the Explanation and clause (2) of article 286. Clause (1) (a) prohibits the taxation of all sales or purchases which take place outside the State, 1082 but a localised sale is a troublesome concept, for, a sale is a composite transaction involving as it does several elements such as agreement to sell, transfer of ownership, payment of the price, delivery of the goods and. so forth, which may take place at different places. How, then, is it to be determined whether a particular sale or purchase took place within or outside the State ? \n It is difficult to say that any one of the ingredients mentioned above is more essential to a sale or purchase than the others. To solve the difficulty an easily applicable test for determining what is an outside sale had to be formulated, and that is what, in our opinion, the Explanation was intended to do. It provides by means of a legal fiction that the State in which the goods sold or purchased are actually delivered for consumption therein is the State in which the sale or purchase is to be considered to have taken place, notwithstanding the property in such goods passed in another State.", "Why an outside sale or purchase is explained by defining what is an inside sale, and why actual delivery and consumption in the State are made the determining factors in locating a sale or purchase will presently appear. The test of sufficient territorial nexus was thus replaced by a simpler and more easily workable test Are the goods actually delivered in the taxing State, as a direct result of a sale or purchase, for the purpose of consumption therein ? Then, such sale or purchase shall be deemed to have taken place in that State and outside all other States. The latter States are prohibited from taxing the sale or purchase the former alone is left free to do so.", "Multiple taxation of the same transaction by different States is also thus avoided. It is, however, argued on behalf of Bombay that the Explanation does not say that the State of delivery is the only State in which the sale or purchase shall be deemed to have taken place. \n If that was the intention, it would have been easy to say so. On the other hand, the non-obstante clause in the Explanation is said to indicate that, apart from cases covered by the legal fiction, the passing of property in the goods is to determine the place of sale. Thus, both the State of delivery 1083 and the State in which the property in the goods sold passes are, it is claimed, empowered to tax", "That question often raises ticklish problems for lawyers and courts, and to make the passing of title the determining factor in the location of a sale or purchase would be to replace old uncertainties and difficulties connected with the nexus basis with new ones. Nor would the hardship of multiple taxation be obviated if two States were still free to impose tax on the same tran- saction", "We will now consider the effect of article 286(2) on the taxability of inter-State sales or purchases of the kind envisaged by the Explanation to clause (1) (a). As both the Explanation and clause (2) deal only with inter-State transactions, it may appear at first blush that whatever taxing power the Explanation may have reserved to the state of delivery is nullified by clause (2), at any rate until Parliament chooses to lift the ban under the power reserved to it by the opening words of clause (2). As one way of avoiding this result I it was suggested by the Advocate- Gneral of Bombay that the expression inter-State trade and commerce in clause (2) may be construed as meaning dealings between a trader in one State and a trader in another, so that the clause would be applicable only to sales or purchases in the course of dealings between such traders. The ban under clause (2) could not in that view, affect the taxability of a sale by a trader in one State to a consumer or user in another.", "As article 286 deals with restrictions on the power of the States to impose tax on the sale or purchase of goods, the Constitution makers evidently thought that it should contain also a specific provision safeguarding sales or purchases of an inter-State character against the taxing power of the States.", "It is however, reasonable to suppose that this particular form of protection to inter-State trade and commerce provided in article 286(2) was not intended to have a wider operation than what is contemplated in Part XIII which declares the general principle of freedom of inter-State commerce and defines the measure of constitutional protection it should enjoy. If such protection is intended to give way before the State-power of taxing goods imported from sister States, subject only to the condition against discrimination, it is legitimate to suppose that the ban under article 286(2) should not operate so as to nullify that power. True, article 304 (a) deals with the restrictions as to imposition of tax on goods, while article 1088 deals with the restrictions as to imposition of tax on sales or purchases of goods.", "Discussing the true nature of a duty of excise and a tax on the sale of goods, Gwyer C. J. observed in the Central Provinces and Berar Sales Tax case (1) It is common ground that the Court is entitled to look at the real substance of the Act imposing it, at what it does and not merely at what it says, in order to ascertain the true nature of the tax. Since writers on political economy are agreed that taxes on the sale of commodities are simply taxes on the commodities themselves, it is possible to regard a tax on the retail sale of motor spirit -and lubricants as a tax on those commodities", "If both the exporting State and the delivery State were entitled, notwithstanding article 286(2), to tax the inter-State sale or purchase, as suggested by the Advocate-General of Bombay, it would mean that the transaction is subjected to double taxation as compared with a sale by a local dealer which pays only one tax. It is precisely this type of discriminatory burden which the principle of freedom of inter-State commerce seeks to avoid, for, it places inter-State trade at a disadvantage in competition with local trade", "On the other hand, if neither State could tax such sale or purchase as is referred to in the explanation, until Parliament lifted the ban, as the Advocate-General of Madras was inclined to think, the result would be that consumers could get out-of-State goods more cheaply than local goods, and local dealers would suffer competitive disadvantage as compared with outside dealers. Does the principle of freedom of inter-State commerce require that a State should foster such commerce to the detriment of domestic trade ? It is one thing to avoid impeding inter-State commerce by imposing discriminatory burdens upon it which internal trade does not have to bear, but quite another to place local products and local business at a disadvantage in competition with outside goods and dealers.", "It would be 1090 a curious perversion of the principle of freedom of inter-State commerce to drive local custom across the border to outside dealers, and that, in our opinion, could not have been contemplated", "It is the respondents case that the sales and purchases made by them in Bombay, in the course of their business, include all the three categories excluded from the scope of State- taxation by article 286, and the Act seeking to bring all of them within its scheme of taxation is bad. It is, therefore, necessary to make a brief survey of the main provisions of the Act and of the rules made thereunder, in order to see whether the respondents complaint is well- founded, and, if so, whether the whole or any part of the Act is to be declared unconstitutional and void.", "it will be seen from the provisions summarised above that the Act does not in terms exclude from its purview the sales or purchases taking place outside the State of Bombay while it does include, by Explanation (2) to the definition of sale, the sales or purchases under which the delivery and consumption take place in Bombay which, by virtue of the Explanation to article 286(1)(a), are to be regarded as local 1094 sales or purchases. On the construction we have placed upon that Explanation, sales or purchases effected in Bombay in respect of goods in Bombay but delivered for consumption outside Bombay are not taxable in Bombay. \n Now, the respondents complain that the latter category of sales or purchases thus held not to be taxable are not expressly excluded by the Act which, therefore, contravenes article 286 (1)(a). No doubt, there is no provision in the Act excluding in express terms sales of the kind referred to above, but neither is there any provision purporting to impose tax on such sales or purchases. On the other hand, the two charging sections of the Act, section 5 and section 10, purport, in express terms, to impose the tax on all sales made within the State of Bombay, and section 18, which lays the tax on purchases, is limited in its operation to purchases of goods delivered to a buyer in the State of Bombay for consumption therein, that is to say, to purchases which unquestionably are taxable by Bombay according to both parties", "The Act and the rules having been brought into operation simultaneously, there is no obvious reason why the rules framed in exercise of the power delegated by the Legislature should not be regarded as part of the law made by the State", "The position might be different if the rules had come into operation sometime later than the charging sections of the Act, for, in that case, it is arguable that if the legislation, without excluding the two classes of sales or purchases, was beyond the competence of the Legislature at the date when it was passed, the exclusion subsequently effected by the rules cannot validate such legislation. But, as already stated, that is not the position here, and the learned Judges below fell into an error by overlooking this crucial fact when they say If the Legislature had no competence on the date the law was passed, the rules subsequently framed cannot confer competence on the Legislature.", "The principle, as it (1) 256 U.S. 642 65 L. Ed. 1098 is tersely put in the American case, is that severability in such cases includes separability in enforcement. \n Our attention was drawn to the decision of the Privy Council in Punjab Province v. Daulat Singh and Others(1) as condemnatory of this principle."], "rank3": ["The Legislature of the State of Bombay enacted the Bombay Sales Tax Act, 1952, (hereinafter referred to as ,the Act) and it was brought into force on October 9, 1952, by notification issued under section 1 (3) of the Act, except sections 5, 9, 10 and 47 which came into operation on November 1, 1952, as notified under section 2 (3). On, the same day the rules made by the State Government in exercise of the power conferred by section 45 of the Act also came into force. 1075 On November 3, 1952, the respondents 1 to 6, who are companies incorporated under the Indian Companies Act, 1913, and respondent No. 7, a partnership firm, all of whom are carrying on business in Bombay of buying and selling motor cars, presented a petition to the High Court under article 226 of the Constitution challenging the validity of the Act on the ground that it is ultra vires the State Legislature, inasmuch as it purported to tax sales arid purchases of goods regardless of the restrictions imposed on State legislative power by article 286 of the Constitution. It was also alleged that the provisions of the Act were discriminatory in their effect and, therefore, void under article 14 read with article 13 of the Constitution.", "The Advocate-General of Bombay, appearing on behalf of the appellants, took strong exception to the manner in which the learned Judges below disposed of the objection to the maintainability of the petition.", "He complained that, having entertained the petition on the ground that infringement of fundamental rights was alleged, and that the remedy under article 226 was, therefore, appropriate, the learned Judges issued a writ without finding that any fundamental right had in fact been infringed. Learned counsel for the State of West Bengal also represented that parties in that State frequently got petitions under article 226 admitted by alleging violation of some fundamental right, and the court sometimes issued the writ asked for without insisting on the allegation being substantiated", "Assam and Bengal made among other things the actual existence of the goods in the Province at the time of the contract of sale the test of taxability. \n In Bihar the pro- duction or manufacture of the goods in the Province was made an additional ground. A net of the widest range perhaps was laid in Central Provinces and Bert where it was sufficient if the goods were actually found in the Province at any time after the contract of sale or purchase in respect thereof was made.", "These articles read as follows 286. (1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place- 1080 (a) outside the State or (b) in the course of the import of the goods into, nor export of the goods out of, the territory of India. Explanation.-For the purposes of sub-clause (a), a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State. Except in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter-State trade or commerce Provided that the President may by order direct that any tax on the sale or purchase of goods which was being lawfully levied by the Government of any State immediately before the commencement of this Constitution shall, notwithstanding that the imposition of such tax is contrary to the provisions of this clause, continue to be levied until the thirty-first day of March, 1951. \n No law made by the Legislature of a State im- posing, or authorising the imposition of, a tax on the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community shall have effect unless it has been reserved for the consideration of the President and has received his assent. 301, Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free. Notwithstanding anything in article 301 or article 303, the Legislature of a State may by law- (a) impose on goods imported from other States any tax to which similar goods manufactured or 1081 produced in that State are subject, so, however, as not to discriminate between goods so imported and goods,, so manufactured or produced and (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President.", "The Act provides for levy of two kinds of taxes, called the general tax and the special tax, by the two charging sections 5 and 10 respectively. Dealer is defined in section 2 (7) as a person who carries on the business of selling goods in the State of Bombay whether for commission, remuneration or otherwise and includes a State Government which carries on such business and any society, club or association which sells goods to its members. The Expla- nation (2) to this definition provides that the manager or agent of a dealer who resides outside the State of Bombay and carries on the business of selling goods in the State of Bombay shall, in respect of such business, be deemed to be a dealer for the purpose of the Act", "Sale is defined by section 2 (14) with all 1091 its grammatical variations and cognate expressions as meaning any transfer of property in goods for cash or deferred payment or other valuable consideration and includes any supply by a society, a club, or an association to its members on payment of price or of fees or subscriptions but does not include a mortgage, hypothecation, charge or pledge. The words buy and purchase are to be construed accordingly.", "There are two Explanations attached to this definition of which the second, which is obviously based on the Explanation to clause (1) (a) of article, 286, provides that the sale of any goods which have actually been delivered in the State of Bombay as a direct result of such sale for the purpose of consumption in the said State, shall be deemed, for the purposes of this Act, to have taken place in the said State, irrespective of the fact that the property in the goods has, by reason of such sale, passed in another State. Turnover is defined by section 2(21) as the aggregate of the amounts of sale price received and receivable by a dealer in respect of any sale of goods made during a given period after deducting the amount, if any, refunded by the dealer to a purchaser in respect of any goods purchased and returned by the purchaser within the prescribed period. Section 5 imposes the general tax on every dealer whose turnover in respect of sales within the State of Bombay during any of the three consecutive years immediately preceding the first day of April, 1952, has exceeded Rs. 30,000 or whose turnover in respect of such sales exceeds the said limit during the year commencing on the first day of April, 1952", "The tax is to be levied on his taxable turnover in respect of sales of goods made on or after the appointed day, i.e., 1st November, 1952, at the rate of 3 pies in the rupee (section 6). By section 7 the taxable turnover is to be determined by first deducting from the turnover of the dealer in respect of all his sales of goods during any period of his liability to pay the general tax, his turnover during that period, in respect of (a) sales of any goods declared from time to time as tax-free under section 8 and(b) ,,such other sales as may be prescribed, No dealer 1092 liable to pay the general tax shall carry on business as a dealer unless he has applied for registration (section 9). \n A more or less similar scheme is provided for the levy of a special tax on the sale of certain special goods specified in Schedule II. By section 10 every dealer whose turnover in respect of sales of special goods made within the State of Bombay has exceeded Rs. 5,000 during the year ended 31st March, 1952, or exceeds the said limit during the year commencing from 1st April, 1952, is charged with a special tax at the rate specified in Schedule 11 on his taxable turnover in respect of the sales of special goods made on or after the appointed day, i.e., 1st November, 1952.", "By section II the taxable turnover is to be determined by first deducting, from the turnover of the dealer in respect of his sales of special goods during any period of his liability, his turnover in respect of (a) sales of special goods purchased by him, on or after the appointed day at a place in the State of Bombay from a dealer holding a licence under section 12 and (b) such other sales as may be prescribed. Every dealer liable to pay the special tax is required to obtain a licence as a condition of his carrying on his business (section 12).\n Then follow certain pro- visions for returns, assessment, payment and recovery of tax. Section 18 imposes a purchase tax at the rate of 3 pies in the rupee on the purchases of such goods as may be notified by the State Government from time to time which have been despatched or brought from any -place in India outside the State of Bombay or are delivered as a direct result of a sale to a buyer in, the State of Bombay for consumption therein, and also an additional tax if the goods are special goods. Section 21 (2) prohibits any person selling goods from collecting from the purchaser any amount by way of tax unless he is a registered dealer or a licensed dealer and is liable to pay the tax under this Act in respect of such sale.", "Section 45 empowers the State Government to make rules for carrying out the purposes of this Act. In particular, such rules may prescribe, among other things, the other sales, turnover in respect of which may be deducted from a dealers turnover in computing his taxable turnover as defined in section 7 and in section 11 sub-section (2) (e). In exercise of the powers conferred by this section, the State Government made and published rules called the Bombay Sales Tax Rules, 1952, which were brought into force on the same day on which the charging sections 5 and 10 of the Act were also brought into force, namely, November 1, 1952", "Of these, Rules 5(1) and 6(1) are important, and they provide for the deduction of the following sales in calculating taxable turnover under section 7 (general tax) and section 11 (special tax) (1) sales which take place (a) in the course of the import of the goods into or export of the goods out of the territory of India or (b) in the course of inter-State trade or commerce. It is to be noted that these are the excluded categories of sales or purchases under article 286 (1) (b) and (2) respectively. \n Rule 5(2) (1) requires, as a condition of the aforesaid deductions, that the goods should be consigned by certain specified modes of transport. Clause (v) lays down a rule of presumption to be acted upon in the absence of evidence of actual consignment of the goods within three months of the sale, that the sale has not taken place in the course of export or of inter- State trade as the case may be."], "label": "ACCEPTED"}, "expert_4": {"rank1": ["Division Bench of the High Court consisting of Chagla C. J. and Dixit J. Chagla C. J., who delivered the judgment, Dixit J. concurring, overruled the preliminary objection disdistinguishing the decisions cited in support thereof by pointing out that the principle that a court would not issue a prerogative writ when an adequate alternative remedy was available could not apply where, as here, a party came to the court with an allegation that his fundamental rights had been infringed and sought relief under article 226.", "On the merits, the learned Judges held that the definition of sale in the Act was so wide as to include the three categories of sale exempted by article 286 from the imposition of sales tax by the States, and, as the definition governed the charging sections 5 and 10, the Act must be taken to impose the tax on such sales also in contravention of article 286.", "The Act must, therefore, be declared wholly void, it being impossible to sever any specific offending provision so as to save the rest of the Act, as the definition pervades the whole Act and the whole scheme of the Act is bound up with the definition of sale.", "The learned Judges rejected the argument that the Act and the Rules must be read together to see whether the State has made a law imposing a tax in contravention of article 286, remarking that if the Act itself is bad,, the rules, made under it cannot have any greater efficacy.", "In the present case, however, the appellants can have no grievance, as the respondents allegation of infringement of their fundamental right under article 19 (1) (g) was based on their contention that the Act was ultra vires the State Legislature, and that contention having been accepted, by the Court below, there would clearly be an unauthorised restriction on the respondents right to carry on their trade, registration and licence being required only to facilitate collection of the tax imposed.", "The delivery State would tax both local and out-of-State goods equally without discrimination against either and that, we think, is the only measure of protection which article 286 could reasonably be supposed to accord to interState sales or purchases, when it is construed in the light of articles 301 and 304.", "The position, therefore, was that, on the date -when the general tax and the special tax became leviable under the Act, sales or purchases of the kind described under article 286(1) (b) and (2) stood in fact excluded from taxation, and the State of 1095 Bombay cannot be considered to have made a law imposing or authorising the imposition of a tax on sales or purchases excluded under the aforesaid clauses of article 286.", "The Act and the rules having been brought into operation simultaneously, there is no obvious reason why the rules framed in exercise of the power delegated by the Legislature should not be regarded as part of the law made by the State.", "No objection can reasonably be raised if the taxing authority insists on certain modes of proof being adduced before a claim to exclusion can be allowed.", "But no discrimination is involved in this classification which is perfectly reason-, able when it is borne in mind that the State may not consider it administratively worthwhile to tax sales by small traders who have no organisational facilities for collecting the tax from their buyers and turn it over to the Government."], "rank2": ["This is an appeal from the judgment and order of the High Court of Judicature at Bombay declaring the Bombay Sales Tax Act, 1952, (Act XXIV of 1952), ultra vires the State Legislature and issuing a writ in the nature of mandamus against the State of Bombay and the Collector of Sales Tax, Bombay, appellants herein, directing them to forbear and desist from enforcing the provisions of the said Act against the respondents who are dealers in motor cars in Bombay.", "a petition to the High Court under article 226 of the Constitution challenging the validity of the Act on the ground that it is ultra vires the State Legislature, inasmuch as it purported to tax sales arid purchases of goods regardless of the restrictions imposed on State legislative power by article 286 of the Constitution.", "It was also alleged that the provisions of the Act were discriminatory in their effect and, therefore, void under article 14 read with article 13 of the Constitution.", "The respondents accordingly prayed for the issue of a writ in the nature of mandamus against the appellants preventing them from enforcing the provisions of the Act against the respondents.", "A further ground of attack was added by amendment of the petition to the effect that the Act being wholly ultra vires and void, the provisions requiring dealers to apply for registration in some cases and to obtain a licence in some others as a condition of carrying on their business, infringed the fundamental rights of the respondents under article 19 (1) (g) of the Constitution.", "The learned Judges however thought, in view of the conclusion they had come to on the question of competency of the State Legislature to pass the Act, it was not necessary to consider the challenge that has been made to the Act under articles 14 and 19 and expressed no opinion on the alleged infringement of the respondents fundamental rights.", "Nor was the Government, which was authorised to make rules for carrying out the purpose of the Act, under an obligation to exclude the exempted sales.", "The rules, too, did not exclude all the three categories of exempted sales but only two of them, and even such exclusion was hedged", "We are of opinion that it is always desirable, when relief under article 226 is sought on allegations of infringement of fundamental rights, that the court should satisfy itself that such allegations are well founded before proceeding further with the matter.", "Therefore, sales-tax, the incidence of which is really directed against the consumer, is, in substance, a tax on the goods imposed, no doubt, on the occasion of the sale as a taxable event.", "It is one thing to avoid impeding inter-State commerce by imposing discriminatory burdens upon it which internal trade does not have to bear, but quite another to place local products and local business at a disadvantage in competition with outside goods and dealers. It would be 1090 a curious perversion of the principle of freedom of inter-State commerce to drive local custom across the border to outside dealers, and that, in our opinion, could not have been contemplated.", "The view which we have expressed above avoids either anomaly and would place local trade and interstate trade on an equal footing.", "The charging sections cannot, therefore, be taken to cover the class of sales or purchases which, on our construction of the Explanation, are to be regarded as taking place outside the State of Bombay. \n We see no force, therefore, in the argument that the Act contravenes the provisions of article 286(1)(a) by purporting to charge sales or purchases excluded by that article from State- taxation.", "As regards the other two categories of sales or purchases excluded by article 286(1)(b) and (2), it is true that the Act taken by itself does not provide for their exclusion.", "But, as pointed out already, rules 5 and 6, which deal respectively with deduction of certain sales in calculating the taxable turnover under sections 7 and 11 exclude these two categories in express terms, and these rules were brought into force simultaneously with the charging sections 5 and 10 on November 1, 1952.", "The position might be different if the rules had come into operation sometime later than the charging sections of the Act, for, in that case, it is arguable that if the legislation, without excluding the two classes of sales or purchases, was beyond the competence of the Legislature at the date when it was passed, the exclusion subsequently effected by the rules cannot validate such legislation.", "But, as already stated, that is not the position here, and the learned Judges below fell into an error by overlooking this crucial fact when they say If the Legislature had no competence on the date the law was passed, the rules subsequently framed cannot confer competence on the Legislature.", "The argument is not without force, and it must be held that rule 5(2)(1) is ultra vires the rule-making authority and therefore void. But it is clearly severable from rule 5(1)(1).", "The restriction regarding the mode of transport of the goods sold or purchased in the course of inter-State trade, to which alone sub-rule (2)(1) relates, can be ignored and the exemption under rule 5(1)(1) may well be allowed to stand.", "Each State must, in imposing a tax of this nature, fix its own limits below which it does not consider it administratively feasible or worthwhile to impose the tax. It is idle to suggest that any discrimination is involved in such classification.", "Apart from the considerations set forth above which tend to support the constitutional validity of the Act, it was broadly contended before us that taxing statutes imposing tax on subjects divisible in their nature which do not exclude in express terms subjects exempted by the Constitution, should not, for that reason, be declared wholly ultra vires and void, for, in such cases, it is always feasible to separate taxes levied on authorised subjects from those levied on exempted subjects and to exclude the latter in the assessment of the tax.", "In such cases, it is claimed, the statute itself should be allowed to stand, the taxing authority being prevented by injunction from imposing the tax on subjects exempted by the Constitution.", "It is a sound rule to extend severability to include separability in enforcement in such cases, and we are of opinion that the principle should be applied in dealing with taxing statutes in this country, We accordingly set aside the declaration made by the court below and quash the writ issued by it except in regard to rule 5 (2) (1).", "An injunction shall, however, issue restraining the appellants from imposing or authorising the imposition of a tax on sales and purchases which are exempted from taxation by article 286 as interpreted above."], "rank3": ["In the affidavit filed in answer the appellants traversed the allegations in the petition and contended, inter alia, that the Act was a complete code and provided for special machinery for dealing with all questions arising under it, including questions of constitutionality, and, therefore, the petition was not maintainable, that the present ease was not an appropriate one for the issue of a writ under article 226 as the validity of the imposition of a tax was questioned, that no assessment proceedings having been initiated against the respondents and no demand notice having been issued, the respondents had no cause of action, and that, properly construed, the Act and the Rules did not contravene article 286 or any other provisions of the Constitution and did not infringe any fundamental right of the respondents", "He complained that, having entertained the petition on the ground that infringement of fundamental rights was alleged, and that the remedy under article 226 was, therefore, appropriate, the learned Judges issued a writ without finding that any fundamental right had in fact been infringed.", "Learned counsel for the State of West Bengal also represented that parties in that State frequently got petitions under article 226 admitted by alleging violation of some fundamental right, and the court sometimes issued the writ asked for without insisting on the allegation being substantiated.", "As Mr. Seervai for the respondents rightly submitted, the fact that the Court below left the question undecided, though the point was concluded by the 1078 decision of this Court in Mohammad Yasin v. The Town Area Committee, Jalalbad (1), which was brought to the notice of the learned Judges, was not the fault of the respondents and gave no real cause for complaint.", "The expression for such State or any part thereof cannot, in our view, be taken to import into entry 54 the restriction that the sale or purchase referred to must take place within the territory of that State.", "All that it means is that the laws which a State is empowered to make must be for the purposes of that State.", "In their attempt to harmonise and achieve these somewhat conflicting objectives they enacted articles 286, 301 an 304.", "These articles read as follows 286. (1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place- 1080 (a) outside the State or (b) in the course of the import of the goods into, nor export of the goods out of, the territory of India.", "Explanation.-For the purposes of sub-clause (a), a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State.", "Except in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter-State trade or commerce Provided that the President may by order direct that any tax on the sale or purchase of goods which was being lawfully levied by the Government of any State immediately before the commencement of this Constitution shall, notwithstanding that the imposition of such tax is contrary to the provisions of this clause, continue to be levied until the thirty-first day of March, 1951.", "No law made by the Legislature of a State im- posing, or authorising the imposition of, a tax on the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community shall have effect unless it has been reserved for the consideration of the President and has received his assent. 301, Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free.", "Notwithstanding anything in article 301 or article 303, the Legislature of a State may by law- (a) impose on goods imported from other States any tax to which similar goods manufactured or 1081 produced in that State are subject, so, however, as not to discriminate between goods so imported and goods,, so manufactured or produced and (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President.", "It will be seen that the principle of freedom of inter- State trade and commerce declared in article 301 is expressly subordinated to the State power of taxing goods imported from sister States, provided only no discrimination is made in favour of similar goods of local origin.", "Thus the States in India have full power of imposing what in American State legislation is -called the use tax, gross receipts tax, etc. not to speak of the familiar property tax, subject only to the condition that such tax is imposed on all goods of the same kind produced or manufactured in the taxing State, although such taxation is undoubtedly calculated to fetter inter-State trade and commerce.", "In other words, the commercial unity of India is made to give way before the State-power of imposing any non-dis- criminatory tax on goods imported from sister States.", "It is difficult to say that any one of the ingredients mentioned above is more essential to a sale or purchase than the others.", "To solve the difficulty an easily applicable test for determining what is an outside sale had to be formulated, and that is what, in our opinion, the Explanation was intended to do.", "It provides by means of a legal fiction that the State in which the goods sold or purchased are actually delivered for consumption therein is the State in which the sale or purchase is to be considered to have taken place, notwithstanding the property in such goods passed in another State.", "It is really not necessary in the context to use the word only in the way suggested, for, when the Explanation says that a sale or purchase shall be deemed to have taken place in a particular State, it follows that it shall be deemed also to have taken place outside the other States.", "Nor can the non-obstante clause be understood as implying that, under the general law relating to the sale of goods, the passing of the property in the goods is the determining factor in locating a sale or purchase.", "Neither the Sale of Goods Act nor the common law relating to the sale of goods has anything to say as to what the situs of a sale is, though certain rules have been laid down for ascertaining the intention of the contracting parties as to when or under what conditions the property in the goods is to pass to the buyer.", "In our opinion, the non-obstante clause was inserted in the Explanation simply with a view to make it clear beyond all possible doubt that it was immaterial where the property in the goods passed, as it might otherwise be regarded as indicative of the place of sale.", "It is to be noted that the Explanation does not say that the consumption should be by the purchaser himself.", "Nor do the words as a direct result have reference to consumption. They qualify actual delivery . \n The expression for the purpose of consumption in that State must, in our opinion, be understood as having reference not merely to the individual importer or purchaser but as contemplating distribution eventually to consumers in general within the State.", "We are therefore of opinion that article 286 (1) (a) read with the Explanation prohibits taxation of sales 1085 or purchases involving inter-State elements by all States except the State in which the goods are delivered for the purpose of consumption therein in the wider sense explained above.", "The latter State is left free to tax such sales or purchases, which power it derives not by virtue of the Explanation but under article 246 (3) read with entry 54 of List II.", "The sale by a trader in one State to a user in another would be a sale in the course of inter-State trade according to the natural meaning of those words, and we can see no reason for importing the restriction that the transaction should be one between two traders only.", "This is, however, not to say that the ban under clause (2) extends to the taxing power which the delivery State is left free, under the Explanation, to exercise.", "We are of opinion that the operation of clause (2) stands excluded as a result of the legal fiction enacted in the explanation, and the State in which the goods are actually delivered for consumption can impose tax on inter-State sales or purchases.", "The effect of the 1086 Explanation in regard to inter-State dealings is, in our view, to invest what, in truth, is an inter-State transac- tion with an intrastate character in relation to the State of delivery, and clause (2) can, therefore, have no application.", "It is true that the legal fiction is to operate for the purposes of sub-clause (a) of clause (1), but that means merely that the Explanation is designed to explain the meaning of the expression outside the State in clause (1) (a).", "When once, however, it is determined with the aid of the fictional test that a particular sale or purchase has taken place within the taxing State, it follows, as a corollary, that the transaction loses its inter-State character and falls outside the purview of clause (2), not because the definition in the Explanation is used for the purpose of clause (2), but because such sale or purchase becomes in the eye of the law a purely local transaction.", "That is the essential element which makes such a transaction inter-State in character, and if it is turned into an intrastate transaction by the operation of the legal fiction which blots out from view the inter-State element , it is not logical to say that the transaction, though now become local and domestic in the eye of the law, still retains its inter-State character.", "If such protection is intended to give way before the State-power of taxing goods imported from sister States, subject only to the condition against discrimination, it is legitimate to suppose that the ban under article 286(2) should not operate so as to nullify that power.", "True, article 304 (a) deals with the restrictions as to imposition of tax on goods, while article 1088 deals with the restrictions as to imposition of tax on sales or purchases of goods.", "But this distinc tion loses its practical importance in the case of sales-tax imposed by the delivery State under the conditions mentioned in the Explanation, for, if we look behind the labels at the substance of the matter, it becomes clear that a tax on sales or purchases imposed by the State in which the goods are delivered for consumption, in the sense already explained, is, in economic effect practically indistinguishable from a tax on the consumption or use of the goods.", "The words in which the goods have actually been delivered ensure that the goods have come into the State, and the expression for the purpose of consumption in the State shows that, though the tax is formally laid on sales, its incidence is aimed at the consumers in the State.", "It will now be seen why the Explanation insists on actual delivery of the goods in the State and their consumption in the State, and why an outside sale or purchase is explained by defining what is an inside sale. The object clearly is to assimilate the conditions, under which the delivery State is left free to tax inter-State sales or purchases, to those under which a State is empowered to impose tax on goods imported into the State from other States under article 304 (a).", "If then, a non-discriminatory use or consumption tax imposed under (1) 1939 F.C.R. 18, 42. 1089 article 304 on goods imported from other States does not infringe the freedom of inter-State commerce declared by article 301, parity of reason and policy requires that a tax on sales or purchases imposed by the State in which the goods are actually delivered for consumption in the State should not be regarded as violative of the ban under article 286 (2), and that is what the statutory fiction enacted in the Explanation was, in our judgment, designed to achieve by divesting the sale or purchase of the kind referred. to in the Explanation of its inter-State character in relation to the State of delivery.", "There is another important consideration which strongly supports the view we have indicated above, namely article 286 (2) does not affect the taxation of such sale or purchase by the State of delivery.", "If both the exporting State and the delivery State were entitled, notwithstanding article 286(2), to tax the inter-State sale or purchase, as suggested by the Advocate-General of Bombay, it would mean that the transaction is subjected to double taxation as compared with a sale by a local dealer which pays only one tax.", "It is precisely this type of discriminatory burden which the principle of freedom of inter-State commerce seeks to avoid, for, it places inter-State trade at a disadvantage in competition with local trade.", "On the other hand, if neither State could tax such sale or purchase as is referred to in the explanation, until Parliament lifted the ban, as the Advocate-General of Madras was inclined to think, the result would be that consumers could get out-of-State goods more cheaply than local goods, and local dealers would suffer competitive disadvantage as compared with outside dealers.", "Does the principle of freedom of inter-State commerce require that a State should foster such commerce to the detriment of domestic trade ?", "The question next arises as to whether the, Act contravenes all or any of the restrictions imposed by article 286.", "There are two Explanations attached to this definition of which the second, which is obviously based on the Explanation to clause (1) (a) of article, 286, provides that the sale of any goods which have actually been delivered in the State of Bombay as a direct result of such sale for the purpose of consumption in the said State, shall be deemed, for the purposes of this Act, to have taken place in the said State, irrespective of the fact that the property in the goods has, by reason of such sale, passed in another State.", "Now, it will be seen from the provisions summarised above that the Act does not in terms exclude from its purview the sales or purchases taking place outside the State of Bombay while it does include, by Explanation (2) to the definition of sale, the sales or purchases under which the delivery and consumption take place in Bombay which, by virtue of the Explanation to article 286(1)(a), are to be regarded as local 1094 sales or purchases.", "On the construction we have placed upon that Explanation, sales or purchases effected in Bombay in respect of goods in Bombay but delivered for consumption outside Bombay are not taxable in Bombay.", "Now, the respondents complain that the latter category of sales or purchases thus held not to be taxable are not expressly excluded by the Act which, therefore, contravenes article 286 (1)(a). No doubt, there is no provision in the Act excluding in express terms sales of the kind referred to above, but neither is there any provision purporting to impose tax on such sales or purchases.", "On the other hand, the two charging sections of the Act, section 5 and section 10, purport, in express terms, to impose the tax on all sales made within the State of Bombay, and section 18, which lays the tax on purchases, is limited in its operation to purchases of goods delivered to a buyer in the State of Bombay for consumption therein, that is to say, to purchases which unquestionably are taxable by Bombay according to both parties.", "Even so, it was contended, the exclusion of the sales covered by clause (1)(b) and clause (2) of article 286 was hedged round with conditions and qualifications which neither the Legislature nor the rule-making authority was competent to impose on the exclusion and, therefore, such rules, even if read as part of the Act, could not cure the constitutional transgression. The conditions and qualifications complained of are mostly found to relate to mere matters of proof, e.g., rule 5(2), Explanation (2), which insists on the production of a certificate from an appropriate authority, before a motor vehicle, despatched to a place outside the State of Bombay by road and driven by its own power, could be exempted as an article sold in the course of interState trade.", "Objection was also taken to clause (1) of (1) 1951 S.C.R. 747. 1096 sub-rule (2) of rule 5 as imposing an unauthorised limi- tation upon the exemption of sales and purchases allowed by rule 5(1), that is to say, while rule 5(1)(1) (allows the deduction of the sales covered by clause (1) (b) and (2) of article 286 in calculating taxable turnover, sub-rule (2) (1) of the same rule provides that, in order to claim such deduction the goods shall be consigned only through a railway, shipping or aircraft company or country boat registered for carrying cargo or public motor transport service or by registered post. \n It is said that there is no reason why sales of goods despatched by other modes of transport should not also be deducted from the taxable turnover, because article 286 (2) in exempting sales in the course of inter-State trade, makes no distinction between modes of transport by which the goods are despatched.", "This limitation, it was claimed, was beyond the competence of the rule-making authority.", "It is unnecessary to go into. the details of these cases which have been worked out in figures, for it must be conceded that the general effect of fixing these minimum limits must necessarily be to enable traders whose taxable turnover is below those limits to sell their goods at lower prices to their customers than dealers whose turnover exceeded 1097 those limits, for the latter have to add the sales-tax to the prices of their goods.", "Our attention was called to certain American cases where this principle has been consistently followed (see Bowman v. Continental Company(1), where all the pre- vious cases are collected).", "In the present case the tax is imposed, in ultimate analysis, on receipts from individual sales or purchases of goods effected during the accounting period, and it is therefore possible to separate at the assessment the receipts derived from exempted sales or purchases and allow the State to enforce the statute with respect to the constitutionally taxable subjects, it being assumed that the State intends naturally to keep what it could lawfully tax, even where it purports to authorize the taxation of what is constitutionally exempt.", "Our attention was drawn to the decision of the Privy Council in Punjab Province v. Daulat Singh and Others(1) as condemnatory of this principle. The case is however, clearly distinguishable. Their Lordships were dealing with a Provincial enactment providing for the avoidance of benami transactions as therein specified and the question was whether it was ultra vires the Legislature as contravening section 298(1) of the Government of India Act, 1935, which forbade the prohibition, inter alia, of disposition of property by an Indian subject on certain grounds which included descent.", "their Lordships made the following observations which were strongly relied on before us The majority of the Federal Court appear to have contemplated another form of severability, namely, by a classification of the particular cases on which the impugned Act may happen to operate, involving an inquiry into the circumstances of each individual case. \n There are no words in the Act capable of being so construed, and such a course would in effect involve an amendment of the Act by the court, a course which is beyond the competency of the court, as has long been well established.", "The subject of the constitutional prohibition was single and indivisible, namely, disposition of property on grounds only of (among other things) descent and if, in its actual operation, the impugned statute was found to transgress the constitutional mandate, the whole Act had to be held void as the words used (1) 1946 F.C.R. 1. (2) 1942 F.C.R. 67. 1099 covered both what was constitutionally permissible and what was not.", "The same principle was applied by this court in the Cross Roads case(1). It was, indeed, applied also in Bowmans case(1) with respect to the licence tax imposed generally on the entire business conducted including inter- State commerce as well as domestic business, but was not applied, as stated above, with respect to excise tax which was laid on every gallon of gasolene sold and was thus divisible in its nature."], "rank4": ["The Legislature of the State of Bombay enacted the Bombay Sales Tax Act, 1952, (hereinafter referred to as ,the Act) and it was brought into force on October 9, 1952, by notification issued under section 1 (3) of the Act, except sections 5, 9, 10 and 47 which came into operation on November 1, 1952, as notified under section 2 (3).", "On, the same day the rules made by the State Government in exercise of the power conferred by section 45 of the Act also came into force.", "In view of the importance of the issues involved, notice of the appeal was issued to the AdvocatesGeneral of States under Order XLI, Rule 1, and many of them intervened and appeared before us.", "The Advocate-General of Bombay, appearing on behalf of the appellants, took strong exception to the manner in which the learned Judges below disposed of the objection to the maintainability of the petition.", "Before considering whether the appellant State has made a law imposing, or authorising the imposition of, a tax on sales or purchases of goods in disregard of constitutional restrictions on its legislative power in that behalf, it is necessary to ascertain the scope of such power and the nature and extent of the restrictions placed upon it by article 286.", "The power is conferred by article 246 (3) read with entry 54 of List 11 of the Seventh Schedule to the Constitution.", "The Legislature of any State has, under these provisions, the exclusive power to make laws for such State or any part thereof with respect to taxes on the sale or purchase of goods other than newspapers.", "As pointed out by the Privy Council in the Wallace Brothers case (2) in dealing with the competency of the Indian Legislature to impose tax on the income arising abroad to a non-resident foreign company, the constitutional validity of the relevant statutory provisions did not turn on the possession by the legislature of extra-territorial powers but on the existence of a sufficient territorial connection between the taxing State and what it seeks to tax.", "In the case of sales-tax it is not necessary that the sale or purchase should take place within the territorial limits of the State in the sense that all the ingredients of a sale like the agreement to sell, the passing of title, delivery of the goods, etc., should have a territorial connection with the State.", "Broadly speaking, local activities of buying or selling carried on in the State in relation to local goods would be a sufficient basis to sustain the taxing power of the State, provided of course, such (1) 1952 S.C.R. 572. (2) 1948 S.C.R. I 1079 activities ultimately resulted in a concluded sale or purchase to be taxed.", "This situation posed to the Constitution makers the problem of restricting the taxing power on sales or purchases involving inter-State elements, and alleviating the tax burden on the consumer.", "At the same time they were evidently anxious to maintain the State power of imposing non-discriminatory taxes on goods imported from other States, while upholding the economic unity of India by providing for the freedom of inter-State trade and commerce.", "Having thus provided for the freedom of inter-State trade and commerce subject to the important qualification mentioned above, the authors of the Constitution had to devise a formula of restrictions to be imposed on the State- power of taxing sales or purchases involving inter-State elements which would avoid the doubts and difficulties arising out of the imposition of sales-tax on the same transaction by several Provincial Legislatures in the country before the commencement of the Constitution.", "This they did by enacting clause (1) (a) with the Explanation and clause (2) of article 286.", "Clause (1) (a) prohibits the taxation of all sales or purchases which take place outside the State, 1082 but a localised sale is a troublesome concept, for, a sale is a composite transaction involving as it does several elements such as agreement to sell, transfer of ownership, payment of the price, delivery of the goods and. so forth, which may take place at different places.", "How, then, is it to be determined whether a particular sale or purchase took place within or outside the State ?", "The test of sufficient territorial nexus was thus replaced by a simpler and more easily workable test Are the goods actually delivered in the taxing State, as a direct result of a sale or purchase, for the purpose of consumption therein ?", "Then, such sale or purchase shall be deemed to have taken place in that State and outside all other States.", "The latter States are prohibited from taxing the sale or purchase the former alone is left free to do so. Multiple taxation of the same transaction by different States is also thus avoided. It is, however, argued on behalf of Bombay that the Explanation does not say that the State of delivery is the only State in which the sale or purchase shall be deemed to have taken place. \n If that was the intention, it would have been easy to say so. On the other hand, the non-obstante clause in the Explanation is said to indicate that, apart from cases covered by the legal fiction, the passing of property in the goods is to determine the place of sale.", "Thus, both the State of delivery 1083 and the State in which the property in the goods sold passes are, it is claimed, empowered to tax.", "That question often raises ticklish problems for lawyers and courts, and to make the passing of title the determining factor in the location of a sale or purchase would be to replace old uncertainties and difficulties connected with the nexus basis with new ones.", "Nor would the hardship of multiple taxation be obviated if two States were still free to impose tax on the same tran- saction.", "It is also to be noted in this connection that, on the construction suggested by the Advocate-General of Bombay, namely, that the Explanation was not intended to deprive the State in which the property in the goods passed of its taxing power, but only to exclude the sales or purchases of the kind described in the Explanation from the operation of clause (1) (a) which prohibits taxation of outside sales or purchases, the Explanation would operate, not as an explanation, but as an exception or a proviso to that clause.", "It 1084 may be that the description of a provision cannot be decisive of its true meaning or interpretation which must depend on the words used therein, but, when two interpretations are sought to be put upon a provision, that which fits the description which the legislature has chosen to apply to it is, according to sound canons of construction, to be adopted provided, of course, it is consistent with the language employed, in preference to the one which attributes to the provision a different effect from what it should have according to its description by the legislature.", "It was then said that the formula of delivery for consumption within a State could only cover the com- paratively few cases of sales or purchases taking place directly between the consumers in the delivery State and dealers in other States, and inter-State sales or purchases between dealers in either State, which must be larger in number and volume, would still be outside the scope of the Explanation, which could not, therefore, have been intended to empower only one State, namely, the delivery State, to tax all inter-State sales or purchases.", "Thus all buyers within the State of delivery from out-of-State sellers, except those buying for re-export out of the State, would be within the scope of-the Explanation and liable to be taxed by the State on their inter-State transactions.", "It should be remembered here that the Explanation deals only with interState sales. or purchases and not with purely local or domestic transactions.", "That these are subject to the taxing power of the State has never been questioned.", "We will now consider the effect of article 286(2) on the taxability of inter-State sales or purchases of the kind envisaged by the Explanation to clause (1) (a).", "As both the Explanation and clause (2) deal only with inter-State transactions, it may appear at first blush that whatever taxing power the Explanation may have reserved to the state of delivery is nullified by clause (2), at any rate until Parliament chooses to lift the ban under the power reserved to it by the opening words of clause (2).", "As one way of avoiding this result I it was suggested by the Advocate- Gneral of Bombay that the expression inter-State trade and commerce in clause (2) may be construed as meaning dealings between a trader in one State and a trader in another, so that the clause would be applicable only to sales or purchases in the course of dealings between such traders.", "The ban under clause (2) could not in that view, affect the taxability of a sale by a trader in one State to a consumer or user in another.", "We cannot agree with this restrictive interpretation of the expression inter-State trade and commerce.", "As already stated, the Explanation envisages sales or purchases under which out-of-State goods are imported into the State.", "The statutory fiction completely masks the inter-State character of the sale or purchase which, as a collateral result of such making, falls outside the scope of clause (2).", "As 1087 We have already pointed out, the Explanation does not cover cases of inter-State sales or purchases under which the goods are imported into the State for reexport to other States and possibly other categories of sales or purchases which do not satisfy all the requirements of the explanation.", "On the other hand there are, in our judgment, cogent considerations which tend to support the view we have expressed above that clause (2) was not intended to affect the power of the delivery State to tax inter-State sales or purchases of the kind mentioned in the Explanation.", "Discussing the true nature of a duty of excise and a tax on the sale of goods, Gwyer C. J. observed in the Central Provinces and Berar Sales Tax case (1) It is common ground that the Court is entitled to look at the real substance of the Act imposing it, at what it does and not merely at what it says, in order to ascertain the true nature of the tax. Since writers on political economy are agreed that taxes on the sale of commodities are simply taxes on the commodities themselves, it is possible to regard a tax on the retail sale of motor spirit -and lubricants as a tax on those commodities.", "It is the respondents case that the sales and purchases made by them in Bombay, in the course of their business, include all the three categories excluded from the scope of State- taxation by article 286, and the Act seeking to bring all of them within its scheme of taxation is bad. It is, therefore, necessary to make a brief survey of the main provisions of the Act and of the rules made thereunder, in order to see whether the respondents complaint is well- founded, and, if so, whether the whole or any part of the Act is to be declared unconstitutional and void.", "The Act provides for levy of two kinds of taxes, called the general tax and the special tax, by the two charging sections 5 and 10 respectively.", "Dealer is defined in section 2 (7) as a person who carries on the business of selling goods in the State of Bombay whether for commission, remuneration or otherwise and includes a State Government which carries on such business and any society, club or association which sells goods to its members. The Expla- nation (2) to this definition provides that the manager or agent of a dealer who resides outside the State of Bombay and carries on the business of selling goods in the State of Bombay shall, in respect of such business, be deemed to be a dealer for the purpose of the Act.", "Sale is defined by section 2 (14) with all 1091 its grammatical variations and cognate expressions as meaning any transfer of property in goods for cash or deferred payment or other valuable consideration and includes any supply by a society, a club, or an association to its members on payment of price or of fees or subscriptions but does not include a mortgage, hypothecation, charge or pledge.", "The words buy and purchase are to be construed accordingly.", "Turnover is defined by section 2(21) as the aggregate of the amounts of sale price received and receivable by a dealer in respect of any sale of goods made during a given period after deducting the amount, if any, refunded by the dealer to a purchaser in respect of any goods purchased and returned by the purchaser within the prescribed period. Section 5 imposes the general tax on every dealer whose turnover in respect of sales within the State of Bombay during any of the three consecutive years immediately preceding the first day of April, 1952, has exceeded Rs. 30,000 or whose turnover in respect of such sales exceeds the said limit during the year commencing on the first day of April, 1952.\n The tax is to be levied on his taxable turnover in respect of sales of goods made on or after the appointed day, i.e., 1st November, 1952, at the rate of 3 pies in the rupee (section 6).", "By section 7 the taxable turnover is to be determined by first deducting from the turnover of the dealer in respect of all his sales of goods during any period of his liability to pay the general tax, his turnover during that period, in respect of (a) sales of any goods declared from time to time as tax-free under section 8 and(b) ,,such other sales as may be prescribed, No dealer 1092 liable to pay the general tax shall carry on business as a dealer unless he has applied for registration (section 9). \n A more or less similar scheme is provided for the levy of a special tax on the sale of certain special goods specified in Schedule II. By section 10 every dealer whose turnover in respect of sales of special goods made within the State of Bombay has exceeded Rs. 5,000 during the year ended 31st March, 1952, or exceeds the said limit during the year commencing from 1st April, 1952, is charged with a special tax at the rate specified in Schedule 11 on his taxable turnover in respect of the sales of special goods made on or after the appointed day, i.e., 1st November, 1952.", "By section II the taxable turnover is to be determined by first deducting, from the turnover of the dealer in respect of his sales of special goods during any period of his liability, his turnover in respect of (a) sales of special goods purchased by him, on or after the appointed day at a place in the State of Bombay from a dealer holding a licence under section 12 and (b) such other sales as may be prescribed.", "Every dealer liable to pay the special tax is required to obtain a licence as a condition of his carrying on his business (section 12).\n Then follow certain pro- visions for returns, assessment, payment and recovery of tax.", "Of these, Rules 5(1) and 6(1) are important, and they provide for the deduction of the following sales in calculating taxable turnover under section 7 (general tax) and section 11 (special tax) (1) sales which take place (a) in the course of the import of the goods into or export of the goods out of the territory of India or (b) in the course of inter-State trade or commerce. It is to be noted that these are the excluded categories of sales or purchases under article 286 (1) (b) and (2) respectively.", "Rule 5(2) (1) requires, as a condition of the aforesaid deductions, that the goods should be consigned by certain specified modes of transport.", "Clause (v) lays down a rule of presumption to be acted upon in the absence of evidence of actual consignment of the goods within three months of the sale, that the sale has not taken place in the course of export or of inter- State trade as the case may be.", "Finally, Mr. Seervai attempted to make out that the provisions of the charging sections 5 and 10 fixing Rs. 30,000 and Rs. 5,000 as the minimum taxable turnover for general tax and special tax respectively were discriminatory and void under article 14 read with article 13 of the Constitution, and he gave us several tables of figures showing how the imposition of the tax actually works out in practice in hypothetical cases."], "rank5": ["In exercise of the legislative power conferred upon them in substantially similar terms by the Government of India Act, 1935, the Provincial Legislatures enacted sales-tax laws for their respective Provinces, acting on the principle of territorial nexus referred to above that is to say, they picked out one or more of the ingredients constituting a sale and made them the basis of their sales-tax legislation.", "Assam and Bengal made among other things the actual existence of the goods in the Province at the time of the contract of sale the test of taxability.", "In Bihar the pro- duction or manufacture of the goods in the Province was made an additional ground.", "Whether the territorial nexus put forward as the basis of the taxing power in each case would be sustained as sufficient was a matter of doubt not having been tested in a court of law.", "And such claims to taxing power led to multiple taxation of the same transaction by different Provinces and cumulation of the burden falling ultimately on the consuming public.", "It is said that even though all the essential ingredients of a sale took place within one State and the sale was, in that sense, a purely intrastate transaction, it might involve transport of the goods across the State- boundary, and that would be sufficient to bring it within the scope of clause (2).", "It is said that, on this view, clause (2) would become practically redundant, as clause (1) (a) read with the explanation as construed by us would itself preclude taxation by other States of inter-State sales or purchases of the kind referred to in the explanation", "As we have seen, in our Constitution the principle of freedom of inter-State trade and commerce is made to give way before the State-power of imposing non-discriminatory taxes on goods imported from other States.", "Now, article 286(2) is but one phase of the protection accorded to interState trade and commerce from the fettering power of State taxation.", "As article 286 deals with restrictions on the power of the States to impose tax on the sale or purchase of goods, the Constitution makers evidently thought that it should contain also a specific provision safeguarding sales or purchases of an inter-State character against the taxing power of the States.", "It is however, reasonable to suppose that this particular form of protection to inter-State trade and commerce provided in article 286(2) was not intended to have a wider operation than what is contemplated in Part XIII which declares the general principle of freedom of inter-State commerce and defines the measure of constitutional protection it should enjoy.", "Each party will bear its own costs throughout."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["The judgment of Patanjali Sastri C. J., Mukherjea and Ghulain Hasan JJ. was delivered by Patanjali Sastri C. J. Vivian Bose and Bhagwati JJ. delivered separate judgments.", "On the construction we have placed upon that Explanation, sales or purchases effected in Bombay in respect of goods in Bombay but delivered for consumption outside Bombay are not taxable in Bombay.", "We see no force, therefore, in the argument that the Act contravenes the provisions of article 286(1)(a) by purporting to charge sales or purchases excluded by that article from State- taxation.", "The position, therefore, was that, on the date -when the general tax and the special tax became leviable under the Act, sales or purchases of the kind described under article 286(1) (b) and (2) stood in fact excluded from taxation, and the State of 1095 Bombay cannot be considered to have made a law imposing or authorising the imposition of a tax on sales or purchases excluded under the aforesaid clauses of article 286.", "The Act and the rules having been brought into operation simultaneously, there is no obvious reason why the rules framed in exercise of the power delegated by the Legislature should not be regarded as part of the law made by the State."], "rank2": ["On, the same day the rules made by the State Government in exercise of the power conferred by section 45 of the Act also came into force.", "which were brought into force on the same day on which the charging sections 5 and 10 of the Act were also brought into force, namely, November 1, 1952.", "It is to be noted that these are the excluded categories of sales or purchases under article 286 (1) (b) and (2) respectively.", "On the other hand, the two charging sections of the Act, section 5 and section 10, purport, in express terms, to impose the tax on all sales made within the State of Bombay, and section 18, which lays the tax on purchases, is limited in its operation to purchases of goods delivered to a buyer in the State of Bombay for consumption therein, that is to say, to purchases which unquestionably are taxable by Bombay according to both parties.", "The charging sections cannot, therefore, be taken to cover the class of sales or purchases which, on our construction of the Explanation, are to be regarded as taking place outside the State of Bombay.", "The position might be different if the rules had come into operation sometime later than the charging sections of the Act, for, in that case, it is arguable that if the legislation, without excluding the two classes of sales or purchases, was beyond the competence of the Legislature at the date when it was passed, the exclusion subsequently effected by the rules cannot validate such legislation."], "rank3": ["Of these, Rules 5(1) and 6(1) are important, and they provide for the deduction of the following sales in calculating taxable turnover under section 7 (general tax) and section 11 (special tax) (1) sales which take place (a) in the course of the import of the goods into or export of the goods out of the territory of India or (b) in the course of inter-State trade or commerce.", "while it does include, by Explanation (2) to the definition of sale, the sales or purchases under which the delivery and consumption take place in Bombay which, by virtue of the Explanation to article 286(1)(a), are to be regarded as local 1094 sales or purchases.", "But, as pointed out already, rules 5 and 6, which deal respectively with deduction of certain sales in calculating the taxable turnover under sections 7 and 11 exclude these two categories in express terms, and these rules were brought into force simultaneously with the charging sections 5 and 10 on November 1, 1952.", "the learned Judges below fell into an error by overlooking this crucial fact when they say If the Legislature had no competence on the date the law was passed, the rules subsequently framed cannot confer competence on the Legislature.", "But it is clearly severable from rule 5(1)(1). The restriction regarding the mode of transport of the goods sold or purchased in the course of inter-State trade, to which alone sub-rule (2)(1) relates, can be ignored and the exemption under rule 5(1)(1) may well be allowed to stand.", "Our attention was drawn to the decision of the Privy Council in Punjab Province v. Daulat Singh and Others(1) as condemnatory of this principle. The case is however, clearly distinguishable.", "It is a sound rule to extend severability to include separability in enforcement in such cases, and we are of opinion that the principle should be applied in dealing with taxing statutes in this country, We accordingly set aside the declaration made by the court below and quash the writ issued by it except in regard to rule 5 (2) (1)."], "rank4": ["the principle of freedom of inter- State trade and commerce declared in article 301 is expressly subordinated to the State power of taxing goods imported from sister States, provided only no discrimination is made in favour of similar goods of local origin.", "the commercial unity of India is made to give way before the State-power of imposing any non-dis- criminatory tax on goods imported from sister States.", "It is really not necessary in the context to use the word only in the way suggested, for, when the Explanation says that a sale or purchase shall be deemed to have taken place in a particular State, it follows that it shall be deemed also to have taken place outside the other States. Nor can the non-obstante clause be understood as implying that, under the general law relating to the sale of goods, the passing of the property in the goods is the determining factor in locating a sale or purchase.", "We are therefore of opinion that article 286 (1) (a) read with the Explanation prohibits taxation of sales 1085 or purchases involving inter-State elements by all States except the State in which the goods are delivered for the purpose of consumption therein in the wider sense explained above.", "In exercise of the powers conferred by this section, the State Government made and published rules called the Bombay Sales Tax Rules, 1952", "Now, it will be seen from the provisions summarised above that the Act does not in terms exclude from its purview the sales or purchases taking place outside the State of Bombay", "It is unnecessary to go into. the details of these cases which have been worked out in figures, for it must be conceded that the general effect of fixing these minimum limits must necessarily be to enable traders whose taxable turnover is below those limits to sell their goods at lower prices to their customers than dealers whose turnover exceeded 1097 those limits, for the latter have to add the sales-tax to the prices of their goods. But no discrimination is involved in this classification which is perfectly reason-, able when it is borne in mind that the State may not consider it administratively worthwhile to tax sales by small traders who have no organisational facilities for collecting the tax from their buyers and turn it over to the Government.", "The majority of the Federal Court appear to have contemplated another form of severability, namely, by a classification of the particular cases on which the impugned Act may happen to operate, involving an inquiry into the circumstances of each individual case."], "rank5": ["Constitution makers the problem of restricting the taxing power on sales or purchases involving inter-State elements, and alleviating the tax burden on the consumer. At the same time they were evidently anxious to maintain the State power of imposing non-discriminatory taxes on goods imported from other States, while upholding the economic unity of India by providing for the freedom of inter-State trade and commerce. In their attempt to harmonise and achieve these somewhat conflicting objectives they enacted articles 286, 301 an 304.", "301, Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free.", "Notwithstanding anything in article 301 or article 303, the Legislature of a State may by law- (a) impose on goods imported from other States any tax to which similar goods manufactured or 1081 produced in that State are subject, so, however, as not to discriminate between goods so imported and goods,, so manufactured or produced and (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President.", "It provides by means of a legal fiction that the State in which the goods sold or purchased are actually delivered for consumption therein is the State in which the sale or purchase is to be considered to have taken place, notwithstanding the property in such goods passed in another State.", "Neither the Sale of Goods Act nor the common law relating to the sale of goods has anything to say as to what the situs of a sale is, though certain rules have been laid down for ascertaining the intention of the contracting parties as to when or under what conditions the property in the goods is to pass to the buyer.", "In our opinion, the non-obstante clause was inserted in the Explanation simply with a view to make it clear beyond all possible doubt that it was immaterial where the property in the goods passed, as it might otherwise be regarded as indicative of the place of sale.", "We are of opinion that the operation of clause (2) stands excluded as a result of the legal fiction enacted in the explanation, and the State in which the goods are actually delivered for consumption can impose tax on inter-State sales or purchases.", "in our Constitution the principle of freedom of inter-State trade and commerce is made to give way before the State-power of imposing non-discriminatory taxes on goods imported from other States.", "Rule 5(2) (1) requires, as a condition of the aforesaid deductions, that the goods should be consigned by certain specified modes of transport. Clause (v) lays down a rule of presumption to be acted upon in the absence of evidence of actual consignment of the goods within three months of the sale, that the sale has not taken place in the course of export or of inter- State trade as the case may be", "No doubt, there is no provision in the Act excluding in express terms sales of the kind referred to above, but neither is there any provision purporting to impose tax on such sales or purchases.", "As regards the other two categories of sales or purchases excluded by article 286(1)(b) and (2), it is true that the Act taken by itself does not provide for their exclusion.", "it must be held that rule 5(2)(1) is ultra vires the rule-making authority and therefore void.", "In the present case the tax is imposed, in ultimate analysis, on receipts from individual sales or purchases of goods effected during the accounting period, and it is therefore possible to separate at the assessment the receipts derived from exempted sales or purchases and allow the State to enforce the statute with respect to the constitutionally taxable subjects, it being assumed that the State intends naturally to keep what it could lawfully tax, even where it purports to authorize the taxation of what is constitutionally exempt.", "The same principle was applied by this court in the Cross Roads case(1). It was, indeed, applied also in Bowmans case(1) with respect to the licence tax imposed generally on the entire business conducted including inter- State commerce as well as domestic business, but was not applied, as stated above, with respect to excise tax which was laid on every gallon of gasolene sold and was thus divisible in its nature."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1953_57", "text": "Bose, J. This is an appeal by an assessee against a judgment and order of the High Court at Bombay delivered on a reference made by the Income-tax Appellate Tribunal. The Bombay High Court refused leave to appeal but the assessee obtained special leave from this Court. The appellant deals in silver and shares and a substantial part of his holding is kept in silver bullion and shares. His business is run and owned by himself. His accounts are maintained according to the mercantile system. It is admitted that under this system stocks can be valued in one of two ways and provided there is no variation in the method from year to year without the sanction of the Income-tax authorities an assessee can choose whichever method, that is to say, the cost price of the stock was wnterred at the beginning of the year and not its market value and similarly the cost price was again entered at the close of the year of any stock which was not disposed of during the yeaar. \nThe entries on the one side of the accounts at the beginning of the year thus balance those on the other in respect of these items with the result that so far as they are concerned the books show neither a profit nor a loss on them. This was the method regularly employed and it is admitted on all hands that this was permissible under this system of accounting. The accounting year with which we are concerned is the calendar year 1942. The silver bars and shares lying with the appellant at the beginning of the year were valued at cost price. In the course of the year the appellant withdrew some bars and shares from the business and settled them on certain trusts, three in number. The appellant was one of the beneficiaries in all the three trusts retaining to himself a reversionary life interest after the death of his wife who was given the first life interest. After certain other life interests the ultimate beneficiaries were charities. The appellant was the managing trustee expressly so created in two of the trusts and virtually so in the third. In this books the appellant credited the business with the cost price of the bars and shares so withdrawn and there lies the crux of the issue which we have to determine. There is no suggestion in this case that the bars and shares were withdrawn from the business otherwise than in good faith. According to the appellant, the act of withdrawl resulted in neither income nor profit nor gain either to himself or to his business, nor was it a business transcation, accordingly it was not taxable. The learned Attorney-General raised two contentions. \nFirst, he said that as the bars and shares were brought into the business any withdrawl of them from the business must be dealt with along ordinary and well-known business lines, namely, that if a person withdraws an asset from a business he must account for it to the business at the marlet rate prevailing at the date of the withdrawl. He said that the mere fact that the appellant was the sole owner of the business can make no difference, for under the Act income is assessable under distinct heads and when we are working out the income of a business the rules applicable to business incomes must be applied whoever is the owner. His second contention was that if the act of withdrawl is at a time when the market price is higher than the cost price, then the State is deprived of a potential profit. He conceded that had the market rate been lower than the cost price, then the appellant would have been entitled to set off the loss on those transactions against his overall profit on the other transcations and thus obtain the advantage of a lower tax on the overall picture. We are of opinion that the learned Attorney-Generals secound contention is unsound because, for income-tax purposes, each year is a self contained accounting period and we can only take into consideration income, profits and gains made in that year and are not concerned with potential profits which may be made in another year any more than we are with losses which may occur in the future. As regards the first contention, we are of opinion that the appellant was right in entering the cost value of the silver and shares at the date of the withdrawl, because it was not a business transcation and by that act the business made no profit or gain, nor did it sustain a loss, and the appellant derived no immediate pecuniary gain the State cannot tax them, for under the Income-tax Act the State has no power to tax a potential future advantage. All it acn tax is income, profits and gains made in the relevant accounting year. It was conceded that if these assets had been sold at cost price the State could have claimed nothing, for a man cannot be compelled to make a profit out of any particular transcation. It was also conceded that if the silver and stocks had lain where they were, then again there would have been no advantage to the State because the appellant would have been entitled to enter their closing vlaues at cost at the end of the year. The learned Attorney-General even conceded that if they had been sold at a loss the appellant would have been entitled to set that off agianst his other gains, but he said that is because all those are business transactions and that is the way the law deals with such matters when they occur in the ordinary course of business. But, he urged, when there is a withdrawl and no sale or its equivalent, the matter is different. As this is a business, any wihtdrawl of the assets is a business matter and the only feasible way of regarding it in a business light is to enter the market price at the date of the withdrawl and whether that happens to favour the assessee or the State is immaterial. We do not agree. It is well recognised that in revenue cases regard must be had to the substance of the transaction rather than to tis mere form. \nIn the present case disregarding technicalities it is impossible to get away from the fact that the business is owned and run by the assessee himself. In a such circumstances we are of opinion that it is wholly unreal and artificial to separate the business from its owner and treat them as if they were separate entities trading with each other and then by means of a fictional sale introduce a fictional profit which in truth and in fact is non-existent. Cut away the fictions and you reach the position that the man is supposed to be selling to himself and thereby making a profit out of himself which on the lace of it is not only absurd but against all canons of mercantile and income-tax law. And worse. He may keep it and not show a profit. He may sell it to another at a loss and cannot be taxed because he cannot be compelled to sell at a fictional profit when the market rises in order that he may be compelled to pay to Government a tax which is anything but fictional. Consider this simple illustration. A man trades in rice and also uses rice for his family consumption. the bags are all stored in one godown and he draws upon his stock as and when he finds it necessary to do so, now for his business, now for his own use. what he keeps for his own personal use cannot be taxed however much the market rises nor can he be taxed on what he gives away from his own personal stock, nor, so far as his shop is concerned, can he be compelled to sell at a profit. If he keeps two sets of books and enters in one all the bags which go into his personal godown and in the other the rice which is withdrawn from the godown into his customers so that only a negligible quantity is left over in the shop after each days sales, his private and personal dealings with the bags in his personal godown could not be taxed unless he sells them at a profit. What he chooses to do with the rice in his godown is no concern of the Income-tax department provided always that he does not sell it or otherwise make a profit out of it. He can consume it, or give it away, or just left it rot. why should it make a difference if instead of keeping two sets of books he keeps only one ? How cah he be said to have made an income personally or his business a profit, because he uses ten bags out of his godown for a feast for the marriage of his daughter? How can it make any difference whether the bags are shifted directly from the godown to the kitchen or from the godown to the shop and from the shop to the kitchen? And yet, when the reasoning of the learned Attorney- General is pushed to tis logical conclusion, the form of the transcation is of its essence and its taxable or not according to the route the rice takes from the godown to the wedding feast. In our opinion, it would make no difference if the man instead of giving the feast himself hands over the rice to his daughter as a gift for the marriage festivities of her son. The appellants mehtod of book-keeping reflects the true position. As he makes his purchases he enters his stock at the cost price on one side of the accounts. At the close of the year he enters the value of any unsold stock at cost on the other side of the accounts thus cancelling out the entries relating to the same unsold stock earlier in the accounts and then that is carried forward as the opening balance in the next years accounts. This cancelling out of the unsold stock from both sides of the accounts leaves only the transactions on which there have been actual sales and gives the true and actual profits or loss on his years dealings. In the same way, the appellant has reflected the true state of his finances and given a truthful picture of the profit and loss in his business by entering the bullion and silver at cost when he withdrew them for a purely non-business purpose and utilised them in a transaction which brought him neither income nor profit nor gain. There is no case quite in point. \nThe learned Attorney-General relied on Gold Coast Selection Trust Limited v. Humphrey (H. M. Inspector of Taxes) (1949) 30 Tax Cas. 209 17 ITR Suppl. 19, but there the assessee received a new and valuable asset in exchange for another in the ordianry course of his trade. It was held that he was bound to account for the receipt was not money it was capable of being valued in terms of money. In the present case, the assessees business received nothing in exchange for the withdrawl of the assets, neither money nor moneys worth, therefore the only fair way of treating the matter was to do just what the appellant did, namely to enter the price at which the assets were valued at the beginning of the year so that the entries would cancel each other out and level the business with neither a gain or a loss on those transcations. The learned Attorney-General contended that if that was allowed great loss would ensue to the State because all a man need do at the end of the year would be to withdraw all assets which had risen in value and leave only those which had depreciated and thus either show a loss or reduce his taxable profits. This arguments can only prevail on the assumption that the State can tax potential profits because, except for that, the State would neither gain nor loss in a case of this kind. Had the assets been left where they were, they would have been valued at the end of the year as they were at the beginning, at the cost price and we would be a gain at some future indefinite date is mere guess work, for equal there might be loss. Apart, however, from that the learned Attorney- Generals rule is equally capable of abuse. A man could as easily withdrawn from the business assets which had depreciated and enter in his books the deprecated market value and leave at cost price the assets which had risen. There are two cases which bear a superficial resemblance to this case. \nThey are In the matter of Messrs. Chouthmal Golapchand (1938 6 ITR 733). and In re Spanish Prospecting company Limited (1911 I ch 92). We refrain from expressing any opinion about them, especially as they appear to reach different conclusions, the facts are not the same and the questions which arose on the facts there were not argued here. they raise matters of wider arose on the facts there were not argued here. They raise matters of wider import which will require consideration in s suitable case. These cases were not cases of a business owned and run by a single owner and so the fiction of treating the business as a separate entity from its owner actually trading with him, which we are asked to apply here, does not arise. In the next place, the business there were not continuing as here. In the Calcutta case, a partnership was wound up and the question related to the valuation of assets consisting of stocks and shares, on the dissolution. In the English case, a company with no fixed capital was under liquidation and the question was whether the market value of certain debentures which the company had purchased ought to be brought into the profit and loss account so as to augment the profits actually shown in the balance-sheet. the company wished to treat those debentures as of no value and thus show a much smaller profit than would otherwise have been the case. On the answer to that question hung the fate of two servants of the company who, under the terms of their agreement with the company, could only be paid their salaries out of the profits of the company. Neither case is in our opinion, apposite here. The question referred were - \n Whether in the circumstances of the case any income arose to the assessee as a result of the transfer of hsres and silver bars to the trustees? If the answer to question (I) is in afirmative, whether the method employed by the Appellate Assistant Commissioner and upheld by the Appellate Tribunal in computing the assessees income from the transfer is the proper method for computing the income? Our answer to the first question is that in the circumstances of this case no income arose to the appellant as a result of the transfer of the shares and silver bars to the trustees. In view of that, the second question does not arise. The appeal is allowed with costs. Bhagwati, J. This appeal by special leave from a judgment of the High Court of Judicature at Bombay on a reference by the Income-tax Appellate Tribunal under Section 66 (I) of the Indian Income-tax Act (XI of 1922) raises an interesting question as to the valuation of an asset withdrawn from the stock-in-trade of a running business. The assessee was in the year of account (calendar year 1942) a dealer in shares and silver. On the 21st January, 1942, he withdrew from the business certain shares and silver bars and executed two deeds of trust and on the 19th October, 1942, he withdrew further shares and silver bars and executed a third deed of trust. The terms and conditions of the deeds of trust are not material for the purpose of this appeal. The assessee kept his books of account on the mercantile basis and the method employed by him in the past for valuing the closing stock of his stock-in-trade was valuation at the cost price thereof. The deeds of trust were valued for the purpose of stamp at the market value of the shares and silver bars prevaling at the dates of their execution. The assessee however showed the transfer of these shares and silver bars to trustees in the books of account at the cost price thereof thus setting off the debit shown in respect of the same at the beginning of the year of account. He contended that the market value of the said shares and silver bars on which the stamp duty was based could not be basis for computing his income from stock-in-trade thus transferred. The Income-tax authorities did not accept this contention and assessed the profit at the difference between the cost price of the said shares and silver bars and the market value thereof at the date of their withdrawal from the business. the Income-tax Officer, the Appellate Assistant Commissioner as also the income-tax Appellate Tribunal rejected this contention of the assessee and the income-tax Appellate tribunal submitted at the instance of the assessee a case under Section 66 (I) of the Act referring the following two questions for the decision of the High Court - \n Wether in the circumstances of the case any income arose to the petitioner as a result of the transfer of shares and silver bars to the trustees? If the answer to the question (I) is in the affirmative, wether the method employed by the Appellate Assistant Commissioner and upheld by the Appellate Tribunal in computing the petitioners income from the transfer is the purpose method for computing the income? The High Court answered both the question in the affirmative. It was not disputed before the Income-tax Act Appellate Tribunal that the shares transferred were the stock-in-trade of the business. As regards the silver bars the Tribunal found that the assessee had been making purchases and sales frequently and that the silver also was stock-in-trade and not a capital investment. Both the shares and the silver bars were thus part of the stock-in-trade of the business. they had been purchased by the assessee from time to time and formed part of the stock-intrade of the business and had been shown at the cost price thereof in the books of account of the previous years and also at the opening of the year of account. If the shares and the silver bars which were thus withdrawn from the stock-in-trade at the closing of the year of account, the value of these shares and silver bars would also have been shown at the cost price in accordance with the system of accounts maintained by the assessee. The question however which falls to be determined is what is the effect of these assets having been withdrawn from the stock-in- trade of the business. So far as the business itself is concerned the asset which has been brought in is of a particular value at the date when it has been so brought in and it is then valued in the books of account at its cost. In the course of the business however the asset appreciates or depreciates in value in accordance with the fluctuations of the market. If the cost price basis is adopted for the valuation of stock- in-trade at the close of the year this appreciation or depreciation in the value as the case may be would not be reflected in the accounts. \n If however the market valued at the market value basis is adopted for such valuation, the asset on being valued at the market rate thereof at the close of the year might show a loss and this loss would be allowed by the Income-tax authorities in computing the profit or loss of the business. In either event, the assessee would have to carry over the asset in the books of account of the subsequent year at the valuation adopted at the close of the previous year and the valuation adopted at the close of the previous year and the assessee would not be allowed to change the basis valuation thus adopted unless he close to adopt at the end of the subsequent year or years valuation at the cost price thus realised and the profit or loss as the case may be, in regard to that asset and that profit or loss would be allowed by the Income-tax authorities in the computation of profit or loss of valuation would not however make any difference in the ultimate reslu. On the cost price basis of valuation all intermediate fluctuation of price during the interval between the bringing of the asset in the business and the realisation of it would be eliminated and the only thing considered in the accounts would be the difference and the price of the asset when it was brought into the business and the price thereof when the asset as at the close of every the fluctuation in the market value of the asset as at the close of every year of account a rectification would have to be made in the result of the trading of the previous year which was not correctly reflected in the accounts by reason of the assessee having adopted the market value obtaining at the close of the previous year as the value of the asset. This process of rectification would continue from year to year until the asset was realised on the sale of the asset would be brought into account in that year. the ultimate result of these operations so fas as the asset itself is concerned would be no different. \n Because if regard be had to the various fluctuations in the market value which have been reflected in the accounts of the intermediate period, what the business actually realised. The only advantage which the assessee obtains would be that he would be able to anticipate in a particular year the loss that may be made on the asset in the following year or years if the prices rose again. Is there any difference in the position when instead of the asset being realised it is withdrawn from the stock-intrade of the business? So far as the business is concerned the asset ceases to be a aprt of the stock-in-trade whether it is realised or is withdrawn from the stock-in-trade. the asset after it has been brought into the business appreciates or depreciates in value in accordance with the fluctuations of the market and that appreciated or depreciated asset continues to be a part of the stock-in-trade of the business until it is realised or withdrawn. This appreciation or depreciation in value is not reflected for the valuation of the stock-in-trade at the close of theyear of account, but is certainly reflected as above indicated in the books of account when the market value basis is adopted. In each case however the actual profit or loss to the business as the case may ne in relation to the price at which the asset was brought into the business would be determined at the date when the asset is realised. That would be the measure of the appreciation or depreciation in value of the asset which till then formed a aprt of the stock-in-trade of the business, and would also be the measure of the ultimate profit or loss as the case may be of the business in regard to that particular asset. When the asset is withdrawn from the stock-in-trade of the business the position in my opinion would be no different. So far as the business is concerned the asset would go out and cease to be a aprt of its stock-in-trade and this again would be the measure of the profit or loss as the case may be of the business qua that particular asset. To my mind it makes not the slightest difference whether an asset is realised in the course of the business or withdrawn from the stock-in-trade of the business. An asset which has appreciated or depreciated in value as the case may be in accordance with the fluctuation of the market ceases to be a aprt of the business, by the one process or the other. So far as the business is concerned it is entitled to credit in its goods account the price of that asset as ahs been realised by the sale thereof or the market value of that asset as at the date of its withdrawal. Looking at the matter from the assessees point of view also, it does not make any the slightest difference whether he realises the asset in the course of the business and utilises it in any manner he chooses. Having brought into the business an asset which was of a particular value at that time, he withdraws from the business that asset at time when it has appreciated or depreciated in value. The business would be entitled to the appreciation or depreciation in value of that asset in so far as the asset had become a part of the stock-in-trade of the business. When the asset is withdrawn by the assessee, the assessee obtains in his hands by reason of such withdrawal an asset which at the time of the withdrawal has appreciated or depreciated in values as the case may be in comparison with its vlaue at the time when it was brought into the business and the assessee on such withdrawal would be able to deal with or dispose of an asset which had thus appreciated or depreciated in value. \n In my opinion the manner of his dealing with the asset after he withdraws it from the stock-in-trade of the business is really immmaterial. What is material from the stock-in-trade of the business and that vlaue can only be determine by the market value of the asset as at the date of its withdrawal. It was urged that the withdrawal of the asset from the stock-in-trade of the business was not a business operation and that an entry on the credit side crediting the cost price of the particular asset would therefore be enough. This argument however does not take into account the appreciation or the deprciation in the value of the asset on the date of the withdrawal as compared to its value when it was intially brought into business. It also doesnot take into account the fact that the assessee might have adopted the market value basis for valuation of stock-in-trade on hand at the close of the previous year or years of account. The entry on the debit side at the beginning of the year of account would not then represent the cost price of the asset but would represent the market valu of the asset at the close of previous year account. What would then be the rational basis on which the credit entry should be made at the date of withdrawal? Should it be the cost price of the asset which was not at all reflected in the accounts except at the intial stage when the asset was brought into the business or the market value of the asset when it was withdrawn? surely the method of account keeping cannot make any differences to actual position, whether an asset has apperciated or depreciated in value and what pofit or loss if any accrued to the business when tje asset was withdrawn from the stock-in-trade of the business. There is also a further fact to be considered and it is that when the asset is withdrawn from the stock-in-trade of the business there would be of necessity an entry in the account of the person withdrawing it debiting the price of that asset to him. If the assessee withdraws from the stock-in-trade of the business an asset which has thus appreciated or depreciated in value is there any justification whatever for debiting him with the cost price of that asset and not the market value of the asset as at the date of withdrawal? In the event of the asset having appreciated in value the assessee should be debited in his account with the appreciated market value of the asset inasmuch as he withdraws from the stock-in-trade of the business an asset has depreciated in value the assessee should certainly not be mulcted. He withdraws from the stock-in-trade of the business an asset which is of a depreciated value as compared with its value when it was brought inhto the business and he should not certainly be debited with a higher price even though it may be the cost price as appearing in the books of account according to the particular system of accounting adopted by the assessee. I am therefore definitely of the opinion that even in the case of withdrawal as in the case of the realisation of the asset the business is entitled to credit the goods account the market value of the asset as at the date of its withdrawl whatever be the method adopted by it for valuation of its stock-in-trade on hand at the close of a year of account. Shri R. J. Kolah appearing for the appellant particularly relied upon a decision of the Calcutta High Court, In the matter of Messrs. \n Chouthmal Golapchand constituted by four partners with equal shares, and they had at the beginning of the accounting year 1935-36 an opening stock of shares valued at cost price of Rs. 85,331. On the 8th January, 1936, the partners resolved to dissolve the firm with effect from the 30th March, 1936, and in view of the pending dissolution they divided amongst themselves on the 9th March, 1936, there shares which were then valued at the rates prevailing in the market at an aggregate sum of Rs. 51,966. There was a difference was claimed by the assessees as a loss in the assessment. This claim of the assessees was negatived on the ground that there was nothing to show that loss had occurred in the year of account. The assessees having adopted the system of valuing the shares at cost price at the end of every year and the opening of the next year, the cost price of shares was taken to have been their value at the beginning of the year of account and the partition was taken as not amounting to a sale of the shares with the result that there was no evidence of any loss. With great respect to the learned Judges I do not see my way to agree with the reasoning of this judgment does not take count of the fact that at the date of the partition the assets which had been brought into the business at the earlier dates had depreciated in value and it was these depreciated assets which were the subject-matter of partition between the partners. Even if the partition be not treated as a sale it was a transer of property, the property of the firm being transferred to the individual partners thereof and each partner obtaining an absolute interest in the shares thus transferred to him by the firm was concerned it was certainly a transfer of the property to the individual partners and even as regards the partners themselves it was transfer of the interests of the partners inter se in the shares respectively transferred absolutely to each of them. If it were necessary to do so I would certainly say that the case was erroneously decided. (See also the judgment of Fletcher Moulton L. J. in In re Spanish Prospecting Co., Ltd. (1911 1 Ch. 92 at p. 98.))\n DECISION ??", "expert_1": {"rank1": ["The question referred were - \n Whether in the circumstances of the case any income arose to the assessee as a result of the transfer of hsres and silver bars to the trustees?", "Our answer to the first question is that in the circumstances of this case no income arose to the appellant as a result of the transfer of the shares and silver bars to the trustees.", "The appeal is allowed with costs.", "I am therefore definitely of the opinion that even in the case of withdrawal as in the case of the realisation of the asset the business is entitled to credit the goods account the market value of the asset as at the date of its withdrawl whatever be the method adopted by it for valuation of its stock-in-trade on hand at the close of a year of account."], "rank2": ["This arguments can only prevail on the assumption that the State can tax potential profits because, except for that, the State would neither gain nor loss in a case of this kind. Had the assets been left where they were, they would have been valued at the end of the year as they were at the beginning, at the cost price and we would be a gain at some future indefinite date is mere guess work, for equal there might be loss.", "We refrain from expressing any opinion about them, especially as they appear to reach different conclusions, the facts are not the same and the questions which arose on the facts there were not argued here. they raise matters of wider arose on the facts there were not argued here.", "When the asset is withdrawn from the stock-in-trade of the business the position in my opinion would be no different. So far as the business is concerned the asset would go out and cease to be a aprt of its stock-in-trade and this again would be the measure of the profit or loss as the case may be of the business qua that particular asset. To my mind it makes not the slightest difference whether an asset is realised in the course of the business or withdrawn from the stock-in-trade of the business. An asset which has appreciated or depreciated in value as the case may be in accordance with the fluctuation of the market ceases to be a aprt of the business, by the one process or the other. So far as the business is concerned it is entitled to credit in its goods account the price of that asset as ahs been realised by the sale thereof or the market value of that asset as at the date of its withdrawal. Looking at the matter from the assessees point of view also, it does not make any the slightest difference whether he realises the asset in the course of the business and utilises it in any manner he chooses. Having brought into the business an asset which was of a particular value at that time, he withdraws from the business that asset at time when it has appreciated or depreciated in value. The business would be entitled to the appreciation or depreciation in value of that asset in so far as the asset had become a part of the stock-in-trade of the business. When the asset is withdrawn by the assessee, the assessee obtains in his hands by reason of such withdrawal an asset which at the time of the withdrawal has appreciated or depreciated in values as the case may be in comparison with its vlaue at the time when it was brought into the business and the assessee on such withdrawal would be able to deal with or dispose of an asset which had thus appreciated or depreciated in value. \n In my opinion the manner of his dealing with the asset after he withdraws it from the stock-in-trade of the business is really immmaterial. What is material from the stock-in-trade of the business and that vlaue can only be determine by the market value of the asset as at the date of its withdrawal.", "This argument however does not take into account the appreciation or the deprciation in the value of the asset on the date of the withdrawal as compared to its value when it was intially brought into business. It also doesnot take into account the fact that the assessee might have adopted the market value basis for valuation of stock-in-trade on hand at the close of the previous year or years of account. The entry on the debit side at the beginning of the year of account would not then represent the cost price of the asset but would represent the market valu of the asset at the close of previous year account. What would then be the rational basis on which the credit entry should be made at the date of withdrawal? Should it be the cost price of the asset which was not at all reflected in the accounts except at the intial stage when the asset was brought into the business or the market value of the asset when it was withdrawn? surely the method of account keeping cannot make any differences to actual position, whether an asset has apperciated or depreciated in value and what pofit or loss if any accrued to the business when tje asset was withdrawn from the stock-in-trade of the business.", "If the assessee withdraws from the stock-in-trade of the business an asset which has thus appreciated or depreciated in value is there any justification whatever for debiting him with the cost price of that asset and not the market value of the asset as at the date of withdrawal? In the event of the asset having appreciated in value the assessee should be debited in his account with the appreciated market value of the asset inasmuch as he withdraws from the stock-in-trade of the business an asset has depreciated in value the assessee should certainly not be mulcted. He withdraws from the stock-in-trade of the business an asset which is of a depreciated value as compared with its value when it was brought inhto the business and he should not certainly be debited with a higher price even though it may be the cost price as appearing in the books of account according to the particular system of accounting adopted by the assessee."], "rank3": ["First, he said that as the bars and shares were brought into the business any withdrawl of them from the business must be dealt with along ordinary and well-known business lines, namely, that if a person withdraws an asset from a business he must account for it to the business at the marlet rate prevailing at the date of the withdrawl. He said that the mere fact that the appellant was the sole owner of the business can make no difference, for under the Act income is assessable under distinct heads and when we are working out the income of a business the rules applicable to business incomes must be applied whoever is the owner. His second contention was that if the act of withdrawl is at a time when the market price is higher than the cost price, then the State is deprived of a potential profit. He conceded that had the market rate been lower than the cost price, then the appellant would have been entitled to set off the loss on those transactions against his overall profit on the other transcations and thus obtain the advantage of a lower tax on the overall picture.", "We are of opinion that the learned Attorney-Generals secound contention is unsound because, for income-tax purposes, each year is a self contained accounting period and we can only take into consideration income, profits and gains made in that year and are not concerned with potential profits which may be made in another year any more than we are with losses which may occur in the future. As regards the first contention, we are of opinion that the appellant was right in entering the cost value of the silver and shares at the date of the withdrawl, because it was not a business transcation and by that act the business made no profit or gain, nor did it sustain a loss, and the appellant derived no immediate pecuniary gain the State cannot tax them, for under the Income-tax Act the State has no power to tax a potential future advantage.", "As this is a business, any wihtdrawl of the assets is a business matter and the only feasible way of regarding it in a business light is to enter", "the market price at the date of the withdrawl and whether that happens to favour the assessee or the State is immaterial. We do not agree. It is well recognised that in revenue cases regard must be had to the substance of the transaction rather than to tis mere form. \nIn the present case disregarding technicalities it is impossible to get away from the fact that the business is owned and run by the assessee himself. In a such circumstances we are of opinion that it is wholly unreal and artificial to separate the business from its owner and treat them as if they were separate entities trading with each other and then by means of a fictional sale introduce a fictional profit which in truth and in fact is non-existent.", "What he chooses to do with the rice in his godown is no concern of the Income-tax department provided always that he does not sell it or otherwise make a profit out of it. He can consume it, or give it away, or just left it rot. why should it make a difference if instead of keeping two sets of books he keeps only one ? How cah he be said to have made an income personally or his business a profit, because he uses ten bags out of his godown for a feast for the marriage of his daughter? How can it make any difference whether the bags are shifted directly from the godown to the kitchen or from the godown to the shop and from the shop to the kitchen? And yet, when the reasoning of the learned Attorney- General is pushed to tis logical conclusion, the form of the transcation is of its essence and its taxable or not according to the route the rice takes from the godown to the wedding feast. In our opinion, it would make no difference if the man instead of giving the feast himself hands over the rice to his daughter as a gift for the marriage festivities of her son.", "The appellants mehtod of book-keeping reflects the true position. As he makes his purchases he enters his stock at the cost price on one side of the accounts. At the close of the year he enters the value of any unsold stock at cost on the other side of the accounts thus cancelling out the entries relating to the same unsold stock earlier in the accounts and then that is carried forward as the opening balance in the next years accounts. This cancelling out of the unsold stock from both sides of the accounts leaves only the transactions on which there have been actual sales and gives the true and actual profits or loss on his years dealings. In the same way, the appellant has reflected the true state of his finances and given a truthful picture of the profit and loss in his business by entering the bullion and silver at cost when he withdrew them for a purely non-business purpose and utilised them in a transaction which brought him neither income nor profit nor gain.", "In the present case, the assessees business received nothing in exchange for the withdrawl of the assets, neither money nor moneys worth, therefore the only fair way of treating the matter was to do just what the appellant did, namely to enter the price at which the assets were valued at the beginning of the year so that the entries would cancel each other out and level the business with neither a gain or a loss on those transcations. The learned Attorney-General contended that if that was allowed great loss would ensue to the State because all a man need do at the end of the year would be to withdraw all assets which had risen in value and leave only those which had depreciated and thus either show a loss or reduce his taxable profits.", "The question however which falls to be determined is what is the effect of these assets having been withdrawn from the stock-in- trade of the business. So far as the business itself is concerned the asset which has been brought in is of a particular value at the date when it has been so brought in and it is then valued in the books of account at its cost. In the course of the business however the asset appreciates or depreciates in value in accordance with the fluctuations of the market. If the cost price basis is adopted for the valuation of stock- in-trade at the close of the year this appreciation or depreciation in the value as the case may be would not be reflected in the accounts. \n If however the market valued at the market value basis is adopted for such valuation, the asset on being valued at the market rate thereof at the close of the year might show a loss and this loss would be allowed by the Income-tax authorities in computing the profit or loss of the business. In either event, the assessee would have to carry over the asset in the books of account of the subsequent year at the valuation adopted at the close of the previous year and the valuation adopted at the close of the previous year and the assessee would not be allowed to change the basis valuation thus adopted unless he close to adopt at the end of the subsequent year or years valuation at the cost price thus realised and the profit or loss as the case may be, in regard to that asset and that profit or loss would be allowed by the Income-tax authorities in the computation of profit or loss of valuation would not however make any difference in the ultimate reslu. On the cost price basis of valuation all intermediate fluctuation of price during the interval between the bringing of the asset in the business and the realisation of it would be eliminated and the only thing considered in the accounts would be the difference and the price of the asset when it was brought into the business and the price thereof when the asset as at the close of every the fluctuation in the market value of the asset as at the close of every year of account a rectification would have to be made in the result of the trading of the previous year which was not correctly reflected in the accounts by reason of the assessee having adopted the market value obtaining at the close of the previous year as the value of the asset. This process of rectification would continue from year to year until the asset was realised on the sale of the asset would be brought into account in that year. the ultimate result of these operations so fas as the asset itself is concerned would be no different. \n Because if regard be had to the various fluctuations in the market value which have been reflected in the accounts of the intermediate period, what the business actually realised. The only advantage which the assessee obtains would be that he would be able to anticipate in a particular year the loss that may be made on the asset in the following year or years if the prices rose again.", "Is there any difference in the position when instead of the asset being realised it is withdrawn from the stock-intrade of the business? So far as the business is concerned the asset ceases to be a aprt of the stock-in-trade whether it is realised or is withdrawn from the stock-in-trade. the asset after it has been brought into the business appreciates or depreciates in value in accordance with the fluctuations of the market and that appreciated or depreciated asset continues to be a part of the stock-in-trade of the business until it is realised or withdrawn. This appreciation or depreciation in value is not reflected for the valuation of the stock-in-trade at the close of theyear of account, but is certainly reflected as above indicated in the books of account when the market value basis is adopted. In each case however the actual profit or loss to the business as the case may ne in relation to the price at which the asset was brought into the business would be determined at the date when the asset is realised. That would be the measure of the appreciation or depreciation in value of the asset which till then formed a aprt of the stock-in-trade of the business, and would also be the measure of the ultimate profit or loss as the case may be of the business in regard to that particular asset.", "With great respect to the learned Judges I do not see my way to agree with the reasoning of this judgment does not take count of the fact that at the date of the partition the assets which had been brought into the business at the earlier dates had depreciated in value and it was these depreciated assets which were the subject-matter of partition between the partners. Even if the partition be not treated as a sale it was a transer of property, the property of the firm being transferred to the individual partners thereof and each partner obtaining an absolute interest in the shares thus transferred to him by the firm was concerned it was certainly a transfer of the property to the individual partners and even as regards the partners themselves it was transfer of the interests of the partners inter se in the shares respectively transferred absolutely to each of them. If it were necessary to do so I would certainly say that the case was erroneously decided."], "rank4": ["This is an appeal by an assessee against a judgment and order of the High Court at Bombay delivered on a reference made by the Income-tax Appellate Tribunal. The Bombay High Court refused leave to appeal but the assessee obtained special leave from this Court.", "This appeal by special leave from a judgment of the High Court of Judicature at Bombay on a reference by the Income-tax Appellate Tribunal under Section 66 (I) of the Indian Income-tax Act (XI of 1922) raises an interesting question as to the valuation of an asset withdrawn from the stock-in-trade of a running business.", "The assessee kept his books of account on the mercantile basis and the method employed by him in the past for valuing the closing stock of his stock-in-trade was valuation at the cost price thereof. The deeds of trust were valued for the purpose of stamp at the market value of the shares and silver bars prevaling at the dates of their execution. The assessee however showed the transfer of these shares and silver bars to trustees in the books of account at the cost price thereof thus setting off the debit shown in respect of the same at the beginning of the year of account. He contended that the market value of the said shares and silver bars on which the stamp duty was based could not be basis for computing his income from stock-in-trade thus transferred. The Income-tax authorities did not accept this contention and assessed the profit at the difference between the cost price of the said shares and silver bars and the market value thereof at the date of their withdrawal from the business. the Income-tax Officer, the Appellate Assistant Commissioner as also the income-tax Appellate Tribunal rejected this contention of the assessee and the income-tax Appellate tribunal submitted at the instance of the assessee a case under Section 66 (I) of the Act referring the following two questions for the decision of the High Court - \n Wether in the circumstances of the case any income arose to the petitioner as a result of the transfer of shares and silver bars to the trustees? If the answer to the question (I) is in the affirmative, wether the method employed by the Appellate Assistant Commissioner and upheld by the Appellate Tribunal in computing the petitioners income from the transfer is the purpose method for computing the income? The High Court answered both the question in the affirmative. It was not disputed before the Income-tax Act Appellate Tribunal that the shares transferred were the stock-in-trade of the business. As regards the silver bars the Tribunal found that the assessee had been making purchases and sales frequently and that the silver also was stock-in-trade and not a capital investment. Both the shares and the silver bars were thus part of the stock-in-trade of the business. they had been purchased by the assessee from time to time and formed part of the stock-intrade of the business and had been shown at the cost price thereof in the books of account of the previous years and also at the opening of the year of account. If the shares and the silver bars which were thus withdrawn from the stock-in-trade at the closing of the year of account, the value of these shares and silver bars would also have been shown at the cost price in accordance with the system of accounts maintained by the assessee."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["In the same way, the appellant has reflected the true state of his finances and given a truthful picture of the profit and loss in his business by entering the bullion and silver at cost when he withdrew them for a purely non-business purpose and utilised them in a transaction which brought him neither income nor profit nor gain.", "Our answer to the first question is that in the circumstances of this case no income arose to the appellant as a result of the transfer of the shares and silver bars to the trustees.", "The assessees having adopted the system of valuing the shares at cost price at the end of every year and the opening of the next year, the cost price of shares was taken to have been their value at the beginning of the year of account and the partition was taken as not amounting to a sale of the shares with the result that there was no evidence of any loss.", "does not take count of the fact that at the date of the partition the assets which had been brought into the business at the earlier dates had depreciated in value and it was these depreciated assets which were the subject-matter of partition between the partners. Even if the partition be not treated as a sale it was a transer of property, the property of the firm being transferred to the individual partners thereof and each partner obtaining an absolute interest in the shares thus transferred to him by the firm was concerned it was certainly a transfer of the property to the individual partners and even as regards the partners themselves it was transfer of the interests of the partners inter se in the shares respectively transferred absolutely to each of them."], "rank2": ["In this books the appellant credited the business with the cost price of the bars and shares so withdrawn and there lies the crux of the issue which we have to determine.", "It is well recognised that in revenue cases regard must be had to the substance of the transaction rather than to tis mere form. \nIn the present case disregarding technicalities it is impossible to get away from the fact that the business is owned and run by the assessee himself. In a such circumstances we are of opinion that it is wholly unreal and artificial to separate the business from its owner and treat them as if they were separate entities trading with each other and then by means of a fictional sale introduce a fictional profit which in truth and in fact is non-existent.", "In the event of the asset having appreciated in value the assessee should be debited in his account with the appreciated market value of the asset inasmuch as he withdraws from the stock-in-trade of the business an asset has depreciated in value the assessee should certainly not be mulcted. He withdraws from the stock-in-trade of the business an asset which is of a depreciated value as compared with its value when it was brought inhto the business and he should not certainly be debited with a higher price even though it may be the cost price as appearing in the books of account according to the particular system of accounting adopted by the assessee. I am therefore definitely of the opinion that even in the case of withdrawal as in the case of the realisation of the asset the business is entitled to credit the goods account the market value of the asset as at the date of its withdrawl whatever be the method adopted by it for valuation of its stock-in-trade on hand at the close of a year of account."], "rank3": ["According to the appellant, the act of withdrawl resulted in neither income nor profit nor gain either to himself or to his business, nor was it a business transcation, accordingly it was not taxable.", "The learned Attorney-General raised two contentions. \nFirst, he said that as the bars and shares were brought into the business any withdrawl of them from the business must be dealt with along ordinary and well-known business lines, namely, that if a person withdraws an asset from a business he must account for it to the business at the marlet rate prevailing at the date of the withdrawl.", "As regards the first contention, we are of opinion that the appellant was right in entering the cost value of the silver and shares at the date of the withdrawl, because it was not a business transcation and by that act the business made no profit or gain, nor did it sustain a loss, and the appellant derived no immediate pecuniary gain the State cannot tax them, for under the Income-tax Act the State has no power to tax a potential future advantage.", "In our opinion, it would make no difference if the man instead of giving the feast himself hands over the rice to his daughter as a gift for the marriage festivities of her son. The appellants mehtod of book-keeping reflects the true position. As he makes his purchases he enters his stock at the cost price on one side of the accounts. At the close of the year he enters the value of any unsold stock at cost on the other side of the accounts thus cancelling out the entries relating to the same unsold stock earlier in the accounts and then that is carried forward as the opening balance in the next years accounts. This cancelling out of the unsold stock from both sides of the accounts leaves only the transactions on which there have been actual sales and gives the true and actual profits or loss on his years dealings.", "So far as the business itself is concerned the asset which has been brought in is of a particular value at the date when it has been so brought in and it is then valued in the books of account at its cost. In the course of the business however the asset appreciates or depreciates in value in accordance with the fluctuations of the market. If the cost price basis is adopted for the valuation of stock- in-trade at the close of the year this appreciation or depreciation in the value as the case may be would not be reflected in the accounts. \n If however the market valued at the market value basis is adopted for such valuation, the asset on being valued at the market rate thereof at the close of the year might show a loss and this loss would be allowed by the Income-tax authorities in computing the profit or loss of the business.", "It was urged that the withdrawal of the asset from the stock-in-trade of the business was not a business operation and that an entry on the credit side crediting the cost price of the particular asset would therefore be enough. This argument however does not take into account the appreciation or the deprciation in the value of the asset on the date of the withdrawal as compared to its value when it was intially brought into business."], "rank4": ["The assessee however showed the transfer of these shares and silver bars to trustees in the books of account at the cost price thereof thus setting off the debit shown in respect of the same at the beginning of the year of account. He contended that the market value of the said shares and silver bars on which the stamp duty was based could not be basis for computing his income from stock-in-trade thus transferred.", "This appreciation or depreciation in value is not reflected for the valuation of the stock-in-trade at the close of theyear of account, but is certainly reflected as above indicated in the books of account when the market value basis is adopted. In each case however the actual profit or loss to the business as the case may ne in relation to the price at which the asset was brought into the business would be determined at the date when the asset is realised."], "label": "REJECTED"}, "expert_3": {"rank1": ["We are of opinion that the learned Attorney-Generals secound contention is unsound because, for income-tax purposes, each year is a self contained accounting period and we can only take into consideration income, profits and gains made in that year and are not concerned with potential profits which may be made in another year any more than we are with losses which may occur in the future. As regards the first contention, we are of opinion that the appellant was right in entering the cost value of the silver and shares at the date of the withdrawl, because it was not a business transcation and by that act the business made no profit or gain, nor did it sustain a loss, and the appellant derived no immediate pecuniary gain the State cannot tax them, for under the Income-tax Act the State has no power to tax a potential future advantage. All it acn tax is income, profits and gains made in the relevant accounting year", "It is well recognised that in revenue cases regard must be had to the substance of the transaction rather than to tis mere form", "In the present case disregarding technicalities it is impossible to get away from the fact that the business is owned and run by the assessee himself. In a such circumstances we are of opinion that it is wholly unreal and artificial to separate the business from its owner and treat them as if they were separate entities trading with each other and then by means of a fictional sale introduce a fictional profit which in truth and in fact is non-existent. Cut away the fictions and you reach the position that the man is supposed to be selling to himself and thereby making a profit out of himself which on the lace of it is not only absurd but against all canons of mercantile and income-tax law. And worse.", "He may keep it and not show a profit", "He may sell it to another at a loss and cannot be taxed because he cannot be compelled to sell at a fictional profit when the market rises in order that he may be compelled to pay to Government a tax which is anything but fictional", "The appellants mehtod of book-keeping reflects the true position. As he makes his purchases he enters his stock at the cost price on one side of the accounts. At the close of the year he enters the value of any unsold stock at cost on the other side of the accounts thus cancelling out the entries relating to the same unsold stock earlier in the accounts and then that is carried forward as the opening balance in the next years accounts. This cancelling out of the unsold stock from both sides of the accounts leaves only the transactions on which there have been actual sales and gives the true and actual profits or loss on his years dealings. In the same way, the appellant has reflected the true state of his finances and given a truthful picture of the profit and loss in his business by entering the bullion and silver at cost when he withdrew them for a purely non-business purpose and utilised them in a transaction which brought him neither income nor profit nor gain", "The question referred were - \n Whether in the circumstances of the case any income arose to the assessee as a result of the transfer of hsres and silver bars to the trustees? If the answer to question (I) is in afirmative, whether the method employed by the Appellate Assistant Commissioner and upheld by the Appellate Tribunal in computing the assessees income from the transfer is the proper method for computing the income? Our answer to the first question is that in the circumstances of this case no income arose to the appellant as a result of the transfer of the shares and silver bars to the trustees. In view of that, the second question does not arise."], "rank2": ["According to the appellant, the act of withdrawl resulted in neither income nor profit nor gain either to himself or to his business, nor was it a business transcation, accordingly it was not taxable. The learned Attorney-General raised two contentions. \nFirst, he said that as the bars and shares were brought into the business any withdrawl of them from the business must be dealt with along ordinary and well-known business lines, namely, that if a person withdraws an asset from a business he must account for it to the business at the marlet rate prevailing at the date of the withdrawl", "He said that the mere fact that the appellant was the sole owner of the business can make no difference, for under the Act income is assessable under distinct heads and when we are working out the income of a business the rules applicable to business incomes must be applied whoever is the owner. His second contention was that if the act of withdrawl is at a time when the market price is higher than the cost price, then the State is deprived of a potential profit", "He conceded that had the market rate been lower than the cost price, then the appellant would have been entitled to set off the loss on those transactions against his overall profit on the other transcations and thus obtain the advantage of a lower tax on the overall picture", "It was conceded that if these assets had been sold at cost price the State could have claimed nothing, for a man cannot be compelled to make a profit out of any particular transcation. It was also conceded that if the silver and stocks had lain where they were, then again there would have been no advantage to the State because the appellant would have been entitled to enter their closing vlaues at cost at the end of the year.", "The learned Attorney-General even conceded that if they had been sold at a loss the appellant would have been entitled to set that off agianst his other gains, but he said that is because all those are business transactions and that is the way the law deals with such matters when they occur in the ordinary course of business", "In the present case, the assessees business received nothing in exchange for the withdrawl of the assets, neither money nor moneys worth, therefore the only fair way of treating the matter was to do just what the appellant did, namely to enter the price at which the assets were valued at the beginning of the year so that the entries would cancel each other out and level the business with neither a gain or a loss on those transcations.", "The learned Attorney-General contended that if that was allowed great loss would ensue to the State because all a man need do at the end of the year would be to withdraw all assets which had risen in value and leave only those which had depreciated and thus either show a loss or reduce his taxable profits. This arguments can only prevail on the assumption that the State can tax potential profits because, except for that, the State would neither gain nor loss in a case of this kind. Had the assets been left where they were, they would have been valued at the end of the year as they were at the beginning, at the cost price and we would be a gain at some future indefinite date is mere guess work, for equal there might be loss. Apart, however, from that the learned Attorney- Generals rule is equally capable of abuse", "A man could as easily withdrawn from the business assets which had depreciated and enter in his books the deprecated market value and leave at cost price the assets which had risen"], "rank3": ["The appellant deals in silver and shares and a substantial part of his holding is kept in silver bullion and shares. His business is run and owned by himself.", "His accounts are maintained according to the mercantile system. It is admitted that under this system stocks can be valued in one of two ways and provided there is no variation in the method from year to year without the sanction of the Income-tax authorities an assessee can choose whichever method, that is to say, the cost price of the stock was wnterred at the beginning of the year and not its market value and similarly the cost price was again entered at the close of the year of any stock which was not disposed of during the yeaar. \nThe entries on the one side of the accounts at the beginning of the year thus balance those on the other in respect of these items with the result that so far as they are concerned the books show neither a profit nor a loss on them. This was the method regularly employed and it is admitted on all hands that this was permissible under this system of accounting.", "The accounting year with which we are concerned is the calendar year 1942", "The silver bars and shares lying with the appellant at the beginning of the year were valued at cost price. In the course of the year the appellant withdrew some bars and shares from the business and settled them on certain trusts, three in number.", "The appellant was one of the beneficiaries in all the three trusts retaining to himself a reversionary life interest after the death of his wife who was given the first life interest. After certain other life interests the ultimate beneficiaries were charities. The appellant was the managing trustee expressly so created in two of the trusts and virtually so in the third", "In this books the appellant credited the business with the cost price of the bars and shares so withdrawn and there lies the crux of the issue which we have to determine. There is no suggestion in this case that the bars and shares were withdrawn from the business otherwise than in good faith"], "label": "ACCEPTED"}, "expert_4": {"rank1": ["Our answer to the first question is that in the circumstances of this case no income arose to the appellant as a result of the transfer of the shares and silver bars to the trustees. In view of that, the second question does not arise.", "The appeal is allowed with costs."], "rank2": ["This is an appeal by an assessee against a judgment and order of the High Court at Bombay delivered on a reference made by the Income-tax Appellate Tribunal.", "We are of opinion that the learned Attorney-Generals secound contention is unsound because, for income-tax purposes, each year is a self contained accounting period and we can only take into consideration income, profits and gains made in that year and are not concerned with potential profits which may be made in another year any more than we are with losses which may occur in the future.", "As regards the first contention, we are of opinion that the appellant was right in entering the cost value of the silver and shares at the date of the withdrawl, because it was not a business transcation and by that act the business made no profit or gain, nor did it sustain a loss, and the appellant derived no immediate pecuniary gain the State cannot tax them, for under the Income-tax Act the State has no power to tax a potential future advantage.", "Cut away the fictions and you reach the position that the man is supposed to be selling to himself and thereby making a profit out of himself which on the lace of it is not only absurd but against all canons of mercantile and income-tax law.", "In the same way, the appellant has reflected the true state of his finances and given a truthful picture of the profit and loss in his business by entering the bullion and silver at cost when he withdrew them for a purely non-business purpose and utilised them in a transaction which brought him neither income nor profit nor gain.", "The question referred were - \n Whether in the circumstances of the case any income arose to the assessee as a result of the transfer of hsres and silver bars to the trustees?", "If the answer to question (I) is in afirmative, whether the method employed by the Appellate Assistant Commissioner and upheld by the Appellate Tribunal in computing the assessees income from the transfer is the proper method for computing the income?"], "rank3": ["The silver bars and shares lying with the appellant at the beginning of the year were valued at cost price.", "In the course of the year the appellant withdrew some bars and shares from the business and settled them on certain trusts, three in number. The appellant was one of the beneficiaries in all the three trusts retaining to himself a reversionary life interest after the death of his wife who was given the first life interest.", "In this books the appellant credited the business with the cost price of the bars and shares so withdrawn and there lies the crux of the issue which we have to determine.", "There is no suggestion in this case that the bars and shares were withdrawn from the business otherwise than in good faith.", "It is well recognised that in revenue cases regard must be had to the substance of the transaction rather than to tis mere form.", "In the present case disregarding technicalities it is impossible to get away from the fact that the business is owned and run by the assessee himself. In a such circumstances we are of opinion that it is wholly unreal and artificial to separate the business from its owner and treat them as if they were separate entities trading with each other and then by means of a fictional sale introduce a fictional profit which in truth and in fact is non-existent.", "And worse. He may keep it and not show a profit. He may sell it to another at a loss and cannot be taxed because he cannot be compelled to sell at a fictional profit when the market rises in order that he may be compelled to pay to Government a tax which is anything but fictional.", "The appellants mehtod of book-keeping reflects the true position. As he makes his purchases he enters his stock at the cost price on one side of the accounts.", "At the close of the year he enters the value of any unsold stock at cost on the other side of the accounts thus cancelling out the entries relating to the same unsold stock earlier in the accounts and then that is carried forward as the opening balance in the next years accounts.", "This cancelling out of the unsold stock from both sides of the accounts leaves only the transactions on which there have been actual sales and gives the true and actual profits or loss on his years dealings.", "In the present case, the assessees business received nothing in exchange for the withdrawl of the assets, neither money nor moneys worth, therefore the only fair way of treating the matter was to do just what the appellant did, namely to enter the price at which the assets were valued at the beginning of the year so that the entries would cancel each other out and level the business with neither a gain or a loss on those transcations.", "Had the assets been left where they were, they would have been valued at the end of the year as they were at the beginning, at the cost price and we would be a gain at some future indefinite date is mere guess work, for equal there might be loss.", "When the asset is withdrawn from the stock-in-trade of the business the position in my opinion would be no different.", "So far as the business is concerned the asset would go out and cease to be a aprt of its stock-in-trade and this again would be the measure of the profit or loss as the case may be of the business qua that particular asset. To my mind it makes not the slightest difference whether an asset is realised in the course of the business or withdrawn from the stock-in-trade of the business."], "rank4": ["The appellant deals in silver and shares and a substantial part of his holding is kept in silver bullion and shares.", "His business is run and owned by himself.", "His accounts are maintained according to the mercantile system.", "It is admitted that under this system stocks can be valued in one of two ways and provided there is no variation in the method from year to year without the sanction of the Income-tax authorities an assessee can choose whichever method, that is to say, the cost price of the stock was wnterred at the beginning of the year and not its market value and similarly the cost price was again entered at the close of the year of any stock which was not disposed of during the yeaar.", "The entries on the one side of the accounts at the beginning of the year thus balance those on the other in respect of these items with the result that so far as they are concerned the books show neither a profit nor a loss on them. This was the method regularly employed and it is admitted on all hands that this was permissible under this system of accounting.", "According to the appellant, the act of withdrawl resulted in neither income nor profit nor gain either to himself or to his business, nor was it a business transcation, accordingly it was not taxable.", "The learned Attorney-General raised two contentions. \nFirst, he said that as the bars and shares were brought into the business any withdrawl of them from the business must be dealt with along ordinary and well-known business lines, namely, that if a person withdraws an asset from a business he must account for it to the business at the marlet rate prevailing at the date of the withdrawl.", "His second contention was that if the act of withdrawl is at a time when the market price is higher than the cost price, then the State is deprived of a potential profit.", "Consider this simple illustration. A man trades in rice and also uses rice for his family consumption. the bags are all stored in one godown and he draws upon his stock as and when he finds it necessary to do so, now for his business, now for his own use. what he keeps for his own personal use cannot be taxed however much the market rises nor can he be taxed on what he gives away from his own personal stock, nor, so far as his shop is concerned, can he be compelled to sell at a profit. If he keeps two sets of books and enters in one all the bags which go into his personal godown and in the other the rice which is withdrawn from the godown into his customers so that only a negligible quantity is left over in the shop after each days sales, his private and personal dealings with the bags in his personal godown could not be taxed unless he sells them at a profit. What he chooses to do with the rice in his godown is no concern of the Income-tax department provided always that he does not sell it or otherwise make a profit out of it.", "In our opinion, it would make no difference if the man instead of giving the feast himself hands over the rice to his daughter as a gift for the marriage festivities of her son.", "The learned Attorney-General contended that if that was allowed great loss would ensue to the State because all a man need do at the end of the year would be to withdraw all assets which had risen in value and leave only those which had depreciated and thus either show a loss or reduce his taxable profits. This arguments can only prevail on the assumption that the State can tax potential profits because, except for that, the State would neither gain nor loss in a case of this kind.", "These cases were not cases of a business owned and run by a single owner and so the fiction of treating the business as a separate entity from its owner actually trading with him, which we are asked to apply here, does not arise.", "Neither case is in our opinion, apposite here."], "rank5": ["There are two cases which bear a superficial resemblance to this case. \nThey are In the matter of Messrs. Chouthmal Golapchand (1938 6 ITR 733). and In re Spanish Prospecting company Limited (1911 I ch 92). We refrain from expressing any opinion about them, especially as they appear to reach different conclusions, the facts are not the same and the questions which arose on the facts there were not argued here. they raise matters of wider arose on the facts there were not argued here."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["As regards the first contention, we are of opinion that the appellant was right in entering the cost value of the silver and shares at the date of the withdrawl, because it was not a business transcation and by that act the business made no profit or gain, nor did it sustain a loss, and the appellant derived no immediate pecuniary gain the State cannot tax them, for under the Income-tax Act the State has no power to tax a potential future advantage.", "in the circumstances of this case no income arose to the appellant as a result of the transfer of the shares and silver bars to the trustees. In view of that, the second question does not arise. The appeal is allowed with costs."], "rank2": ["We do not agree.", "It is well recognised that in revenue cases regard must be had to the substance of the transaction rather than to tis mere form."], "rank3": ["There is no suggestion in this case that the bars and shares were withdrawn from the business otherwise than in good faith.", "All it acn tax is income, profits and gains made in the relevant accounting year.", "In the present case disregarding technicalities it is impossible to get away from the fact that the business is owned and run by the assessee himself.", "In a such circumstances we are of opinion that it is wholly unreal and artificial to separate the business from its owner and treat them as if they were separate entities trading with each other and then by means of a fictional sale introduce a fictional profit which in truth and in fact is non-existent.", "The appellants mehtod of book-keeping reflects the true position. As he makes his purchases he enters his stock at the cost price on one side of the accounts. At the close of the year he enters the value of any unsold stock at cost on the other side of the accounts thus cancelling out the entries relating to the same unsold stock earlier in the accounts and then that is carried forward as the opening balance in the next years accounts. This cancelling out of the unsold stock from both sides of the accounts leaves only the transactions on which there have been actual sales and gives the true and actual profits or loss on his years dealings. In the same way, the appellant has reflected the true state of his finances and given a truthful picture of the profit and loss in his business by entering the bullion and silver at cost when he withdrew them for a purely non-business purpose and utilised them in a transaction which brought him neither income nor profit nor gain.", "This arguments can only prevail on the assumption that the State can tax potential profits because, except for that, the State would neither gain nor loss in a case of this kind. Had the assets been left where they were, they would have been valued at the end of the year as they were at the beginning, at the cost price and we would be a gain at some future indefinite date is mere guess work, for equal there might be loss."], "rank4": ["We are of opinion that the learned Attorney-Generals secound contention is unsound because, for income-tax purposes, each year is a self contained accounting period and we can only take into consideration income, profits and gains made in that year and are not concerned with potential profits which may be made in another year any more than we are with losses which may occur in the future.", "It was conceded that if these assets had been sold at cost price the State could have claimed nothing, for a man cannot be compelled to make a profit out of any particular transcation. It was also conceded that if the silver and stocks had lain where they were, then again there would have been no advantage to the State because the appellant would have been entitled to enter their closing vlaues at cost at the end of the year.", "Cut away the fictions and you reach the position that the man is supposed to be selling to himself and thereby making a profit out of himself which on the lace of it is not only absurd but against all canons of mercantile and income-tax law.", "And yet, when the reasoning of the learned Attorney- General is pushed to tis logical conclusion, the form of the transcation is of its essence and its taxable or not according to the route the rice takes from the godown to the wedding feast.", "In the present case, the assessees business received nothing in exchange for the withdrawl of the assets, neither money nor moneys worth, therefore the only fair way of treating the matter was to do just what the appellant did, namely to enter the price at which the assets were valued at the beginning of the year so that the entries would cancel each other out and level the business with neither a gain or a loss on those transcations.", "the learned Attorney- Generals rule is equally capable of abuse. A man could as easily withdrawn from the business assets which had depreciated and enter in his books the deprecated market value and leave at cost price the assets which had risen."], "rank5": ["He conceded that had the market rate been lower than the cost price, then the appellant would have been entitled to set off the loss on those transactions against his overall profit on the other transcations and thus obtain the advantage of a lower tax on the overall picture.", "The learned Attorney-General even conceded that if they had been sold at a loss the appellant would have been entitled to set that off agianst his other gains", "And worse. He may keep it and not show a profit. He may sell it to another at a loss and cannot be taxed because he cannot be compelled to sell at a fictional profit when the market rises in order that he may be compelled to pay to Government a tax which is anything but fictional.", "In our opinion, it would make no difference if the man instead of giving the feast himself hands over the rice to his daughter as a gift for the marriage festivities of her son."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1953_74", "text": "Mahajan, J. This is appeal from the Judgment of the High Court of Judicature at Bombay delivered on a reference under Section 66(1) of the Indian Income-tax Act, 1922, whereby the High Court answered the first referred question in the negative. The assessment in question concern the year 1943-44. A Hindu undivided family was carrying on business in Bombay, Madras and the Mysore State. Its business was taken over by a registered firm on March 17, 1942. For the purpose of this appeal however this circumstance is not material. The case has been dealt with on the assumption that a single assessee carried on business from October 10, 1948, to November 8, 1942, the relevant accounting year. According to the accounts of the assessee, during this period the Mysore branch purchased goods from the Bombay head office and the Madras branch of the value of Rs. 2,45,455. The Income-tax Officer estimated these purchases of the Mysore branch in British India at Rs. 3,00,000 and its profits at Rs. 75,000 on the sale of these goods in Mysore. In view of the provisions of Section 42 of the Act half of this profit, i.e., to the extent of Rs. 37,500, was deemed to accrue or a rise in British India, because of the business connection of the non-resident branch in British India. It was contended that the assessee being a person resident in India, Section 42 could not be invoked in the case, because that section had application only to cases of non-resident. \nThe Income-tax Tribunal following the decision of the Bombay High Court in Commissioner of Income-tax v. Western India Life Assurance Co., Ltd., upheld this contention, and ruled that no part of the Mysore profit could be taxed in British India. At the instance of the Commissioner of Income-tax Excess Profits Tax, Bombay City, three question were referred to the High Court under Section 66(1), the first of these being - Whether in the circumstances of the case can the profits on the sale of goods in the Mysore State be deemed to accrue or arise in British India under Section 42(1) of the India Income-tax Act. The High Court returned an answer to the question in the negative after resettling it in these terms - Whether on the facts and the circumstances of the case the Income-tax Officer was right in applying the provision of Section 42(1) of the Income-tax Act and holding that Rs. 37,500 were profits deemed to accrue in British India and in including in the assessment a portion thereof. \nThis appeal is before us on a certificate granted by the High Court and the only question canvassed here is whether Section 42(1) of the India Income-tax Act has application to the case of a resident assessee or whether its scope be limited to non-resident assessee alone. It is common ground that if Section 42 of the Act has no application to the case of a resident assessee the whole of the Mysore profit, namely Rs. 75,000 cannot be included in the assessment of the year 1943-44. On the other hand, if such an assessee is within the ambit of the section, in that event the sum R s. 37,500 or any part of it would be liable to assessment during the assessment year in question. Section 42 of the Act is in these terms - \n All income, profits or gains accruing or arising, whether directly or indirectly, through or from any business connection in the taxable territories, or through or from any property in the taxable territories, or through or from any asset or source of income in the taxable territories, or through or from any money lent at interest and brought into the taxable territories in cash or in kind or through or from the sale, exchange or transfer of a capital asset in the taxable territories, shall be deemed to be income accruing or arising within the taxable territories, and were the person entitled to the income, profits or gains is not resident in the taxable territories, shall be chargeable to income-tax either in his name or in the name of his agent and in the latter case such agent shall be deemed to be, for all the purposes of this Act, the assessee in respect of such income-tax \n Provided that where the person entitle to the income, profits or gains is not resident in the taxable territories, the income-tax so chargeable nay be recovered by deduction under any of the provisions of Section 18 and that any arrears of tax may be recovered also in accordance with the provision of this Act from any assets of the non- resident person which are, or may at any time come within the taxable territories \n Provided further that any such agent, or any person who apprehends that he may be assessed as such an agent, may retain out of any money payable by him to such non-resident person a sum equal to his estimated liability under this sub-section, and in the event of any disagreement between the non-resident person and such agent or person as to the amount to be so retained, such agent or person may secure from the Income-tax Officer a certificate stating the amount to be so retained pending final settlement of the certificate so obtained shall be his warrant for retaining that amount \n Provided further that the amount recoverable from such agent or person at the time of final settlement shall not exceed the amount specified in such certificate except to the extent to which such agent or person may at such time have in his hands additional assets of such non- resident person. Where a person not resident or not ordinarily resident in the taxable territories carries on business with a person resident in the taxable territories, and it appears to the Income-tax Officer, that owing to the close connection between such persons the course of business is so arranged that the business done by the resident person with the person not resident or not ordinarily resident produces to the resident either no profits or less than the ordinary profits which might be expected to arise in that business, the profits derived therefrom or which may reasonably be deemed to have been derived therefrom, shall be chargeable to income-tax in the purposes of this Act, the assessee in respect of such income-tax. \n In the case of a business of which all the operations are not carried out in the taxable territories the profits and gains of the business deemed under this section to accrue or arise in the taxable territories shall be only such profits and gains as are reasonably attributable to that part of the operations carried out in the taxable territories. Before its amendment in the year 1939 the first part of the section ran thus - 42. (1) In the case of any person residing out of British India, all profits or gains accruing or arising to such person, whether directly or indirectly, through or from any business connection or property in British India, shall be deemed to be income accruing or arising within British India, and shall be chargeable to income-tax in the name of the agent of any such person, and such agent shall be deemed to be, for all the purposes of this Act, the assessee in respect of such income- tax . The rest of the section was substantially in the same termes. In spite of its amendment in 1939 the marginal note to the section continued to refer to non-resident as before, though the words residing out of British India were deleted from the body of sub-section (1). The retention of this marginal note gave rise to conflicting decision on the question whether the section in spite of the chang made in its language in 1939 still continued to have application to cases of non- resident alone. In order to clarify this matter, by Act XXII of 1947 the magical note was amended and it now is in these terms - Income deemed to accrue or arise within British India. It is significant that the changes made in Section 42 in the year 1939 were consequential to the entire recasting of Section 4 of the Act. Section 4 as it stood prior to 1939 charged income-tax on all income, profits or gains, from whatever source derived, accruing or arising, or received in British India or deemed under the provisions of the Act to accrue, or arise, or to be received in British India. It further provided that the income, profits and gains accruing or arising without British India to a person resident in British India shall, if they are received in or brought into British India, be deemed to have accrued or arisen in British India and to be income, profits and gains of the year in which they are so received or brought, notwithstanding the fact that they did not so accrued or arise in that year. By the amendment in the year 1939, the total income of any previous year of any person was defined as including all income, profits and gains from whatever source derived which \n (a) are received or are deemed to be received in British India in such year by or on behalf of such person, or\n (b) if such person is resident in British India during such year, - \n accrue or arise or are deemed to accrue or arise to him in British India during such year or\n accrue or arise to him without British India during such year or \n (c) if such person in sot resident in British India during such year, accrue or arise or are deemed to accrue or arise to him in British India during such year \n This legislative change in the Act made all income accruing or arising or deemed to accrue or arise in British India during the previous year to a resident the subject to charge, apart from income accruing or arising without British India during the previous year. The term deemed brings within the net of chargeability income not actually accruing but which is supposed nationally to have accrued. It involves a number of concepts. By statutory fiction income which can in no sense be said to accrue at all may be considered as so accruing. Similarly, the fiction may relate to the place, the person or be in respect of the year of taxability. Section 42(1) defines what income is deemed to accrue within the taxable territories. It is only by application of this definition that one class of income deemed to accrue to a resident within the taxable territories within the meaning of Section 4(1)(b)(i) can be estimated. The words In the case of any person residing out of British India were deleted from Section 42(1) during the tendency of the amendment bill of 1939 in the Council of State presumably with the object of making the section application to any person who had any income which in a primary sense arose in British India, even though technically it had arisen abroad, irrespective of the circumstance whether that person was resident, ordinarily resident or not ordinarily resident. By Section 8 of Act XXIII of 1941, clause (c) was added to Section 14 of the Act. No effect was to be given to this amendment before the year ending March 31, 1943. \nThe relevant part of Section 14 after this amendment is in these terms - The tax shall not be payable by an assessee in respect of any income, profits or gains accruing or arising to him within a Part B State, unless such income, profits or gains are received or deemed to be received in or are brought into the taxable territories in the previous year by or on behalf of the assessee, or are assessable under Section 12-B or Section 42. In view of these legislative changes in the provisions of Section 4, 14 and 42 of the Act, the conclusion is irresistible that the object or recasting Section 42(1) in general terms was to make the definition of deemed income given in the section generally applicable to all classes of assessees. This sub-section has been drafted in the widest terms and there is nothing whatsoever in its language to suggest that its operation is confined to non-residents only. Wherever the legislature intended to limit the operation of any part of this section to non-residents alone, it said so in express terms. Sub- section (2) and the latter portion of sub-section (1) expressly concern themselves with the case of non-residents, while sub-section (1) and (3) are so framed that they cover both residents and non- residents. A Bench to the Bombay High Court in Commissioner of Income-tax v. Western India Life Insurance Co., held that notwithstanding its amendment in 1939 the section applied only to non-residents. Reliance was placed, inter alia, on the circumstance that the marginal note appended to the section indicating that it applied to non-resident alone, had not been deleted. To avoid this criticism and to remove doubts the legislature by Act XXIII of 1947 changed the marginal note also. It seems to us that any other construction of the section would create an anomaly, inasmuch as the Part B State income falling under Section 42 would not be assessable in the hands of a resident, but it would be assessable in the hands of a non-resident, because the Income-tax Act, while it ropes in world income of a resident exempts income accruing within the Part B States from its ambit, except when such income is received or is brought into taxable territory or comes within the ambit of Section 42. \nSuch a construction would be contrary to the policy of the Act. It is unnecessary to dwell on this point at any great length in view of the circumstance that the decision in Commissioner of Income-tax v. Western India Life Insurance Co., has been dissented from and for good reasons, in subsequent cases. In Sutlej Cotton Mills Ltd. v. Commissioner of Income-tax, West Bengal, a Bench of the Calcutta High Court considered this matter at some length and reached the decision the sub-sections (1) and (3) of Section 42 covered cases of both residents as well as non-residents. The same view was taken by a Bench of the Madras v. P arasuram Jethanand. Again the matter was discussed in this court in Commissioner of Income-tax, Bombay v. Ahmedbhai Umarbhai Co., by Patanjali Sastri, J., as he then was, and also by Mukherjea, J., in the same case. This is what Patanjali Sastri, J., said on this point - It is noteworthy that the first part of sub-section (1) of Section 42 providing that certain classes of income are to be deemed to accrue or arise in British India is not confined in its application to non- residents, but is in general terms so as to be applicable to both residents and non-residents. Before its amendment in 1939 the sub- section began with the words in the case of any person residing out of British India which obviously restricted the application of the provision to non-resident persons, but in its amended form the sub- section has been recast into two distinct parts, the first of which is not so restricted, and the second part alone, which begins with the words and where the person entitled to the income, profits and gains is not resident in British India, is made applicable to non-resident persons, thereby showing that the former part applies to both residents and non-residents. The opening words of the first proviso also point to the same conclusion, for these words would be supplusage it the sub-section as a whole applied only to non-residents. \n A contrary view has, no doubt, been expressed by a Division Bench of the Bombay High Court in Commissioner of Income-tax v. Western India Life Insurance Co., Ltd. Though reference was made in that case to the alteration in the structure of sub-section (I) its significance, as it seems to me, was not properly appreciated. The facts that the marginal note to the whole section refers to non-residents and that the section itself finds a place in Chapter V headed Liability in special cases were relied upon as supporting the view that sub-section (I) as a whole applies only to non-residents. As pointed out by the Privy Council in Balraj Kunwar v. Jagatpal Singh, marginal notes in an Indian statute, as in an Act of Parliament, cannot be referred to for the purpose of construing the statute, and it may be mentioned in this connection that the marginal note relied on has since been replaced by the words Income deemed to accrue or arise within British India which makes it clear that the main object of sub-section (I) was to define that expression see Section 12(a) of Act XXII of 1947. Nor can the title of a chapter be legitimately used to restrict the plain terms of an enactment. \n The same view was expressed by Mukherjea, J. Nothing that has been said by Mr. Kolah before us justifies reconsideration of these opinions. Mr. Kolah argued that when the world income of a resident was brought within the net of chargeability by Section 4 in 1939 it was then wholly unnecessary to include such an assessee in the ambit of Section 42. In our judgment, this contention is fallacious. Whatever income arises in a primary sense to a resident in the taxable territories is chargeable under Section 4(1)(b)(i). Hence it was necessary to make Section 42 applicable to such a case. Whatever other consideration may arise in estimating the foreign income of a resident will not be applicable to income deemed to accrue within the taxable territory. Moreover, as above pointed out, in view of the provisions of Section 14(2)(c), resident assessees, but for Section 42(1), would not be liable to assessment regarding income accruing to them in Part B States, even if there is a business connection in the taxable territory. \n Mr. Kolan was unable to suggest any reasonable explanation for the deletion of the words any person residing out of British India from Section 42(1) as it stood before 1939. The only purpose in deleting these words could be to bring residents within the ambit of the section. There is no reason whatsoever for not giving to the palin words of the section the meaning that on the face of it they bear. For the reasons given above we are of the opinion that the answer re turned by the High Court of Bombay to the first question referred to it was wrong.\n DECISION ??", "expert_1": {"rank1": ["Nothing that has been said by Mr. Kolah before us justifies reconsideration of these opinions.", "In our judgment, this contention is fallacious.", "For the reasons given above we are of the opinion that the answer re turned by the High Court of Bombay to the first question referred to it was wrong."], "rank2": ["In view of these legislative changes in the provisions of Section 4, 14 and 42 of the Act, the conclusion is irresistible that the object or recasting Section 42(1) in general terms was to make the definition of deemed income given in the section generally applicable to all classes of assessees. This sub-section has been drafted in the widest terms and there is nothing whatsoever in its language to suggest that its operation is confined to non-residents only. Wherever the legislature intended to limit the operation of any part of this section to non-residents alone, it said so in express terms. Sub- section (2) and the latter portion of sub-section (1) expressly concern themselves with the case of non-residents, while sub-section (1) and (3) are so framed that they cover both residents and non- residents.", "It seems to us that any other construction of the section would create an anomaly, inasmuch as the Part B State income falling under Section 42 would not be assessable in the hands of a resident, but it would be assessable in the hands of a non-resident, because the Income-tax Act, while it ropes in world income of a resident exempts income accruing within the Part B States from its ambit, except when such income is received or is brought into taxable territory or comes within the ambit of Section 42. \nSuch a construction would be contrary to the policy of the Act.", "In Sutlej Cotton Mills Ltd. v. Commissioner of Income-tax, West Bengal, a Bench of the Calcutta High Court considered this matter at some length and reached the decision the sub-sections (1) and (3) of Section 42 covered cases of both residents as well as non-residents.", "It is noteworthy that the first part of sub-section (1) of Section 42 providing that certain classes of income are to be deemed to accrue or arise in British India is not confined in its application to non- residents, but is in general terms so as to be applicable to both residents and non-residents. Before its amendment in 1939 the sub- section began with the words in the case of any person residing out of British India which obviously restricted the application of the provision to non-resident persons, but in its amended form the sub- section has been recast into two distinct parts, the first of which is not so restricted, and the second part alone, which begins with the words and where the person entitled to the income, profits and gains is not resident in British India, is made applicable to non-resident persons, thereby showing that the former part applies to both residents and non-residents. The opening words of the first proviso also point to the same conclusion, for these words would be supplusage it the sub-section as a whole applied only to non-residents.", "As pointed out by the Privy Council in Balraj Kunwar v. Jagatpal Singh, marginal notes in an Indian statute, as in an Act of Parliament, cannot be referred to for the purpose of construing the statute, and it may be mentioned in this connection that the marginal note relied on has since been replaced by the words Income deemed to accrue or arise within British India which makes it clear that the main object of sub-section (I) was to define that expression see Section 12(a) of Act XXII of 1947.", "Nor can the title of a chapter be legitimately used to restrict the plain terms of an enactment.", "Mr. Kolah argued that when the world income of a resident was brought within the net of chargeability by Section 4 in 1939 it was then wholly unnecessary to include such an assessee in the ambit of Section 42.", "Whatever income arises in a primary sense to a resident in the taxable territories is chargeable under Section 4(1)(b)(i). Hence it was necessary to make Section 42 applicable to such a case. Whatever other consideration may arise in estimating the foreign income of a resident will not be applicable to income deemed to accrue within the taxable territory. Moreover, as above pointed out, in view of the provisions of Section 14(2)(c), resident assessees, but for Section 42(1), would not be liable to assessment regarding income accruing to them in Part B States, even if there is a business connection in the taxable territory.", "Mr. Kolan was unable to suggest any reasonable explanation for the deletion of the words any person residing out of British India from Section 42(1) as it stood before 1939. The only purpose in deleting these words could be to bring residents within the ambit of the section. There is no reason whatsoever for not giving to the palin words of the section the meaning that on the face of it they bear."], "rank3": ["It is common ground that if Section 42 of the Act has no application to the case of a resident assessee the whole of the Mysore profit, namely Rs. 75,000 cannot be included in the assessment of the year 1943-44. On the other hand, if such an assessee is within the ambit of the section, in that event the sum R s. 37,500 or any part of it would be liable to assessment during the assessment year in question.", "It further provided that the income, profits and gains accruing or arising without British India to a person resident in British India shall, if they are received in or brought into British India, be deemed to have accrued or arisen in British India and to be income, profits and gains of the year in which they are so received or brought, notwithstanding the fact that they did not so accrued or arise in that year.", "By the amendment in the year 1939, the total income of any previous year of any person was defined as including all income, profits and gains from whatever source derived which \n (a) are received or are deemed to be received in British India in such year by or on behalf of such person, or\n (b) if such person is resident in British India during such year, - \n accrue or arise or are deemed to accrue or arise to him in British India during such year or\n accrue or arise to him without British India during such year or \n (c) if such person in sot resident in British India during such year, accrue or arise or are deemed to accrue or arise to him in British India during such year \n This legislative change in the Act made all income accruing or arising or deemed to accrue or arise in British India during the previous year to a resident the subject to charge, apart from income accruing or arising without British India during the previous year. The term deemed brings within the net of chargeability income not actually accruing but which is supposed nationally to have accrued.", "The tax shall not be payable by an assessee in respect of any income, profits or gains accruing or arising to him within a Part B State, unless such income, profits or gains are received or deemed to be received in or are brought into the taxable territories in the previous year by or on behalf of the assessee, or are assessable under Section 12-B or Section 42."], "rank4": ["This is appeal from the Judgment of the High Court of Judicature at Bombay delivered on a reference under Section 66(1) of the Indian Income-tax Act, 1922, whereby the High Court answered the first referred question in the negative", "It was contended that the assessee being a person resident in India, Section 42 could not be invoked in the case, because that section had application only to cases of non-resident.", "At the instance of the Commissioner of Income-tax Excess Profits Tax, Bombay City, three question were referred to the High Court under Section 66(1), the first of these being - Whether in the circumstances of the case can the profits on the sale of goods in the Mysore State be deemed to accrue or arise in British India under Section 42(1) of the India Income-tax Act. The High Court returned an answer to the question in the negative after resettling it in these terms - Whether on the facts and the circumstances of the case the Income-tax Officer was right in applying the provision of Section 42(1) of the Income-tax Act and holding that Rs. 37,500 were profits deemed to accrue in British India and in including in the assessment a portion thereof. \nThis appeal is before us on a certificate granted by the High Court and the only question canvassed here is whether Section 42(1) of the India Income-tax Act has application to the case of a resident assessee or whether its scope be limited to non-resident assessee alone."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["In view of these legislative changes in the provisions of Section 4, 14 and 42 of the Act, the conclusion is irresistible that the object or recasting Section 42(1) in general terms was to make the definition of deemed income given in the section generally applicable to all classes of assessees. This sub-section has been drafted in the widest terms and there is nothing whatsoever in its language to suggest that its operation is confined to non-residents only. Wherever the legislature intended to limit the operation of any part of this section to non-residents alone, it said so in express terms."], "rank2": ["Section 42(1) of the India Income-tax Act has application to the case of a resident assessee or whether its scope be limited to non-resident assessee alone.", "It seems to us that any other construction of the section would create an anomaly, inasmuch as the Part B State income falling under Section 42 would not be assessable in the hands of a resident, but it would be assessable in the hands of a non-resident, because the Income-tax Act, while it ropes in world income of a resident exempts income accruing within the Part B States from its ambit, except when such income is received or is brought into taxable territory or comes within the ambit of Section 42. \nSuch a construction would be contrary to the policy of the Act.", "Whatever income arises in a primary sense to a resident in the taxable territories is chargeable under Section 4(1)(b)(i). Hence it was necessary to make Section 42 applicable to such a case. Whatever other consideration may arise in estimating the foreign income of a resident will not be applicable to income deemed to accrue within the taxable territory. Moreover, as above pointed out, in view of the provisions of Section 14(2)(c), resident assessees, but for Section 42(1), would not be liable to assessment regarding income accruing to them in Part B States, even if there is a business connection in the taxable territory."], "rank3": ["The rest of the section was substantially in the same termes. In spite of its amendment in 1939 the marginal note to the section continued to refer to non-resident as before, though the words residing out of British India were deleted from the body of sub-section (1). The retention of this marginal note gave rise to conflicting decision on the question whether the section in spite of the chang made in its language in 1939 still continued to have application to cases of non- resident alone. In order to clarify this matter, by Act XXII of 1947 the magical note was amended and it now is in these terms - Income deemed to accrue or arise within British India. It is significant that the changes made in Section 42 in the year 1939 were consequential to the entire recasting of Section 4 of the Act.", "The term deemed brings within the net of chargeability income not actually accruing but which is supposed nationally to have accrued.", "By statutory fiction income which can in no sense be said to accrue at all may be considered as so accruing. Similarly, the fiction may relate to the place, the person or be in respect of the year of taxability. Section 42(1) defines what income is deemed to accrue within the taxable territories. It is only by application of this definition that one class of income deemed to accrue to a resident within the taxable territories within the meaning of Section 4(1)(b)(i) can be estimated.", "Sutlej Cotton Mills Ltd. v. Commissioner of Income-tax, West Bengal, a Bench of the Calcutta High Court considered this matter at some length and reached the decision the sub-sections (1) and (3) of Section 42 covered cases of both residents as well as non-residents."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["This appeal is before us on a certificate granted by the High Court and the only question canvassed here is whether Section 42(1) of the India Income-tax Act has application to the case of a resident assessee or whether its scope be limited to non-resident assessee alone. It is common ground that if Section 42 of the Act has no application to the case of a resident assessee the whole of the Mysore profit, namely Rs. 75,000 cannot be included in the assessment of the year 1943-44. On the other hand, if such an assessee is within the ambit of the section, in that event the sum R s. 37,500 or any part of it would be liable to assessment during the assessment year in question", "In view of these legislative changes in the provisions of Section 4, 14 and 42 of the Act, the conclusion is irresistible that the object or recasting Section 42(1) in general terms was to make the definition of deemed income given in the section generally applicable to all classes of assessees", "This sub-section has been drafted in the widest terms and there is nothing whatsoever in its language to suggest that its operation is confined to non-residents only. Wherever the legislature intended to limit the operation of any part of this section to non-residents alone, it said so in express terms.", "notwithstanding its amendment in 1939 the section applied only to non-residents", "It seems to us that any other construction of the section would create an anomaly, inasmuch as the Part B State income falling under Section 42 would not be assessable in the hands of a resident, but it would be assessable in the hands of a non-resident, because the Income-tax Act, while it ropes in world income of a resident exempts income accruing within the Part B States from its ambit, except when such income is received or is brought into taxable territory or comes within the ambit of Section 42. \nSuch a construction would be contrary to the policy of the Act", "reached the decision the sub-sections (1) and (3) of Section 42 covered cases of both residents as well as non-residents.", "It is noteworthy that the first part of sub-section (1) of Section 42 providing that certain classes of income are to be deemed to accrue or arise in British India is not confined in its application to non- residents, but is in general terms so as to be applicable to both residents and non-residents.", "The facts that the marginal note to the whole section refers to non-residents and that the section itself finds a place in Chapter V headed Liability in special cases were relied upon as supporting the view that sub-section (I) as a whole applies only to non-residents", "marginal notes in an Indian statute, as in an Act of Parliament, cannot be referred to for the purpose of construing the statute, and it may be mentioned in this connection that the marginal note relied on has since been replaced by the words Income deemed to accrue or arise within British India which makes it clear that the main object of sub-section (I) was to define that expression see Section 12(a) of Act XXII of 1947", "Nor can the title of a chapter be legitimately used to restrict the plain terms of an enactment", "Whatever income arises in a primary sense to a resident in the taxable territories is chargeable under Section 4(1)(b)(i). Hence it was necessary to make Section 42 applicable to such a case. Whatever other consideration may arise in estimating the foreign income of a resident will not be applicable to income deemed to accrue within the taxable territory", "in view of the provisions of Section 14(2)(c), resident assessees, but for Section 42(1), would not be liable to assessment regarding income accruing to them in Part B States, even if there is a business connection in the taxable territory.", "reasonable explanation for the deletion of the words any person residing out of British India from Section 42(1) as it stood before 1939. The only purpose in deleting these words could be to bring residents within the ambit of the section. There is no reason whatsoever for not giving to the palin words of the section the meaning that on the face of it they bear", "For the reasons given above we are of the opinion that the answer re turned by the High Court of Bombay to the first question referred to it was wrong."], "rank2": ["The case has been dealt with on the assumption that a single assessee carried on business from October 10, 1948, to November 8, 1942, the relevant accounting year. According to the accounts of the assessee, during this period the Mysore branch purchased goods from the Bombay head office and the Madras branch of the value of Rs. 2,45,455.", "In view of the provisions of Section 42 of the Act half of this profit, i.e., to the extent of Rs. 37,500, was deemed to accrue or a rise in British India, because of the business connection of the non-resident branch in British India", "At the instance of the Commissioner of Income-tax Excess Profits Tax, Bombay City, three question were referred to the High Court under Section 66(1), the first of these being - Whether in the circumstances of the case can the profits on the sale of goods in the Mysore State be deemed to accrue or arise in British India under Section 42(1) of the India Income-tax Act. The High Court returned an answer to the question in the negative after resettling it in these terms - Whether on the facts and the circumstances of the case the Income-tax Officer was right in applying the provision of Section 42(1) of the Income-tax Act and holding that Rs. 37,500 were profits deemed to accrue in British India and in including in the assessment a portion thereof.", "Section 42 of the Act is in these terms - \n All income, profits or gains accruing or arising, whether directly or indirectly, through or from any business connection in the taxable territories, or through or from any property in the taxable territories, or through or from any asset or source of income in the taxable territories, or through or from any money lent at interest and brought into the taxable territories in cash or in kind or through or from the sale, exchange or transfer of a capital asset in the taxable territories, shall be deemed to be income accruing or arising within the taxable territories, and were the person entitled to the income, profits or gains is not resident in the taxable territories, shall be chargeable to income-tax either in his name or in the name of his agent and in the latter case such agent shall be deemed to be, for all the purposes of this Act, the assessee in respect of such income-tax \n Provided that where the person entitle to the income, profits or gains is not resident in the taxable territories, the income-tax so chargeable nay be recovered by deduction under any of the provisions of Section 18 and that any arrears of tax may be recovered also in accordance with the provision of this Act from any assets of the non- resident person which are, or may at any time come within the taxable territories \n Provided further that any such agent, or any person who apprehends that he may be assessed as such an agent, may retain out of any money payable by him to such non-resident person a sum equal to his estimated liability under this sub-section, and in the event of any disagreement between the non-resident person and such agent or person as to the amount to be so retained, such agent or person may secure from the Income-tax Officer a certificate stating the amount to be so retained pending final settlement of the certificate so obtained shall be his warrant for retaining that amount \n Provided further that the amount recoverable from such agent or person at the time of final settlement shall not exceed the amount specified in such certificate except to the extent to which such agent or person may at such time have in his hands additional assets of such non- resident person. Where a person not resident or not ordinarily resident in the taxable territories carries on business with a person resident in the taxable territories, and it appears to the Income-tax Officer, that owing to the close connection between such persons the course of business is so arranged that the business done by the resident person with the person not resident or not ordinarily resident produces to the resident either no profits or less than the ordinary profits which might be expected to arise in that business, the profits derived therefrom or which may reasonably be deemed to have been derived therefrom, shall be chargeable to income-tax in the purposes of this Act, the assessee in respect of such income-tax", "In the case of a business of which all the operations are not carried out in the taxable territories the profits and gains of the business deemed under this section to accrue or arise in the taxable territories shall be only such profits and gains as are reasonably attributable to that part of the operations carried out in the taxable territories", "In spite of its amendment in 1939 the marginal note to the section continued to refer to non-resident as before, though the words residing out of British India were deleted from the body of sub-section (1)", "The retention of this marginal note gave rise to conflicting decision on the question whether the section in spite of the chang made in its language in 1939 still continued to have application to cases of non- resident alone. In order to clarify this matter, by Act XXII of 1947 the magical note was amended and it now is in these terms - Income deemed to accrue or arise within British India.", "It is significant that the changes made in Section 42 in the year 1939 were consequential to the entire recasting of Section 4 of the Act.", "By the amendment in the year 1939, the total income of any previous year of any person was defined as including all income, profits and gains from whatever source derived which \n (a) are received or are deemed to be received in British India in such year by or on behalf of such person, or\n (b) if such person is resident in British India during such year, - \n accrue or arise or are deemed to accrue or arise to him in British India during such year or\n accrue or arise to him without British India during such year or \n (c) if such person in sot resident in British India during such year, accrue or arise or are deemed to accrue or arise to him in British India during such year \n This legislative change in the Act made all income accruing or arising or deemed to accrue or arise in British India during the previous year to a resident the subject to charge, apart from income accruing or arising without British India during the previous year.", "The term deemed brings within the net of chargeability income not actually accruing but which is supposed nationally to have accrued.", "By statutory fiction income which can in no sense be said to accrue at all may be considered as so accruing", "Similarly, the fiction may relate to the place, the person or be in respect of the year of taxability. Section 42(1) defines what income is deemed to accrue within the taxable territories", "It is only by application of this definition that one class of income deemed to accrue to a resident within the taxable territories within the meaning of Section 4(1)(b)(i) can be estimated", "The words In the case of any person residing out of British India were deleted from Section 42(1) during the tendency of the amendment bill of 1939 in the Council of State presumably with the object of making the section application to any person who had any income which in a primary sense arose in British India, even though technically it had arisen abroad, irrespective of the circumstance whether that person was resident, ordinarily resident or not ordinarily resident. By Section 8 of Act XXIII of 1941, clause (c) was added to Section 14 of the Act", "No effect was to be given to this amendment before the year ending March 31, 1943. \nThe relevant part of Section 14 after this amendment is in these terms - The tax shall not be payable by an assessee in respect of any income, profits or gains accruing or arising to him within a Part B State, unless such income, profits or gains are received or deemed to be received in or are brought into the taxable territories in the previous year by or on behalf of the assessee, or are assessable under Section 12-B or Section 42.", "Sub- section (2) and the latter portion of sub-section (1) expressly concern themselves with the case of non-residents, while sub-section (1) and (3) are so framed that they cover both residents and non- residents", "in its amended form the sub- section has been recast into two distinct parts, the first of which is not so restricted, and the second part alone, which begins with the words and where the person entitled to the income, profits and gains is not resident in British India, is made applicable to non-resident persons, thereby showing that the former part applies to both residents and non-residents. The opening words of the first proviso also point to the same conclusion, for these words would be supplusage it the sub-section as a whole applied only to non-residents."], "rank3": ["This is appeal from the Judgment of the High Court of Judicature at Bombay delivered on a reference under Section 66(1) of the Indian Income-tax Act, 1922, whereby the High Court answered the first referred question in the negative. The assessment in question concern the year 1943-44", "A Hindu undivided family was carrying on business in Bombay, Madras and the Mysore State. Its business was taken over by a registered firm on March 17, 1942", "The Income-tax Officer estimated these purchases of the Mysore branch in British India at Rs. 3,00,000 and its profits at Rs. 75,000 on the sale of these goods in Mysore", "It was contended that the assessee being a person resident in India, Section 42 could not be invoked in the case, because that section had application only to cases of non-resident. \nThe Income-tax Tribunal following the decision of the Bombay High Court in Commissioner of Income-tax v. Western India Life Assurance Co., Ltd., upheld this contention, and ruled that no part of the Mysore profit could be taxed in British India", "Before its amendment in the year 1939 the first part of the section ran thus - 42. (1) In the case of any person residing out of British India, all profits or gains accruing or arising to such person, whether directly or indirectly, through or from any business connection or property in British India, shall be deemed to be income accruing or arising within British India, and shall be chargeable to income-tax in the name of the agent of any such person, and such agent shall be deemed to be, for all the purposes of this Act, the assessee in respect of such income- tax . The rest of the section was substantially in the same termes.", "Section 4 as it stood prior to 1939 charged income-tax on all income, profits or gains, from whatever source derived, accruing or arising, or received in British India or deemed under the provisions of the Act to accrue, or arise, or to be received in British India. It further provided that the income, profits and gains accruing or arising without British India to a person resident in British India shall, if they are received in or brought into British India, be deemed to have accrued or arisen in British India and to be income, profits and gains of the year in which they are so received or brought, notwithstanding the fact that they did not so accrued or arise in that year"], "label": "ACCEPTED"}, "expert_4": {"rank2": ["This is appeal from the Judgment of the High Court of Judicature at Bombay delivered on a reference under Section 66(1) of the Indian Income-tax Act, 1922, whereby the High Court answered the first referred question in the negative.", "This appeal is before us on a certificate granted by the High Court and the only question canvassed here is whether Section 42(1) of the India Income-tax Act has application to the case of a resident assessee or whether its scope be limited to non-resident assessee alone.", "The only purpose in deleting these words could be to bring residents within the ambit of the section. There is no reason whatsoever for not giving to the palin words of the section the meaning that on the face of it they bear. For the reasons given above we are of the opinion that the answer re turned by the High Court of Bombay to the first question referred to it was wrong."], "rank3": ["According to the accounts of the assessee, during this period the Mysore branch purchased goods from the Bombay head office and the Madras branch of the value of Rs. 2,45,455. The Income-tax Officer estimated these purchases of the Mysore branch in British India at Rs. 3,00,000 and its profits at Rs. 75,000 on the sale of these goods in Mysore.", "The Income-tax Tribunal following the decision of the Bombay High Court in Commissioner of Income-tax v. Western India Life Assurance Co., Ltd., upheld this contention, and ruled that no part of the Mysore profit could be taxed in British India. At the instance of the Commissioner of Income-tax Excess Profits Tax, Bombay City, three question were referred to the High Court under Section 66(1), the first of these being - Whether in the circumstances of the case can the profits on the sale of goods in the Mysore State be deemed to accrue or arise in British India under Section 42(1) of the India Income-tax Act.", "The High Court returned an answer to the question in the negative after resettling it in these terms - Whether on the facts and the circumstances of the case the Income-tax Officer was right in applying the provision of Section 42(1) of the Income-tax Act and holding that Rs. 37,500 were profits deemed to accrue in British India and in including in the assessment a portion thereof.", "In the case of a business of which all the operations are not carried out in the taxable territories the profits and gains of the business deemed under this section to accrue or arise in the taxable territories shall be only such profits and gains as are reasonably attributable to that part of the operations carried out in the taxable territories.", "By the amendment in the year 1939, the total income of any previous year of any person was defined as including all income, profits and gains from whatever source derived which \n (a) are received or are deemed to be received in British India in such year by or on behalf of such person, or\n (b) if such person is resident in British India during such year, - \n accrue or arise or are deemed to accrue or arise to him in British India during such year or\n accrue or arise to him without British India during such year or \n (c) if such person in sot resident in British India during such year, accrue or arise or are deemed to accrue or arise to him in British India during such year \n This legislative change in the Act made all income accruing or arising or deemed to accrue or arise in British India during the previous year to a resident the subject to charge, apart from income accruing or arising without British India during the previous year.", "By statutory fiction income which can in no sense be said to accrue at all may be considered as so accruing. Similarly, the fiction may relate to the place, the person or be in respect of the year of taxability. Section 42(1) defines what income is deemed to accrue within the taxable territories. It is only by application of this definition that one class of income deemed to accrue to a resident within the taxable territories within the meaning of Section 4(1)(b)(i) can be estimated.", "Mr. Kolah argued that when the world income of a resident was brought within the net of chargeability by Section 4 in 1939 it was then wholly unnecessary to include such an assessee in the ambit of Section 42. In our judgment, this contention is fallacious.", "Whatever income arises in a primary sense to a resident in the taxable territories is chargeable under Section 4(1)(b)(i). Hence it was necessary to make Section 42 applicable to such a case. Whatever other consideration may arise in estimating the foreign income of a resident will not be applicable to income deemed to accrue within the taxable territory. Moreover, as above pointed out, in view of the provisions of Section 14(2)(c), resident assessees, but for Section 42(1), would not be liable to assessment regarding income accruing to them in Part B States, even if there is a business connection in the taxable territory."], "rank4": ["It is common ground that if Section 42 of the Act has no application to the case of a resident assessee the whole of the Mysore profit, namely Rs. 75,000 cannot be included in the assessment of the year 1943-44. On the other hand, if such an assessee is within the ambit of the section, in that event the sum R s. 37,500 or any part of it would be liable to assessment during the assessment year in question.", "Section 42 of the Act is in these terms - \n All income, profits or gains accruing or arising, whether directly or indirectly, through or from any business connection in the taxable territories, or through or from any property in the taxable territories, or through or from any asset or source of income in the taxable territories, or through or from any money lent at interest and brought into the taxable territories in cash or in kind or through or from the sale, exchange or transfer of a capital asset in the taxable territories, shall be deemed to be income accruing or arising within the taxable territories, and were the person entitled to the income, profits or gains is not resident in the taxable territories, shall be chargeable to income-tax either in his name or in the name of his agent and in the latter case such agent shall be deemed to be, for all the purposes of this Act, the assessee in respect of such income-tax \n Provided that where the person entitle to the income, profits or gains is not resident in the taxable territories, the income-tax so chargeable nay be recovered by deduction under any of the provisions of Section 18 and that any arrears of tax may be recovered also in accordance with the provision of this Act from any assets of the non- resident person which are, or may at any time come within the taxable territories \n Provided further that any such agent, or any person who apprehends that he may be assessed as such an agent, may retain out of any money payable by him to such non-resident person a sum equal to his estimated liability under this sub-section, and in the event of any disagreement between the non-resident person and such agent or person as to the amount to be so retained, such agent or person may secure from the Income-tax Officer a certificate stating the amount to be so retained pending final settlement of the certificate so obtained shall be his warrant for retaining that amount \n Provided further that the amount recoverable from such agent or person at the time of final settlement shall not exceed the amount specified in such certificate except to the extent to which such agent or person may at such time have in his hands additional assets of such non- resident person.", "Where a person not resident or not ordinarily resident in the taxable territories carries on business with a person resident in the taxable territories, and it appears to the Income-tax Officer, that owing to the close connection between such persons the course of business is so arranged that the business done by the resident person with the person not resident or not ordinarily resident produces to the resident either no profits or less than the ordinary profits which might be expected to arise in that business, the profits derived therefrom or which may reasonably be deemed to have been derived therefrom, shall be chargeable to income-tax in the purposes of this Act, the assessee in respect of such income-tax.", "The relevant part of Section 14 after this amendment is in these terms - The tax shall not be payable by an assessee in respect of any income, profits or gains accruing or arising to him within a Part B State, unless such income, profits or gains are received or deemed to be received in or are brought into the taxable territories in the previous year by or on behalf of the assessee, or are assessable under Section 12-B or Section 42.", "Sub- section (2) and the latter portion of sub-section (1) expressly concern themselves with the case of non-residents, while sub-section (1) and (3) are so framed that they cover both residents and non- residents.", "A Bench to the Bombay High Court in Commissioner of Income-tax v. Western India Life Insurance Co., held that notwithstanding its amendment in 1939 the section applied only to non-residents.", "In Sutlej Cotton Mills Ltd. v. Commissioner of Income-tax, West Bengal, a Bench of the Calcutta High Court considered this matter at some length and reached the decision the sub-sections (1) and (3) of Section 42 covered cases of both residents as well as non-residents. The same view was taken by a Bench of the Madras v. P arasuram Jethanand. Again the matter was discussed in this court in Commissioner of Income-tax, Bombay v.", "Ahmedbhai Umarbhai Co", "It is noteworthy that the first part of sub-section (1) of Section 42 providing that certain classes of income are to be deemed to accrue or arise in British India is not confined in its application to non- residents, but is in general terms so as to be applicable to both residents and non-residents.", "Before its amendment in 1939 the sub- section began with the words in the case of any person residing out of British India which obviously restricted the application of the provision to non-resident persons, but in its amended form the sub- section has been recast into two distinct parts, the first of which is not so restricted, and the second part alone, which begins with the words and where the person entitled to the income, profits and gains is not resident in British India, is made applicable to non-resident persons, thereby showing that the former part applies to both residents and non-residents. The opening words of the first proviso also point to the same conclusion, for these words would be supplusage it the sub-section as a whole applied only to non-residents.", "As pointed out by the Privy Council in Balraj Kunwar v. Jagatpal Singh, marginal notes in an Indian statute, as in an Act of Parliament, cannot be referred to for the purpose of construing the statute, and it may be mentioned in this connection that the marginal note relied on has since been replaced by the words Income deemed to accrue or arise within British India which makes it clear that the main object of sub-section (I) was to define that expression see Section 12(a) of Act XXII of 1947.", "Nor can the title of a chapter be legitimately used to restrict the plain terms of an enactment."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["In view of these legislative changes in the provisions of Section 4, 14 and 42 of the Act, the conclusion is irresistible that the object or recasting Section 42(1) in general terms was to make the definition of deemed income given in the section generally applicable to all classes of assessees. This sub-section has been drafted in the widest terms and there is nothing whatsoever in its language to suggest that its operation is confined to non-residents only.", "For the reasons given above we are of the opinion that the answer re turned by the High Court of Bombay to the first question referred to it was wrong."], "rank2": ["Wherever the legislature intended to limit the operation of any part of this section to non-residents alone, it said so in express terms.", "The only purpose in deleting these words could be to bring residents within the ambit of the section. There is no reason whatsoever for not giving to the palin words of the section the meaning that on the face of it they bear."], "rank3": ["The tax shall not be payable by an assessee in respect of any income, profits or gains accruing or arising to him within a Part B State, unless such income, profits or gains are received or deemed to be received in or are brought into the taxable territories in the previous year by or on behalf of the assessee, or are assessable under Section 12-B or Section 42.", "It seems to us that any other construction of the section would create an anomaly, inasmuch as the Part B State income falling under Section 42 would not be assessable in the hands of a resident, but it would be assessable in the hands of a non-resident, because the Income-tax Act, while it ropes in world income of a resident exempts income accruing within the Part B States from its ambit, except when such income is received or is brought into taxable territory or comes within the ambit of Section 42. \nSuch a construction would be contrary to the policy of the Act."], "rank4": ["Section 4 as it stood prior to 1939 charged income-tax on all income, profits or gains, from whatever source derived, accruing or arising, or received in British India or deemed under the provisions of the Act to accrue, or arise, or to be received in British India.", "It further provided that the income, profits and gains accruing or arising without British India to a person resident in British India shall, if they are received in or brought into British India, be deemed to have accrued or arisen in British India and to be income, profits and gains of the year in which they are so received or brought, notwithstanding the fact that they did not so accrued or arise in that year.", "By the amendment in the year 1939, the total income of any previous year of any person was defined as including all income, profits and gains from whatever source derived which \n (a) are received or are deemed to be received in British India in such year by or on behalf of such person, or\n (b) if such person is resident in British India during such year, - \n accrue or arise or are deemed to accrue or arise to him in British India during such year or\n accrue or arise to him without British India during such year or \n (c) if such person in sot resident in British India during such year, accrue or arise or are deemed to accrue or arise to him in British India during such year", "The words In the case of any person residing out of British India were deleted from Section 42(1) during the tendency of the amendment bill of 1939 in the Council of State presumably with the object of making the section application to any person who had any income which in a primary sense arose in British India, even though technically it had arisen abroad, irrespective of the circumstance whether that person was resident, ordinarily resident or not ordinarily resident.", "Again the matter was discussed in this court in Commissioner of Income-tax, Bombay v. Ahmedbhai Umarbhai Co., by Patanjali Sastri, J., as he then was, and also by Mukherjea, J., in the same case.", "but is in general terms so as to be applicable to both residents and non-residents.", "Before its amendment in 1939 the sub- section began with the words in the case of any person residing out of British India which obviously restricted the application of the provision to non-resident persons, but in its amended form the sub- section has been recast into two distinct parts, the first of which is not so restricted, and the second part alone, which begins with the words and where the person entitled to the income, profits and gains is not resident in British India, is made applicable to non-resident persons, thereby showing that the former part applies to both residents and non-residents.", "The opening words of the first proviso also point to the same conclusion, for these words would be supplusage it the sub-section as a whole applied only to non-residents."], "rank5": ["Section 42 of the Act is in these terms - \n All income, profits or gains accruing or arising, whether directly or indirectly, through or from any business connection in the taxable territories, or through or from any property in the taxable territories, or through or from any asset or source of income in the taxable territories, or through or from any money lent at interest and brought into the taxable territories in cash or in kind or through or from the sale, exchange or transfer of a capital asset in the taxable territories, shall be deemed to be income accruing or arising within the taxable territories, and were the person entitled to the income, profits or gains is not resident in the taxable territories, shall be chargeable to income-tax either in his name or in the name of his agent", "Before its amendment in the year 1939 the first part of the section ran thus - 42. (1) In the case of any person residing out of British India, all profits or gains accruing or arising to such person, whether directly or indirectly, through or from any business connection or property in British India, shall be deemed to be income accruing or arising within British India, and shall be chargeable to income-tax in the name of the agent of any such person, and such agent shall be deemed to be, for all the purposes of this Act, the assessee in respect of such income- tax .", "In order to clarify this matter, by Act XXII of 1947 the magical note was amended and it now is in these terms - Income deemed to accrue or arise within British India.", "In Sutlej Cotton Mills Ltd. v. Commissioner of Income-tax, West Bengal, a Bench of the Calcutta High Court considered this matter at some length and reached the decision the sub-sections (1) and (3) of Section 42 covered cases of both residents as well as non-residents.", "The same view was taken by a Bench of the Madras v. P arasuram Jethanand."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1954_0", "text": "CiviL APPELLATE JURISDICTION Civil Appeal No. 64 of 1953. Appeal by special leave from the Judgment and Decree, dated the 29th November, 1951, of the Court of the Judicial Commissioner for Himachal Pradesh at Simla in Civil Revision No. 52 of 1951. Gopal Singh for the appellants. C. Isaacs (Amar Nath Chona, with him) for the respondents. 1954. January 19. The Judgment of the Court was delivered by DAS J.-This is an appeal by special leave against the order made on the 20th November, 1951, by the Judicial Commissioner of Himachal Pradesh in proceedings instituted by the respondents under articles 226 and 227 of the Constitution of India. There is no substantial dispute as to the facts leading up to the present appeal. The appellants were tenants of a certain shop premises situate in Solan Bazar in the district of Mahasu in Himachal Pradesh. On the llth October, 1947, they had executed a rent deed by which they agreed to pay an annual rent of Rs. 175 payable as to Rs. 50 on the last of Baisakh and as to the balance of Rs. 125 in the month of October, in default of which payment, the respondents, as landlords, would be entitled to recover the whole of the said rent in one lump sum. \nThe tenancy created by the rent deed was only for one year in the first instance but it provided that if the tenants desired to continue in occupation they must execute a further rent deed before the expiration of the said term. The appellants never executed any further rent deed but held over and continued in occupation of the demised premises. The appellants fell into arrears with the payments of rents due for the years 1948 and 1949 and the respondents made applications to the Rent Controller for eviction of the appellants under section 13 (2) (i) of the East Punjab Urban Rent Restriction Act, 1949, as extended to Himachal Pradesh. The appellants, however, paid up the arrears of rent into court and claimed the benefit of the proviso to section 13 (2) (i). The claim was allowed and the said applications were dismissed accordingly on the 18th December, 1950. The appellants again fell into arrears with the pay- ment of rent due for the year 1950. On the 26th December, 1950, the respondents served on the appellants a notice c alling upon the latter to pay whole of the said rent forthwith but the appellants failed to do so. The respondents thereupon, on the 2nd January, 1951, filed an application under section 13 (2) (i) for the eviction of the appellants on the ground of nonpayment of rent. Thereafter, on the 10th January, 1951, the appellants made an application to the Rent Controller for the fixation of a fair rent under section 4 of the said Act. On the 25th January, 1951, the appellants filed their written statements in the proceedings under section 13 (2) (i) admitting the nonpayment of rent and the receipt of the notice but pleaded (i) that the respondents application was barred by reason of the rejection of the previous applications for eviction made by the respondents and (ii) that the present application could not be entertained in view of the pendency of their application for fixation of a fair rent under section 4 of the said Act. On the 20th February, 1951, the Rent Controller framed the following issues- \n Whether the application in question was not entertainable in view of the judgment of the District Judge, dated the 18th December, 1950 Onus on defendants. If issue No. I is not proved, had the opposite party (tenants) not paid the rent and as such were they liable to be ejected? Onus on plaintiffs. Have the opposite party already filed an application in the said court for the fixation of rent and are they, therefore, not liable for ejectment pending the decision on the application and what is its effect on the said application? Onus on defendants. By his judgment, dated the 29th May, 1951, the Rent Controller held that as the previous applications related to non-payment of rents for the years 1948 and 1949 the present application which was founded on non-payment of rent for 1950 was not barred under section 14 of the said Act but, although the fact of rent being in arrears was admitted, the Rent Controller did not think fit to make an order directing the appellants to put the respondents in possession of the demised premises. The reasons given by him were as follows- Regarding the non-payment of the rent when the plea of the tenant is only that he is waiting for the fixation of fair rent by the Rent Controller there is not enough ground for ejectment. A civil suit for the recovery of the rent would have been a more appropriate method of obtaining that rent. \n I therefore dismiss the suit. The parties should bear their own The respondents preferred an appeal to the District Judge of Mahasu under section 15 of the said Act. The learned District Judge dismissed the appeal observing- On behalf of the landlord it was urged that under section 13 (2) of the Punjab Urban Rent Restriction Act, as applied to Himachal Pradesh, the Controller, if it came to the finding that rent had not been paid, had no option but to direct the tenant to put the landlord in possession. Undoubtedly, that is the correct legal position, but in the present case the non-payment of rent was due to a misapprehension of the legal position created by the tenant filing an application for fixing fair rent. 1, therefore, think that this case can be distinguished and does not fall within section 13 (2), Punjab Urban Rent Restriction Act. The respondents moved the Judicial Commissioner, Himachal Pradesh, under articles 226 and 227 of the Constitution of India for setting aside the order of the District Judge. The learned Judicial Commissioner held that in view of the admitted failure to pay the rent as provided by the rent deed or at the first hearing of the court under the proviso to section 13 (2) (i) the courts below had acted arbitrarily in refusing to make an order for ejectment against the tenants who had not done what was incumbent on them to do under the law and that such a situation called for inter- ference by the court of the Judicial Commissioner in order to keep the subordinate courts within the bounds of their authority. \n He accordingly set aside the orders of the courts below and allowed the application for ejectment but gave the appelants three months time for vacating the premises. The appellants have now come up before this court on appeal by special leave obtained from this court. Learned advocate appearing in support of this appeal urges that the learned Judicial Commissioner acted wholly without jurisdiction inasmuch as (1) the Rent Controller or the District Judge exercising powers under the Act was not amenable to the jurisdiction of the High Court and, therefore, article 227 confers no power on the court of the Judicial Commissioner over the Rent Controller or the District Judge, and (2) that article 227 read with article 241 confers no power of judicial superintendence on the court of the Judicial Commissioner. Re. l.-The court of the Judicial Commissioner of Himachal Pradesh exercises jurisdiction in relation to the whole of the territories of Himachal Pradesh. The Rent Controller and the District Judge exercising jurisdiction under the Act are certainly tribunals, if not courts, and they function within the territories of Himachal Pradesh. \n Therefore, article 297 (1) read with article 241 confers on the court of the Judicial Commissioner power of superintendence over such tribunals. The words in relation to which obviously qualify the word territories and not the words courts and tribunals. Re. 2.The material part of article 227 substantially reproduces the provisions of section 107 of the Government of India Act, 1915, except that the power of superintendence has been extended by the article also to tribunals. That the Rent Controller and the District Judge exercising jurisdiction under the Act are tribunals cannot and has not been controverted. The only question raised is as to the nature of the power of superintendence conferred by the article. Reference is made to clause (2) of the article in support of the contention that this article only confers on the High Court administrative superintendence over the subordinate courts and tribunals. We are unable to accept this contention because clause ( 2) is, expressed to be without prejudice to the.generality of the provisions in clause (1). Further, the preponderance of judicial opinion in India was that section 107 which was similar in terms to section 15 of the High Courts Act, 1861, gave a power of judicial superintendence to the High Court apart from and independently of the provisions of other laws conferring revisional jurisdiction on the High Court. \n In this connection it has to be remembered that section 107 of the Government of India Act, 1915, was reproduced in the Government of India Act, 1935, as section 224. Section 224 of the 1935 Act, however, introduced sub-section (2), which was new, providing that nothing in the section should be construed as giving the High Court any jurisdiction to,question any judgment of any inferior court which was not otherwise subject to appeal or revision. The idea presumably was to nullify the effect of the decisions of the different High Courts referred to above. Section 224 of the 1935 Act has been reproduced with certain modifications in article 227 of the Constitution. It is significant to note that sub-section (2) to section 224, of the 1935 Act has been omitted from article 227. This significant omission has been regarded by all High Courts in India before whom this question has arisen As having restored to the High Court the power of judicial superintendence it had under section 15 of the High Courts Act, 186 1, and section 107 of the Government of India Act, 1915. See the cases referred to in -Moti Lal v. The State through Shrimati Sagrawati(1). Our attention has not been drawn to any case which has taken a different view and, as at present advised, we see no reason to take a different view. This power of superintendence conferred by article 227 is, as pointed out by Harries C. J., in Dalmia Jain Airways Ltd. \n Sukumar Mukherjee(2), to be exercised most sparingly and only in appropriate cases in order to keep the Subordinate Courts within the bounds of their authority and not for correcting mere errors.\n DECISION ??", "expert_1": {"rank1": ["Learned advocate appearing in support of this appeal urges that the learned Judicial Commissioner acted wholly without jurisdiction inasmuch as (1) the Rent Controller or the District Judge exercising powers under the Act was not amenable to the jurisdiction of the High Court and, therefore, article 227 confers no power on the court of the Judicial Commissioner over the Rent Controller or the District Judge, and (2) that article 227 read with article 241 confers no power of judicial superintendence on the court of the Judicial Commissioner.", "Re. l.-The court of the Judicial Commissioner of Himachal Pradesh exercises jurisdiction in relation to the whole of the territories of Himachal Pradesh. The Rent Controller and the District Judge exercising jurisdiction under the Act are certainly tribunals, if not courts, and they function within the territories of Himachal Pradesh. \n Therefore, article 297 (1) read with article 241 confers on the court of the Judicial Commissioner power of superintendence over such tribunals. The words in relation to which obviously qualify the word territories and not the words courts and tribunals.", "The material part of article 227 substantially reproduces the provisions of section 107 of the Government of India Act, 1915, except that the power of superintendence has been extended by the article also to tribunals. That the Rent Controller and the District Judge exercising jurisdiction under the Act are tribunals cannot and has not been controverted. The only question raised is as to the nature of the power of superintendence conferred by the article. Reference is made to clause (2) of the article in support of the contention that this article only confers on the High Court administrative superintendence over the subordinate courts and tribunals. We are unable to accept this contention because clause ( 2) is, expressed to be without prejudice to the.generality of the provisions in clause (1)."], "rank2": ["Further, the preponderance of judicial opinion in India was that section 107 which was similar in terms to section 15 of the High Courts Act, 1861, gave a power of judicial superintendence to the High Court apart from and independently of the provisions of other laws conferring revisional jurisdiction on the High Court."], "rank3": ["In this connection it has to be remembered that section 107 of the Government of India Act, 1915, was reproduced in the Government of India Act, 1935, as section 224. Section 224 of the 1935 Act, however, introduced sub-section (2), which was new, providing that nothing in the section should be construed as giving the High Court any jurisdiction to,question any judgment of any inferior court which was not otherwise subject to appeal or revision. The idea presumably was to nullify the effect of the decisions of the different High Courts referred to above. Section 224 of the 1935 Act has been reproduced with certain modifications in article 227 of the Constitution. It is significant to note that sub-section (2) to section 224, of the 1935 Act has been omitted from article 227. This significant omission has been regarded by all High Courts in India before whom this question has arisen As having restored to the High Court the power of judicial superintendence it had under section 15 of the High Courts Act, 186 1, and section 107 of the Government of India Act, 1915. See the cases referred to in -Moti Lal v. The State through Shrimati Sagrawati(1). Our attention has not been drawn to any case which has taken a different view and, as at present advised, we see no reason to take a different view."], "rank4": ["By his judgment, dated the 29th May, 1951, the Rent Controller held that as the previous applications related to non-payment of rents for the years 1948 and 1949 the present application which was founded on non-payment of rent for 1950 was not barred under section 14 of the said Act but, although the fact of rent being in arrears was admitted, the Rent Controller did not think fit to make an order directing the appellants to put the respondents in possession of the demised premises. The reasons given by him were as follows- Regarding the non-payment of the rent when the plea of the tenant is only that he is waiting for the fixation of fair rent by the Rent Controller there is not enough ground for ejectment. A civil suit for the recovery of the rent would have been a more appropriate method of obtaining that rent. \n I therefore dismiss the suit. The parties should bear their own The respondents preferred an appeal to the District Judge of Mahasu under section 15 of the said Act.", "The learned District Judge dismissed the appeal observing- On behalf of the landlord it was urged that under section 13 (2) of the Punjab Urban Rent Restriction Act, as applied to Himachal Pradesh, the Controller, if it came to the finding that rent had not been paid, had no option but to direct the tenant to put the landlord in possession. Undoubtedly, that is the correct legal position, but in the present case the non-payment of rent was due to a misapprehension of the legal position created by the tenant filing an application for fixing fair rent. 1, therefore, think that this case can be distinguished and does not fall within section 13 (2), Punjab Urban Rent Restriction Act. The respondents moved the Judicial Commissioner, Himachal Pradesh, under articles 226 and 227 of the Constitution of India for setting aside the order of the District Judge.", "The learned Judicial Commissioner held that in view of the admitted failure to pay the rent as provided by the rent deed or at the first hearing of the court under the proviso to section 13 (2) (i) the courts below had acted arbitrarily in refusing to make an order for ejectment against the tenants who had not done what was incumbent on them to do under the law and that such a situation called for inter- ference by the court of the Judicial Commissioner in order to keep the subordinate courts within the bounds of their authority. \n He accordingly set aside the orders of the courts below and allowed the application for ejectment but gave the appelants three months time for vacating the premises."], "rank5": ["This is an appeal by special leave against the order made on the 20th November, 1951, by the Judicial Commissioner of Himachal Pradesh in proceedings instituted by the respondents under articles 226 and 227 of the Constitution of India. There is no substantial dispute as to the facts leading up to the present appeal. The appellants were tenants of a certain shop premises situate in Solan Bazar in the district of Mahasu in Himachal Pradesh. On the llth October, 1947, they had executed a rent deed by which they agreed to pay an annual rent of Rs. 175 payable as to Rs. 50 on the last of Baisakh and as to the balance of Rs. 125 in the month of October, in default of which payment, the respondents, as landlords, would be entitled to recover the whole of the said rent in one lump sum. \nThe tenancy created by the rent deed was only for one year in the first instance but it provided that if the tenants desired to continue in occupation they must execute a further rent deed before the expiration of the said term. The appellants never executed any further rent deed but held over and continued in occupation of the demised premises. The appellants fell into arrears with the payments of rents due for the years 1948 and 1949 and the respondents made applications to the Rent Controller for eviction of the appellants under section 13 (2) (i) of the East Punjab Urban Rent Restriction Act, 1949, as extended to Himachal Pradesh. The appellants, however, paid up the arrears of rent into court and claimed the benefit of the proviso to section 13 (2) (i). The claim was allowed and the said applications were dismissed accordingly on the 18th December, 1950. The appellants again fell into arrears with the pay- ment of rent due for the year 1950. On the 26th December, 1950, the respondents served on the appellants a notice c alling upon the latter to pay whole of the said rent forthwith but the appellants failed to do so. The respondents thereupon, on the 2nd January, 1951, filed an application under section 13 (2) (i) for the eviction of the appellants on the ground of nonpayment of rent. Thereafter, on the 10th January, 1951, the appellants made an application to the Rent Controller for the fixation of a fair rent under section 4 of the said Act. On the 25th January, 1951, the appellants filed their written statements in the proceedings under section 13 (2) (i) admitting the nonpayment of rent and the receipt of the notice but pleaded (i) that the respondents application was barred by reason of the rejection of the previous applications for eviction made by the respondents and (ii) that the present application could not be entertained in view of the pendency of their application for fixation of a fair rent under section 4 of the said Act. On the 20th February, 1951, the Rent Controller framed the following issues- \n Whether the application in question was not entertainable in view of the judgment of the District Judge, dated the 18th December, 1950 Onus on defendants. If issue No. I is not proved, had the opposite party (tenants) not paid the rent and as such were they liable to be ejected? Onus on plaintiffs. Have the opposite party already filed an application in the said court for the fixation of rent and are they, therefore, not liable for ejectment pending the decision on the application and what is its effect on the said application? Onus on defendants.", "This power of superintendence conferred by article 227 is, as pointed out by Harries C. J., in Dalmia Jain Airways Ltd. \n Sukumar Mukherjee(2), to be exercised most sparingly and only in appropriate cases in order to keep the Subordinate Courts within the bounds of their authority and not for correcting mere errors."], "label": "REJECTED"}, "expert_2": {"rank1": ["Section 224 of the 1935 Act, however, introduced sub-section (2), which was new, providing that nothing in the section should be construed as giving the High Court any jurisdiction to,question any judgment of any inferior court which was not otherwise subject to appeal or revision.", "It is significant to note that sub-section (2) to section 224, of the 1935 Act has been omitted from article 227. This significant omission has been regarded by all High Courts in India before whom this question has arisen As having restored to the High Court the power of judicial superintendence it had under section 15 of the High Courts Act, 186 1, and section 107 of the Government of India Act, 1915.", "This power of superintendence conferred by article 227 is, as pointed out by Harries C. J., in Dalmia Jain Airways Ltd. \n Sukumar Mukherjee(2), to be exercised most sparingly and only in appropriate cases in order to keep the Subordinate Courts within the bounds of their authority and not for correcting mere errors."], "rank2": ["Learned advocate appearing in support of this appeal urges that the learned Judicial Commissioner acted wholly without jurisdiction inasmuch as (1) the Rent Controller or the District Judge exercising powers under the Act was not amenable to the jurisdiction of the High Court and, therefore, article 227 confers no power on the court of the Judicial Commissioner over the Rent Controller or the District Judge, and (2) that article 227 read with article 241 confers no power of judicial superintendence on the court of the Judicial Commissioner.", "The only question raised is as to the nature of the power of superintendence conferred by the article. Reference is made to clause (2) of the article in support of the contention that this article only confers on the High Court administrative superintendence over the subordinate courts and tribunals."], "label": "REJECTED"}, "expert_3": {"rank1": ["The court of the Judicial Commissioner of Himachal Pradesh exercises jurisdiction in relation to the whole of the territories of Himachal Pradesh. The Rent Controller and the District Judge exercising jurisdiction under the Act are certainly tribunals, if not courts, and they function within the territories of Himachal Pradesh", "Therefore, article 297 (1) read with article 241 confers on the court of the Judicial Commissioner power of superintendence over such tribunals. The words in relation to which obviously qualify the word territories and not the words courts and tribunals", "The material part of article 227 substantially reproduces the provisions of section 107 of the Government of India Act, 1915, except that the power of superintendence has been extended by the article also to tribunals. That the Rent Controller and the District Judge exercising jurisdiction under the Act are tribunals cannot and has not been controverted.", "The only question raised is as to the nature of the power of superintendence conferred by the article.", "clause ( 2) is, expressed to be without prejudice to the.generality of the provisions in clause (1). Further, the preponderance of judicial opinion in India was that section 107 which was similar in terms to section 15 of the High Courts Act, 1861, gave a power of judicial superintendence to the High Court apart from and independently of the provisions of other laws conferring revisional jurisdiction on the High Court.", "Section 224 of the 1935 Act, however, introduced sub-section (2), which was new, providing that nothing in the section should be construed as giving the High Court any jurisdiction to,question any judgment of any inferior court which was not otherwise subject to appeal or revision. The idea presumably was to nullify the effect of the decisions of the different High Courts referred to above", "Section 224 of the 1935 Act has been reproduced with certain modifications in article 227 of the Constitution. It is significant to note that sub-section (2) to section 224, of the 1935 Act has been omitted from article 227. This significant omission has been regarded by all High Courts in India before whom this question has arisen As having restored to the High Court the power of judicial superintendence it had under section 15 of the High Courts Act, 186 1, and section 107 of the Government of India Act, 1915.", "This power of superintendence conferred by article 227 is, as pointed out by Harries C. J., in Dalmia Jain Airways Ltd. \n Sukumar Mukherjee(2), to be exercised most sparingly and only in appropriate cases in order to keep the Subordinate Courts within the bounds of their authority and not for correcting mere errors."], "rank2": ["By his judgment, dated the 29th May, 1951, the Rent Controller held that as the previous applications related to non-payment of rents for the years 1948 and 1949 the present application which was founded on non-payment of rent for 1950 was not barred under section 14 of the said Act but, although the fact of rent being in arrears was admitted, the Rent Controller did not think fit to make an order directing the appellants to put the respondents in possession of the demised premises.", "The learned Judicial Commissioner held that in view of the admitted failure to pay the rent as provided by the rent deed or at the first hearing of the court under the proviso to section 13 (2) (i) the courts below had acted arbitrarily in refusing to make an order for ejectment against the tenants who had not done what was incumbent on them to do under the law and that such a situation called for inter- ference by the court of the Judicial Commissioner in order to keep the subordinate courts within the bounds of their authority. \n He accordingly set aside the orders of the courts below and allowed the application for ejectment but gave the appelants three months time for vacating the premises", "In this connection it has to be remembered that section 107 of the Government of India Act, 1915, was reproduced in the Government of India Act, 1935, as section 224"], "rank3": ["This is an appeal by special leave against the order made on the 20th November, 1951, by the Judicial Commissioner of Himachal Pradesh in proceedings instituted by the respondents under articles 226 and 227 of the Constitution of India", "The appellants were tenants of a certain shop premises situate in Solan Bazar in the district of Mahasu in Himachal Pradesh", "On the llth October, 1947, they had executed a rent deed by which they agreed to pay an annual rent of Rs. 175 payable as to Rs. 50 on the last of Baisakh and as to the balance of Rs. 125 in the month of October, in default of which payment, the respondents, as landlords, would be entitled to recover the whole of the said rent in one lump sum. \nThe tenancy created by the rent deed was only for one year in the first instance but it provided that if the tenants desired to continue in occupation they must execute a further rent deed before the expiration of the said term. The appellants never executed any further rent deed but held over and continued in occupation of the demised premises.", "The appellants fell into arrears with the payments of rents due for the years 1948 and 1949 and the respondents made applications to the Rent Controller for eviction of the appellants under section 13 (2) (i) of the East Punjab Urban Rent Restriction Act, 1949, as extended to Himachal Pradesh. The appellants, however, paid up the arrears of rent into court and claimed the benefit of the proviso to section 13 (2) (i)", "The claim was allowed and the said applications were dismissed accordingly on the 18th December, 1950. The appellants again fell into arrears with the pay- ment of rent due for the year 1950. On the 26th December, 1950, the respondents served on the appellants a notice c alling upon the latter to pay whole of the said rent forthwith but the appellants failed to do so", "The respondents thereupon, on the 2nd January, 1951, filed an application under section 13 (2) (i) for the eviction of the appellants on the ground of nonpayment of rent. Thereafter, on the 10th January, 1951, the appellants made an application to the Rent Controller for the fixation of a fair rent under section 4 of the said Act", "The respondents preferred an appeal to the District Judge of Mahasu under section 15 of the said Act.", "The learned District Judge dismissed the appeal observing- On behalf of the landlord it was urged that under section 13 (2) of the Punjab Urban Rent Restriction Act, as applied to Himachal Pradesh, the Controller, if it came to the finding that rent had not been paid, had no option but to direct the tenant to put the landlord in possession. Undoubtedly, that is the correct legal position, but in the present case the non-payment of rent was due to a misapprehension of the legal position created by the tenant filing an application for fixing fair rent. 1, therefore, think that this case can be distinguished and does not fall within section 13 (2), Punjab Urban Rent Restriction Act", "The respondents moved the Judicial Commissioner, Himachal Pradesh, under articles 226 and 227 of the Constitution of India for setting aside the order of the District Judge", "The appellants have now come up before this court on appeal by special leave obtained from this court"], "rank4": ["On the 20th February, 1951, the Rent Controller framed the following issues- \n Whether the application in question was not entertainable in view of the judgment of the District Judge, dated the 18th December, 1950", "If issue No. I is not proved, had the opposite party (tenants) not paid the rent and as such were they liable to be ejected? Onus on plaintiffs.", "Have the opposite party already filed an application in the said court for the fixation of rent and are they, therefore, not liable for ejectment pending the decision on the application and what is its effect on the said application? Onus on defendants"], "label": "REJECTED"}, "expert_4": {"rank1": ["-This is an appeal by special leave against the order made on the 20th November, 1951, by the Judicial Commissioner of Himachal Pradesh in proceedings instituted by the respondents under articles 226 and 227 of the Constitution of India. There is no substantial dispute as to the facts leading up to the present appeal.", "On the 20th February, 1951, the Rent Controller framed the following issues- \n Whether the application in question was not entertainable in view of the judgment of the District Judge, dated the 18th December, 1950 Onus on defendants. If issue No.", "Have the opposite party already filed an application in the said court for the fixation of rent and are they, therefore, not liable for ejectment pending the decision on the application and what is its effect on the said application? Onus on defendants.", "I therefore dismiss the suit."], "rank2": ["The appellants were tenants of a certain shop premises situate in Solan Bazar in the district of Mahasu in Himachal Pradesh. On the llth October, 1947, they had executed a rent deed by which they agreed to pay an annual rent of Rs. 175 payable as to Rs. 50 on the last of Baisakh and as to the balance of Rs. 125 in the month of October, in default of which payment, the respondents, as landlords, would be entitled to recover the whole of the said rent in one lump sum. \nThe tenancy created by the rent deed was only for one year in the first instance but it provided that if the tenants desired to continue in occupation they must execute a further rent deed before the expiration of the said term.", "The appellants never executed any further rent deed but held over and continued in occupation of the demised premises. The appellants fell into arrears with the payments of rents due for the years 1948 and 1949 and the respondents made applications to the Rent Controller for eviction of the appellants under section 13 (2) (i) of the East Punjab Urban Rent Restriction Act, 1949, as extended to Himachal Pradesh. The appellants, however, paid up the arrears of rent into court and claimed the benefit of the proviso to section 13 (2) (i). The claim was allowed and the said applications were dismissed accordingly on the 18th December, 1950. The appellants again fell into arrears with the pay- ment of rent due for the year 1950. On the 26th December, 1950, the respondents served on the appellants a notice c alling upon the latter to pay whole of the said rent forthwith but the appellants failed to do so.", "On the 25th January, 1951, the appellants filed their written statements in the proceedings under section 13 (2) (i) admitting the nonpayment of rent and the receipt of the notice but pleaded (i) that the respondents application was barred by reason of the rejection of the previous applications for eviction made by the respondents and (ii) that the present application could not be entertained in view of the pendency of their application for fixation of a fair rent under section 4 of the said Act.", "On the 20th February, 1951, the Rent Controller framed the following issues- \n Whether the application in question was not entertainable in view of the judgment of the District Judge, dated the 18th December, 1950 Onus on defendants. If issue No. I is not proved, had the opposite party (tenants) not paid the rent and as such were they liable to be ejected? Onus on plaintiffs.", "The parties should bear their own The respondents preferred an appeal to the District Judge of Mahasu under section 15 of the said Act. The learned District Judge dismissed the appeal observing- On behalf of the landlord it was urged that under section 13 (2) of the Punjab Urban Rent Restriction Act, as applied to Himachal Pradesh, the Controller, if it came to the finding that rent had not been paid, had no option but to direct the tenant to put the landlord in possession.", "The only question raised is as to the nature of the power of superintendence conferred by the article."], "rank3": ["By his judgment, dated the 29th May, 1951, the Rent Controller held that as the previous applications related to non-payment of rents for the years 1948 and 1949 the present application which was founded on non-payment of rent for 1950 was not barred under section 14 of the said Act but, although the fact of rent being in arrears was admitted, the Rent Controller did not think fit to make an order directing the appellants to put the respondents in possession of the demised premises.", "Undoubtedly, that is the correct legal position, but in the present case the non-payment of rent was due to a misapprehension of the legal position created by the tenant filing an application for fixing fair rent. 1, therefore, think that this case can be distinguished and does not fall within section 13 (2), Punjab Urban Rent Restriction Act.", "The learned Judicial Commissioner held that in view of the admitted failure to pay the rent as provided by the rent deed or at the first hearing of the court under the proviso to section 13 (2) (i) the courts below had acted arbitrarily in refusing to make an order for ejectment against the tenants who had not done what was incumbent on them to do under the law and that such a situation called for inter- ference by the court of the Judicial Commissioner in order to keep the subordinate courts within the bounds of their authority. \n He accordingly set aside the orders of the courts below and allowed the application for ejectment but gave the appelants three months time for vacating the premises.", "The Rent Controller and the District Judge exercising jurisdiction under the Act are certainly tribunals, if not courts, and they function within the territories of Himachal Pradesh. \n Therefore, article 297 (1) read with article 241 confers on the court of the Judicial Commissioner power of superintendence over such tribunals. The words in relation to which obviously qualify the word territories and not the words courts and tribunals. Re. 2.The material part of article 227 substantially reproduces the provisions of section 107 of the Government of India Act, 1915, except that the power of superintendence has been extended by the article also to tribunals. That the Rent Controller and the District Judge exercising jurisdiction under the Act are tribunals cannot and has not been controverted.", "We are unable to accept this contention because clause ( 2) is, expressed to be without prejudice to the.generality of the provisions in clause (1). Further, the preponderance of judicial opinion in India was that section 107 which was similar in terms to section 15 of the High Courts Act, 1861, gave a power of judicial superintendence to the High Court apart from and independently of the provisions of other laws conferring revisional jurisdiction on the High Court.", "In this connection it has to be remembered that section 107 of the Government of India Act, 1915, was reproduced in the Government of India Act, 1935, as section 224.", "Section 224 of the 1935 Act, however, introduced sub-section (2), which was new, providing that nothing in the section should be construed as giving the High Court any jurisdiction to,question any judgment of any inferior court which was not otherwise subject to appeal or revision. The idea presumably was to nullify the effect of the decisions of the different High Courts referred to above.", "Section 224 of the 1935 Act has been reproduced with certain modifications in article 227 of the Constitution.", "It is significant to note that sub-section (2) to section 224, of the 1935 Act has been omitted from article 227. This significant omission has been regarded by all High Courts in India before whom this question has arisen As having restored to the High Court the power of judicial superintendence it had under section 15 of the High Courts Act, 186 1, and section 107 of the Government of India Act, 1915.", "Our attention has not been drawn to any case which has taken a different view and, as at present advised, we see no reason to take a different view. This power of superintendence conferred by article 227 is, as pointed out by Harries C.", "J., in Dalmia Jain Airways Ltd.", "Sukumar Mukherjee(2), to be exercised most sparingly and only in appropriate cases in order to keep the Subordinate Courts within the bounds of their authority and not for correcting mere errors."], "rank4": ["The reasons given by him were as follows- Regarding the non-payment of the rent when the plea of the tenant is only that he is waiting for the fixation of fair rent by the Rent Controller there is not enough ground for ejectment. A civil suit for the recovery of the rent would have been a more appropriate method of obtaining that rent.", "The respondents moved the Judicial Commissioner, Himachal Pradesh, under articles 226 and 227 of the Constitution of India for setting aside the order of the District Judge.", "Reference is made to clause (2) of the article in support of the contention that this article only confers on the High Court administrative superintendence over the subordinate courts and tribunals.", "See the cases referred to in -Moti Lal v.", "The State through Shrimati Sagrawati(1)."], "label": "REJECTED"}, "expert_5": {"rank1": ["In this connection it has to be remembered that section 107 of the Government of India Act, 1915, was reproduced in the Government of India Act, 1935, as section 224. Section 224 of the 1935 Act, however, introduced sub-section (2), which was new, providing that nothing in the section should be construed as giving the High Court any jurisdiction to,question any judgment of any inferior court which was not otherwise subject to appeal or revision. The idea presumably was to nullify the effect of the decisions of the different High Courts referred to above. Section 224 of the 1935 Act has been reproduced with certain modifications in article 227 of the Constitution. It is significant to note that sub-section (2) to section 224, of the 1935 Act has been omitted from article 227. This significant omission has been regarded by all High Courts in India before whom this question has arisen As having restored to the High Court the power of judicial superintendence it had under section 15 of the High Courts Act, 186 1, and section 107 of the Government of India Act, 1915."], "rank2": ["That the Rent Controller and the District Judge exercising jurisdiction under the Act are tribunals cannot and has not been controverted.", "the preponderance of judicial opinion in India was that section 107 which was similar in terms to section 15 of the High Courts Act, 1861, gave a power of judicial superintendence to the High Court apart from and independently of the provisions of other laws conferring revisional jurisdiction on the High Court.", "Moti Lal v. The State through Shrimati Sagrawati(1)."], "rank3": ["The material part of article 227 substantially reproduces the provisions of section 107 of the Government of India Act, 1915, except that the power of superintendence has been extended by the article also to tribunals."], "rank4": ["The court of the Judicial Commissioner of Himachal Pradesh exercises jurisdiction in relation to the whole of the territories of Himachal Pradesh. The Rent Controller and the District Judge exercising jurisdiction under the Act are certainly tribunals, if not courts, and they function within the territories of Himachal Pradesh.", "The words in relation to which obviously qualify the word territories and not the words courts and tribunals.", "clause ( 2) is, expressed to be without prejudice to the.generality of the provisions in clause (1)."], "rank5": ["There is no substantial dispute as to the facts leading up to the present appeal.", "the appellants filed their written statements in the proceedings under section 13 (2) (i) admitting the nonpayment of rent and the receipt of the notice"], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1954_114", "text": "CIVIL APPEAL JURISDICTION Civil Miscellaneous Petition No, 641 of 1954, Application for review of the Judgment of this Court in Civil Appeal No. 152 of 1954. C. Chatterjee (G. C. Mathur, with him) for the petitioner. Veda Vyas (S. K. Kapoor and Naunit Lal, with him) for the respondent. 1954. October 18. The Judgment of the Court was delivered by VENKATARAMA AYYAR J.-This is an application for review of the judgment of this Court in Civil Appeal No. 52 of 1954. That was an appeal against an order of the Election Tribunal, Himachal Pradesh (Simla), dismissing a petition to set aside the election of the respondent to the Legislative Assembly, Himachal Pradesh, from the Rohru Constituency. \nTwo points were raised at the hearing of the appeal before us One was that the respondent was disqualified for election to the Assembly under section 17 of Act No. XLIX of 1951, read with section 7(d) of Act No. XLIII of 195 1, by reason of the fact that he was interested in contracts for the supply of Ayurvedic Medicines to the Himachal Pradesh Government, and the other, that he had appointed Government servants as polling agents, and had thereby contravened section 123(8) of Act No. XLIII of 1951. On the first question, we held that, on a true construction of section 17, what would be a disqualification for election to either House of Parliament under article 102 would, under that section, be disqualification for election to the Legislatures of Part C States, and that the disqualification under section 7 (d) of Act No. XLIII of 1951 would accordingly be a disqualification under section 17 of Act No. XLIX of 195 1. A further contention was then raised on behalf of the respondent that even if section 7(d) were to be imported into section 17, that would not disqualify him, because under that section, the disqualification must be to being elected to either House of Parliament, and that under sections 7 and 9 of Act No. XLIII of 1951, a contract to operate as a disqualification to the election to either House of Parliament must be, with the Central Government, whereas the contracts of the respondent were with the Government of Himachal Pradesh. The answer of the petitioner to this contention was that under article 239 the administration of Part C States was vested in the President acting through the Chief Commissioner or the Lieutenant-Governor, and that the contracts of the respondent with the Chief Commissioner, Himachal Pradesh, must be held to be contracts with the Central Government. We, however, disagreed with this con- tention, and held that article 239 had not the effect of merging States with the Central Government, and converting contracts with the States into those with the Central Government. \nIn this application, Mr. Chatterjee appearing for the petitioner invites our attention to the definition of Central Government in section 3(8)(b)(ii) of the General Clauses Act. It is as follows Central Governmnet shall in relation to anything done or to be done after the commencement of the Constitution, mean the President and shall include in relation to the administration of a Part C State, the Chief Commissioner or Lieutenant-Governor or Government of a neighbouring State or other authority acting within the scope of the authority given to him or it under article 239 or article 243 of the Constitution, as the case may be. He argues that by force of this definition, contracts with the Chief Commissioner of Himachal Pradesh must be treated as contracts with the Central Government, and that in consequence, the respondent was disqualified for election under section 17 of Act No. XLIX of 1951, read along with section 7(d) of Act No. XLIII of 1951. As against this, Mr. Veda Vyas for the respondent relies on the definition of State in section 3(60)(b) of the General Clauses Act, which runs as follows State Government as respects anything done or to be done after the commencement of the Constitution, shall mean, in a Part A State, the Governor, in a Part B State the Rajpramukh, and in a Part C State the Central Government. His contention is that there being in the Constitution a fundamental distinction between the Government of the Union and Government of the States, section 3(8) of the General Clauses Act should be so construed as not to destroy that distinction, and that having regard to the definition of State in section 3(60), it must be held that to the extent the Central Government administers Part C States under article 239, its character is that of the State Governments. We are unable to agree that section 3(8) has the effect of putting an end to the status of Part C -States as independent units, distinct from the Union Government under the Constitution. It merely recognies that those States are centrally administered through the President under article 239, and enacts that the expression Central Government should include the Chief Commissioner administering a Part C State under the authority given to him under article 239. Section 3(8) does not affect the status of Part C States as distinct entities having their own Legislature and judiciary, as provided in articles 239 and 240. Its true scope will be clear if, adapting it, we substitute for the words Central Government in section 9 of Act No. XLIII of 195 1, the words the Chief commissioner acting within the scope of the authority given to him under article 239. \nA contract with the Chief Commissioner would, therefore, under section 9 read with section 3(8) of the General Clauses Act, be a contract with the Central Government, and would operate as a disqualification for election to either House of Parliament under sections 7(d) and 9 of Act No. XLIII of 1951, and it would be a disqualification under section 17 of Act No. XLIX of 1951, for election to the Legislative Assembly of the State. It is argued for the respondent that this construction would lead to this anomaly that whereas in the States in Part A or Part B a contract with the State would operate as disqualification only for election to the State Legislatures, such a contract would in Part C States operate as a disqualification to be chosen, both to the State Legislature and to either House of Parliament. That anomaly is undoubtedly there. But the contrary conclusion also involves the anomaly already pointed out, that in Part C States a contract with the State Government is not a disqualification for election even to the State Legislature, as it is in Parts A and B States. Whatever the anomaly, in our view, the proper course is to give effect to the plain language of the statute. We must accordingly hold that in view of section 3(8) of the General Clauses Act, a contract with the Chief Commissioner in a Part C State is a contract with the Central Government, and that would be a disqualification for election to the Legislative Assembly under section 17 of Act No. XLIX of 1951 read with section 7(8) of Act No. XLIII of 1951. This conclusion, however, can result in no advantage to the petitioner, as the further finding of the Election Tribunal is that no contracts of the respondent with the Himachal Pradesh Government were proved to have been subsisting at the material period. \nThat finding is, for the reasons already given, not open to attack in this appeal, and is sufficient answer to the objection that the respondent was disqualified under section 17. The second point that was argued before us in appeal was that the respondent had appointed certain Government servants to act as polling agents, and had thereby committed a major corrupt practice under section 123(8) of Act No. XLIII of 1951. In rejecting this contention we observed that, as an abstract proposition of law, the mere appointment of a Government servant as a polling agent in itself and without more is not an infringement of section 123(8). The correctness of this conclusion is now challenged by Mr. Chatterjee. His contention is that having regard to the nature of the duties of a polling agent as laid down by the Rules and furtfier elucidated by the instructions contained in the Election Manual issued by the Government, the polling agent must be held to be interested in the candidate for whom he acts as polling agent, and that his employment would therefore be hit by section 123(8). \nExamining closely the duties of a polling agent under the Rules and under the Election Manual, they can be grouped under three categories. The first category relates to the period of time antecedent to the recording of votes. The duties of the polling agent at this stage are to see that the ballot boxes are, to start with, empty, that the names of the candidates and their symbols are correctly set out thereon, that the slits in the boxes are in an open position, that the knobs of the slits are properly secured, and that the boxes are properly bolted and sealed. These are duties which are cast on the presiding officer and the polling officers as well, and as these are matters to be attended to before any recording or votes begins, it is difficult to see how they -can be said to assist in the furtherance of the election prospects of any one candidate more than of any other. The second stage is when the polling is actually in progress. The duty of the polling agent at this stage is to identify the voters. Rule 27 provides that when there is a doubt as to the identity of a voter, the presiding officer may interrogate the voter and that be should do so, if so required by a polling agent. Under rule 30, it is open to the polling agent to challenge any voter on the ground that he is not the person whose name is entered in the voters list, and when such objection is taken, it is the duty of the presiding officer to hold an enquiry and pass an order. The object of these Rules is to prevent personation, and that is a matter in which the duty is cast equally on the presiding officer. Rule 24 provides that, The presiding officer may employ at the polling station such persons as he thinks fit to assist him-or any polling officer in identifying the electors. \nThe work of the polling agent under rules 27 and 30 is of the same character, and it cannot in itself be said to further the election prospects of any particular candidate. The third stage is reached after the polling is over. Then the boxes are to be examined with. a view to find out whether the slits are open and the seals intact, the object of these provisions being to ensure that the ballot boxes had not been tampered with during the time of actual polling. Then the unused ballot papers, the tendered ballot papers and other material documents-are required to be put in separate packages, and the polling agents have the right to seal all of them. It cannot be said that in carrying out these duties the polling agent advances the election prospects of the candidate, as they admittedly relate to a stage after the completion of the polling. Indeed, the work of the polling agent both in the first stage and in the last stage is similar in character, and neither can be said to contravene section 123(8). \nAs regards the second stage, as already stated in our judgment, the duty of polling agent is merely to identify a voter, and that could not by itself and without more be said to further the election prospects of the candidate. Reliance was placed by Mr. Chatterjee on the following passage in Parkers Election Agent and Returning Officer, Fifth Edition, at page 20- The polling agents appointed for the same candidate to attend the several polling stations at any election, are engaged on the same duty and in the same interest, and it is generally very desirable that they should meet, under the presidency of the candidate or his election agent, before the opening of the poll for the purpose of mutual discussion and co-operation. What that passage means is that as the duty to be performed by the polling agents at the several booths is of the same character, it would be desirable that they should all be assembled and their duties explained to them. This has no bearing on the question whether those duties are such as must inherently promote the election prospects of the candidate. A passage which is more in point is the one at page 18, mentioning who could be appointed as polling agents. It is as follows Any competent person, whether an elector or not, may be appointed as polling agent, provided he be not the returning officer, the acting or deputy acting returning officer, or an officer or clerk appointed under P.E.R., r. 27, or a partner or clerk of any of them. \nIn this connection, it must be noted that while section 41 of Act No. XLIII of 1951 contains a prohibition against the appointment of certain persons as election agents, there is none such with, reference to the appointment of polling agents under section 46 of the Act. To hold that Government servants are, as such and as a class, disqualified to act as polling agents would be to engraft an exception to the statute, which is not there. Accordingly, we reaffirm the view taken by us that the appointment of a Government servant as polling agent does not, without more, contravene section 123(8). It is scarcely necessary to repeat our observation in the original judgment that if it is made out that the candidate or his agent had abused the right to appoint a Government servant as polling agent by exploiting the situation for furthering his election prospects, then the matter can be dealt with as an infringement of section 123(8).\nDECISION ??", "expert_1": {"rank1": ["In this connection, it must be noted that while section 41 of Act No. XLIII of 1951 contains a prohibition against the appointment of certain persons as election agents, there is none such with, reference to the appointment of polling agents under section 46 of the Act. To hold that Government servants are, as such and as a class, disqualified to act as polling agents would be to engraft an exception to the statute, which is not there.", "Accordingly, we reaffirm the view taken by us that the appointment of a Government servant as polling agent does not, without more, contravene section 123(8)."], "rank2": ["On the first question, we held that, on a true construction of section 17, what would be a disqualification for election to either House of Parliament under article 102 would, under that section, be disqualification for election to the Legislatures of Part C States, and that the disqualification under section 7 (d) of Act No. XLIII of 1951 would accordingly be a disqualification under section 17 of Act No. XLIX of 195 1.", "We are unable to agree that section 3(8) has the effect of putting an end to the status of Part C -States as independent units, distinct from the Union Government under the Constitution. It merely recognies that those States are centrally administered through the President under article 239, and enacts that the expression Central Government should include the Chief Commissioner administering a Part C State under the authority given to him under article 239.", "Whatever the anomaly, in our view, the proper course is to give effect to the plain language of the statute. We must accordingly hold that in view of section 3(8) of the General Clauses Act, a contract with the Chief Commissioner in a Part C State is a contract with the Central Government, and that would be a disqualification for election to the Legislative Assembly under section 17 of Act No. XLIX of 1951 read with section 7(8) of Act No. XLIII of 1951. This conclusion, however, can result in no advantage to the petitioner, as the further finding of the Election Tribunal is that no contracts of the respondent with the Himachal Pradesh Government were proved to have been subsisting at the material period. \nThat finding is, for the reasons already given, not open to attack in this appeal, and is sufficient answer to the objection that the respondent was disqualified under section 17.", "The second point that was argued before us in appeal was that the respondent had appointed certain Government servants to act as polling agents, and had thereby committed a major corrupt practice under section 123(8) of Act No. XLIII of 1951.", "In rejecting this contention we observed that, as an abstract proposition of law, the mere appointment of a Government servant as a polling agent in itself and without more is not an infringement of section 123(8).", "These are duties which are cast on the presiding officer and the polling officers as well, and as these are matters to be attended to before any recording or votes begins, it is difficult to see how they -can be said to assist in the furtherance of the election prospects", "of any one candidate more than of any other. The second", "stage is when the polling is actually in progress. The duty of the polling agent at this stage is to identify the voters.", "Indeed, the work of the polling agent both in the first stage and in the last stage is similar in character, and neither can be said to contravene section 123(8). \nAs regards the second stage, as already stated in our judgment, the duty of polling agent is merely to identify a voter, and that could not by itself and without more be said to further the election prospects of the candidate.", "It is scarcely necessary to repeat our observation in the original judgment that if it is made out that the candidate or his agent had abused the right to appoint a Government servant as polling agent by exploiting the situation for furthering his election prospects, then the matter can be dealt with as an infringement of section 123(8)."], "rank3": ["This is an application for review of the judgment of this Court in Civil Appeal No. 52 of 1954. That was an appeal against an order of the Election Tribunal, Himachal Pradesh (Simla), dismissing a petition to set aside the election of the respondent to the Legislative Assembly, Himachal Pradesh, from the Rohru Constituency. \nTwo points were raised at the hearing of the appeal before us One was that the respondent was disqualified for election to the Assembly under section 17 of Act No. XLIX of 1951, read with section 7(d) of Act No. XLIII of 195 1, by reason of the fact that he was interested in contracts for the supply of Ayurvedic Medicines to the Himachal Pradesh Government, and the other, that he had appointed Government servants as polling agents, and had thereby contravened section 123(8) of Act No. XLIII of 1951.", "We, however, disagreed with this con- tention, and held that article 239 had not the effect of merging States with the Central Government, and converting contracts with the States into those with the Central Government."], "label": "REJECTED"}, "expert_2": {"rank1": ["we held that, on a true construction of section 17, what would be a disqualification for election to either House of Parliament under article 102 would, under that section, be disqualification for election to the Legislatures of Part C States, and that the disqualification under section 7 (d) of Act No. XLIII of 1951 would accordingly be a disqualification under section 17 of Act No. XLIX of 195 1.", "We are unable to agree that section 3(8) has the effect of putting an end to the status of Part C -States as independent units, distinct from the Union Government under the Constitution. It merely recognies that those States are centrally administered through the President under article 239, and enacts that the expression Central Government should include the Chief Commissioner administering a Part C State under the authority given to him under article 239.", "A contract with the Chief Commissioner would, therefore, under section 9 read with section 3(8) of the General Clauses Act, be a contract with the Central Government, and would operate as a disqualification for election to either House of Parliament under sections 7(d) and 9 of Act No. XLIII of 1951, and it would be a disqualification under section 17 of Act No. XLIX of 1951, for election to the Legislative Assembly of the State.", "This conclusion, however, can result in no advantage to the petitioner, as the further finding of the Election Tribunal is that no contracts of the respondent with the Himachal Pradesh Government were proved to have been subsisting at the material period. \nThat finding is, for the reasons already given, not open to attack in this appeal, and is sufficient answer to the objection that the respondent was disqualified under section 17", "section 41 of Act No. XLIII of 1951 contains a prohibition against the appointment of certain persons as election agents, there is none such with, reference to the appointment of polling agents under section 46 of the Act. To hold that Government servants are, as such and as a class, disqualified to act as polling agents would be to engraft an exception to the statute, which is not there. Accordingly, we reaffirm the view taken by us that the appointment of a Government servant as polling agent does not, without more, contravene section 123(8)."], "rank2": ["That was an appeal against an order of the Election Tribunal, Himachal Pradesh (Simla), dismissing a petition to set aside the election of the respondent to the Legislative Assembly, Himachal Pradesh, from the Rohru Constituency.", "definition of Central Government in section 3(8)(b)(ii) of the General Clauses Act. It is as follows Central Governmnet shall in relation to anything done or to be done after the commencement of the Constitution, mean the President and shall include in relation to the administration of a Part C State, the Chief Commissioner or Lieutenant-Governor or Government of a neighbouring State or other authority acting within the scope of the authority given to him or it under article 239 or article 243 of the Constitution, as the case may be. He argues that by force of this definition, contracts with the Chief Commissioner of Himachal Pradesh must be treated as contracts with the Central Government, and that in consequence, the respondent was disqualified for election under section 17 of Act No. XLIX of 1951, read along with section 7(d) of Act No. XLIII of 1951."], "rank3": ["His contention is that there being in the Constitution a fundamental distinction between the Government of the Union and Government of the States, section 3(8) of the General Clauses Act should be so construed as not to destroy that distinction, and that having regard to the definition of State in section 3(60), it must be held that to the extent the Central Government administers Part C States under article 239, its character is that of the State Governments.", "We must accordingly hold that in view of section 3(8) of the General Clauses Act, a contract with the Chief Commissioner in a Part C State is a contract with the Central Government, and that would be a disqualification for election to the Legislative Assembly under section 17 of Act No. XLIX of 1951 read with section 7(8) of Act No. XLIII of 1951.", "His contention is that having regard to the nature of the duties of a polling agent as laid down by the Rules and furtfier elucidated by the instructions contained in the Election Manual issued by the Government, the polling agent must be held to be interested in the candidate for whom he acts as polling agent, and that his employment would therefore be hit by section 123(8).", "Any competent person, whether an elector or not, may be appointed as polling agent, provided he be not the returning officer, the acting or deputy acting returning officer, or an officer or clerk appointed under P.E.R., r. 27, or a partner or clerk of any of them."], "label": "REJECTED"}, "expert_3": {"rank1": ["We are unable to agree that section 3(8) has the effect of putting an end to the status of Part C -States as independent units, distinct from the Union Government under the Constitution. It merely recognies that those States are centrally administered through the President under article 239, and enacts that the expression Central Government should include the Chief Commissioner administering a Part C State under the authority given to him under article 239.", "Section 3(8) does not affect the status of Part C States as distinct entities having their own Legislature and judiciary, as provided in articles 239 and 240.", "That anomaly is undoubtedly there. But the contrary conclusion also involves the anomaly already pointed out, that in Part C States a contract with the State Government is not a disqualification for election even to the State Legislature, as it is in Parts A and B States. Whatever the anomaly, in our view, the proper course is to give effect to the plain language of the statute. We must accordingly hold that in view of section 3(8) of the General Clauses Act, a contract with the Chief Commissioner in a Part C State is a contract with the Central Government, and that would be a disqualification for election to the Legislative Assembly under section 17 of Act No.", "read with section 7(8) of Act No.", "This conclusion, however, can result in no advantage to the petitioner, as the further finding of the Election Tribunal is that no contracts of the respondent with the Himachal Pradesh Government were proved to have been subsisting at the material period. \nThat finding is, for the reasons already given, not open to attack in this appeal, and is sufficient answer to the objection that the respondent was disqualified under section 17.", "Examining closely the duties of a polling agent under the Rules and under the Election Manual, they can be grouped under three categories", "The first category relates to the period of time antecedent to the recording of votes. The duties of the polling agent at this stage are to see that the ballot boxes are, to start with, empty, that the names of the candidates and their symbols are correctly set out thereon, that the slits in the boxes are in an open position, that the knobs of the slits are properly secured, and that the boxes are properly bolted and sealed. These are duties which are cast on the presiding officer and the polling officers as well, and as these are matters to be attended to before any recording or votes begins, it is difficult to see how they -can be said to assist in the furtherance of the election prospects of any one candidate more than of any other. The second stage is when the polling is actually in progress", "The duty of the polling agent at this stage is to identify the voters", "The object of these Rules is to prevent personation, and that is a matter in which the duty is cast equally on the presiding officer.", "The work of the polling agent under rules 27 and 30 is of the same character, and it cannot in itself be said to further the election prospects of any particular candidate", "The third stage is reached after the polling is over. Then the boxes are to be examined with. a view to find out whether the slits are open and the seals intact, the object of these provisions being to ensure that the ballot boxes had not been tampered with during the time of actual polling. Then the unused ballot papers, the tendered ballot papers and other material documents-are required to be put in separate packages, and the polling agents have the right to seal all of them. It cannot be said that in carrying out these duties the polling agent advances the election prospects of the candidate, as they admittedly relate to a stage after the completion of the polling. Indeed, the work of the polling agent both in the first stage and in the last stage is similar in character, and neither can be said to contravene section 123(8).", "the duty to be performed by the polling agents at the several booths is of the same character, it would be desirable that they should all be assembled and their duties explained to them. This has no bearing on the question whether those duties are such as must inherently promote the election prospects of the candidate", "Any competent person, whether an elector or not, may be appointed as polling agent, provided he be not the returning officer, the acting or deputy acting returning officer, or an officer or clerk appointed under P.E.R., r. 27, or a partner or clerk of any of them.", "it must be noted that while section 41 of Act No. XLIII of 1951 contains a prohibition against the appointment of certain persons as election agents, there is none such with, reference to the appointment of polling agents under section 46 of the Act. To hold that Government servants are, as such and as a class, disqualified to act as polling agents would be to engraft an exception to the statute, which is not there. Accordingly, we reaffirm the view taken by us that the appointment of a Government servant as polling agent does not, without more, contravene section 123(8)"], "rank2": ["On the first question, we held that, on a true construction of section 17, what would be a disqualification for election to either House of Parliament under article 102 would, under that section, be disqualification for election to the Legislatures of Part C States, and that the disqualification under section 7 (d) of Act No", "XLIII of 1951 would accordingly be a disqualification under section 17 of Act No. XLIX of 195 1", "held that article 239 had not the effect of merging States with the Central Government, and converting contracts with the States into those with the Central Government", "definition of Central Government in section 3(8)(b)(ii) of the General Clauses Act. It is as follows Central Governmnet shall in relation to anything done or to be done after the commencement of the Constitution, mean the President and shall include in relation to the administration of a Part C State, the Chief Commissioner or Lieutenant-Governor or Government of a neighbouring State or other authority acting within the scope of the authority given to him or it under article 239 or article 243 of the Constitution, as the case may be.", "Its true scope will be clear if, adapting it, we substitute for the words Central Government in section 9 of Act No. XLIII of 195 1, the words the Chief commissioner acting within the scope of the authority given to him under article 239. \nA contract with the Chief Commissioner would, therefore, under section 9 read with section 3(8) of the General Clauses Act, be a contract with the Central Government, and would operate as a disqualification for election to either House of Parliament under sections 7(d) and 9 of Act No. XLIII of 1951, and it would be a disqualification under section 17 of Act No", "for election to the Legislative Assembly of the State", "It is argued for the respondent that this construction would lead to this anomaly that whereas in the States in Part A or Part B a contract with the State would operate as disqualification only for election to the State Legislatures, such a contract would in Part C States operate as a disqualification to be chosen, both to the State Legislature and to either House of Parliament", "In rejecting this contention we observed that, as an abstract proposition of law, the mere appointment of a Government servant as a polling agent in itself and without more is not an infringement of section 123(8)", "Rule 27 provides that when there is a doubt as to the identity of a voter, the presiding officer may interrogate the voter and that be should do so, if so required by a polling agent. Under rule 30, it is open to the polling agent to challenge any voter on the ground that he is not the person whose name is entered in the voters list, and when such objection is taken, it is the duty of the presiding officer to hold an enquiry and pass an order.", "Rule 24 provides that, The presiding officer may employ at the polling station such persons as he thinks fit to assist him-or any polling officer in identifying the electors."], "rank3": ["This is an application for review of the judgment of this Court in Civil Appeal No. 52 of 1954. That was an appeal against an order of the Election Tribunal, Himachal Pradesh (Simla), dismissing a petition to set aside the election of the respondent to the Legislative Assembly, Himachal Pradesh, from the Rohru Constituency.", "Two points were raised at the hearing of the appeal before us One was that the respondent was disqualified for election to the Assembly under section 17 of Act No. XLIX of 1951, read with section 7(d) of Act No. XLIII of 195 1, by reason of the fact that he was interested in contracts for the supply of Ayurvedic Medicines to the Himachal Pradesh Government, and the other, that he had appointed Government servants as polling agents, and had thereby contravened section 123(8) of Act No", "The second point that was argued before us in appeal was that the respondent had appointed certain Government servants to act as polling agents, and had thereby committed a major corrupt practice under section 123(8) of Act No. XLIII of 1951."], "label": "REJECTED"}, "expert_4": {"rank1": ["This is an application for review of the judgment of this Court in Civil Appeal No. 52 of 1954.", "Accordingly, we reaffirm the view taken by us that the appointment of a Government servant as polling agent does not, without more, contravene section 123(8)."], "rank2": ["That was an appeal against an order of the Election Tribunal, Himachal Pradesh (Simla), dismissing a petition to set aside the election of the respondent to the Legislative Assembly, Himachal Pradesh, from the Rohru Constituency.", "Section 3(8) does not affect the status of Part C States as distinct entities having their own Legislature and judiciary, as provided in articles 239 and 240.", "Whatever the anomaly, in our view, the proper course is to give effect to the plain language of the statute.", "We must accordingly hold that in view of section 3(8) of the General Clauses Act, a contract with the Chief Commissioner in a Part C State is a contract with the Central Government, and that would be a disqualification for election to the Legislative Assembly under section 17 of Act No. XLIX of 1951 read with section 7(8) of Act No. XLIII of 1951.", "In rejecting this contention we observed that, as an abstract proposition of law, the mere appointment of a Government servant as a polling agent in itself and without more is not an infringement of section 123(8).", "To hold that Government servants are, as such and as a class, disqualified to act as polling agents would be to engraft an exception to the statute, which is not there."], "rank3": ["Two points were raised at the hearing of the appeal before us One was that the respondent was disqualified for election to the Assembly under section 17 of Act No. XLIX of 1951, read with section 7(d) of Act No.", "XLIII of 195 1, by reason of the fact that he was interested in contracts for the supply of Ayurvedic Medicines to the Himachal Pradesh Government, and the other, that he had appointed Government servants as polling agents, and had thereby contravened section 123(8) of Act No. XLIII of 1951.", "On the first question, we held that, on a true construction of section 17, what would be a disqualification for election to either House of Parliament under article 102 would, under that section, be disqualification for election to the Legislatures of Part C States, and that the disqualification under section 7 (d) of Act No. XLIII of 1951 would accordingly be a disqualification under section 17 of Act No.", "XLIX of 195 1.", "We, however, disagreed with this con- tention, and held that article 239 had not the effect of merging States with the Central Government, and converting contracts with the States into those with the Central Government.", "In this application, Mr. Chatterjee appearing for the petitioner invites our attention to the definition of Central Government in section 3(8)(b)(ii) of the General Clauses Act. It is as follows Central Governmnet shall in relation to anything done or to be done after the commencement of the Constitution, mean the President and shall include in relation to the administration of a Part C State, the Chief Commissioner or Lieutenant-Governor or Government of a neighbouring State or other authority acting within the scope of the authority given to him or it under article 239 or article 243 of the Constitution, as the case may be.", "We are unable to agree that section 3(8) has the effect of putting an end to the status of Part C -States as independent units, distinct from the Union Government under the Constitution. It merely recognies that those States are centrally administered through the President under article 239, and enacts that the expression Central Government should include the Chief Commissioner administering a Part C State under the authority given to him under article 239.", "Its true scope will be clear if, adapting it, we substitute for the words Central Government in section 9 of Act No. XLIII of 195 1, the words the Chief commissioner acting within the scope of the authority given to him under article 239. \nA contract with the Chief Commissioner would, therefore, under section 9 read with section 3(8) of the General Clauses Act, be a contract with the Central Government, and would operate as a disqualification for election to either House of Parliament under sections 7(d) and 9 of Act No. XLIII of 1951, and it would be a disqualification under section 17 of Act No. XLIX of 1951, for election to the Legislative Assembly of the State. It is argued for the respondent that this construction would lead to this anomaly that whereas in the States in Part A or Part B a contract with the State would operate as disqualification only for election to the State Legislatures, such a contract would in Part C States operate as a disqualification to be chosen, both to the State Legislature and to either House of Parliament.", "That anomaly is undoubtedly there.", "But the contrary conclusion also involves the anomaly already pointed out, that in Part C States a contract with the State Government is not a disqualification for election even to the State Legislature, as it is in Parts A and B States.", "This conclusion, however, can result in no advantage to the petitioner, as the further finding of the Election Tribunal is that no contracts of the respondent with the Himachal Pradesh Government were proved to have been subsisting at the material period.", "That finding is, for the reasons already given, not open to attack in this appeal, and is sufficient answer to the objection that the respondent was disqualified under section 17.", "The second point that was argued before us in appeal was that the respondent had appointed certain Government servants to act as polling agents, and had thereby committed a major corrupt practice under section 123(8) of Act No. XLIII of 1951.", "Examining closely the duties of a polling agent under the Rules and under the Election Manual, they can be grouped under three categories.", "The first category relates to the period of time antecedent to the recording of votes.", "The duties of the polling agent at this stage are to see that the ballot boxes are, to start with, empty, that the names of the candidates and their symbols are correctly set out thereon, that the slits in the boxes are in an open position, that the knobs of the slits are properly secured, and that the boxes are properly bolted and sealed.", "The second stage is when the polling is actually in progress.", "The duty of the polling agent at this stage is to identify the voters.", "Rule 27 provides that when there is a doubt as to the identity of a voter, the presiding officer may interrogate the voter and that be should do so, if so required by a polling agent.", "The work of the polling agent under rules 27 and 30 is of the same character, and it cannot in itself be said to further the election prospects of any particular candidate.", "The third stage is reached after the polling is over.", "Then the boxes are to be examined with. a view to find out whether the slits are open and the seals intact, the object of these provisions being to ensure that the ballot boxes had not been tampered with during the time of actual polling.", "Then the unused ballot papers, the tendered ballot papers and other material documents-are required to be put in separate packages, and the polling agents have the right to seal all of them. It cannot be said that in carrying out these duties the polling agent advances the election prospects of the candidate, as they admittedly relate to a stage after the completion of the polling. Indeed, the work of the polling agent both in the first stage and in the last stage is similar in character, and neither can be said to contravene section 123(8).", "A passage which is more in point is the one at page 18, mentioning who could be appointed as polling agents.", "It is as follows Any competent person, whether an elector or not, may be appointed as polling agent, provided he be not the returning officer, the acting or deputy acting returning officer, or an officer or clerk appointed under P.E.R., r. 27, or a partner or clerk of any of them. \nIn this connection, it must be noted that while section 41 of Act No. XLIII of 1951 contains a prohibition against the appointment of certain persons as election agents, there is none such with, reference to the appointment of polling agents under section 46 of the Act.", "if it is made out that the candidate or his agent had abused the right to appoint a Government servant as polling agent by exploiting the situation for furthering his election prospects, then the matter can be dealt with as an infringement of section 123(8)."], "rank4": ["A further contention was then raised on behalf of the respondent that even if section 7(d) were to be imported into section 17, that would not disqualify him, because under that section, the disqualification must be to being elected to either House of Parliament, and that under sections 7 and 9 of Act No. XLIII of 1951, a contract to operate as a disqualification to the election to either House of Parliament must be, with the Central Government, whereas the contracts of the respondent were with the Government of Himachal Pradesh.", "The answer of the petitioner to this contention was that under article 239 the administration of Part C States was vested in the President acting through the Chief Commissioner or the Lieutenant-Governor, and that the contracts of the respondent with the Chief Commissioner, Himachal Pradesh, must be held to be contracts with the Central Government.", "He argues that by force of this definition, contracts with the Chief Commissioner of Himachal Pradesh must be treated as contracts with the Central Government, and that in consequence, the respondent was disqualified for election under section 17 of Act No.", "As against this, Mr. Veda Vyas for the respondent relies on the definition of State in section 3(60)(b) of the General Clauses Act, which runs as follows State Government as respects anything done or to be done after the commencement of the Constitution, shall mean, in a Part A State, the Governor, in a Part B State the Rajpramukh, and in a Part C State the Central Government.", "His contention is that there being in the Constitution a fundamental distinction between the Government of the Union and Government of the States, section 3(8) of the General Clauses Act should be so construed as not to destroy that distinction, and that having regard to the definition of State in section 3(60), it must be held that to the extent the Central Government administers Part C States under article 239, its character is that of the State Governments.", "The correctness of this conclusion is now challenged", "His contention is that having regard to the nature of the duties of a polling agent as laid down by the Rules and furtfier elucidated by the instructions contained in the Election Manual issued by the Government, the polling agent must be held to be interested in the candidate for whom he acts as polling agent, and that his employment would therefore be hit by section 123(8).", "Reliance was placed by Mr. Chatterjee on the following passage in Parkers Election Agent and Returning Officer", "What that passage means is that as the duty to be performed by the polling agents at the several booths is of the same character, it would be desirable that they should all be assembled and their duties explained to them.", "This has no bearing on the question whether those duties are such as must inherently promote the election prospects of the candidate."], "label": "REJECTED"}, "expert_5": {"rank1": ["This conclusion, however, can result in no advantage to the petitioner, as the further finding of the Election Tribunal is that no contracts of the respondent with the Himachal Pradesh Government were proved to have been subsisting at the material period. \nThat finding is, for the reasons already given, not open to attack in this appeal, and is sufficient answer to the objection that the respondent was disqualified under section 17.", "while section 41 of Act No. XLIII of 1951 contains a prohibition against the appointment of certain persons as election agents, there is none such with, reference to the appointment of polling agents under section 46 of the Act.", "To hold that Government servants are, as such and as a class, disqualified to act as polling agents would be to engraft an exception to the statute, which is not there."], "rank2": ["It is as follows Any competent person, whether an elector or not, may be appointed as polling agent, provided he be not the returning officer, the acting or deputy acting returning officer, or an officer or clerk appointed under P.E.R., r. 27, or a partner or clerk of any of them."], "rank3": ["A contract with the Chief Commissioner would, therefore, under section 9 read with section 3(8) of the General Clauses Act, be a contract with the Central Government, and would operate as a disqualification for election to either House of Parliament under sections 7(d) and 9 of Act No. XLIII of 1951, and it would be a disqualification under section 17 of Act No. XLIX of 1951, for election to the Legislative Assembly of the State.", "Whatever the anomaly, in our view, the proper course is to give effect to the plain language of the statute.", "the mere appointment of a Government servant as a polling agent in itself and without more is not an infringement of section 123(8).", "The work of the polling agent under rules 27 and 30 is of the same character, and it cannot in itself be said to further the election prospects of any particular candidate.", "As regards the second stage, as already stated in our judgment, the duty of polling agent is merely to identify a voter, and that could not by itself and without more be said to further the election prospects of the candidate."], "rank4": ["It merely recognies that those States are centrally administered through the President under article 239, and enacts that the expression Central Government should include the Chief Commissioner administering a Part C State under the authority given to him under article 239.", "These are duties which are cast on the presiding officer and the polling officers as well, and as these are matters to be attended to before any recording or votes begins, it is difficult to see how they -can be said to assist in the furtherance of the election prospects of any one candidate more than of any other.", "It cannot be said that in carrying out these duties the polling agent advances the election prospects of the candidate, as they admittedly relate to a stage after the completion of the polling."], "rank5": ["It is as follows Central Governmnet shall in relation to anything done or to be done after the commencement of the Constitution, mean the President and shall include in relation to the administration of a Part C State, the Chief Commissioner or Lieutenant-Governor or Government of a neighbouring State or other authority acting within the scope of the authority given to him or it under article 239 or article 243 of the Constitution, as the case may be.", "Section 3(8) does not affect the status of Part C States as distinct entities having their own Legislature and judiciary, as provided in articles 239 and 240.", "But the contrary conclusion also involves the anomaly already pointed out, that in Part C States a contract with the State Government is not a disqualification for election even to the State Legislature, as it is in Parts A and B States."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1954_13", "text": "CRMINAL APPELLATE JURISDICTION Case No. 281 of 1951. Appeal under article 132 of the Constitution of India from the Judgment and Order dated the 1st August, 1951, of the High Court of Judicature at Madras in Criminal Miscellaneous Petitions Nos.1261 and 1263 of 1951. Rajah Iyer (R. Ganapathy Iyer and M. S. K. Aiyangar, with him) for the appellant petitioners, 1145 \n J. Umrigar and S., Subramaniam for respondent No. 2. 1954. March 18. The Judgment of the Court was delivered by BOSE J.-The question in this case is whether an appeal lies to this court under section 476B of the Criminal Procedure Code from an order of a Division Bench of a High Court directing the filing of a complaint for perjury. Two persons, Govindan and Damodaran, filed petitions under section 491 of the Criminal Procedure Code for release claiming that they had been illegally detained by two Sub- Inspectors of Police who are the appellants before us. Govindan said he was being detained by one Sub-Inspector and Damodaran said he was being detained by the other. \n Both the Sub Inspectors said that the petitioners were not in their custody. The first Sub-Inspector, who was concerned with Govindan, said that Govindan had never been arrested by him and had not been in his custody at. any time. The other denied that Damodaran was in his custody. He admitted that he had arrested him at one time but said that he had been released long before the petition. Each swore an affidavit in support of his return. In view of this conflict between the two sets of statements the High Court directed the District Judge to make an enquiry. Considerable evidence was recorded and documents were filed and the District Judge reported that in his opinion the statements made by the two Sub-Inspectors were correct. The High Court disagreed and, after an elaborate examination of the evidence, reached the conclusion that the petitioners were telling the truth and not the Sub- Inspectors. The petitioners were however regularly arrested after their petitions and before the High Courts order one was released on bail and the other was remanded to jail custody by an order of a Magistrate. Accordingly their petitions became infructuous and were dismissed. After this, the petitioners applied to the High Court under section 476 of the Criminal Procedure Code and 1146 asked that the Sub-InsPectors be prosecuted for perjury under section 193, Indian Penal Code. The applications were granted and the Deputy Registrar of the High Court was directed to make the necessary complaints. The Sub-Inspeetors thereupon asked for leave to appeal to this court. Leave was refused on the ground that no appeal lies, but leave was granted under article 132 as an interpretation of articles 134 (1) and 372 of the Constitution was involved. \n The Sub Inspectors have appealed here against that order as also against the order under section 476. In addition, as an added precaution, they have filed a petition for special leave to appeal under article 136 (1). The first question we have to decide is whether there is a right. of appeal. That turns on the true meaning of-section 476B of the Criminal Procedure Code read with section 195 (3). The relevant portion of the former reads thus - Any person against whom a complaint has been made under section 476 may appeal to the court to which such former court is subordinate within the meaning of section 195 (3) The latter section reads- For the purpose of this section, a court shall be deemed to be subordinate to the court to which appeals ordinarily lie from the appealable decrees or sentences of such former court The rest of the section does not concern us. Two things are evident. First, that a right of appeal has been expressly conferred by section 476B provided there is a higher forum to which an appeal can be made and second that the appellate forum has been designated in an artificial way. The appeal lies to the court to which the former court is subordinate within the meaning of section 195 (3). But sub. ordinate does not bear its ordinary meaning. It is used as a term of art and has been given a special meaning by reason of the definition in section 195 (3) a fiction has been imposed by the use of the word deemed., We have accordingly next to examine the content of the fiction. 1147 The section says that the court making the order under section 476 shall be deemed to be subordinate to the court (a) to which appeals ordinarily lie (b) from the appelable decrees or sentences of such former court. Now the former court in this case is a Division Bench of the High Court. The only court to which an appeal ordinarily lies from the appealable decrees and sentences of a Division Bench of a High Court is this court. \n Therefore, a Division Bench of a High court is a court subordinate to this court within the meaning of section 195 (3) accordingly an appeal lies to this court from an order of a Division Bench under section 476 It was contended that there is no ordinary right of appeal to this court and that such rights as there are those expressly conferred by the Constitution in a very limited and circumscribed set of circumstances, therefore, such appeals as lie to this court cannot be said to lie ordinarily. We do not agree. Such an argument concentrates attention on the word ordinarily and ignored the words appealable decrees or sentences. Before we can apply the definition we have first to see whether there is a class of decrees or sentences in the court under consideration which areat all open to appeal. If there are not, the matter- ends and there is no right of appeal under section 476.B. If there are, then we have to see to which court those appeals will ordinarily lie. It is evident that the only court to which the appealable decrees and sentences of a Division Bench of a High Court can lie is the Supreme Court. \n There is no other court to which an appeal can be made. It follows that is the ordinary course in the case of all appealable decrees and sentences and that consequently this is the court to which such appeals will ordinarily lie. As there is a right of appeal we have next to consider the matter on its merits and there the only relevant consideration is whether it is expedient in the interests of justice that an enquiry should be 1148 made and a, complaint filed. That involves a careful balancing of many factors. The High Court has scrutinised the. evidence minutely and has disclosed ample material on which a judicial mind could reasonably reach the conclusion that there is matter here which requires investigation in a criminal court and that it is expedient in the interests of justice to have it enquired into. We have not examined the evidence for ourselves and we express no opinion on the merits of the respective cases but after a careful reading of the judgment, of the High Court and the report of the District Judge we can find no reason for interfering with the High Courts discretion on that score. We do not intend to say more than this about the merits as we are anxious not to prejudge or prejudice the case of either side. \n The learned Judges of the High Court have also very -rightly observed in their order under section 476 that they were not expressing any opinion on the guilt or innocence of the appellants. We were informed at the hearing that two further sets of proceedings arising out of the same facts are now, pending against the appellants. One is two civil suits for damages for wrongful confinement. The other,is two criminal prosecutions under section 344, Indian Penal Code, for wrongful confinement, one against each Sub-Inspector. It was said that the simultaneous prosecution of these, matters will embarrass the accused. But after the hearing of the appeal we received information that the two criminal prosecutions have been closed with liberty to file fresh complaints when the papers are ready, as the High Court records were not available on the application of the accused As these prosecutions are not pending at the moment, the objection regarding them does not arise but we can see that the simultaneous prosecution of the present criminal proceedings out of which this appeal arises and the civil suits will embarrass the accused. We have therefore to determine which should be stayed. As between the civil and the criminal proceedings we are of the opinion that the criminal matters should 1149 be given precedence. There is some difference of opinion in the High Courts of India on this point. No hard and fast rule ban. be laid down but we do not consider that the possibility of conflicting decisions in the civil and criminal courts is a relevant consideration. 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. \n The only relevant consideration 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 concerned 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 consistent with a fair and impartial trial. Another reason is that it is undesirable to let things glide till memories have grown too dim to trust. This,however, is not a hard and fast rule. Special considerations obtaining in any particular case might make some other course more expedient and just. For example, the civil case or the other criminal proceeding may be so hear its end as to make it inexpedient to stay it in order to give precedence to a prosecution order of under section 476. But in this case we are of the view that the civil suits should be stayed till the criminal proceedings have finished.\n DECISION ??", "expert_1": {"rank1": ["As between the civil and the criminal proceedings we are of the opinion that the criminal matters should 1149 be given precedence.", "But in this case we are of the view that the civil suits should be stayed till the criminal proceedings have finished."], "rank2": ["We were informed at the hearing that two further sets of proceedings arising out of the same facts are now, pending against the appellants. One is two civil suits for damages for wrongful confinement. The other,is two criminal prosecutions under section 344, Indian Penal Code, for wrongful confinement, one against each Sub-Inspector. It was said that the simultaneous prosecution of these, matters will embarrass the accused. But after the hearing of the appeal we received information that the two criminal prosecutions have been closed with liberty to file fresh complaints when the papers are ready, as the High Court records were not available on the application of the accused As these prosecutions are not pending at the moment, the objection regarding them does not arise but we can see that the simultaneous prosecution of the present criminal proceedings out of which this appeal arises and the civil suits will embarrass the accused. We have therefore to determine which should be stayed.", "No hard and fast rule ban. be laid down but we do not consider that the possibility of conflicting decisions in the civil and criminal courts is a relevant consideration. 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. \n The only relevant consideration 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 concerned 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 consistent with a fair and impartial trial. Another reason is that it is undesirable to let things glide till memories have grown too dim to trust. This,however, is not a hard and fast rule. Special considerations obtaining in any particular case might make some other course more expedient and just."], "rank3": ["First, that a right of appeal has been expressly conferred by section 476B provided there is a higher forum to which an appeal can be made and second that the appellate forum has been designated in an artificial way. The appeal lies to the court to which the former court is subordinate within the meaning of section 195 (3).", "The only court to which an appeal ordinarily lies from the appealable decrees and sentences of a Division Bench of a High Court is this court. \n Therefore, a Division Bench of a High court is a court subordinate to this court within the meaning of section 195 (3) accordingly an appeal lies to this court from an order of a Division Bench under section 476 It was contended that there is no ordinary right of appeal to this court and that such rights as there are those expressly conferred by the Constitution in a very limited and circumscribed set of circumstances, therefore, such appeals as lie to this court cannot be said to lie ordinarily. We do not agree. Such an argument concentrates attention on the word ordinarily and ignored the words appealable decrees or sentences. Before we can apply the definition we have first to see whether there is a class of decrees or sentences in the court under consideration which areat all open to appeal. If there are not, the matter- ends and there is no right of appeal under section 476.B. If there are, then we have to see to which court those appeals will ordinarily lie.", "It is evident that the only court to which the appealable decrees and sentences of a Division Bench of a High Court can lie is the Supreme Court. \n There is no other court to which an appeal can be made. It follows that is the ordinary course in the case of all appealable decrees and sentences and that consequently this is the court to which such appeals will ordinarily lie. As there is a right of appeal we have next to consider the matter on its merits and there the only relevant consideration is whether it is expedient in the interests of justice that an enquiry should be 1148 made and a, complaint filed.", "The High Court has scrutinised the. evidence minutely and has disclosed ample material on which a judicial mind could reasonably reach the conclusion that there is matter here which requires investigation in a criminal court and that it is expedient in the interests of justice to have it enquired into. We have not examined the evidence for ourselves and we express no opinion on the merits of the respective cases but after a careful reading of the judgment, of the High Court and the report of the District Judge we can find no reason for interfering with the High Courts discretion on that score. We do not intend to say more than this about the merits as we are anxious not to prejudge or prejudice the case of either side. \n The learned Judges of the High Court have also very -rightly observed in their order under section 476 that they were not expressing any opinion on the guilt or innocence of the appellants."], "rank4": ["The question in this case is whether an appeal lies to this court under section 476B of the Criminal Procedure Code from an order of a Division Bench of a High Court directing the filing of a complaint for perjury.", "The first question we have to decide is whether there is a right. of appeal. That turns on the true meaning of-section 476B of the Criminal Procedure Code read with section 195 (3)."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["First, that a right of appeal has been expressly conferred by section 476B provided there is a higher forum to which an appeal can be made and second that the appellate forum has been designated in an artificial way.", "It is evident that the only court to which the appealable decrees and sentences of a Division Bench of a High Court can lie is the Supreme Court. \n There is no other court to which an appeal can be made. It follows that is the ordinary course in the case of all appealable decrees and sentences and that consequently this is the court to which such appeals will ordinarily lie."], "rank2": ["The question in this case is whether an appeal lies to this court under section 476B of the Criminal Procedure Code from an order of a Division Bench of a High Court directing the filing of a complaint for perjury.", "The appeal lies to the court to which the former court is subordinate within the meaning of section 195 (3). But sub. ordinate does not bear its ordinary meaning. It is used as a term of art and has been given a special meaning by reason of the definition in section 195 (3) a fiction has been imposed by the use of the word deemed., We have accordingly next to examine the content of the fiction. 1147 The section says that the court making the order under section 476 shall be deemed to be subordinate to the court (a) to which appeals ordinarily lie (b) from the appelable decrees or sentences of such former court. Now the former court in this case is a Division Bench of the High Court.", "We do not agree. Such an argument concentrates attention on the word ordinarily and ignored the words appealable decrees or sentences. Before we can apply the definition we have first to see whether there is a class of decrees or sentences in the court under consideration which areat all open to appeal."], "rank3": ["Two persons, Govindan and Damodaran, filed petitions under section 491 of the Criminal Procedure Code for release claiming that they had been illegally detained by two Sub- Inspectors of Police who are the appellants before us.", "Considerable evidence was recorded and documents were filed and the District Judge reported that in his opinion the statements made by the two Sub-Inspectors were correct. The High Court disagreed and, after an elaborate examination of the evidence, reached the conclusion that the petitioners were telling the truth and not the Sub- Inspectors.", "the petitioners applied to the High Court under section 476 of the Criminal Procedure Code and 1146 asked that the Sub-InsPectors be prosecuted for perjury under section 193, Indian Penal Code. The applications were granted and the Deputy Registrar of the High Court was directed to make the necessary complaints. The Sub-Inspeetors thereupon asked for leave to appeal to this court. Leave was refused on the ground that no appeal lies, but leave was granted under article 132 as an interpretation of articles 134 (1) and 372 of the Constitution was involved. \n The Sub Inspectors have appealed here against that order as also against the order under section 476.", "We have not examined the evidence for ourselves and we express no opinion on the merits of the respective cases but after a careful reading of the judgment, of the High Court and the report of the District Judge we can find no reason for interfering with the High Courts discretion on that score. We do not intend to say more than this about the merits as we are anxious not to prejudge or prejudice the case of either side."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["The question in this case is whether an appeal lies to this court under section 476B of the Criminal Procedure Code from an order of a Division Bench of a High Court directing the filing of a complaint for perjury", "The first question we have to decide is whether there is a right. of appeal. That turns on the true meaning of-section 476B of the Criminal Procedure Code read with section 195 (3).", "Two things are evident. First, that a right of appeal has been expressly conferred by section 476B provided there is a higher forum to which an appeal can be made and second that the appellate forum has been designated in an artificial way. The appeal lies to the court to which the former court is subordinate within the meaning of section 195 (3). But sub. ordinate does not bear its ordinary meaning", "It is used as a term of art and has been given a special meaning by reason of the definition in section 195 (3) a fiction has been imposed by the use of the word deemed., We have accordingly next to examine the content of the fiction. 1147 The section says that the court making the order under section 476 shall be deemed to be subordinate to the court (a) to which appeals ordinarily lie (b) from the appelable decrees or sentences of such former court", "Now the former court in this case is a Division Bench of the High Court. The only court to which an appeal ordinarily lies from the appealable decrees and sentences of a Division Bench of a High Court is this court. \n Therefore, a Division Bench of a High court is a court subordinate to this court within the meaning of section 195 (3) accordingly an appeal lies to this court from an order of a Division Bench under section 476", "Before we can apply the definition we have first to see whether there is a class of decrees or sentences in the court under consideration which areat all open to appeal. If there are not, the matter- ends and there is no right of appeal under section 476.B. If there are, then we have to see to which court those appeals will ordinarily lie.", "It is evident that the only court to which the appealable decrees and sentences of a Division Bench of a High Court can lie is the Supreme Court. \n There is no other court to which an appeal can be made.", "It follows that is the ordinary course in the case of all appealable decrees and sentences and that consequently this is the court to which such appeals will ordinarily lie. As there is a right of appeal we have next to consider the matter on its merits and there the only relevant consideration is whether it is expedient in the interests of justice that an enquiry should be 1148 made and a, complaint filed", "after a careful reading of the judgment, of the High Court and the report of the District Judge we can find no reason for interfering with the High Courts discretion on that score.", "We have therefore to determine which should be stayed. As between the civil and the criminal proceedings we are of the opinion that the criminal matters should 1149 be given precedence. There is some difference of opinion in the High Courts of India on this point.", "we do not consider that the possibility of conflicting decisions in the civil and criminal courts is a relevant consideration. 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 consideration 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 concerned 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 consistent with a fair and impartial trial.", "Another reason is that it is undesirable to let things glide till memories have grown too dim to trust", "Special considerations obtaining in any particular case might make some other course more expedient and just", "But in this case we are of the view that the civil suits should be stayed till the criminal proceedings have finished."], "rank2": ["Both the Sub Inspectors said that the petitioners were not in their custody. The first Sub-Inspector, who was concerned with Govindan, said that Govindan had never been arrested by him and had not been in his custody at. any time. The other denied that Damodaran was in his custody", "He admitted that he had arrested him at one time but said that he had been released long before the petition. Each swore an affidavit in support of his return", "The relevant portion of the former reads thus - Any person against whom a complaint has been made under section 476 may appeal to the court to which such former court is subordinate within the meaning of section 195 (3) The latter section reads- For the purpose of this section, a court shall be deemed to be subordinate to the court to which appeals ordinarily lie from the appealable decrees or sentences of such former court The rest of the section does not concern us.", "We were informed at the hearing that two further sets of proceedings arising out of the same facts are now, pending against the appellants. One is two civil suits for damages for wrongful confinement. The other,is two criminal prosecutions under section 344, Indian Penal Code, for wrongful confinement, one against each Sub-Inspector. It was said that the simultaneous prosecution of these, matters will embarrass the accused. But after the hearing of the appeal we received information that the two criminal prosecutions have been closed with liberty to file fresh complaints when the papers are ready, as the High Court records were not available on the application of the accused As these prosecutions are not pending at the moment, the objection regarding them does not arise but we can see that the simultaneous prosecution of the present criminal proceedings out of which this appeal arises and the civil suits will embarrass the accused."], "rank3": ["Two persons, Govindan and Damodaran, filed petitions under section 491 of the Criminal Procedure Code for release claiming that they had been illegally detained by two Sub- Inspectors of Police who are the appellants before us. Govindan said he was being detained by one Sub-Inspector and Damodaran said he was being detained by the other", "In view of this conflict between the two sets of statements the High Court directed the District Judge to make an enquiry. Considerable evidence was recorded and documents were filed and the District Judge reported that in his opinion the statements made by the two Sub-Inspectors were correct. The High Court disagreed and, after an elaborate examination of the evidence, reached the conclusion that the petitioners were telling the truth and not the Sub- Inspectors.", "After this, the petitioners applied to the High Court under section 476 of the Criminal Procedure Code and 1146 asked that the Sub-InsPectors be prosecuted for perjury under section 193, Indian Penal Code. The applications were granted and the Deputy Registrar of the High Court was directed to make the necessary complaints. The Sub-Inspeetors thereupon asked for leave to appeal to this court.", "Leave was refused on the ground that no appeal lies, but leave was granted under article 132 as an interpretation of articles 134 (1) and 372 of the Constitution was involved. \n The Sub Inspectors have appealed here against that order as also against the order under section 476", "In addition, as an added precaution, they have filed a petition for special leave to appeal under article 136 (1)"], "rank4": ["The petitioners were however regularly arrested after their petitions and before the High Courts order one was released on bail and the other was remanded to jail custody by an order of a Magistrate. Accordingly their petitions became infructuous and were dismissed."], "label": "ACCEPTED"}, "expert_4": {"rank1": ["Appeal under article 132 of the Constitution of India from the Judgment and Order dated the 1st August, 1951, of the High Court of Judicature at Madras in Criminal Miscellaneous Petitions Nos.1261 and 1263 of 1951.", "-The question in this case is whether an appeal lies to this court under section 476B of the Criminal Procedure Code from an order of a Division Bench of a High Court directing the filing of a complaint for perjury."], "rank2": ["The first question we have to decide is whether there is a right. of appeal."], "rank3": ["Two persons, Govindan and Damodaran, filed petitions under section 491 of the Criminal Procedure Code for release claiming that they had been illegally detained by two Sub- Inspectors of Police who are the appellants before us.", "Govindan said he was being detained by one Sub-Inspector and Damodaran said he was being detained by the other.", "Both the Sub Inspectors said that the petitioners were not in their custody.", "Each swore an affidavit in support of his return.", "After this, the petitioners applied to the High Court under section 476 of the Criminal Procedure Code and 1146 asked that the Sub-InsPectors be prosecuted for perjury under section 193, Indian Penal Code.", "The applications were granted and the Deputy Registrar of the High Court was directed to make the necessary complaints.", "The Sub-Inspeetors thereupon asked for leave to appeal to this court.", "Leave was refused on the ground that no appeal lies, but leave was granted under article 132 as an interpretation of articles 134 (1) and 372 of the Constitution was involved.", "That turns on the true meaning of-section 476B of the Criminal Procedure Code read with section 195 (3).", "The relevant portion of the former reads thus - Any person against whom a complaint has been made under section 476 may appeal to the court to which such former court is subordinate within the meaning of section 195 (3) The latter section reads- For the purpose of this section, a court shall be deemed to be subordinate to the court to which appeals ordinarily lie from the appealable decrees or sentences of such former court The rest of the section does not concern us.", "Two things are evident.", "First, that a right of appeal has been expressly conferred by section 476B provided there is a higher forum to which an appeal can be made and second that the appellate forum has been designated in an artificial way.", "The appeal lies to the court to which the former court is subordinate within the meaning of section 195 (3). But sub. ordinate does not bear its ordinary meaning.", "We do not agree. Such an argument concentrates attention on the word ordinarily and ignored the words appealable decrees or sentences.", "Before we can apply the definition we have first to see whether there is a class of decrees or sentences in the court under consideration which areat all open to appeal.", "If there are not, the matter- ends and there is no right of appeal under section 476.B.", "If there are, then we have to see to which court those appeals will ordinarily lie.", "It is evident that the only court to which the appealable decrees and sentences of a Division Bench of a High Court can lie is the Supreme Court. \n There is no other court to which an appeal can be made.", "The High Court has scrutinised the. evidence minutely and has disclosed ample material on which a judicial mind could reasonably reach the conclusion that there is matter here which requires investigation in a criminal court and that it is expedient in the interests of justice to have it enquired into.", "we can find no reason for interfering with the High Courts discretion on that score.", "We do not intend to say more than this about the merits as we are anxious not to prejudge or prejudice the case of either side.", "The learned Judges of the High Court have also very -rightly observed in their order under section 476 that they were not expressing any opinion on the guilt or innocence of the appellants.", "As between the civil and the criminal proceedings we are of the opinion that the criminal matters should 1149 be given precedence.", "No hard and fast rule ban. be laid down but we do not consider that the possibility of conflicting decisions in the civil and criminal courts is a relevant consideration.", "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.", "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 concerned 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 consistent with a fair and impartial trial.", "Special considerations obtaining in any particular case might make some other course more expedient and just. For example, the civil case or the other criminal proceeding may be so hear its end as to make it inexpedient to stay it in order to give precedence to a prosecution order of under section 476. But in this case we are of the view that the civil suits should be stayed till the criminal proceedings have finished."], "rank4": ["The first Sub-Inspector, who was concerned with Govindan, said that Govindan had never been arrested by him and had not been in his custody at. any time.", "The other denied that Damodaran was in his custody.", "He admitted that he had arrested him at one time but said that he had been released long before the petition.", "The High Court disagreed and, after an elaborate examination of the evidence, reached the conclusion that the petitioners were telling the truth and not the Sub- Inspectors.", "The petitioners were however regularly arrested after their petitions and before the High Courts order one was released on bail and the other was remanded to jail custody by an order of a Magistrate. Accordingly their petitions became infructuous and were dismissed.", "It is used as a term of art and has been given a special meaning by reason of the definition in section 195 (3) a fiction has been imposed by the use of the word deemed., We have accordingly next to examine the content of the fiction. 1147 The section says that the court making the order under section 476 shall be deemed to be subordinate to the court (a) to which appeals ordinarily lie (b) from the appelable decrees or sentences of such former court.", "the former court in this case is a Division Bench of the High Court.", "The only court to which an appeal ordinarily lies from the appealable decrees and sentences of a Division Bench of a High Court is this court.", "Therefore, a Division Bench of a High court is a court subordinate to this court within the meaning of section 195 (3) accordingly an appeal lies to this court from an order of a Division Bench under section 476 It was contended that there is no ordinary right of appeal to this court and that such rights as there are those expressly conferred by the Constitution in a very limited and circumscribed set of circumstances, therefore, such appeals as lie to this court cannot be said to lie ordinarily.", "It follows that is the ordinary course in the case of all appealable decrees and sentences and that consequently this is the court to which such appeals will ordinarily lie.", "As there is a right of appeal we have next to consider the matter on its merits and there the only relevant consideration is whether it is expedient in the interests of justice that an enquiry should be 1148 made and a, complaint filed.", "That involves a careful balancing of many factors."], "rank5": ["In view of this conflict between the two sets of statements the High Court directed the District Judge to make an enquiry. Considerable evidence was recorded and documents were filed and the District Judge reported that in his opinion the statements made by the two Sub-Inspectors were correct."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["The High Court has scrutinised the. evidence minutely and has disclosed ample material on which a judicial mind could reasonably reach the conclusion that there is matter here which requires investigation in a criminal court and that it is expedient in the interests of justice to have it enquired into.", "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 consistent with a fair and impartial trial."], "rank2": ["after a careful reading of the judgment, of the High Court and the report of the District Judge we can find no reason for interfering with the High Courts discretion on that score.", "As between the civil and the criminal proceedings we are of the opinion that the criminal matters should 1149 be given precedence.", "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 concerned has forgotten all about the crime."], "rank3": ["The only court to which an appeal ordinarily lies from the appealable decrees and sentences of a Division Bench of a High Court is this court", "Therefore, a Division Bench of a High court is a court subordinate to this court within the meaning of section 195 (3) accordingly an appeal lies to this court from an order of a Division Bench under section 476", "It is evident that the only court to which the appealable decrees and sentences of a Division Bench of a High Court can lie is the Supreme Court. \n There is no other court to which an appeal can be made. It follows that is the ordinary course in the case of all appealable decrees and sentences and that consequently this is the court to which such appeals will ordinarily lie.", "they were not expressing any opinion on the guilt or innocence of the appellants.", "Another reason is that it is undesirable to let things glide till memories have grown too dim to trust."], "rank4": ["Any person against whom a complaint has been made under section 476 may appeal to the court to which such former court is subordinate within the meaning of section 195 (3)", "The latter section reads- For the purpose of this section, a court shall be deemed to be subordinate to the court to which appeals ordinarily lie from the appealable decrees or sentences of such former court", "Before we can apply the definition we have first to see whether there is a class of decrees or sentences in the court under consideration which areat all open to appeal. If there are not, the matter- ends and there is no right of appeal under section 476.B. If there are, then we have to see to which court those appeals will ordinarily lie.", "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."], "rank5": ["The High Court disagreed and, after an elaborate examination of the evidence, reached the conclusion that the petitioners were telling the truth and not the Sub- Inspectors.", "we do not consider that the possibility of conflicting decisions in the civil and criminal courts is a relevant consideration."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1954_144", "text": "CIVIL APPELLATe, JURISDICTION Civil Appeal No.100 of 1953. Appeal by special leave from the Judgment and Order, dated the 27th November, 1952, the High Court of Judicature, Punjab, Circuit Bench at Delhi, in Civil Writ No. 65-D of 1952 arising out of the Judgment and Order, dated the 11th November, 1952, of the Election Tribunal at Delhi in Election Petition No. 10 of 1952. C. Chatterjee (A. N. Sinha, with him) for the appellant. P. Sinha (R. Patnaik, with him) for the respondent. 1954. January 20., The Judgment of the Court was delivered by MAHAJAN C. J.-This is an appeal by special leave against the decision of the Delhi Election Tribunal, dated the 11th November, 1952, in Election Petition No. 10 of 1952. The appellant Jagan Nath was elected a member of the Delhi State Legislative Assembly from Constituency No. 25 (Roshanara) of the Delhi State. \nThe polling in this constituency took place on the 14th January, 1952. On the 26th April, 1952, which was the last date under the law for the presentation of an election petition, Jaswant Singh (respondent No. 1) presented such a petition before the Secretary of the Election Commission at New Delhi challenging the election of the appellant and contesting the order of the Returning Officer rejecting his nomination paper. In the petition he impleaded as respondents, Brahma Sarup, Ram Prashad Poddar and the appellant, Jagan Nath, but he omitted to implead, as required by section 82 of the Representation of the People Act, 1951, Baijnath, one of the candidates, whose nomination had been accepted but who had withdrawn his candidature subsequently. On the 14th July, 1952, the Election Commissioner appointed an Election Tribunal comprising respondents 5 to 7. \nThis appointment was published in the Gazette of India on the 26th July, 1952, and the election petition after due publication was referred to the tribunal. On the 26th August, 1952, which was the first date of hearing before the tribunal, the appellant raised a preliminary objection that the omission to implead Baijnath, a duly nominated candidate as a respondent in the petition.- was fatal to its maintainability. The petitioner contended that Baijnath was neither a necessary nor a proper party and that in any event the non-joinder of a party. was not fatal to the petition in view of the provisions of Order 1, rule 9, Civil Procedure Code. In the alternative, it was claimed that if it was considered that he was a necessary or proper party, permission may be given to the petitioner to implead him. The tribunal decided the preliminary point in favour of the petitioner and held that the non-joinder of Baijnath as a respondent was not fatal to the petition. On the finding, however, that Baijnath was a proper party to be impleaded in the case, the tribunal directed that he added as a respondent in the petition and notice of the petition be served on him. In the view of the tribunal Baijnath was not a necessary party in the sense that in his absence no effective decision could be given in the case and that being a proper party, there was no obstacle to his being joined as a respondent even after the expiry of the period of limitation prescribed for making the petition. \nThe appellant being dissatisfied with this decision, made an application to the Punjab High Court under articles 226 and 227.of the Constitution of India for the issue of a writ of certiorari quashing the order of the tribunal on the ground that it was without jurisdiction and for an order that the election petition be dismissed as there was no valid petition before the Election Tribunal for trial. This petition was summarily rejected by the High Court on the 27th November, 1952. On a petition presented to this court under article 136 of the Constitution, special leave was granted by this court. In this appeal it was contended before us that the Election Tribunal was not a court of general jurisdiction, that it was established by the Representation of the People Act, 1951, for the special purpose of trying election petitions, that its jurisdiction was derived from the statute upon certain specified terms and conditions precedent contained in the statute itself and that it had no general and inherent powers of an existing court and that being so, if the terms and conditions precedent prescribed by the statute were not complied with, it had no jurisdiction to act. According to the appellant, the scheme of the Act was that no election could be called in question except by an election petition presented in accordance with the provisions of Part VI of the Act (section 80), and it was suggested that unless all the requirements of sections 81, 82, 83 and 117 were complied with, an election could not be questioned and that no subsequent addition or amendment of the petition after the expiry of the 14 days prescribed for presenting a petition was permissible. \nIt was further contended that the provisions of section 82 were explicit and mandatory and admitted of no exceptions and the petition not being in accordance with the provisions of the law, there was no valid petition which the tribunal could proceed to try. Lastly, it was contended that the provisions of the Code of Civil Procedure were applicable to the trial of petitions but could not be of assistance in determining whether a petition had been validly presented. The general rule is well settled that the statutory requirements of election law must be strictly observed and that an election contest is not an action at law or a suit in equity but is a purely statutory proceeding unknown to the common law and that the court possesses no common law power. It is also well settled that it is a sound principle of natural justice that the success of a candidate who has won at an election should not be lightly interfered with and any petition seeking such interference must strictly conform to the requirements of the law. None of these propositions however have any application if the special law itself confers authority on a tribunal to proceed with a petition in accordance with certain procedure and when it does not state the consequences of non-compliance with certain procedural requirements laid down by it. It is always to be borne in mind that though the election of a successful candidate is not to be lightly interfered with, one of the essentials of that law is also to safeguard the purity of the election process and also to see that people do not get elected by flagrant breaches of that law or by corrupt practices. In cases where the election law does not prescribe the consequence, or does not lay down penalty for non-compliance with certain procedural requirements of that law, the jurisdiction of the tribunal entrusted with the trial of the case is not affected. \nIt is in these circumstances necessary to set out the different provisions of the Act relevant to the matter canvassed before us. Part VI of the Act deals with Disputes regarding Elections. Chapter I of this Part is the definition chapter. Chapter 11 consists of six sections. Section 80 provides that no election on shall be called in question except by an election petition presented in accordance with the provisions of this Part. Section 81 provides that an election petition calling in question any election may be presented on one or more of the grounds specified in Sub- sections (1) and (2) of sections 100 and 101 to the Election Commission by any candidate at such election or any- elector in such form and within such time but not earlier than the date of publication of the name or names of the returned candidate or candidates at such election under section 67, as may be prescribed that an election petition shall be deemed to have been presented to the Election Commission (a) when it is delivered to the Secretary to the Commission or to such other officer as may be appointed by the Election Commission in this behalf- \n by the person making the petition, or \n by a person authorized in writing in this behalf by the person making the petition or (b) when it is sent by registered post and is delivered to the Secretary to the Commission or the officer so appointed. Section 82 provides as follows A petitioner shall join as respondents to his petition all the candidates who were duly nominated at the election other than himself if he was so nominated. Section 83 states that an election petition shall contain a concise statement of the material facts on which the petitioner relies and shall be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure for the verification of pleadings. It further provides that the petition shall be accompanied by a list signed and verified in like manner setting forth full particulars of any corrupt or illegal practice which the petitioner alleges, including as full a statement as possible of the names of the parties alleged to have committed such corrupt or illegal practice and the date and place of the commission of each such practice. \n Provision is also made in the section empowering the tribunal to obtain further particulars by allowing an amendment. Section 84 concerns the relief which a petitioner may claim, and section 85 provides that if the provisions of sections 81, 83 or 117 are not complied with, the Election Commission shall dismiss the petition. Power is however given to the Commission to condone delay in making the petition for sufficient cause. Chapter III of Part VI deals with the trial of election petitions. It consists of 21 sections. Section 86 provides that if the petition is not dismissed under section 85, the Election Commission shall appoint an election tribunal for the trial of the petition. Provision, is then made for constituting the tribunal and the place where the trial should take place. Section 90 prescribes the procedure to be followed by the tribunal. Sub-section (2) of section 90 is in these terms - Subject to the provisions of this Act and of any rules made thereunder, every election petition shall be tried by the tribunal, as nearly as may be, in accordance with the procedure applicable under the Code of Civil Procedure, 1908, to the trial of suits. Sub-section (4) provides that notwithstanding anything contained in section 85, the tribunal may dismiss an election petition which does not comply with the provisions of sections 81, 83 or 117. It is significant that both the Election Commission and the tribunal have been given powers in express terms to dismiss an election petition which does not comply with the requirements of sections 81, 83 or 117, but no such powers are given to dismiss a petition in limine which does not comply with the provisions of section 82. Such a petition can only be dismissed at the conclusion of the trial and on grounds sufficient to dismiss it (section 98). Specific provisions have been made to ensure that allegations of corrupt practice etc. are not lightly or frivolously made by providing that the petition must be. properly verified and the allegations contained therein stated with a certain amount of definiteness and accuracy and it is an express provision of Part VI itself that the procedure of the tribunal is to be governed by the Code of Civil Procedure and where a petition complies with sections 81, 83 or 117, the Commission is bound to refer the petition to an election tribunal and the tribunal, unless it is of the opinion that the petition is not in accordance with sections 81, 83 or 117, is bound to try it and decide it according to the provisions of law. \n Provision has been made in section 90 (1) for any other candidate subject to the provisions of section 119, to have himself impleaded as a party in the case within a prescribed period. This provision indicates that the array of parties as provided by section 82 is not final and conclusive and that defects can be cured. Provisions of sections 110, 115 and 116 of Chapter IV of this Part also support this view. Section,110 provides the procedure for the withdrawal of a petition. It says that any person who might himself have been a party may within 14 days of the publication of the notice of withdrawal in the official gazette apply to be substituted as a petitioner in the place of the party withdrawing it. Section 115 provides that such a person can be substituted as a petitioner on the death of the original petitioner while section 116 provides that if a sole respondent dies or gives notice that he does not wish to oppose the petition or any of the respondents dies or gives such notice and there is no other respondent who is appearing in the petition, the tribunal shall cause notice of such event to be published in the official gazette and thereupon any person who might have been a petitioner may within 14 days of such publication apply to be substituted in the place of such respondent and oppose the petition and shall be entitled to continue the proceedings on such terms as the tribunal may think fit. These provisions suggest that if any proper party is omitted from the lists of respondents, such a defect is not fatal and the tribunal is entitled to deal with it under the provisions of the Code of Civil Procedure, Order I, rules 9, 10 and 13. Baijnath was a candidate who had withdrawn his candidature and had not contested the election. \n By reason of his absence or presence having regard to the grounds on which the petition was based no prejudice was likely to result to the respondent No. I because the main ground on which the petition was based was that the petitioners nomination paper had been wrongly rejected. Baijnath did not claim that he had acquired any substantive rights by reason of the failure of the petitioner to implied him within the period prescribed and there is no question of depriving him of any such rights. In our opinion, the tribunal rightly disallowed the preliminary objection. Mr. Chatterjee, the learned counsel for the appellant, drew our attention to certain decisions given by the different election tribunals constituted under the Representation of the People Act, 1951, in support of his contention. On a careful perusal of the different decisions given by the various election tribunals it appears that there is no uniformity of opinion between them on this point. Conflicting opinions have been expressed by these tribunals. It is unnecessary to discuss all these decisions in detail. It will be sufficient to say. that we are in entire agreement with those decisions which have held that non- compliance with the provisions of section 82 is not fatal to the petition. The matter has to be determined in accordance with the rules of the Code of Civil Procedure which have Is been made expressly applicable. Mr. Chatterjee laid emphasis on the decision of the Election Tribunal, Lucknow, presided over by Shri N. S., Lokur in Election Petition No. 287 of 1952 published in the Gazette of India dated 20th December, 1951, Part 11, Section 3, page 1034. \n In that case two persons who had been duly nominated as candidates but who had withdrawn their candidature were not impleaded as respondents as required by section 82 of the Representation of the People Act, 1951 It was held that the non-joinder was fatal ,to the petition. It was said that the wording of the Act is peremptory and mandatory and it makes it incumbent on the petitioner to join as respondents all candidates duly nominated and it gives him no option and the failure to do so involves rejection of the petition. Reliance was placed on certain decisions of Election Tribunals given under the election rules in force under the Government of India Act, 1935, and the decision of another Election Tribunal, Quilon, in Sri Ramchandra Nair v. Sri Ramehandra Das reproduced At page 2396e, Gazette of India Extraordinary, Part I, Section 1, dated the llth of November, 1952. It was said that unless all the requirements of rules 81, 82 and 83 are complied with the election cannot be questioned. As regards the omission of section 82 from the provisions of section 85, it was observed that the Election Commission can at once discover whether the provisions of sections 81, 83 and 117 are complied with but the same cannot be said about the requirements of section 82 and that the Election, Commission will have to hold an inquiry as to who were the candidates duly nominated before determining whether all of them had been joined or not, that this burden of inquiry was not thrown on the Commission but it was left for the determination of the tribunal, and hence it was that section 82 was not included in section 85. Both the reasons given by the tribunal cannot, in our opinion, be sustained. The provisions of section 82 are in terms similar to the provisions of Order XXXIV, rule I of the Code of Civil Procedure. Therein it is provided that all persons having an interest either in the mortgage security or in the right of redemption shall be joined as parties to any suit relating to the mortgage. There is ample authority for the view that this is merely a directory provision and non-joinder of any party is not a fatal defect and a decree can be passed so far as the parties actually on record are concerned unless the party omitted is a necessary party in the sense that in his absence no relief could be given at all even as regards parties actually on record. \n There is no valid reason for treating the word shall in section 82 in a manner different from the same word used in Order XXXIV, rule 1, Civil Procedure Code. It is one of the rules of construction that a provision like this is not mandatory unless non-compliance with it is made penal. As regards the dictum of the Lucknow Tribunal that no inquiry is required to be made in the case of non-compliance with the provisions of sections 81, 83 and 117 but that an inquiry would be necessary to determine whether certain parties were nominated candidates or not, in our opinion it cannot stand scrutiny. Whether a petition has been presented by a person who has purported to sign it or by someone else or whether an agent who has signed the petition is a duly authorized agent or not are its much matters of inquiry as the question of determination of the names of nominated candidates. This fact can be easily determined by reference to the Returning Officer. That this reasoning of the tribunal is not sound is fully demonstrated by a reference to the next case cited by the learned counsel and decided by the same tribunal presided over by Shri N. S. Lokur. \n In that case the question arose whether the petition was duly verified and whether it was accompanied by all the necessary lists required by section 83 (2). An elaborate inquiry had to be conducted to determine the point whether the petition was typed on blank paper signed by the petitioner or whether it was signed by him or some person authorized on his behalf after it had been typed. It is thus clear that it is no valid explanation to say that section 82 was omitted from the provisions of section 85 simply on the ground that the Election Commission was absolved from the duty of making elaborate inquiries at the stage when it had to say whether the provisions of sections 81, 83 and 117 had been complied with. From the circumstance that section 82 does not find a place in the provisions of section 85 the conclusion follows that the directions contained in section 82 were not considered to be of such a character as to involve the dismissal of a petition in limine and that the matter was such as could be dealt with by the tribunal under the provisions of the Code of Civil Procedure specifically made applicable to the trial of election petitions. The Bombay Tribunal, presided over by Shri B. D. Nandkarni has taken a contrary view in Election Petition No. 72 of 1952, page 286, Gazette of India Extraordinary, dated the 5th February, 1953. The issue in this case was whether Shri \n C. Patil, was a necessary party and -whether by the omission to implead him the whole petition was bad. The tribunal held that the defect was not fatal. In another case, Petition No. 113 of 1952, decided on 28th July, 1953, the majority of the Bombay Tribunal, decided otherwise. The view of the majority was that the mandatory nature of the provisions of section 82 itself contains within it the -consequence of dismissal for non-compliance with its provisions and a separate provision for the dismissal of the petition for non-compliance with its provisions was not necessary and it would have been superfluous. These observations run counter to the scheme of the Act itself as envisaged by section 85. The provisions of sections 81, 83 and 117 are also mandatory and still in section 85 it is provided in specific terms that the Election Commission shall dismiss the petition if it is not in accordance with the provisions of those sections. \n The, tribunal is given a similar power by section 90 (4). The member of the tribunal who dissented from the majority view gave cogent and sound reasons for holding that non- joinder of a duly nominated candidate who has withdrawn was not necessarily fatal to the petition. In Election Petition No. 83 of 1952 decided by the Election Tribunal presided over by Shri B. C. Vakil, the tribunal took the view that such a defect was fatal. A Division Bench of the Bombay High Court in Special Civil Appeal No. 2017 of 1952, decided on the 19th of December, 1952, allowed even a defective verification to be amended. It is not necessary to express any final opinion on matters specifically covered by sections 81, 83 and 117 and dealt with by section 85 of the Act but at the same time it is not possible to accept the view that in spite of the provisions of section 85 failure to comply strictly with the provisions of section 82 has, the same consequences as are contained in section 85. In our opinion the determination of the question whether the parties to the petition have been properly impleaded is a matter not for the Election Commission but for the tribunal. Various provisions of the Act referred to above show that the election petition does not necessarily abate or fail by reason of the death of the petitioner or any of the respondents or by their ceasing to take any interest in the trial of the petition once that petition has been referred to the tribunal.\nDECISION ??", "expert_1": {"rank1": ["It is thus clear that it is no valid explanation to say that section 82 was omitted from the provisions of section 85 simply on the ground that the Election Commission was absolved from the duty of making elaborate inquiries at the stage when it had to say whether the provisions of sections 81, 83 and 117 had been complied with. From the circumstance that section 82 does not find a place in the provisions of section 85 the conclusion follows that the directions contained in section 82 were not considered to be of such a character as to involve the dismissal of a petition in limine and that the matter was such as could be dealt with by the tribunal under the provisions of the Code of Civil Procedure specifically made applicable to the trial of election petitions.", "It is not necessary to express any final opinion on matters specifically covered by sections 81, 83 and 117 and dealt with by section 85 of the Act but at the same time it is not possible to accept the view that in spite of the provisions of section 85 failure to comply strictly with the provisions of section 82 has, the same consequences as are contained in section 85. In our opinion the determination of the question whether the parties to the petition have been properly impleaded is a matter not for the Election Commission but for the tribunal. Various provisions of the Act referred to above show that the election petition does not necessarily abate or fail by reason of the death of the petitioner or any of the respondents or by their ceasing to take any interest in the trial of the petition once that petition has been referred to the tribunal."], "rank2": ["These provisions suggest that if any proper party is omitted from the lists of respondents, such a defect is not fatal and the tribunal is entitled to deal with it under the provisions of the Code of Civil Procedure, Order I, rules 9, 10 and 13.", "In our opinion, the tribunal rightly disallowed the preliminary objection.", "It will be sufficient to say. that we are in entire agreement with those decisions which have held that non- compliance with the provisions of section 82 is not fatal to the petition. The matter has to be determined in accordance with the rules of the Code of Civil Procedure which have Is been made expressly applicable.", "As regards the omission of section 82 from the provisions of section 85, it was observed that the Election Commission can at once discover whether the provisions of sections 81, 83 and 117 are complied with but the same cannot be said about the requirements of section 82 and that the Election, Commission will have to hold an inquiry as to who were the candidates duly nominated before determining whether all of them had been joined or not, that this burden of inquiry was not thrown on the Commission but it was left for the determination of the tribunal, and hence it was that section 82 was not included in section 85. Both the reasons given by the tribunal cannot, in our opinion, be sustained. The provisions of section 82 are in terms similar to the provisions of Order XXXIV, rule I of the Code of Civil Procedure. Therein it is provided that all persons having an interest either in the mortgage security or in the right of redemption shall be joined as parties to any suit relating to the mortgage. There is ample authority for the view that this is merely a directory provision and non-joinder of any party is not a fatal defect and a decree can be passed so far as the parties actually on record are concerned unless the party omitted is a necessary party in the sense that in his absence no relief could be given at all even as regards parties actually on record. \n There is no valid reason for treating the word shall in section 82 in a manner different from the same word used in Order XXXIV, rule 1, Civil Procedure Code. It is one of the rules of construction that a provision like this is not mandatory unless non-compliance with it is made penal. As regards the dictum of the Lucknow Tribunal that no inquiry is required to be made in the case of non-compliance with the provisions of sections 81, 83 and 117 but that an inquiry would be necessary to determine whether certain parties were nominated candidates or not, in our opinion it cannot stand scrutiny.", "Whether a petition has been presented by a person who has purported to sign it or by someone else or whether an agent who has signed the petition is a duly authorized agent or not are its much matters of inquiry as the question of determination of the names of nominated candidates. This fact can be easily determined by reference to the Returning Officer. That this reasoning of the tribunal is not sound is fully demonstrated by a reference to the next case cited by the learned counsel and decided by the same tribunal presided over by Shri N. S. Lokur.", "The view of the majority was that the mandatory nature of the provisions of section 82 itself contains within it the -consequence of dismissal for non-compliance with its provisions and a separate provision for the dismissal of the petition for non-compliance with its provisions was not necessary and it would have been superfluous. These observations run counter to the scheme of the Act itself as envisaged by section 85. The provisions of sections 81, 83 and 117 are also mandatory and still in section 85 it is provided in specific terms that the Election Commission shall dismiss the petition if it is not in accordance with the provisions of those sections. \n The, tribunal is given a similar power by section 90 (4)."], "rank3": ["The general rule is well settled that the statutory requirements of election law must be strictly observed and that an election contest is not an action at law or a suit in equity but is a purely statutory proceeding unknown to the common law and that the court possesses no common law power.", "It is also well settled that it is a sound principle of natural justice that the success of a candidate who has won at an election should not be lightly interfered with and any petition seeking such interference must strictly conform to the requirements of the law. None of these propositions however have any application if the special law itself confers authority on a tribunal to proceed with a petition in accordance with certain procedure and when it does not state the consequences of non-compliance with certain procedural requirements laid down by it. It is always to be borne in mind that though the election of a successful candidate is not to be lightly interfered with, one of the essentials of that law is also to safeguard the purity of the election process and also to see that people do not get elected by flagrant breaches of that law or by corrupt practices. In cases where the election law does not prescribe the consequence, or does not lay down penalty for non-compliance with certain procedural requirements of that law, the jurisdiction of the tribunal entrusted with the trial of the case is not affected.", "It is significant that both the Election Commission and the tribunal have been given powers in express terms to dismiss an election petition which does not comply with the requirements of sections 81, 83 or 117, but no such powers are given to dismiss a petition in limine which does not comply with the provisions of section 82. Such a petition can only be dismissed at the conclusion of the trial and on grounds sufficient to dismiss it (section 98)."], "rank4": ["This is an appeal by special leave against the decision of the Delhi Election Tribunal, dated the 11th November, 1952, in Election Petition No. 10 of 1952. The appellant Jagan Nath was elected a member of the Delhi State Legislative Assembly from Constituency No. 25 (Roshanara) of the Delhi State. \nThe polling in this constituency took place on the 14th January, 1952. On the 26th April, 1952, which was the last date under the law for the presentation of an election petition, Jaswant Singh (respondent No. 1) presented such a petition before the Secretary of the Election Commission at New Delhi challenging the election of the appellant and contesting the order of the Returning Officer rejecting his nomination paper. In the petition he impleaded as respondents, Brahma Sarup, Ram Prashad Poddar and the appellant, Jagan Nath, but he omitted to implead, as required by section 82 of the Representation of the People Act, 1951, Baijnath, one of the candidates, whose nomination had been accepted but who had withdrawn his candidature subsequently. On the 14th July, 1952, the Election Commissioner appointed an Election Tribunal comprising respondents 5 to 7. \nThis appointment was published in the Gazette of India on the 26th July, 1952, and the election petition after due publication was referred to the tribunal. On the 26th August, 1952, which was the first date of hearing before the tribunal, the appellant raised a preliminary objection that the omission to implead Baijnath, a duly nominated candidate as a respondent in the petition.- was fatal to its maintainability. The petitioner contended that Baijnath was neither a necessary nor a proper party and that in any event the non-joinder of a party. was not fatal to the petition in view of the provisions of Order 1, rule 9, Civil Procedure Code. In the alternative, it was claimed that if it was considered that he was a necessary or proper party, permission may be given to the petitioner to implead him. The tribunal decided the preliminary point in favour of the petitioner and held that the non-joinder of Baijnath as a respondent was not fatal to the petition. On the finding, however, that Baijnath was a proper party to be impleaded in the case, the tribunal directed that he added as a respondent in the petition and notice of the petition be served on him. In the view of the tribunal Baijnath was not a necessary party in the sense that in his absence no effective decision could be given in the case and that being a proper party, there was no obstacle to his being joined as a respondent even after the expiry of the period of limitation prescribed for making the petition. \nThe appellant being dissatisfied with this decision, made an application to the Punjab High Court under articles 226 and 227.of the Constitution of India for the issue of a writ of certiorari quashing the order of the tribunal on the ground that it was without jurisdiction and for an order that the election petition be dismissed as there was no valid petition before the Election Tribunal for trial. This petition was summarily rejected by the High Court on the 27th November, 1952. On a petition presented to this court under article 136 of the Constitution, special leave was granted by this court. In this appeal it was contended before us that the Election Tribunal was not a court of general jurisdiction, that it was established by the Representation of the People Act, 1951, for the special purpose of trying election petitions, that its jurisdiction was derived from the statute upon certain specified terms and conditions precedent contained in the statute itself and that it had no general and inherent powers of an existing court and that being so, if the terms and conditions precedent prescribed by the statute were not complied with, it had no jurisdiction to act."], "label": "REJECTED"}, "expert_2": {"rank1": ["There is ample authority for the view that this is merely a directory provision and non-joinder of any party is not a fatal defect and a decree can be passed so far as the parties actually on record are concerned unless the party omitted is a necessary party in the sense that in his absence no relief could be given at all even as regards parties actually on record. \n There is no valid reason for treating the word shall in section 82 in a manner different from the same word used in Order XXXIV, rule 1, Civil Procedure Code.", "From the circumstance that section 82 does not find a place in the provisions of section 85 the conclusion follows that the directions contained in section 82 were not considered to be of such a character as to involve the dismissal of a petition in limine and that the matter was such as could be dealt with by the tribunal under the provisions of the Code of Civil Procedure specifically made applicable to the trial of election petitions.", "Various provisions of the Act referred to above show that the election petition does not necessarily abate or fail by reason of the death of the petitioner or any of the respondents or by their ceasing to take any interest in the trial of the petition once that petition has been referred to the tribunal."], "rank2": ["On the 26th April, 1952, which was the last date under the law for the presentation of an election petition, Jaswant Singh (respondent No. 1) presented such a petition before the Secretary of the Election Commission at New Delhi challenging the election of the appellant and contesting the order of the Returning Officer rejecting his nomination paper. In the petition he impleaded as respondents, Brahma Sarup, Ram Prashad Poddar and the appellant, Jagan Nath, but he omitted to implead, as required by section 82 of the Representation of the People Act, 1951, Baijnath, one of the candidates, whose nomination had been accepted but who had withdrawn his candidature subsequently.", "On the 26th August, 1952, which was the first date of hearing before the tribunal, the appellant raised a preliminary objection that the omission to implead Baijnath, a duly nominated candidate as a respondent in the petition.- was fatal to its maintainability.", "It is significant that both the Election Commission and the tribunal have been given powers in express terms to dismiss an election petition which does not comply with the requirements of sections 81, 83 or 117, but no such powers are given to dismiss a petition in limine which does not comply with the provisions of section 82.", "Provision has been made in section 90 (1) for any other candidate subject to the provisions of section 119, to have himself impleaded as a party in the case within a prescribed period. This provision indicates that the array of parties as provided by section 82 is not final and conclusive and that defects can be cured. Provisions of sections 110, 115 and 116 of Chapter IV of this Part also support this view. Section,110 provides the procedure for the withdrawal of a petition. It says that any person who might himself have been a party may within 14 days of the publication of the notice of withdrawal in the official gazette apply to be substituted as a petitioner in the place of the party withdrawing it. Section 115 provides that such a person can be substituted as a petitioner on the death of the original petitioner while section 116 provides that if a sole respondent dies or gives notice that he does not wish to oppose the petition or any of the respondents dies or gives such notice and there is no other respondent who is appearing in the petition, the tribunal shall cause notice of such event to be published in the official gazette and thereupon any person who might have been a petitioner may within 14 days of such publication apply to be substituted in the place of such respondent and oppose the petition and shall be entitled to continue the proceedings on such terms as the tribunal may think fit. These provisions suggest that if any proper party is omitted from the lists of respondents, such a defect is not fatal and the tribunal is entitled to deal with it under the provisions of the Code of Civil Procedure, Order I, rules 9, 10 and 13."], "rank3": ["it was contended before us that the Election Tribunal was not a court of general jurisdiction, that it was established by the Representation of the People Act, 1951, for the special purpose of trying election petitions, that its jurisdiction was derived from the statute upon certain specified terms and conditions precedent contained in the statute itself and that it had no general and inherent powers of an existing court and that being so, if the terms and conditions precedent prescribed by the statute were not complied with, it had no jurisdiction to act. According to the appellant, the scheme of the Act was that no election could be called in question except by an election petition presented in accordance with the provisions of Part VI of the Act (section 80), and it was suggested that unless all the requirements of sections 81, 82, 83 and 117 were complied with, an election could not be questioned and that no subsequent addition or amendment of the petition after the expiry of the 14 days prescribed for presenting a petition was permissible. \nIt was further contended that the provisions of section 82 were explicit and mandatory and admitted of no exceptions and the petition not being in accordance with the provisions of the law, there was no valid petition which the tribunal could proceed to try.", "decision of the Election Tribunal, Lucknow, presided over by Shri N. S., Lokur in Election Petition No. 287 of 1952 published in the Gazette of India dated 20th December, 1951, Part 11, Section 3, page 1034. \n In that case two persons who had been duly nominated as candidates but who had withdrawn their candidature were not impleaded as respondents as required by section 82 of the Representation of the People Act, 1951 It was held that the non-joinder was fatal ,to the petition. It was said that the wording of the Act is peremptory and mandatory and it makes it incumbent on the petitioner to join as respondents all candidates duly nominated and it gives him no option and the failure to do so involves rejection of the petition.", "As regards the omission of section 82 from the provisions of section 85, it was observed that the Election Commission can at once discover whether the provisions of sections 81, 83 and 117 are complied with but the same cannot be said about the requirements of section 82 and that the Election, Commission will have to hold an inquiry as to who were the candidates duly nominated before determining whether all of them had been joined or not, that this burden of inquiry was not thrown on the Commission but it was left for the determination of the tribunal, and hence it was that section 82 was not included in section 85."], "rank4": ["It is also well settled that it is a sound principle of natural justice that the success of a candidate who has won at an election should not be lightly interfered with and any petition seeking such interference must strictly conform to the requirements of the law.", "It is always to be borne in mind that though the election of a successful candidate is not to be lightly interfered with, one of the essentials of that law is also to safeguard the purity of the election process and also to see that people do not get elected by flagrant breaches of that law or by corrupt practices.", "In cases where the election law does not prescribe the consequence, or does not lay down penalty for non-compliance with certain procedural requirements of that law, the jurisdiction of the tribunal entrusted with the trial of the case is not affected."], "label": "REJECTED"}, "expert_3": {"rank1": ["The general rule is well settled that the statutory requirements of election law must be strictly observed and that an election contest is not an action at law or a suit in equity but is a purely statutory proceeding unknown to the common law and that the court possesses no common law power. It is also well settled that it is a sound principle of natural justice that the success of a candidate who has won at an election should not be lightly interfered with and any petition seeking such interference must strictly conform to the requirements of the law.", "None of these propositions however have any application if the special law itself confers authority on a tribunal to proceed with a petition in accordance with certain procedure and when it does not state the consequences of non-compliance with certain procedural requirements laid down by it. It is always to be borne in mind that though the election of a successful candidate is not to be lightly interfered with, one of the essentials of that law is also to safeguard the purity of the election process and also to see that people do not get elected by flagrant breaches of that law or by corrupt practices. In cases where the election law does not prescribe the consequence, or does not lay down penalty for non-compliance with certain procedural requirements of that law, the jurisdiction of the tribunal entrusted with the trial of the case is not affected.", "It is significant that both the Election Commission and the tribunal have been given powers in express terms to dismiss an election petition which does not comply with the requirements of sections 81, 83 or 117, but no such powers are given to dismiss a petition in limine which does not comply with the provisions of section 82. Such a petition can only be dismissed at the conclusion of the trial and on grounds sufficient to dismiss it", "Provision has been made in section 90 (1) for any other candidate subject to the provisions of section 119, to have himself impleaded as a party in the case within a prescribed period. This provision indicates that the array of parties as provided by section 82 is not final and conclusive and that defects can be cured. Provisions of sections 110, 115 and 116 of Chapter IV of this Part also support this view", "These provisions suggest that if any proper party is omitted from the lists of respondents, such a defect is not fatal and the tribunal is entitled to deal with it under the provisions of the Code of Civil Procedure, Order I, rules 9, 10 and 13.", "Baijnath was a candidate who had withdrawn his candidature and had not contested the election. \n By reason of his absence or presence having regard to the grounds on which the petition was based no prejudice was likely to result to the respondent No. I because the main ground on which the petition was based was that the petitioners nomination paper had been wrongly rejected. Baijnath did not claim that he had acquired any substantive rights by reason of the failure of the petitioner to implied him within the period prescribed and there is no question of depriving him of any such rights.", "In our opinion, the tribunal rightly disallowed the preliminary objection.", "It will be sufficient to say. that we are in entire agreement with those decisions which have held that non- compliance with the provisions of section 82 is not fatal to the petition. The matter has to be determined in accordance with the rules of the Code of Civil Procedure which have Is been made expressly applicable", "The provisions of section 82 are in terms similar to the provisions of Order XXXIV, rule I of the Code of Civil Procedure. Therein it is provided that all persons having an interest either in the mortgage security or in the right of redemption shall be joined as parties to any suit relating to the mortgage. There is ample authority for the view that this is merely a directory provision and non-joinder of any party is not a fatal defect and a decree can be passed so far as the parties actually on record are concerned unless the party omitted is a necessary party in the sense that in his absence no relief could be given at all even as regards parties actually on record. \n There is no valid reason for treating the word shall in section 82 in a manner different from the same word used in Order XXXIV, rule 1, Civil Procedure Code. It is one of the rules of construction that a provision like this is not mandatory unless non-compliance with it is made penal.", "Whether a petition has been presented by a person who has purported to sign it or by someone else or whether an agent who has signed the petition is a duly authorized agent or not are its much matters of inquiry as the question of determination of the names of nominated candidates. This fact can be easily determined by reference to the Returning Officer", "It is thus clear that it is no valid explanation to say that section 82 was omitted from the provisions of section 85 simply on the ground that the Election Commission was absolved from the duty of making elaborate inquiries at the stage when it had to say whether the provisions of sections 81, 83 and 117 had been complied with. From the circumstance that section 82 does not find a place in the provisions of section 85 the conclusion follows that the directions contained in section 82 were not considered to be of such a character as to involve the dismissal of a petition in limine and that the matter was such as could be dealt with by the tribunal under the provisions of the Code of Civil Procedure specifically made applicable to the trial of election petitions", "The provisions of sections 81, 83 and 117 are also mandatory and still in section 85 it is provided in specific terms that the Election Commission shall dismiss the petition if it is not in accordance with the provisions of those sections. \n The, tribunal is given a similar power by section 90 (4). The member of the tribunal who dissented from the majority view gave cogent and sound reasons for holding that non- joinder of a duly nominated candidate who has withdrawn was not necessarily fatal to the petition", "It is not necessary to express any final opinion on matters specifically covered by sections 81, 83 and 117 and dealt with by section 85 of the Act but at the same time it is not possible to accept the view that in spite of the provisions of section 85 failure to comply strictly with the provisions of section 82 has, the same consequences as are contained in section 85. In our opinion the determination of the question whether the parties to the petition have been properly impleaded is a matter not for the Election Commission but for the tribunal. Various provisions of the Act referred to above show that the election petition does not necessarily abate or fail by reason of the death of the petitioner or any of the respondents or by their ceasing to take any interest in the trial of the petition once that petition has been referred to the tribunal."], "rank2": ["On the 26th August, 1952, which was the first date of hearing before the tribunal, the appellant raised a preliminary objection that the omission to implead Baijnath, a duly nominated candidate as a respondent in the petition.- was fatal to its maintainability. The petitioner contended that Baijnath was neither a necessary nor a proper party and that in any event the non-joinder of a party. was not fatal to the petition in view of the provisions of Order 1, rule 9, Civil Procedure Code. In the alternative, it was claimed that if it was considered that he was a necessary or proper party, permission may be given to the petitioner to implead him. The tribunal decided the preliminary point in favour of the petitioner and held that the non-joinder of Baijnath as a respondent was not fatal to the petition.", "On the finding, however, that Baijnath was a proper party to be impleaded in the case, the tribunal directed that he added as a respondent in the petition and notice of the petition be served on him", "Section 80 provides that no election on shall be called in question except by an election petition presented in accordance with the provisions of this Part. Section 81 provides that an election petition calling in question any election may be presented on one or more of the grounds specified in Sub- sections (1) and (2) of sections 100 and 101 to the Election Commission by any candidate at such election or any- elector in such form and within such time but not earlier than the date of publication of the name or names of the returned candidate or candidates at such election under section 67, as may be prescribed that an election petition shall be deemed to have been presented to the Election Commission (a) when it is delivered to the Secretary to the Commission or to such other officer as may be appointed by the Election Commission in this behalf- \n by the person making the petition, or \n by a person authorized in writing in this behalf by the person making the petition or (b) when it is sent by registered post and is delivered to the Secretary to the Commission or the officer so appointed", "Section 82 provides as follows A petitioner shall join as respondents to his petition all the candidates who were duly nominated at the election other than himself if he was so nominated. Section 83 states that an election petition shall contain a concise statement of the material facts on which the petitioner relies and shall be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure for the verification of pleadings. It further provides that the petition shall be accompanied by a list signed and verified in like manner setting forth full particulars of any corrupt or illegal practice which the petitioner alleges, including as full a statement as possible of the names of the parties alleged to have committed such corrupt or illegal practice and the date and place of the commission of each such practice", "Provision is also made in the section empowering the tribunal to obtain further particulars by allowing an amendment. Section 84 concerns the relief which a petitioner may claim, and section 85 provides that if the provisions of sections 81, 83 or 117 are not complied with, the Election Commission shall dismiss the petition", "Section 86 provides that if the petition is not dismissed under section 85, the Election Commission shall appoint an election tribunal for the trial of the petition.", "Section 90 prescribes the procedure to be followed by the tribunal. Sub-section (2) of section 90 is in these terms - Subject to the provisions of this Act and of any rules made thereunder, every election petition shall be tried by the tribunal, as nearly as may be, in accordance with the procedure applicable under the Code of Civil Procedure, 1908, to the trial of suits. Sub-section (4) provides that notwithstanding anything contained in section 85, the tribunal may dismiss an election petition which does not comply with the provisions of sections 81, 83 or 117", "Specific provisions have been made to ensure that allegations of corrupt practice etc. are not lightly or frivolously made by providing that the petition must be. properly verified and the allegations contained therein stated with a certain amount of definiteness and accuracy and it is an express provision of Part VI itself that the procedure of the tribunal is to be governed by the Code of Civil Procedure and where a petition complies with sections 81, 83 or 117, the Commission is bound to refer the petition to an election tribunal and the tribunal, unless it is of the opinion that the petition is not in accordance with sections 81, 83 or 117, is bound to try it and decide it according to the provisions of law", "Section,110 provides the procedure for the withdrawal of a petition. It says that any person who might himself have been a party may within 14 days of the publication of the notice of withdrawal in the official gazette apply to be substituted as a petitioner in the place of the party withdrawing it", "Section 115 provides that such a person can be substituted as a petitioner on the death of the original petitioner while section 116 provides that if a sole respondent dies or gives notice that he does not wish to oppose the petition or any of the respondents dies or gives such notice and there is no other respondent who is appearing in the petition, the tribunal shall cause notice of such event to be published in the official gazette and thereupon any person who might have been a petitioner may within 14 days of such publication apply to be substituted in the place of such respondent and oppose the petition and shall be entitled to continue the proceedings on such terms as the tribunal may think fit.", "That this reasoning of the tribunal is not sound is fully demonstrated by a reference to the next case cited by the learned counsel and decided by the same tribunal presided over by Shri N. S. Lokur. \n In that case the question arose whether the petition was duly verified and whether it was accompanied by all the necessary lists required by section 83 (2). An elaborate inquiry had to be conducted to determine the point whether the petition was typed on blank paper signed by the petitioner or whether it was signed by him or some person authorized on his behalf after it had been typed.", "The Bombay Tribunal, presided over by Shri B. D. Nandkarni has taken a contrary view in Election Petition No. 72 of 1952, page 286, Gazette of India Extraordinary, dated the 5th February, 1953. The issue in this case was whether Shri \n C. Patil, was a necessary party and -whether by the omission to implead him the whole petition was bad. The tribunal held that the defect was not fatal"], "rank3": ["On the 26th April, 1952, which was the last date under the law for the presentation of an election petition, Jaswant Singh (respondent No. 1) presented such a petition before the Secretary of the Election Commission at New Delhi challenging the election of the appellant and contesting the order of the Returning Officer rejecting his nomination paper. In the petition he impleaded as respondents, Brahma Sarup, Ram Prashad Poddar and the appellant, Jagan Nath, but he omitted to implead, as required by section 82 of the Representation of the People Act, 1951, Baijnath, one of the candidates, whose nomination had been accepted but who had withdrawn his candidature subsequently.", "On the 14th July, 1952, the Election Commissioner appointed an Election Tribunal comprising respondents 5 to 7. \nThis appointment was published in the Gazette of India on the 26th July, 1952, and the election petition after due publication was referred to the tribunal.", "In the view of the tribunal Baijnath was not a necessary party in the sense that in his absence no effective decision could be given in the case and that being a proper party, there was no obstacle to his being joined as a respondent even after the expiry of the period of limitation prescribed for making the petition. \nThe appellant being dissatisfied with this decision, made an application to the Punjab High Court under articles 226 and 227.of the Constitution of India for the issue of a writ of certiorari quashing the order of the tribunal on the ground that it was without jurisdiction and for an order that the election petition be dismissed as there was no valid petition before the Election Tribunal for trial. This petition was summarily rejected by the High Court on the 27th November, 1952. On a petition presented to this court under article 136 of the Constitution, special leave was granted by this court"], "rank4": ["The appellant Jagan Nath was elected a member of the Delhi State Legislative Assembly from Constituency No. 25 (Roshanara) of the Delhi State. \nThe polling in this constituency took place on the 14th January, 1952"], "label": "REJECTED"}, "expert_4": {"rank1": ["These provisions suggest that if any proper party is omitted from the lists of respondents, such a defect is not fatal and the tribunal is entitled to deal with it under the provisions of the Code of Civil Procedure, Order I, rules 9, 10 and 13.", "In our opinion, the tribunal rightly disallowed the preliminary objection."], "rank2": ["This is an appeal by special leave against the decision of the Delhi Election Tribunal, dated the 11th November, 1952, in Election Petition No. 10 of 1952.", "This provision indicates that the array of parties as provided by section 82 is not final and conclusive and that defects can be cured.", "Baijnath was a candidate who had withdrawn his candidature and had not contested the election. \n By reason of his absence or presence having regard to the grounds on which the petition was based no prejudice was likely to result to the respondent", "because the main ground on which the petition was based was that the petitioners nomination paper had been wrongly rejected.", "It is one of the rules of construction that a provision like this is not mandatory unless non-compliance with it is made penal.", "In our opinion the determination of the question whether the parties to the petition have been properly impleaded is a matter not for the Election Commission but for the tribunal.", "Various provisions of the Act referred to above show that the election petition does not necessarily abate or fail by reason of the death of the petitioner or any of the respondents or by their ceasing to take any interest in the trial of the petition once that petition has been referred to the tribunal."], "rank3": ["In cases where the election law does not prescribe the consequence, or does not lay down penalty for non-compliance with certain procedural requirements of that law, the jurisdiction of the tribunal entrusted with the trial of the case is not affected.", "Part VI of the Act deals with Disputes regarding Elections.", "Section 80 provides that no election on shall be called in question except by an election petition presented in accordance with the provisions of this Part.", "Section 81 provides that an election petition calling in question any election may be presented on one or more of the grounds specified in Sub- sections (1) and (2) of sections 100 and 101 to the Election Commission by any candidate at such election or any- elector in such form and within such time but not earlier than the date of publication of the name or names of the returned candidate or candidates at such election under section 67, as may be prescribed that an election petition shall be deemed to have been presented to the Election Commission (a) when it is delivered to the Secretary to the Commission or to such other officer as may be appointed by the Election Commission in this behalf- \n by the person making the petition, or \n by a person authorized in writing in this behalf by the person making the petition or (b) when it is sent by registered post and is delivered to the Secretary to the Commission or the officer so appointed.", "Section 82 provides as follows A petitioner shall join as respondents to his petition all the candidates who were duly nominated at the election other than himself if he was so nominated.", "section 85 provides that if the provisions of sections 81, 83 or 117 are not complied with, the Election Commission shall dismiss the petition.", "Power is however given to the Commission to condone delay in making the petition for sufficient cause.", "Section 86 provides that if the petition is not dismissed under section 85, the Election Commission shall appoint an election tribunal for the trial of the petition.", "Sub-section (4) provides that notwithstanding anything contained in section 85, the tribunal may dismiss an election petition which does not comply with the provisions of sections 81, 83 or 117.", "It is significant that both the Election Commission and the tribunal have been given powers in express terms to dismiss an election petition which does not comply with the requirements of sections 81, 83 or 117, but no such powers are given to dismiss a petition in limine which does not comply with the provisions of section 82.", "Such a petition can only be dismissed at the conclusion of the trial and on grounds sufficient to dismiss it (section 98).", "Provision has been made in section 90 (1) for any other candidate subject to the provisions of section 119, to have himself impleaded as a party in the case within a prescribed period.", "Provisions of sections 110, 115 and 116 of Chapter IV of this Part also support this view.", "Section,110 provides the procedure for the withdrawal of a petition. It says that any person who might himself have been a party may within 14 days of the publication of the notice of withdrawal in the official gazette apply to be substituted as a petitioner in the place of the party withdrawing it.", "Baijnath did not claim that he had acquired any substantive rights by reason of the failure of the petitioner to implied him within the period prescribed and there is no question of depriving him of any such rights.", "On a careful perusal of the different decisions given by the various election tribunals it appears that there is no uniformity of opinion between them on this point.", "It will be sufficient to say. that we are in entire agreement with those decisions which have held that non- compliance with the provisions of section 82 is not fatal to the petition.", "The matter has to be determined in accordance with the rules of the Code of Civil Procedure which have Is been made expressly applicable.", "The provisions of section 82 are in terms similar to the provisions of Order XXXIV, rule I of the Code of Civil Procedure.", "Therein it is provided that all persons having an interest either in the mortgage security or in the right of redemption shall be joined as parties to any suit relating to the mortgage.", "There is ample authority for the view that this is merely a directory provision and non-joinder of any party is not a fatal defect and a decree can be passed so far as the parties actually on record are concerned unless the party omitted is a necessary party in the sense that in his absence no relief could be given at all even as regards parties actually on record.", "There is no valid reason for treating the word shall in section 82 in a manner different from the same word used in Order XXXIV, rule 1, Civil Procedure Code.", "It is thus clear that it is no valid explanation to say that section 82 was omitted from the provisions of section 85 simply on the ground that the Election Commission was absolved from the duty of making elaborate inquiries at the stage when it had to say whether the provisions of sections 81, 83 and 117 had been complied with.", "From the circumstance that section 82 does not find a place in the provisions of section 85 the conclusion follows that the directions contained in section 82 were not considered to be of such a character as to involve the dismissal of a petition in limine and that the matter was such as could be dealt with by the tribunal under the provisions of the Code of Civil Procedure specifically made applicable to the trial of election petitions.", "Election Petition No. 72 of 1952, page 286, Gazette of India Extraordinary, dated the 5th February, 1953. The issue in this case was whether Shri \n C. Patil, was a necessary party and -whether by the omission to implead him the whole petition was bad.", "The tribunal held that the defect was not fatal.", "The provisions of sections 81, 83 and 117 are also mandatory and still in section 85 it is provided in specific terms that the Election Commission shall dismiss the petition if it is not in accordance with the provisions of those sections. \n The, tribunal is given a similar power by section 90 (4).", "The member of the tribunal who dissented from the majority view gave cogent and sound reasons for holding that non- joinder of a duly nominated candidate who has withdrawn was not necessarily fatal to the petition.", "A Division Bench of the Bombay High Court in Special Civil Appeal No. 2017 of 1952, decided on the 19th of December, 1952, allowed even a defective verification to be amended.", "It is not necessary to express any final opinion on matters specifically covered by sections 81, 83 and 117 and dealt with by section 85 of the Act but at the same time it is not possible to accept the view that in spite of the provisions of section 85 failure to comply strictly with the provisions of section 82 has, the same consequences as are contained in section 85."], "rank4": ["The appellant Jagan Nath was elected a member of the Delhi State Legislative Assembly from Constituency No. 25 (Roshanara) of the Delhi State.", "On the 26th April, 1952, which was the last date under the law for the presentation of an election petition, Jaswant Singh (respondent No. 1) presented such a petition before the Secretary of the Election Commission at New Delhi challenging the election of the appellant and contesting the order of the Returning Officer rejecting his nomination paper.", "In the petition he impleaded as respondents, Brahma Sarup, Ram Prashad Poddar and the appellant, Jagan Nath, but he omitted to implead, as required by section 82 of the Representation of the People Act, 1951, Baijnath, one of the candidates, whose nomination had been accepted but who had withdrawn his candidature subsequently.", "the Election Commissioner appointed an Election Tribunal comprising respondents 5 to 7.", "On the 26th August, 1952, which was the first date of hearing before the tribunal, the appellant raised a preliminary objection that the omission to implead Baijnath, a duly nominated candidate as a respondent in the petition.- was fatal to its maintainability.", "The petitioner contended that Baijnath was neither a necessary nor a proper party and that in any event the non-joinder of a party. was not fatal to the petition in view of the provisions of Order 1, rule 9, Civil Procedure Code.", "In the alternative, it was claimed that if it was considered that he was a necessary or proper party, permission may be given to the petitioner to implead him.", "The tribunal decided the preliminary point in favour of the petitioner and held that the non-joinder of Baijnath as a respondent was not fatal to the petition.", "On the finding, however, that Baijnath was a proper party to be impleaded in the case, the tribunal directed that he added as a respondent in the petition and notice of the petition be served on him.", "The appellant being dissatisfied with this decision, made an application to the Punjab High Court under articles 226 and 227.of the Constitution of India for the issue of a writ of certiorari quashing the order of the tribunal on the ground that it was without jurisdiction and for an order that the election petition be dismissed as there was no valid petition before the Election Tribunal for trial.", "This petition was summarily rejected by the High Court on the 27th November, 1952."], "label": "REJECTED"}, "expert_5": {"rank1": ["It is significant that both the Election Commission and the tribunal have been given powers in express terms to dismiss an election petition which does not comply with the requirements of sections 81, 83 or 117, but no such powers are given to dismiss a petition in limine which does not comply with the provisions of section 82. Such a petition can only be dismissed at the conclusion of the trial and on grounds sufficient to dismiss it (section 98).", "This provision indicates that the array of parties as provided by section 82 is not final and conclusive and that defects can be cured.", "It will be sufficient to say. that we are in entire agreement with those decisions which have held that non- compliance with the provisions of section 82 is not fatal to the petition.", "From the circumstance that section 82 does not find a place in the provisions of section 85 the conclusion follows that the directions contained in section 82 were not considered to be of such a character as to involve the dismissal of a petition in limine and that the matter was such as could be dealt with by the tribunal under the provisions of the Code of Civil Procedure specifically made applicable to the trial of election petitions.", "it is not possible to accept the view that in spite of the provisions of section 85 failure to comply strictly with the provisions of section 82 has, the same consequences as are contained in section 85."], "rank2": ["section 85 provides that if the provisions of sections 81, 83 or 117 are not complied with, the Election Commission shall dismiss the petition.", "Sub-section (4) provides that notwithstanding anything contained in section 85, the tribunal may dismiss an election petition which does not comply with the provisions of sections 81, 83 or 117.", "it is an express provision of Part VI itself that the procedure of the tribunal is to be governed by the Code of Civil Procedure and where a petition complies with sections 81, 83 or 117, the Commission is bound to refer the petition to an election tribunal and the tribunal, unless it is of the opinion that the petition is not in accordance with sections 81, 83 or 117, is bound to try it and decide it according to the provisions of law.", "The matter has to be determined in accordance with the rules of the Code of Civil Procedure which have Is been made expressly applicable."], "rank3": ["though the election of a successful candidate is not to be lightly interfered with, one of the essentials of that law is also to safeguard the purity of the election process and also to see that people do not get elected by flagrant breaches of that law or by corrupt practices.", "Sub-section (2) of section 90 is in these terms - Subject to the provisions of this Act and of any rules made thereunder, every election petition shall be tried by the tribunal, as nearly as may be, in accordance with the procedure applicable under the Code of Civil Procedure, 1908, to the trial of suits.", "By reason of his absence or presence having regard to the grounds on which the petition was based no prejudice was likely to result to the respondent No.", "I because the main ground on which the petition was based was that the petitioners nomination paper had been wrongly rejected. Baijnath did not claim that he had acquired any substantive rights by reason of the failure of the petitioner to implied him within the period prescribed and there is no question of depriving him of any such rights.", "In our opinion the determination of the question whether the parties to the petition have been properly impleaded is a matter not for the Election Commission but for the tribunal."], "rank4": ["In cases where the election law does not prescribe the consequence, or does not lay down penalty for non-compliance with certain procedural requirements of that law, the jurisdiction of the tribunal entrusted with the trial of the case is not affected.", "Provisions of sections 110, 115 and 116 of Chapter IV of this Part also support this view.", "These provisions suggest that if any proper party is omitted from the lists of respondents, such a defect is not fatal and the tribunal is entitled to deal with it under the provisions of the Code of Civil Procedure, Order I, rules 9, 10 and 13.", "There is ample authority for the view that this is merely a directory provision and non-joinder of any party is not a fatal defect and a decree can be passed so far as the parties actually on record are concerned unless the party omitted is a necessary party in the sense that in his absence no relief could be given at all even as regards parties actually on record. \n There is no valid reason for treating the word shall in section 82 in a manner different from the same word used in Order XXXIV, rule 1, Civil Procedure Code. It is one of the rules of construction that a provision like this is not mandatory unless non-compliance with it is made penal."], "rank5": ["Section 82 provides as follows A petitioner shall join as respondents to his petition all the candidates who were duly nominated at the election other than himself if he was so nominated.", "Provision has been made in section 90 (1) for any other candidate subject to the provisions of section 119, to have himself impleaded as a party in the case within a prescribed period.", "On a careful perusal of the different decisions given by the various election tribunals it appears that there is no uniformity of opinion between them on this point. Conflicting opinions have been expressed by these tribunals.", "It is thus clear that it is no valid explanation to say that section 82 was omitted from the provisions of section 85 simply on the ground that the Election Commission was absolved from the duty of making elaborate inquiries at the stage when it had to say whether the provisions of sections 81, 83 and 117 had been complied with.", "The Bombay Tribunal, presided over by Shri B. D. Nandkarni has taken a contrary view in Election Petition No. 72 of 1952, page 286, Gazette of India Extraordinary, dated the 5th February, 1953. The issue in this case was whether Shri \n C. Patil, was a necessary party and -whether by the omission to implead him the whole petition was bad. The tribunal held that the defect was not fatal."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1954_158", "text": "CIVIL APPELLATE JURISDICTION Civil Appeal No. 108 of 1952. Appeal from the Judgment and Decree dated the 29th March, 1950, of the High Court of Judicature at Calcutta in Appeal from Original Decree No. 121 of 1945 arising from the Decree dated the 22nd December, 1944, of the Court of Subordinate Judge at Alipore, in Title Suit No. 70 of 1941. C. Chatterjee (C. N. Laik, D. N. Mukherjee and Sukumar Ghose, with him) for the appellants. P. Sinha (B.B. Haldar and S. C. Bannerji, with him) for respondents Nos. I to 3. 1954. May 21. The Judgment of the Court was delivered by MUKHERJEA J.-This appeal, which has come before us, on a certificate granted by the High Court of Calcutta, under article 133(1) of the Constitution, is directed against a judgment and decree of a Division Bench of that Court dated the 29th March, 1950, affirming, on appeal, those of the Subordinate Judge, Fourth Court, Alipore, passed in Title Suit. No. 70 of 1941. The appellants before us are the heirs and legal representatives of the original defendant No. 3 in the suit, which was commenced by the plaintiffs respondents to recover possession of the property in dispute, on establishment of their title, as reversionary heirs of one Haripada Patra, after the death of his mother Rashmoni, who got the property in the restricted rights of a Hindu female heir on Haripadas death. \nTo appreciate the contentions that have been raised by the parties to this appeal it would be necessary to narrate the material facts in chronological order. The property in suit which is premises No. 6 Dwarik Ghoses Lane situated in the suburb of Calcutta admittedly formed part of the estate of one Mahendra Narayan Patra, a Hindu inhabitant of Bengal, owning considerable properties, who died on the 17th April, 1903, leaving him surviving his widow Rashmoni, two infant sons by her, Mohini Mohan and Haripada and a grandson Ram Narayan by a predeceased son Shyama Charan. Shyama Charan was the son of Mahendra by his first wife, who died during his lifetime. On the 17th February, 1901, Mahendra executed a will by which he made certain religious and charitable dispositions and subject. to them, directed his properties to be divided amongst his infant sons Mohini and Haripada and his grandson Ram Narayan. Ram Narayan was appointed executor under the will. After the death of Mahendra, Ram Narayan applied for probate of the will and probate was obtained by him on the 6th of October, 1904, Ram Narayan entered upon the management of the estate. He developed extravagant and immoral habits and soon ran into debts. The bulk of the properties were mortgaged to one Kironsashi who having obtained a decree on the mortgage applied for sale of the mortgaged properties. \nThereupon Rashmoni on behalf of her infant sons instituted a suit against the mortgagee and the mortgagor and got a declaration that the mortgage decree could not bind the infants shares in the properties left by their father. This judgment was given on the 31st March, 1909. On the 13th August, 1909, the two infant sons of Mahendra to wit Mohini and Haripada, by their mother and next friend Rashmoni, instituted a suit in the Court of the Subordinate Judge at Alipore, being Title Suit No. 45 of 1909, claiming administration of the estate left by Mahendra as well as partition and accounts on the basis of the will left by him. On the 14th of August, 1909, one Baroda Kanta Sarkar, Sheristadar of the Court of the District Judge, Alipore, was appointed, with the consent of both parties, receiver of the estate forming the subject-matter of the litigation. The receiver took possession of the properties immediately after this order was made. The -management by the receiver, as it appears, was not at all proper or beneficial to the interest of the two sons of Mahendra. Mahendra himself left no debts and whatever debts were contracted,, were contracted by Ram Narayan to meet his own immoral and extravagant expenses. The receiver however went on borrowing large gums of money upon ex-parte orders received from the Court, the ostensible object of which was to pay off the debts due by Ram Narayan which were not at all binding on the plaintiffs. Fearing that the longer the suit continued and the properties remained in the hands of the receiver the more harmful it- would be to the interests of the minors, Rashmoni on behalf of the minors compromised the suit. with Ram Narayan and a Solenama was filed on the 13th June, 1910. The terms of the compromise, in substance, were, that the properties in suit were to be held in divided shares between the three parties and specific allotments were made in favour of each, the properties allotted to the share of Haripada being specified in schedules Gha and Chha attached to the compromise petition. \nIt was further provided that the receiver would be discharged on submitting his final accounts. It may be mentioned here that the property which is the subject-matter of the present suit was, under the Solenama, allotted to the share of Haripada. On the very day that the compromise was filed, Rashmoni applied for discharge of the receiver. The Court made an order directing the receiver to submit his final accounts within one month, or as early as possible, when the - necessary order for discharge would be made. It was further directed that as the suit was disposed of on compromise the receiver should discontinue collecting rents and profits due to the estate from that day. This order however was modified by a subsequent order made on 23rd June, 19 10, which directed that the receiver was to continue in possession of the estate until he was paid whatever was due to him for his ordinary commission and allowances and until the parties deposited in Court the amounts borrowed by the receiver under orders of the Court or in the alternative gave sufficient indemnity for the same. After this, Rashmoni on behalf of her minor sons filed two successive applications before the Subordinate Judge praying for permission to raise by mortgage, of a part of the estate, the moneys necessary for releasing the estate from the hands of the receiver. \nThe first application was rejected and the second was granted, after it was brought to the notice of the Subordinate Judge that the receiver was attempting to dissuade prospective lenders who were approached on behalf of Rashmoni, to lend any money to her. On the 16th of January, 191 1, Haripada, the younger son of Rashmoni, died and his interest devolved upon his mother as his heir under the Hindu law. On the 28th January, 1911, the following order was recorded by the Suborainate Judge The receiver has filed a statement showing the amount as due to him up to the end of the. current month. This claim amounts to Rs. 20,950-2-6 pies only. The parties may deposit the sum on or before the 1st February next in Court and on such deposit the receiver will be discharged and the possession of the estate of late Mahendr Narayan Patra, will be made over to the parties. On the very same day Mohini exectued a mortgage (Ex. M-1) in favour of one Suhasini Dasi by which he hypothecated the properties allotted to his share and also his future interest as reversions to the share of Haripada, to secure an advance of Rs. 30,000. The loan was to carry interest at the rate of 18 per annum. One thing may be mentioned in connection with this mortgage, and that is, that amongst the properties included in the mortgage were two properties, namely, premises No. 15/1 and 16 Chetlahat Road, which had already been sold and to which the mortgagor bad no title at the date of the mortgage. On the 1st February, 1911, Mohini deposited in Court the sum of Rs. 2,0,950-2-6 pies, being the amount alleged to. be due to the receiver and the Court by an order passed on that date directed the release of the estate from the hands of the receiver. After the estate was released a petition was filed on behalf of the plaintiffs on the 15th February, 1911, praying that the loans said to be contracted by the receiver should not be paid out of the money deposited in Court, as these borrowings were made not for the protection of the estate but only for the personal benefit of the defendant, Ram Narayan, and to pay off his creditors. \nIt was contended that the loans raised by the receiver were not raised in good faith, after proper notice to the plaintiffs but on the strength of orders which he obtained ex-parte from the Subordinate Judge without disclosing the material facts. This application. was rejected by the Court on the 23rd February,1911. After this order was made,the plaintiffs put in a petition praying that payment of the moneys, due to the creditor- with the exception of what was necessary to pay off one of the creditors, named Rakhal Das Adhya, be stayed till the following Monday as the plaintiffs wanted to move the High Court against the order of the Subordinate Judge mentioned above. The Court granted this prayer and on the 2nd of March following, orders were received from the High Court directing that the moneys were to be detained in Court pending further orders. The High Court made order on the plaintiff s petition on the 29th May, 1911. The learned Judges were very critical of the appointment of the Sheristadar of the Court as receiver of the estate and in no measured terms blamed the Subordinate Judge for passing ex-parte, orders for raising loans on the applications of the receiver without any investigation at all and the receiver also for borrowing money not for the benefit of the estate but for the personal benefit of Ram Narayan, the defendant. \nThe High Court directed a full and proper investigation of the accounts of the receiver by a Commissioner and a Vakil of the High Court was appointed for that purpose. The Commissioner after a protracted enquiry submitted his report which was accepted by the High Court. Under the final orders passed by the High Court not only were the plaintiffs held not liable to pay any money to the receiver but the receiver was directed to pay a sum of Rs. 6,708 to the plaintiffs. The plaintiffs were also to-receive Rs. 4,084 from the defendant, Ram Narayan. The defendant was to pay Rs. 19,124 to the receiver and the receiver wag made personally liable for the loans that he had incurred. This order was made on the 23rd July, 1913. In the meantime while the investigation of accounts were going on under orders of the High Court, Rashmoni, together with her son Mohini executed a security bond -(Ex. E-1) on the 1st August, 1911, and it is upon the legal effect of this document that the decision of this case practically depends. By this security bond, which was executed in favour of Suhasini Dasi, the mortgagee in the mortgage bond of Mohini, Rashmoni purported to hypothecate all the properties that she got as heir of Haripada, as additional security for the loan of Rs. 30,000 already advanced to Mohini under the mortgage. As is stated already, two properties situated at Chetla were included in the mortgage of Mohini although they were already sold. The security bond recites that the mortgagee having discovered this fact was about to Institute legal proceedings against the mortgagor and it was primarily to ward off these threatened proceedings and remove any apprehension from the minds of the mortgagee about the sufficiency of the security that this bond was executed. It is further stated in the bond that the estate of Haripada in the hands of his mother was benefited by the deposit of Rs. 20,950 in Court by Mohini Mohan out of the sum of Rs. 30,000 borrowed on the mortgage and that Mohini had spent the remaining amount of the loan towards clearing certain debts of Rashmoni herself and to meet the litigation and other expenses of both of them. Mohini died soon after on the 8th of November, 1911. On October 13, 1917, Suhasini instituted a suit for enforcing the mortgage and the security bond against Rashmoni and the heirs of Mohini. preliminary decree was passed on compromise in that suit on the 24th September, 1918, and on the 25th July, 1919, the decree was made final. \nThe decree was put into execution and on the 15th September, 1919, along with other properties, the property in dispute was put up to sale and it was purchased by Annada Prasad Ghose for Rs. 13,500. On the 14th November, 1919, Bhubaneswari, wife of Ram Narayan, as guardian of her infant sons filed a suit, being Title Suit No. 254 of 1919 against Suhasini, Rashmoni and Annada attacking the validity of the mortgage decree obtained by Suhasini as well as the sale in execution thereof. The suit ended on the 6th July, 1921, and the plaintiff gave up her claim. On September 5, 1922, Annada Ghose borrowed a sum of Rs. 10,000 from Sarat Kumar Das, the original defendant No. 3 in, the suit and the father of the present appellants and by way of equitable mortgage deposited with the lender the title deeds of the property No. 6, Dwarik Ghose Lane. On the 14th September, 1925, Annada sold the property by executing a conveyance in favour of the mortgagee Sarat Kumar Das for a consideration of Rs. 15,500. On the 8th June, 1939, Rashmoni died. About a year later on July 15, 1940, the three sons of Ram Narayan, who are the reversionary heirs of Haripada after the death of Rashmoni, commenced the present suit in the Court of the Subordinate Judge at Alipore claiming to recover possession of the property on the allegation, that the security bond executed by Rashmoni not being supported by legal necessity, the sale in execution of the mortgage as well as the subsequent conveyance in favour of Sarat Kumar Das could pass only the right, title and interest of Rashmoni and could not affect the reversionary rights of the plaintiffs. Several other persons were impleaded as parties defendants and a number of issues were raised with which we are not concerned in this appeal. What concerns us in this appeal is the dispute between the plaintiffs on the one hand and defendant No. 3 on the other and this dispute centered. round three points, namely, \n Whether the security bond (Ex. E-1) executed by Rashmoni along with Mohini was executed for legal, necessity and was therefore binding on the reversioners, of Haripada after the death of Rashmoni ? Whether the fact that Mohini, who was the presumptive reversioner at that time, joined with his mother in executing the security bond would make it binding on the -,actual reversioner after the death of Rashmomi? In any event if such consent on the part of the presumptive reversioner raised a presumption of legal necessity, was that presumption rebutted in the present case by the evidence adduced by the parties ? Whether the title of defendant No. I was protected ,he being a stranger purchaser who had purchased the -property from the purchaser at an execution sale after making proper enquiries and obtaining legal advice ? The trial Judge by his judgment dated the 22nd December, 1944, decided all these points in favour of the plaintiffs and decreed the suit. On appeal by the defendant to the High Court, the decision of the trial Judge was affirmed. The heirs of defendant No.3 have now come up to this Court and Mr. Chatterjee appearing in support of the appeal has reiterated all the three points which were urged on behalf of his clients in the Courts below. On the first point both the Courts below have held concurrently, that there was absolutely no legal necessity which justified the execution of the security bond by Rashmoni in favour of Suhasini. Mr. Chatterjee lays stress on the fact that it was a matter of imperative necessity for both the plaintiffs to get back the estate of their father from the hands of the receiver as the debts contracted by the receiver were mounting Up day after day. It is pointed out that on the 28th January, 1911, the Court had made a peremptory order to the effect that the properties could be released only if the plaintiffs deposited Rs. 20,950 annas odd on or before the 1st February next. \n In order to comply with this order Mohini had no other alternative but to borrow- money on the mortgage of his properties and this he had to do before the 1st February, 1911. It is true that because of the unfortunate death of Haripada only a few days before, Rashmoni could not join in executing the mortgage but she, as heir of Haripada, was really answerable for half of the money that was required to be deposited in Court. It is said that this was not a mere moral obligation but a legal liability on the part of the lady, as Mohini could have claimed contribution from her to the extent that Haripadas estate was benefited by the deposit. The execution of the security bond therefore was an act beneficial to the estate of Haripada. The contentions, though somewhat plausible at first sight, seem to us to be wholly without substance. In the first place the money borrowed by Mohini or deposited by him in Court did not and could not benefit Haripadas estate at all. As was found, on investigation of accounts, under orders of the High Court later on, nothing at all was due to the receiver by the estate of Haripada or Mohini. On the other hand, both the brothers were entitled to get a fairly large sum of money from the receiver. \n The trial Judge found that there was no urgent necessity to borrow money for releasing the estate and in fact it was Mohini who acted in hot haste to execute the mortgage, his only object being to get the properties in his own hands. It may be, that it was not possible to know the actual state of affairs with regard to the receivers accounts and consequently it might well have been thought prudent to borrow money to ward off what was considered to be a danger to the estate. This might furnish some excuse or explanation for Mohinis borrowing money on the 28th January, 191 1, but that could not make the act of Rashmoni in executing the security bond, seven months after that event, an act of prudent management on her part dictated either by legal necessity or considerations of benefit to the estate of her deceased son In the first place it is to be noted-that the total amount borrowed by Mohini was Rs. 30,000 out of which Rs. 20,950 only were required to be deposited in Court. The recital in the security bond that the rest of the money was spent by, Mohini to pay off certain debts of Rashmoni herself and also to meet the litigation and household expenses of both of them has been held by the Subordinate Judge to be false. It has been found on facts that Rashmoni had no occasion to incur any debts either for litigation expenses or for any other purpose. But the most important thing that would require consideration is the state of things actually existing at the time when the security bond was executed. Even if the release of the estate was considered to be desirable, that had been already accomplished by Mohini who borrowed money on his own responsibility. The utmost that could be said was that Rashmoni was bound to reimburse Mohini to the extent that the deposit of money by Mohini had benefited the estate of Haripada. \n The High Court has rightly pointed out that Rashmoni did not execute the bond to raise any money to pay off her share of the deposit and in fact no necessity for raising money for that purpose at all existed at that time. As has been mentioned already, by an order passed by the High Court on the revision petition of Mohini and his mother against the order of the Subordinate Judge dated the 23rd February, 191 1, the whole amount of money deposited in Court on the 1st, February, 191 1, with the exception of a small sum that was paid to a creditor, with the consent of both parties, was detained in Court. The High Court dispos- ed of the revision case on 29th May, 1611, and directed investigation into the accounts of the receiver by a Commissioner appointed by it. As said already, the Court passed severe strictures on the conduct of the receiver as well as of the Subordinate Judge and plainly indicated that the moneys borrowed by the receiver were borrowed not for the benefit of the plaintiffs at all. Undoubtedly the accounts were still to be investigated but what necessity there possibly could be for Rashmoni to execute, after the High Court had made the order as stated above, a security bond by which she mortgaged all the properties that were allotted to Haripada in his share as an additional security for the entire loan of Rs. 30,000 no portion of which be defied the estate of Haripada at all? In our opinion the only object of executing the security bond was to protect Mohini who was threatened with legal proceedings by his creditor for having included a nonexistent property in the mortgage bond. Rashmoni certainly acted at the instance of and for the benefit of Mohini and she might have been actuated by a feeling of Maternal affection to save her son from a real or imaginary danger. But by no stretch of imagination could it be regarded as a prudent act on the part of a Hindu female heir which was necessary for the protection of the estate of the last male holder. In our opinion the view taken by the Courts below is quite proper and as a concurrent finding of fact it should not be disturbed by this Court. The second point urged by Mr. Chatterjee raises the question as to whether the fact of Mohinis joining his mother in executing the security bond would make the transaction binding on the actual reversioner, Mohini being admittedly the presumptive reversioner of Haripada at the date of the transaction. We do not think that there could be any serious controversy about the law on this point. The alienation here, was by way of mortgage and so no question of surrender could possibly arise. \n Mohini being the immediate reversioner who joined in the execution of the security bond must be deemed to have consented to the transaction. Such consent may raise a presumption that the transaction was for legal necessity or that the mortgagee had acted therein after proper and bona flde enquiry and has satisfied himself as to the existence of such necessity(1). But this. presumption is rebuttable and it is open to the actual reversioner to establish that there was in fact no legal necessity and there has been no proper and bonafide enquiry by the mortgagee. There is no doubt that both the Courts below have proceeded on a correct view of law and both have come to the conclusion upon a consideration of the evidence in the case that the presumption that arose by reason of the then reversioners giving consent to the transaction was rebutted by the facts transpiring in evidence. Mr. Chatterjee placed considerable reliance upon another document which purports to be a deed of declaration and was executed by Ram Narayan on the 5th of October, 1918. At this time Mohini was dead and Ram Narayan was the immediate reversioner to the estate of Haripada and by this deed he declared inter alia that the debts contracted by Rashmoni were for proper and legal necessity. This deed purports to be addressed to Bangshidari Ghosh and Keshav Dutt, two other alienees of the properties of Mohini and Haripada and does not amount to a representation made to the auction purchaser Annada Prasad Ghose or to the father of the present appellants. In fact they had not come in the picture at all at that time. At the most it can be regarded only as an admission by a presumptive reversioner and cannot have any higher value than the consent expressed by Mohini who figured as a co-execuitant of the security bond. It cannot bind the actual reversioner in any way. Mr. Chatterjee attempted to put forward an argument on the authority of certain observations in the case of Bajrangi v. Monokarnika(2) that as the present appellants are the sons of Ram Narayan the admissions made by their father would bind them as well. It is true that there is a passage at the end of the judgment in Monokarnikas case(1) which lends some apparent support to the contention of the learned counsel. The concluding words in the judgment stand as follows \n Vide Debi Prosad Chowdhury v. Golap Bhagat, I.L.R. 40 Cal. 721 at 78I. Approved of by the judicial Committee in Gounden v. Gounden, 46 I.A. 72, 84. (2) 35 I.A. 1. The appellants who claim through Matadin Singh and Baijnath Singh must be held bound by the consent of their fathers. But the true import of this passage was discussed by the Privy Council in their later pronouncement in Rangasami Gounden v. Nachippa Gounden(1) and it was held that the words referred to above should I not be construed to lay down the proposition that such consent on the part of the father would operate proprio vigore and would be binding on the sons. This proposition, Their Lordships observed, was opposed both to principle and authority, it being a settled doctrine of Hindu law that nobody has a vested right so long as the widow is alive and the eventual reversioner does not claim through anyone who went before him. As the sons of Ram Narayan claim as heirs of Haripada and not of their father, the admissions, if any, made by the latter could not in any way bind them. This contention of the appellant must therefore fail. The third and the last contention raised by Mr. Chatterjee is that in any event his client is a stranger who has bona fide purchased the property for good consideration after making due enquiries and on proper legal advice and be cannot therefore be affected by any infirmity of title by reason of the absence of legal necessity. In our opinion the contention formulated in this form really involves a misconception of the legal position of an alienee of a Hindu widows property. The interest of a Hindu widow in the pro- perties inherited by her bears no analogy or resemblance to what may be described as an equitable estate in English law and which cannot be followed in the hands of a bonafide purchaser for value without notice. From very early times the Hindu widows estate has been described as qualified proprietorship with powers of alienation only when there is justifying necessity, and the restrictions on the powers of alienation are inseparable from her estate (2). For legal necessity she can convey to another an absolute title to the property vested in her. If there is no legal necessity, the transferee gets only the widows estate which is not even an (1) 46 I.A. 72 at 83-84. Vide The Collector of Masaulipatam v. Cavaly Venkata, \n M.I.A. 529, indefeasible life estate for it can come to an end not merely on her death but on the happening of other contingencies like re-marriage, adoption, etc. If an alienee from a Hindu widow succeeds in establishing that there was legal necessity for transfer, he is completely protected and it is immaterial that the necessity was brought about by the mismanagement of the limited owner herself. Even if there is no necessity in fact, but it is proved that there was representation of necessity and the alienee after making bona fide enquiries satisfied himself as best as he could that such necessity existed, then as the Privy Council pointed out in Hunooman Persaud Pandays case (1) the actual existence of a legal necessity is not a condition precedent to the validity of the sale. The position therefore is that if there is no necessity in fact or if the alienee could not prove that he made bona fide enquiries and was satisfied about its existence, the transfer is undoubtedly not void but the transferee would get only the widows estate in the property which does not affect in any way the interest of the reversioner. In this case the alienation was by way of mortgage. The finding of both the Courts below is that there was no legal necessity which justified the execution of the security bond. The mortgagee also could not prove that there was representation of the legal necessity and that she satisfied herself by bona fide enquiries that such necessity did exist. On this point the, finding recorded by the High Court is as follows \n In the present case, there is no scope for an argument that there was such representation of legal necessity or that on bona fide enquiry the alienee satisfied herself that there was such a necessity, for as I have already pointed out the security bond itself states that it was in consideration of benefits already received and with a view to induce Suhasini to forbear from proceeding against Mohini, that the bond was being executed. There is no representation in the bond that the alienation was made with a view to securing any benefit to the estate or to avert any danger to the estate or for the purpose of any other legal necessity. Whatever enquiries the appellants may have made (1) 6 M.I.A, would be of no avail to them when the alienation is not binding on the whole estate but only on the womans estate of Rashmoni. In our opinion the view taken by the High Court is quite proper. On this finding the security bond could operate only on the widows estate of Rashmoni and it was that interest alone which passed to the purchase. at the mortgage sale. The subsequent transferee could not claim to have acquired any higher right than what his predecessor had and it is immaterial whether he bona fide paid the purchase money or took proper legal advice.\n DECISION ??", "expert_1": {"rank1": ["In our opinion the view taken by the High Court is quite proper. On this finding the security bond could operate only on the widows estate of Rashmoni and it was that interest alone which passed to the purchase. at the mortgage sale. The subsequent transferee could not claim to have acquired any higher right than what his predecessor had and it is immaterial whether he bona fide paid the purchase money or took proper legal advice."], "rank2": ["The contentions, though somewhat plausible at first sight, seem to us to be wholly without substance.", "As was found, on investigation of accounts, under orders of the High Court later on, nothing at all was due to the receiver by the estate of Haripada or Mohini. On the other hand, both the brothers were entitled to get a fairly large sum of money from the receiver.", "In our opinion the only object of executing the security bond was to protect Mohini who was threatened with legal proceedings by his creditor for having included a nonexistent property in the mortgage bond. Rashmoni certainly acted at the instance of and for the benefit of Mohini and she might have been actuated by a feeling of Maternal affection to save her son from a real or imaginary danger. But by no stretch of imagination could it be regarded as a prudent act on the part of a Hindu female heir which was necessary for the protection of the estate of the last male holder. In our opinion the view taken by the Courts below is quite proper and as a concurrent finding of fact it should not be disturbed by this Court.", "We do not think that there could be any serious controversy about the law on this point. The alienation here, was by way of mortgage and so no question of surrender could possibly arise. \n Mohini being the immediate reversioner who joined in the execution of the security bond must be deemed to have consented to the transaction. Such consent may raise a presumption that the transaction was for legal necessity or that the mortgagee had acted therein after proper and bona flde enquiry and has satisfied himself as to the existence of such necessity(1). But this. presumption is rebuttable and it is open to the actual reversioner to establish that there was in fact no legal necessity and there has been no proper and bonafide enquiry by the mortgagee. There is no doubt that both the Courts below have proceeded on a correct view of law and both have come to the conclusion upon a consideration of the evidence in the case that the presumption that arose by reason of the then reversioners giving consent to the transaction was rebutted by the facts transpiring in evidence.", "This contention of the appellant must therefore fail.", "In our opinion the contention formulated in this form really involves a misconception of the legal position of an alienee of a Hindu widows property.", "The position therefore is that if there is no necessity in fact or if the alienee could not prove that he made bona fide enquiries and was satisfied about its existence, the transfer is undoubtedly not void but the transferee would get only the widows estate in the property which does not affect in any way the interest of the reversioner.", "In this case the alienation was by way of mortgage. The finding of both the Courts below is that there was no legal necessity which justified the execution of the security bond. The mortgagee also could not prove that there was representation of the legal necessity and that she satisfied herself by bona fide enquiries that such necessity did exist.", "In the present case, there is no scope for an argument that there was such representation of legal necessity or that on bona fide enquiry the alienee satisfied herself that there was such a necessity, for as I have already pointed out the security bond itself states that it was in consideration of benefits already received and with a view to induce Suhasini to forbear from proceeding against Mohini, that the bond was being executed. There is no representation in the bond that the alienation was made with a view to securing any benefit to the estate or to avert any danger to the estate or for the purpose of any other legal necessity. Whatever enquiries the appellants may have made (1) 6 M.I.A, would be of no avail to them when the alienation is not binding on the whole estate but only on the womans estate of Rashmoni."], "rank3": ["This deed purports to be addressed to Bangshidari Ghosh and Keshav Dutt, two other alienees of the properties of Mohini and Haripada and does not amount to a representation made to the auction purchaser Annada Prasad Ghose or to the father of the present appellants. In fact they had not come in the picture at all at that time. At the most it can be regarded only as an admission by a presumptive reversioner and cannot have any higher value than the consent expressed by Mohini who figured as a co-execuitant of the security bond. It cannot bind the actual reversioner in any way.", "It is true that there is a passage at the end of the judgment in Monokarnikas case(1) which lends some apparent support to the contention of the learned counsel.", "it was held that the words referred to above should I not be construed to lay down the proposition that such consent on the part of the father would operate proprio vigore and would be binding on the sons. This proposition, Their Lordships observed, was opposed both to principle and authority, it being a settled doctrine of Hindu law that nobody has a vested right so long as the widow is alive and the eventual reversioner does not claim through anyone who went before him. As the sons of Ram Narayan claim as heirs of Haripada and not of their father, the admissions, if any, made by the latter could not in any way bind them.", "The third and the last contention raised by Mr. Chatterjee is that in any event his client is a stranger who has bona fide purchased the property for good consideration after making due enquiries and on proper legal advice and be cannot therefore be affected by any infirmity of title by reason of the absence of legal necessity", "The interest of a Hindu widow in the pro- perties inherited by her bears no analogy or resemblance to what may be described as an equitable estate in English law and which cannot be followed in the hands of a bonafide purchaser for value without notice. From very early times the Hindu widows estate has been described as qualified proprietorship with powers of alienation only when there is justifying necessity, and the restrictions on the powers of alienation are inseparable from her estate (2). For legal necessity she can convey to another an absolute title to the property vested in her. If there is no legal necessity, the transferee gets only the widows estate which is not even an (1) 46 I.A. 72 at 83-84. Vide The Collector of Masaulipatam v. Cavaly Venkata, \n M.I.A. 529, indefeasible life estate for it can come to an end not merely on her death but on the happening of other contingencies like re-marriage, adoption, etc. If an alienee from a Hindu widow succeeds in establishing that there was legal necessity for transfer, he is completely protected and it is immaterial that the necessity was brought about by the mismanagement of the limited owner herself. Even if there is no necessity in fact, but it is proved that there was representation of necessity and the alienee after making bona fide enquiries satisfied himself as best as he could that such necessity existed, then as the Privy Council pointed out in Hunooman Persaud Pandays case (1) the actual existence of a legal necessity is not a condition precedent to the validity of the sale."], "rank4": ["This appeal, which has come before us, on a certificate granted by the High Court of Calcutta, under article 133(1) of the Constitution, is directed against a judgment and decree of a Division Bench of that Court dated the 29th March, 1950, affirming, on appeal, those of the Subordinate Judge, Fourth Court, Alipore, passed in Title Suit", "The appellants before us are the heirs and legal representatives of the original defendant No. 3 in the suit, which was commenced by the plaintiffs respondents to recover possession of the property in dispute, on establishment of their title, as reversionary heirs of one Haripada Patra, after the death of his mother Rashmoni, who got the property in the restricted rights of a Hindu female heir on Haripadas death.", "What concerns us in this appeal is the dispute between the plaintiffs on the one hand and defendant No. 3 on the other and this dispute centered. round three points, namely, \n Whether the security bond (Ex. E-1) executed by Rashmoni along with Mohini was executed for legal, necessity and was therefore binding on the reversioners, of Haripada after the death of Rashmoni ? Whether the fact that Mohini, who was the presumptive reversioner at that time, joined with his mother in executing the security bond would make it binding on the -,actual reversioner after the death of Rashmomi? In any event if such consent on the part of the presumptive reversioner raised a presumption of legal necessity, was that presumption rebutted in the present case by the evidence adduced by the parties ? Whether the title of defendant No. I was protected ,he being a stranger purchaser who had purchased the -property from the purchaser at an execution sale after making proper enquiries and obtaining legal advice ? The trial Judge by his judgment dated the 22nd December, 1944, decided all these points in favour of the plaintiffs and decreed the suit. On appeal by the defendant to the High Court, the decision of the trial Judge was affirmed. The heirs of defendant No.3 have now come up to this Court", "On the first point both the Courts below have held concurrently, that there was absolutely no legal necessity which justified the execution of the security bond by Rashmoni in favour of Suhasini", "It may be, that it was not possible to know the actual state of affairs with regard to the receivers accounts and consequently it might well have been thought prudent to borrow money to ward off what was considered to be a danger to the estate.", "The High Court has rightly pointed out that Rashmoni did not execute the bond to raise any money to pay off her share of the deposit and in fact no necessity for raising money for that purpose at all existed at that time."], "label": "REJECTED"}, "expert_2": {"rank1": ["In our opinion the only object of executing the security bond was to protect Mohini who was threatened with legal proceedings by his creditor for having included a nonexistent property in the mortgage bond. Rashmoni certainly acted at the instance of and for the benefit of Mohini and she might have been actuated by a feeling of Maternal affection to save her son from a real or imaginary danger. But by no stretch of imagination could it be regarded as a prudent act on the part of a Hindu female heir which was necessary for the protection of the estate of the last male holder. In our opinion the view taken by the Courts below is quite proper and as a concurrent finding of fact it should not be disturbed by this Court.", "Mohini being the immediate reversioner who joined in the execution of the security bond must be deemed to have consented to the transaction. Such consent may raise a presumption that the transaction was for legal necessity or that the mortgagee had acted therein after proper and bona flde enquiry and has satisfied himself as to the existence of such necessity(1). But this. presumption is rebuttable and it is open to the actual reversioner to establish that there was in fact no legal necessity and there has been no proper and bonafide enquiry by the mortgagee. There is no doubt that both the Courts below have proceeded on a correct view of law and both have come to the conclusion upon a consideration of the evidence in the case that the presumption that arose by reason of the then reversioners giving consent to the transaction was rebutted by the facts transpiring in evidence.", "In the present case, there is no scope for an argument that there was such representation of legal necessity or that on bona fide enquiry the alienee satisfied herself that there was such a necessity, for as I have already pointed out the security bond itself states that it was in consideration of benefits already received and with a view to induce Suhasini to forbear from proceeding against Mohini, that the bond was being executed. There is no representation in the bond that the alienation was made with a view to securing any benefit to the estate or to avert any danger to the estate or for the purpose of any other legal necessity. Whatever enquiries the appellants may have made (1) 6 M.I.A, would be of no avail to them when the alienation is not binding on the whole estate but only on the womans estate of Rashmoni.", "the security bond could operate only on the widows estate of Rashmoni and it was that interest alone which passed to the purchase. at the mortgage sale.", "The subsequent transferee could not claim to have acquired any higher right than what his predecessor had and it is immaterial whether he bona fide paid the purchase money or took proper legal advice."], "rank2": ["The appellants before us are the heirs and legal representatives of the original defendant No. 3 in the suit, which was commenced by the plaintiffs respondents to recover possession of the property in dispute, on establishment of their title, as reversionary heirs of one Haripada Patra, after the death of his mother Rashmoni, who got the property in the restricted rights of a Hindu female heir on Haripadas death.", "Rashmoni, together with her son Mohini executed a security bond -(Ex. E-1) on the 1st August, 1911, and it is upon the legal effect of this document that the decision of this case practically depends. By this security bond, which was executed in favour of Suhasini Dasi, the mortgagee in the mortgage bond of Mohini, Rashmoni purported to hypothecate all the properties that she got as heir of Haripada, as additional security for the loan of Rs. 30,000 already advanced to Mohini under the mortgage.", "that the security bond executed by Rashmoni not being supported by legal necessity, the sale in execution of the mortgage as well as the subsequent conveyance in favour of Sarat Kumar Das could pass only the right, title and interest of Rashmoni and could not affect the reversionary rights of the plaintiffs.", "What concerns us in this appeal is the dispute between the plaintiffs on the one hand and defendant No. 3 on the other and this dispute centered. round three points, namely, \n Whether the security bond (Ex. E-1) executed by Rashmoni along with Mohini was executed for legal, necessity and was therefore binding on the reversioners, of Haripada after the death of Rashmoni ? Whether the fact that Mohini, who was the presumptive reversioner at that time, joined with his mother in executing the security bond would make it binding on the -,actual reversioner after the death of Rashmomi? In any event if such consent on the part of the presumptive reversioner raised a presumption of legal necessity, was that presumption rebutted in the present case by the evidence adduced by the parties ? Whether the title of defendant No. I was protected ,he being a stranger purchaser who had purchased the -property from the purchaser at an execution sale after making proper enquiries and obtaining legal advice ?", "As was found, on investigation of accounts, under orders of the High Court later on, nothing at all was due to the receiver by the estate of Haripada or Mohini. On the other hand, both the brothers were entitled to get a fairly large sum of money from the receiver. \n The trial Judge found that there was no urgent necessity to borrow money for releasing the estate and in fact it was Mohini who acted in hot haste to execute the mortgage, his only object being to get the properties in his own hands. It may be, that it was not possible to know the actual state of affairs with regard to the receivers accounts and consequently it might well have been thought prudent to borrow money to ward off what was considered to be a danger to the estate.", "But the most important thing that would require consideration is the state of things actually existing at the time when the security bond was executed. Even if the release of the estate was considered to be desirable, that had been already accomplished by Mohini who borrowed money on his own responsibility. The utmost that could be said was that Rashmoni was bound to reimburse Mohini to the extent that the deposit of money by Mohini had benefited the estate of Haripada. \n The High Court has rightly pointed out that Rashmoni did not execute the bond to raise any money to pay off her share of the deposit and in fact no necessity for raising money for that purpose at all existed at that time.", "it being a settled doctrine of Hindu law that nobody has a vested right so long as the widow is alive and the eventual reversioner does not claim through anyone who went before him.", "The interest of a Hindu widow in the pro- perties inherited by her bears no analogy or resemblance to what may be described as an equitable estate in English law and which cannot be followed in the hands of a bonafide purchaser for value without notice. From very early times the Hindu widows estate has been described as qualified proprietorship with powers of alienation only when there is justifying necessity, and the restrictions on the powers of alienation are inseparable from her estate (2). For legal necessity she can convey to another an absolute title to the property vested in her.", "If an alienee from a Hindu widow succeeds in establishing that there was legal necessity for transfer, he is completely protected and it is immaterial that the necessity was brought about by the mismanagement of the limited owner herself. Even if there is no necessity in fact, but it is proved that there was representation of necessity and the alienee after making bona fide enquiries satisfied himself as best as he could that such necessity existed, then as the Privy Council pointed out in Hunooman Persaud Pandays case (1) the actual existence of a legal necessity is not a condition precedent to the validity of the sale. The position therefore is that if there is no necessity in fact or if the alienee could not prove that he made bona fide enquiries and was satisfied about its existence, the transfer is undoubtedly not void but the transferee would get only the widows estate in the property which does not affect in any way the interest of the reversioner. In this case the alienation was by way of mortgage. The finding of both the Courts below is that there was no legal necessity which justified the execution of the security bond."], "rank3": ["The High Court directed a full and proper investigation of the accounts of the receiver by a Commissioner and a Vakil of the High Court was appointed for that purpose. The Commissioner after a protracted enquiry submitted his report which was accepted by the High Court. Under the final orders passed by the High Court not only were the plaintiffs held not liable to pay any money to the receiver but the receiver was directed to pay a sum of Rs. 6,708 to the plaintiffs"], "rank4": ["Mahendra executed a will by which he made certain religious and charitable dispositions and subject. to them, directed his properties to be divided amongst his infant sons Mohini and Haripada and his grandson Ram Narayan. Ram Narayan was appointed executor under the will. After the death of Mahendra, Ram Narayan applied for probate of the will and probate was obtained by him on the 6th of October, 1904, Ram Narayan entered upon the management of the estate. He developed extravagant and immoral habits and soon ran into debts.", "Rashmoni on behalf of her infant sons instituted a suit against the mortgagee and the mortgagor and got a declaration that the mortgage decree could not bind the infants shares in the properties left by their father.", "On the 14th of August, 1909, one Baroda Kanta Sarkar, Sheristadar of the Court of the District Judge, Alipore, was appointed, with the consent of both parties, receiver of the estate forming the subject-matter of the litigation. The receiver took possession of the properties immediately after this order was made. The -management by the receiver, as it appears, was not at all proper or beneficial to the interest of the two sons of Mahendra.", "The receiver however went on borrowing large gums of money upon ex-parte orders received from the Court, the ostensible object of which was to pay off the debts due by Ram Narayan which were not at all binding on the plaintiffs. Fearing that the longer the suit continued and the properties remained in the hands of the receiver the more harmful it- would be to the interests of the minors, Rashmoni on behalf of the minors compromised the suit. with Ram Narayan and a Solenama was filed on the 13th June, 1910. The terms of the compromise, in substance, were, that the properties in suit were to be held in divided shares between the three parties and specific allotments were made in favour of each, the properties allotted to the share of Haripada being specified in schedules Gha and Chha attached to the compromise petition. \nIt was further provided that the receiver would be discharged on submitting his final accounts.", "Suhasini instituted a suit for enforcing the mortgage and the security bond against Rashmoni and the heirs of Mohini. preliminary decree was passed on compromise in that suit on the 24th September, 1918, and on the 25th July, 1919, the decree was made final. \nThe decree was put into execution and on the 15th September, 1919, along with other properties, the property in dispute was put up to sale and it was purchased by Annada Prasad Ghose for Rs. 13,500."], "rank5": ["The security bond recites that the mortgagee having discovered this fact was about to Institute legal proceedings against the mortgagor and it was primarily to ward off these threatened proceedings and remove any apprehension from the minds of the mortgagee about the sufficiency of the security that this bond was executed."], "label": "REJECTED"}, "expert_3": {"rank1": ["In the meantime while the investigation of accounts were going on under orders of the High Court, Rashmoni, together with her son Mohini executed a security bond -(Ex. E-1) on the 1st August, 1911, and it is upon the legal effect of this document that the decision of this case practically depends", "What concerns us in this appeal is the dispute between the plaintiffs on the one hand and defendant No. 3 on the other and this dispute centered. round three points, namely, \n Whether the security bond (Ex. E-1) executed by Rashmoni along with Mohini was executed for legal, necessity and was therefore binding on the reversioners, of Haripada after the death of Rashmoni ? Whether the fact that Mohini, who was the presumptive reversioner at that time, joined with his mother in executing the security bond would make it binding on the -,actual reversioner after the death of Rashmomi?", "In any event if such consent on the part of the presumptive reversioner raised a presumption of legal necessity, was that presumption rebutted in the present case by the evidence adduced by the parties ? Whether the title of defendant No. I was protected ,he being a stranger purchaser who had purchased the -property from the purchaser at an execution sale after making proper enquiries and obtaining legal advice", "It is true that because of the unfortunate death of Haripada only a few days before, Rashmoni could not join in executing the mortgage but she, as heir of Haripada, was really answerable for half of the money that was required to be deposited in Court. It is said that this was not a mere moral obligation but a legal liability on the part of the lady, as Mohini could have claimed contribution from her to the extent that Haripadas estate was benefited by the deposit. The execution of the security bond therefore was an act beneficial to the estate of Haripada. The contentions, though somewhat plausible at first sight, seem to us to be wholly without substance", "In the first place the money borrowed by Mohini or deposited by him in Court did not and could not benefit Haripadas estate at all", "As was found, on investigation of accounts, under orders of the High Court later on, nothing at all was due to the receiver by the estate of Haripada or Mohini. On the other hand, both the brothers were entitled to get a fairly large sum of money from the receiver. \n The trial Judge found that there was no urgent necessity to borrow money for releasing the estate and in fact it was Mohini who acted in hot haste to execute the mortgage, his only object being to get the properties in his own hands. It may be, that it was not possible to know the actual state of affairs with regard to the receivers accounts and consequently it might well have been thought prudent to borrow money to ward off what was considered to be a danger to the estate", "This might furnish some excuse or explanation for Mohinis borrowing money on the 28th January, 191 1, but that could not make the act of Rashmoni in executing the security bond, seven months after that event, an act of prudent management on her part dictated either by legal necessity or considerations of benefit to the estate of her deceased son In the first place it is to be noted-that the total amount borrowed by Mohini was Rs. 30,000 out of which Rs. 20,950 only were required to be deposited in Court", "The recital in the security bond that the rest of the money was spent by, Mohini to pay off certain debts of Rashmoni herself and also to meet the litigation and household expenses of both of them has been held by the Subordinate Judge to be false. It has been found on facts that Rashmoni had no occasion to incur any debts either for litigation expenses or for any other purpose. But the most important thing that would require consideration is the state of things actually existing at the time when the security bond was executed. Even if the release of the estate was considered to be desirable, that had been already accomplished by Mohini who borrowed money on his own responsibility.", "The utmost that could be said was that Rashmoni was bound to reimburse Mohini to the extent that the deposit of money by Mohini had benefited the estate of Haripada", "The High Court has rightly pointed out that Rashmoni did not execute the bond to raise any money to pay off her share of the deposit and in fact no necessity for raising money for that purpose at all existed at that time.", "As has been mentioned already, by an order passed by the High Court on the revision petition of Mohini and his mother against the order of the Subordinate Judge dated the 23rd February, 191 1, the whole amount of money deposited in Court on the 1st, February, 191 1, with the exception of a small sum that was paid to a creditor, with the consent of both parties, was detained in Court. The High Court dispos- ed of the revision case on 29th May, 1611, and directed investigation into the accounts of the receiver by a Commissioner appointed by it. As said already, the Court passed severe strictures on the conduct of the receiver as well as of the Subordinate Judge and plainly indicated that the moneys borrowed by the receiver were borrowed not for the benefit of the plaintiffs at all", "Undoubtedly the accounts were still to be investigated but what necessity there possibly could be for Rashmoni to execute, after the High Court had made the order as stated above, a security bond by which she mortgaged all the properties that were allotted to Haripada in his share as an additional security for the entire loan of Rs. 30,000 no portion of which be defied the estate of Haripada at all? In our opinion the only object of executing the security bond was to protect Mohini who was threatened with legal proceedings by his creditor for having included a nonexistent property in the mortgage bond", "Rashmoni certainly acted at the instance of and for the benefit of Mohini and she might have been actuated by a feeling of Maternal affection to save her son from a real or imaginary danger. But by no stretch of imagination could it be regarded as a prudent act on the part of a Hindu female heir which was necessary for the protection of the estate of the last male holder. In our opinion the view taken by the Courts below is quite proper and as a concurrent finding of fact it should not be disturbed by this Court.", "The alienation here, was by way of mortgage and so no question of surrender could possibly arise. \n Mohini being the immediate reversioner who joined in the execution of the security bond must be deemed to have consented to the transaction. Such consent may raise a presumption that the transaction was for legal necessity or that the mortgagee had acted therein after proper and bona flde enquiry and has satisfied himself as to the existence of such necessity(1). But this. presumption is rebuttable and it is open to the actual reversioner to establish that there was in fact no legal necessity and there has been no proper and bonafide enquiry by the mortgagee", "There is no doubt that both the Courts below have proceeded on a correct view of law and both have come to the conclusion upon a consideration of the evidence in the case that the presumption that arose by reason of the then reversioners giving consent to the transaction was rebutted by the facts transpiring in evidence", "This deed purports to be addressed to Bangshidari Ghosh and Keshav Dutt, two other alienees of the properties of Mohini and Haripada and does not amount to a representation made to the auction purchaser Annada Prasad Ghose or to the father of the present appellants. In fact they had not come in the picture at all at that time. At the most it can be regarded only as an admission by a presumptive reversioner and cannot have any higher value than the consent expressed by Mohini who figured as a co-execuitant of the security bond", "It cannot bind the actual reversioner in any way", "As the sons of Ram Narayan claim as heirs of Haripada and not of their father, the admissions, if any, made by the latter could not in any way bind them.", "In our opinion the contention formulated in this form really involves a misconception of the legal position of an alienee of a Hindu widows property. The interest of a Hindu widow in the pro- perties inherited by her bears no analogy or resemblance to what may be described as an equitable estate in English law and which cannot be followed in the hands of a bonafide purchaser for value without notice. From very early times the Hindu widows estate has been described as qualified proprietorship with powers of alienation only when there is justifying necessity, and the restrictions on the powers of alienation are inseparable from her estate (2). For legal necessity she can convey to another an absolute title to the property vested in her. If there is no legal necessity, the transferee gets only the widows estate which is not even an", "indefeasible life estate for it can come to an end not merely on her death but on the happening of other contingencies like re-marriage, adoption, etc. If an alienee from a Hindu widow succeeds in establishing that there was legal necessity for transfer, he is completely protected and it is immaterial that the necessity was brought about by the mismanagement of the limited owner herself. Even if there is no necessity in fact, but it is proved that there was representation of necessity and the alienee after making bona fide enquiries satisfied himself as best as he could that such necessity existed, then as the Privy Council pointed out in Hunooman Persaud Pandays case (1) the actual existence of a legal necessity is not a condition precedent to the validity of the sale. The position therefore is that if there is no necessity in fact or if the alienee could not prove that he made bona fide enquiries and was satisfied about its existence, the transfer is undoubtedly not void but the transferee would get only the widows estate in the property which does not affect in any way the interest of the reversioner", "In this case the alienation was by way of mortgage.", "The finding of both the Courts below is that there was no legal necessity which justified the execution of the security bond. The mortgagee also could not prove that there was representation of the legal necessity and that she satisfied herself by bona fide enquiries that such necessity did exist. On this point the, finding recorded by the High Court is as follows \n In the present case, there is no scope for an argument that there was such representation of legal necessity or that on bona fide enquiry the alienee satisfied herself that there was such a necessity, for as I have already pointed out the security bond itself states that it was in consideration of benefits already received and with a view to induce Suhasini to forbear from proceeding against Mohini, that the bond was being executed. There is no representation in the bond that the alienation was made with a view to securing any benefit to the estate or to avert any danger to the estate or for the purpose of any other legal necessity", "Whatever enquiries the appellants may have made (1) 6 M.I.A, would be of no avail to them when the alienation is not binding on the whole estate but only on the womans estate of Rashmoni", "On this finding the security bond could operate only on the widows estate of Rashmoni and it was that interest alone which passed to the purchase. at the mortgage sale. The subsequent transferee could not claim to have acquired any higher right than what his predecessor had and it is immaterial whether he bona fide paid the purchase money or took proper legal advice."], "rank2": ["On the 1st February, 1911, Mohini deposited in Court the sum of Rs. 2,0,950-2-6 pies, being the amount alleged to. be due to the receiver and the Court by an order passed on that date directed the release of the estate from the hands of the receiver. After the estate was released a petition was filed on behalf of the plaintiffs on the 15th February, 1911, praying that the loans said to be contracted by the receiver should not be paid out of the money deposited in Court, as these borrowings were made not for the protection of the estate but only for the personal benefit of the defendant, Ram Narayan, and to pay off his creditors.", "It was contended that the loans raised by the receiver were not raised in good faith, after proper notice to the plaintiffs but on the strength of orders which he obtained ex-parte from the Subordinate Judge without disclosing the material facts. This application. was rejected by the Court on the 23rd February,1911. After this order was made,the plaintiffs put in a petition praying that payment of the moneys, due to the creditor- with the exception of what was necessary to pay off one of the creditors, named Rakhal Das Adhya, be stayed till the following Monday as the plaintiffs wanted to move the High Court against the order of the Subordinate Judge mentioned above.", "The Court granted this prayer and on the 2nd of March following, orders were received from the High Court directing that the moneys were to be detained in Court pending further orders", "The High Court made order on the plaintiff s petition on the 29th May, 1911. The learned Judges were very critical of the appointment of the Sheristadar of the Court as receiver of the estate and in no measured terms blamed the Subordinate Judge for passing ex-parte, orders for raising loans on the applications of the receiver without any investigation at all and the receiver also for borrowing money not for the benefit of the estate but for the personal benefit of Ram Narayan, the defendant. \nThe High Court directed a full and proper investigation of the accounts of the receiver by a Commissioner and a Vakil of the High Court was appointed for that purpose. The Commissioner after a protracted enquiry submitted his report which was accepted by the High Court", "Under the final orders passed by the High Court not only were the plaintiffs held not liable to pay any money to the receiver but the receiver was directed to pay a sum of Rs. 6,708 to the plaintiffs.", "The plaintiffs were also to-receive Rs. 4,084 from the defendant, Ram Narayan. The defendant was to pay Rs. 19,124 to the receiver and the receiver wag made personally liable for the loans that he had incurred. This order was made on the 23rd July, 1913", "By this security bond, which was executed in favour of Suhasini Dasi, the mortgagee in the mortgage bond of Mohini, Rashmoni purported to hypothecate all the properties that she got as heir of Haripada, as additional security for the loan of Rs. 30,000 already advanced to Mohini under the mortgage. As is stated already, two properties situated at Chetla were included in the mortgage of Mohini although they were already sold. The security bond recites that the mortgagee having discovered this fact was about to Institute legal proceedings against the mortgagor and it was primarily to ward off these threatened proceedings and remove any apprehension from the minds of the mortgagee about the sufficiency of the security that this bond was executed.", "It is further stated in the bond that the estate of Haripada in the hands of his mother was benefited by the deposit of Rs. 20,950 in Court by Mohini Mohan out of the sum of Rs. 30,000 borrowed on the mortgage and that Mohini had spent the remaining amount of the loan towards clearing certain debts of Rashmoni herself and to meet the litigation and other expenses of both of them", "On September 5, 1922, Annada Ghose borrowed a sum of Rs. 10,000 from Sarat Kumar Das, the original defendant No. 3 in, the suit and the father of the present appellants and by way of equitable mortgage deposited with the lender the title deeds of the property No. 6, Dwarik Ghose Lane. On the 14th September, 1925, Annada sold the property by executing a conveyance in favour of the mortgagee Sarat Kumar Das for a consideration of Rs. 15,500. On the 8th June, 1939, Rashmoni died", "About a year later on July 15, 1940, the three sons of Ram Narayan, who are the reversionary heirs of Haripada after the death of Rashmoni, commenced the present suit in the Court of the Subordinate Judge at Alipore claiming to recover possession of the property on the allegation, that the security bond executed by Rashmoni not being supported by legal necessity, the sale in execution of the mortgage as well as the subsequent conveyance in favour of Sarat Kumar Das could pass only the right, title and interest of Rashmoni and could not affect the reversionary rights of the plaintiffs", "The trial Judge by his judgment dated the 22nd December, 1944, decided all these points in favour of the plaintiffs and decreed the suit. On appeal by the defendant to the High Court, the decision of the trial Judge was affirmed.", "The heirs of defendant No.3 have now come up", "On the first point both the Courts below have held concurrently, that there was absolutely no legal necessity which justified the execution of the security bond by Rashmoni in favour of Suhasini.", "Chatterjee placed considerable reliance upon another document which purports to be a deed of declaration and was executed by Ram Narayan on the 5th of October, 1918. At this time Mohini was dead and Ram Narayan was the immediate reversioner to the estate of Haripada and by this deed he declared inter alia that the debts contracted by Rashmoni were for proper and legal necessity", "It is true that there is a passage at the end of the judgment in Monokarnikas case(1) which lends some apparent support to the contention of the learned counsel", "it was held that the words referred to above should I not be construed to lay down the proposition that such consent on the part of the father would operate proprio vigore and would be binding on the sons. This proposition, Their Lordships observed, was opposed both to principle and authority, it being a settled doctrine of Hindu law that nobody has a vested right so long as the widow is alive and the eventual reversioner does not claim through anyone who went before him."], "rank3": ["The property in suit which is premises No. 6 Dwarik Ghoses Lane situated in the suburb of Calcutta admittedly formed part of the estate of one Mahendra Narayan Patra, a Hindu inhabitant of Bengal, owning considerable properties, who died on the 17th April, 1903, leaving him surviving his widow Rashmoni, two infant sons by her, Mohini Mohan and Haripada and a grandson Ram Narayan by a predeceased son Shyama Charan. Shyama Charan was the son of Mahendra by his first wife, who died during his lifetime. On the 17th February, 1901, Mahendra executed a will by which he made certain religious and charitable dispositions and subject. to them, directed his properties to be divided amongst his infant sons Mohini and Haripada and his grandson Ram Narayan", "Ram Narayan was appointed executor under the will. After the death of Mahendra, Ram Narayan applied for probate of the will and probate was obtained by him on the 6th of October, 1904, Ram Narayan entered upon the management of the estate", "He developed extravagant and immoral habits and soon ran into debts. The bulk of the properties were mortgaged to one Kironsashi who having obtained a decree on the mortgage applied for sale of the mortgaged properties. \nThereupon Rashmoni on behalf of her infant sons instituted a suit against the mortgagee and the mortgagor and got a declaration that the mortgage decree could not bind the infants shares in the properties left by their father", "This judgment was given on the 31st March, 1909", "On the 13th August, 1909, the two infant sons of Mahendra to wit Mohini and Haripada, by their mother and next friend Rashmoni, instituted a suit in the Court of the Subordinate Judge at Alipore, being Title Suit No. 45 of 1909, claiming administration of the estate left by Mahendra as well as partition and accounts on the basis of the will left by him. On the 14th of August, 1909, one Baroda Kanta Sarkar, Sheristadar of the Court of the District Judge, Alipore, was appointed, with the consent of both parties, receiver of the estate forming the subject-matter of the litigation. The receiver took possession of the properties immediately after this order was made. The -management by the receiver, as it appears, was not at all proper or beneficial to the interest of the two sons of Mahendra", "Mahendra himself left no debts and whatever debts were contracted,, were contracted by Ram Narayan to meet his own immoral and extravagant expenses", "The receiver however went on borrowing large gums of money upon ex-parte orders received from the Court, the ostensible object of which was to pay off the debts due by Ram Narayan which were not at all binding on the plaintiffs. Fearing that the longer the suit continued and the properties remained in the hands of the receiver the more harmful it- would be to the interests of the minors, Rashmoni on behalf of the minors compromised the suit. with Ram Narayan and a Solenama was filed on the 13th June, 1910. The terms of the compromise, in substance, were, that the properties in suit were to be held in divided shares between the three parties and specific allotments were made in favour of each, the properties allotted to the share of Haripada being specified in schedules Gha and Chha attached to the compromise petition. \nIt was further provided that the receiver would be discharged on submitting his final accounts", "It may be mentioned here that the property which is the subject-matter of the present suit was, under the Solenama, allotted to the share of Haripada", "The Court made an order directing the receiver to submit his final accounts within one month, or as early as possible, when the - necessary order for discharge would be made. It was further directed that as the suit was disposed of on compromise the receiver should discontinue collecting rents and profits due to the estate from that day. This order however was modified by a subsequent order made on 23rd June, 19 10, which directed that the receiver was to continue in possession of the estate until he was paid whatever was due to him for his ordinary commission and allowances and until the parties deposited in Court the amounts borrowed by the receiver under orders of the Court or in the alternative gave sufficient indemnity for the same.", "After this, Rashmoni on behalf of her minor sons filed two successive applications before the Subordinate Judge praying for permission to raise by mortgage, of a part of the estate, the moneys necessary for releasing the estate from the hands of the receiver. \nThe first application was rejected and the second was granted, after it was brought to the notice of the Subordinate Judge that the receiver was attempting to dissuade prospective lenders who were approached on behalf of Rashmoni, to lend any money to her.", "On the 16th of January, 191 1, Haripada, the younger son of Rashmoni, died and his interest devolved upon his mother as his heir under the Hindu law. On the 28th January, 1911, the following order was recorded by the Suborainate Judge The receiver has filed a statement showing the amount as due to him up to the end of the. current month. This claim amounts to Rs. 20,950-2-6 pies only", "The parties may deposit the sum on or before the 1st February next in Court and on such deposit the receiver will be discharged and the possession of the estate of late Mahendr Narayan Patra, will be made over to the parties. On the very same day Mohini exectued a mortgage", "M-1) in favour of one Suhasini Dasi by which he hypothecated the properties allotted to his share and also his future interest as reversions to the share of Haripada, to secure an advance of Rs. 30,000. The loan was to carry interest at the rate of 18 per annum. One thing may be mentioned in connection with this mortgage, and that is, that amongst the properties included in the mortgage were two properties, namely, premises No. 15/1 and 16 Chetlahat Road, which had already been sold and to which the mortgagor bad no title at the date of the mortgage", "Mohini died soon after on the 8th of November, 1911. On October 13, 1917, Suhasini instituted a suit for enforcing the mortgage and the security bond against Rashmoni and the heirs of Mohini. preliminary decree was passed on compromise in that suit on the 24th September, 1918, and on the 25th July, 1919, the decree was made final. \nThe decree was put into execution and on the 15th September, 1919, along with other properties, the property in dispute was put up to sale and it was purchased by Annada Prasad Ghose for Rs. 13,500. On the 14th November, 1919, Bhubaneswari, wife of Ram Narayan, as guardian of her infant sons filed a suit, being Title Suit No. 254 of 1919 against Suhasini, Rashmoni and Annada attacking the validity of the mortgage decree obtained by Suhasini as well as the sale in execution thereof.", "The suit ended on the 6th July, 1921, and the plaintiff gave up her claim"], "rank4": ["The appellants before us are the heirs and legal representatives of the original defendant No. 3 in the suit, which was commenced by the plaintiffs respondents to recover possession of the property in dispute, on establishment of their title, as reversionary heirs of one Haripada Patra, after the death of his mother Rashmoni, who got the property in the restricted rights of a Hindu female heir on Haripadas death"], "label": "REJECTED"}, "expert_4": {"rank1": ["The appellants before us are the heirs and legal representatives of the original defendant No. 3 in the suit, which was commenced by the plaintiffs respondents to recover possession of the property in dispute, on establishment of their title, as reversionary heirs of one Haripada Patra, after the death of his mother Rashmoni, who got the property in the restricted rights of a Hindu female heir on Haripadas death.", "On this finding the security bond could operate only on the widows estate of Rashmoni and it was that interest alone which passed to the purchase. at the mortgage sale. The subsequent transferee could not claim to have acquired any higher right than what his predecessor had and it is immaterial whether he bona fide paid the purchase money or took proper legal advice."], "rank2": ["The position therefore is that if there is no necessity in fact or if the alienee could not prove that he made bona fide enquiries and was satisfied about its existence, the transfer is undoubtedly not void but the transferee would get only the widows estate in the property which does not affect in any way the interest of the reversioner.", "On this point the, finding recorded by the High Court is as follows \n In the present case, there is no scope for an argument that there was such representation of legal necessity or that on bona fide enquiry the alienee satisfied herself that there was such a necessity, for as I have already pointed out the security bond itself states that it was in consideration of benefits already received and with a view to induce Suhasini to forbear from proceeding against Mohini, that the bond was being executed.", "There is no representation in the bond that the alienation was made with a view to securing any benefit to the estate or to avert any danger to the estate or for the purpose of any other legal necessity."], "rank3": ["About a year later on July 15, 1940, the three sons of Ram Narayan, who are the reversionary heirs of Haripada after the death of Rashmoni, commenced the present suit in the Court of the Subordinate Judge at Alipore claiming to recover possession of the property on the allegation, that the security bond executed by Rashmoni not being supported by legal necessity, the sale in execution of the mortgage as well as the subsequent conveyance in favour of Sarat Kumar Das could pass only the right, title and interest of Rashmoni and could not affect the reversionary rights of the plaintiffs.", "What concerns us in this appeal is the dispute between the plaintiffs on the one hand and defendant No. 3 on the other and this dispute centered. round three points, namely, \n Whether the security bond (Ex. E-1) executed by Rashmoni along with Mohini was executed for legal, necessity and was therefore binding on the reversioners, of Haripada after the death of Rashmoni ?", "Whether the fact that Mohini, who was the presumptive reversioner at that time, joined with his mother in executing the security bond would make it binding on the -,actual reversioner after the death of Rashmomi?", "In any event if such consent on the part of the presumptive reversioner raised a presumption of legal necessity, was that presumption rebutted in the present case by the evidence adduced by the parties ?", "Whether the title of defendant No. I was protected ,he being a stranger purchaser who had purchased the -property from the purchaser at an execution sale after making proper enquiries and obtaining legal advice ?", "In the first place the money borrowed by Mohini or deposited by him in Court did not and could not benefit Haripadas estate at all.", "As was found, on investigation of accounts, under orders of the High Court later on, nothing at all was due to the receiver by the estate of Haripada or Mohini.", "On the other hand, both the brothers were entitled to get a fairly large sum of money from the receiver.", "The trial Judge found that there was no urgent necessity to borrow money for releasing the estate and in fact it was Mohini who acted in hot haste to execute the mortgage, his only object being to get the properties in his own hands.", "The recital in the security bond that the rest of the money was spent by, Mohini to pay off certain debts of Rashmoni herself and also to meet the litigation and household expenses of both of them has been held by the Subordinate Judge to be false.", "The High Court has rightly pointed out that Rashmoni did not execute the bond to raise any money to pay off her share of the deposit and in fact no necessity for raising money for that purpose at all existed at that time.", "Undoubtedly the accounts were still to be investigated but what necessity there possibly could be for Rashmoni to execute, after the High Court had made the order as stated above, a security bond by which she mortgaged all the properties that were allotted to Haripada in his share as an additional security for the entire loan of Rs. 30,000 no portion of which be defied the estate of Haripada at all?", "In our opinion the only object of executing the security bond was to protect Mohini who was threatened with legal proceedings by his creditor for having included a nonexistent property in the mortgage bond.", "Rashmoni certainly acted at the instance of and for the benefit of Mohini and she might have been actuated by a feeling of Maternal affection to save her son from a real or imaginary danger.", "But by no stretch of imagination could it be regarded as a prudent act on the part of a Hindu female heir which was necessary for the protection of the estate of the last male holder. In our opinion the view taken by the Courts below is quite proper and as a concurrent finding of fact it should not be disturbed by this Court.", "The alienation here, was by way of mortgage and so no question of surrender could possibly arise.", "There is no doubt that both the Courts below have proceeded on a correct view of law and both have come to the conclusion upon a consideration of the evidence in the case that the presumption that arose by reason of the then reversioners giving consent to the transaction was rebutted by the facts transpiring in evidence.", "At the most it can be regarded only as an admission by a presumptive reversioner and cannot have any higher value than the consent expressed by Mohini who figured as a co-execuitant of the security bond.", "It cannot bind the actual reversioner in any way.", "the true import of this passage was discussed by the Privy Council in their later pronouncement in Rangasami Gounden v. Nachippa Gounden(1) and it was held that the words referred to above should I not be construed to lay down the proposition that such consent on the part of the father would operate proprio vigore and would be binding on the sons.", "This proposition, Their Lordships observed, was opposed both to principle and authority, it being a settled doctrine of Hindu law that nobody has a vested right so long as the widow is alive and the eventual reversioner does not claim through anyone who went before him.", "As the sons of Ram Narayan claim as heirs of Haripada and not of their father, the admissions, if any, made by the latter could not in any way bind them. This contention of the appellant must therefore fail.", "In our opinion the contention formulated in this form really involves a misconception of the legal position of an alienee of a Hindu widows property. The interest of a Hindu widow in the pro- perties inherited by her bears no analogy or resemblance to what may be described as an equitable estate in English law and which cannot be followed in the hands of a bonafide purchaser for value without notice.", "From very early times the Hindu widows estate has been described as qualified proprietorship with powers of alienation only when there is justifying necessity, and the restrictions on the powers of alienation are inseparable from her estate (2).", "For legal necessity she can convey to another an absolute title to the property vested in her.", "If there is no legal necessity, the transferee gets only the widows estate which is not even an (1) 46 I.A. 72 at 83-84. Vide The Collector of Masaulipatam v. Cavaly Venkata, \n M.I.A. 529, indefeasible life estate for it can come to an end not merely on her death but on the happening of other contingencies like re-marriage, adoption, etc.", "If an alienee from a Hindu widow succeeds in establishing that there was legal necessity for transfer, he is completely protected and it is immaterial that the necessity was brought about by the mismanagement of the limited owner herself.", "In this case the alienation was by way of mortgage. The finding of both the Courts below is that there was no legal necessity which justified the execution of the security bond. The mortgagee also could not prove that there was representation of the legal necessity and that she satisfied herself by bona fide enquiries that such necessity did exist.", "Whatever enquiries the appellants may have made (1) 6 M.I.A, would be of no avail to them when the alienation is not binding on the whole estate but only on the womans estate of Rashmoni. In our opinion the view taken by the High Court is quite proper."], "rank4": ["Thereupon Rashmoni on behalf of her infant sons instituted a suit against the mortgagee and the mortgagor and got a declaration that the mortgage decree could not bind the infants shares in the properties left by their father.", "The terms of the compromise, in substance, were, that the properties in suit were to be held in divided shares between the three parties and specific allotments were made in favour of each, the properties allotted to the share of Haripada being specified in schedules Gha and Chha attached to the compromise petition. \nIt was further provided that the receiver would be discharged on submitting his final accounts.", "It may be mentioned here that the property which is the subject-matter of the present suit was, under the Solenama, allotted to the share of Haripada.", "One thing may be mentioned in connection with this mortgage, and that is, that amongst the properties included in the mortgage were two properties, namely, premises No. 15/1 and 16 Chetlahat Road, which had already been sold and to which the mortgagor bad no title at the date of the mortgage.", "Under the final orders passed by the High Court not only were the plaintiffs held not liable to pay any money to the receiver but the receiver was directed to pay a sum of Rs. 6,708 to the plaintiffs.", "The plaintiffs were also to-receive Rs. 4,084 from the defendant, Ram Narayan. The defendant was to pay Rs. 19,124 to the receiver and the receiver wag made personally liable for the loans that he had incurred.", "In the meantime while the investigation of accounts were going on under orders of the High Court, Rashmoni, together with her son Mohini executed a security bond -(Ex. E-1) on the 1st August, 1911, and it is upon the legal effect of this document that the decision of this case practically depends.", "By this security bond, which was executed in favour of Suhasini Dasi, the mortgagee in the mortgage bond of Mohini, Rashmoni purported to hypothecate all the properties that she got as heir of Haripada, as additional security for the loan of Rs. 30,000 already advanced to Mohini under the mortgage.", "two properties situated at Chetla were included in the mortgage of Mohini although they were already sold.", "It is further stated in the bond that the estate of Haripada in the hands of his mother was benefited by the deposit of Rs. 20,950 in Court by Mohini Mohan out of the sum of Rs. 30,000 borrowed on the mortgage and that Mohini had spent the remaining amount of the loan towards clearing certain debts of Rashmoni herself and to meet the litigation and other expenses of both of them. Mohini died soon after on the 8th of November, 1911.", "On October 13, 1917, Suhasini instituted a suit for enforcing the mortgage and the security bond against Rashmoni and the heirs of Mohini. preliminary decree was passed on compromise in that suit on the 24th September, 1918, and on the 25th July, 1919, the decree was made final.", "On the 8th June, 1939, Rashmoni died.", "The trial Judge by his judgment dated the 22nd December, 1944, decided all these points in favour of the plaintiffs and decreed the suit. On appeal by the defendant to the High Court, the decision of the trial Judge was affirmed.", "The heirs of defendant No.3 have now come up to this Court and Mr. Chatterjee appearing in support of the appeal has reiterated all the three points which were urged on behalf of his clients in the Courts below.", "On the first point both the Courts below have held concurrently, that there was absolutely no legal necessity which justified the execution of the security bond by Rashmoni in favour of Suhasini.", "The second point urged by Mr. Chatterjee raises the question as to whether the fact of Mohinis joining his mother in executing the security bond would make the transaction binding on the actual reversioner, Mohini being admittedly the presumptive reversioner of Haripada at the date of the transaction.", "Mr. Chatterjee placed considerable reliance upon another document which purports to be a deed of declaration and was executed by Ram Narayan on the 5th of October, 1918.", "At this time Mohini was dead and Ram Narayan was the immediate reversioner to the estate of Haripada and by this deed he declared inter alia that the debts contracted by Rashmoni were for proper and legal necessity.", "This deed purports to be addressed to Bangshidari Ghosh and Keshav Dutt, two other alienees of the properties of Mohini and Haripada and does not amount to a representation made to the auction purchaser Annada Prasad Ghose or to the father of the present appellants.", "Mr. Chatterjee attempted to put forward an argument on the authority of certain observations in the case of Bajrangi v. Monokarnika(2) that as the present appellants are the sons of Ram Narayan the admissions made by their father would bind them as well.", "The third and the last contention raised by Mr. Chatterjee is that in any event his client is a stranger who has bona fide purchased the property for good consideration after making due enquiries and on proper legal advice and be cannot therefore be affected by any infirmity of title by reason of the absence of legal necessity."], "rank5": ["The property in suit which is premises No. 6 Dwarik Ghoses Lane situated in the suburb of Calcutta admittedly formed part of the estate of one Mahendra Narayan Patra, a Hindu inhabitant of Bengal, owning considerable properties, who died on the 17th April, 1903, leaving him surviving his widow Rashmoni, two infant sons by her, Mohini Mohan and Haripada and a grandson Ram Narayan by a predeceased son Shyama Charan.", "Mahendra executed a will by which he made certain religious and charitable dispositions and subject. to them, directed his properties to be divided amongst his infant sons Mohini and Haripada and his grandson Ram Narayan. Ram Narayan was appointed executor under the will.", "After the death of Mahendra, Ram Narayan applied for probate of the will and probate was obtained by him on the 6th of October, 1904, Ram Narayan entered upon the management of the estate.", "He developed extravagant and immoral habits and soon ran into debts.", "The bulk of the properties were mortgaged to one Kironsashi who having obtained a decree on the mortgage applied for sale of the mortgaged properties.", "On the 13th August, 1909, the two infant sons of Mahendra to wit Mohini and Haripada, by their mother and next friend Rashmoni, instituted a suit in the Court of the Subordinate Judge at Alipore, being Title Suit No. 45 of 1909, claiming administration of the estate left by Mahendra as well as partition and accounts on the basis of the will left by him.", "The -management by the receiver, as it appears, was not at all proper or beneficial to the interest of the two sons of Mahendra.", "The receiver however went on borrowing large gums of money upon ex-parte orders received from the Court, the ostensible object of which was to pay off the debts due by Ram Narayan which were not at all binding on the plaintiffs.", "Rashmoni on behalf of the minors compromised the suit. with Ram Narayan and a Solenama was filed on the 13th June, 1910.", "On the very day that the compromise was filed, Rashmoni applied for discharge of the receiver.", "Rashmoni on behalf of her minor sons filed two successive applications before the Subordinate Judge praying for permission to raise by mortgage, of a part of the estate, the moneys necessary for releasing the estate from the hands of the receiver.", "The first application was rejected and the second was granted, after it was brought to the notice of the Subordinate Judge that the receiver was attempting to dissuade prospective lenders who were approached on behalf of Rashmoni, to lend any money to her.", "On the 16th of January, 191 1, Haripada, the younger son of Rashmoni, died and his interest devolved upon his mother as his heir under the Hindu law.", "On the very same day Mohini exectued a mortgage (Ex. M-1) in favour of one Suhasini Dasi by which he hypothecated the properties allotted to his share and also his future interest as reversions to the share of Haripada, to secure an advance of Rs. 30,000. The loan was to carry interest at the rate of 18 per annum.", "On the 1st February, 1911, Mohini deposited in Court the sum of Rs. 2,0,950-2-6 pies, being the amount alleged to. be due to the receiver and the Court by an order passed on that date directed the release of the estate from the hands of the receiver.", "After the estate was released a petition was filed on behalf of the plaintiffs on the 15th February, 1911, praying that the loans said to be contracted by the receiver should not be paid out of the money deposited in Court, as these borrowings were made not for the protection of the estate but only for the personal benefit of the defendant, Ram Narayan, and to pay off his creditors.", "This application. was rejected by the Court on the 23rd February,1911.", "The learned Judges were very critical of the appointment of the Sheristadar of the Court as receiver of the estate and in no measured terms blamed the Subordinate Judge for passing ex-parte, orders for raising loans on the applications of the receiver without any investigation at all and the receiver also for borrowing money not for the benefit of the estate but for the personal benefit of Ram Narayan, the defendant.", "The High Court directed a full and proper investigation of the accounts of the receiver by a Commissioner and a Vakil of the High Court was appointed for that purpose.", "The Commissioner after a protracted enquiry submitted his report which was accepted by the High Court."], "label": "REJECTED"}, "expert_5": {"rank1": ["In our opinion the view taken by the Courts below is quite proper and as a concurrent finding of fact it should not be disturbed by this Court.", "But this. presumption is rebuttable and it is open to the actual reversioner to establish that there was in fact no legal necessity and there has been no proper and bonafide enquiry by the mortgagee. There is no doubt that both the Courts below have proceeded on a correct view of law and both have come to the conclusion upon a consideration of the evidence in the case that the presumption that arose by reason of the then reversioners giving consent to the transaction was rebutted by the facts transpiring in evidence.", "It cannot bind the actual reversioner in any way.", "In our opinion the view taken by the High Court is quite proper. On this finding the security bond could operate only on the widows estate of Rashmoni and it was that interest alone which passed to the purchase. at the mortgage sale. The subsequent transferee could not claim to have acquired any higher right than what his predecessor had and it is immaterial whether he bona fide paid the purchase money or took proper legal advice."], "rank2": ["As was found, on investigation of accounts, under orders of the High Court later on, nothing at all was due to the receiver by the estate of Haripada or Mohini.", "The recital in the security bond that the rest of the money was spent by, Mohini to pay off certain debts of Rashmoni herself and also to meet the litigation and household expenses of both of them has been held by the Subordinate Judge to be false.", "The alienation here, was by way of mortgage and so no question of surrender could possibly arise.", "As the sons of Ram Narayan claim as heirs of Haripada and not of their father, the admissions, if any, made by the latter could not in any way bind them.", "if the alienee could not prove that he made bona fide enquiries and was satisfied about its existence, the transfer is undoubtedly not void but the transferee would get only the widows estate in the property which does not affect in any way the interest of the reversioner.", "The finding of both the Courts below is that there was no legal necessity which justified the execution of the security bond. The mortgagee also could not prove that there was representation of the legal necessity and that she satisfied herself by bona fide enquiries that such necessity did exist."], "rank3": ["In the first place the money borrowed by Mohini or deposited by him in Court did not and could not benefit Haripadas estate at all.", "but that could not make the act of Rashmoni in executing the security bond, seven months after that event, an act of prudent management on her part dictated either by legal necessity or considerations of benefit to the estate of her deceased son In the first place it is to be noted-that the total amount borrowed by Mohini was Rs. 30,000 out of which Rs. 20,950 only were required to be deposited in Court.", "It has been found on facts that Rashmoni had no occasion to incur any debts either for litigation expenses or for any other purpose.", "Even if the release of the estate was considered to be desirable, that had been already accomplished by Mohini who borrowed money on his own responsibility.", "But by no stretch of imagination could it be regarded as a prudent act on the part of a Hindu female heir which was necessary for the protection of the estate of the last male holder.", "But the true import of this passage was discussed by the Privy Council in their later pronouncement in Rangasami Gounden v. Nachippa Gounden(1) and it was held that the words referred to above should I not be construed to lay down the proposition that such consent on the part of the father would operate proprio vigore and would be binding on the sons. This proposition, Their Lordships observed, was opposed both to principle and authority, it being a settled doctrine of Hindu law that nobody has a vested right so long as the widow is alive and the eventual reversioner does not claim through anyone who went before him.", "If an alienee from a Hindu widow succeeds in establishing that there was legal necessity for transfer, he is completely protected and it is immaterial that the necessity was brought about by the mismanagement of the limited owner herself. Even if there is no necessity in fact, but it is proved that there was representation of necessity and the alienee after making bona fide enquiries satisfied himself as best as he could that such necessity existed, then as the Privy Council pointed out in Hunooman Persaud Pandays case (1) the actual existence of a legal necessity is not a condition precedent to the validity of the sale."], "rank4": ["On the other hand, both the brothers were entitled to get a fairly large sum of money from the receiver.", "it was Mohini who acted in hot haste to execute the mortgage, his only object being to get the properties in his own hands.", "The utmost that could be said was that Rashmoni was bound to reimburse Mohini to the extent that the deposit of money by Mohini had benefited the estate of Haripada.", "In our opinion the only object of executing the security bond was to protect Mohini who was threatened with legal proceedings by his creditor for having included a nonexistent property in the mortgage bond.", "Mohini being the immediate reversioner who joined in the execution of the security bond must be deemed to have consented to the transaction. Such consent may raise a presumption that the transaction was for legal necessity or that the mortgagee had acted therein after proper and bona flde enquiry and has satisfied himself as to the existence of such necessity(1).", "The interest of a Hindu widow in the pro- perties inherited by her bears no analogy or resemblance to what may be described as an equitable estate in English law and which cannot be followed in the hands of a bonafide purchaser for value without notice. From very early times the Hindu widows estate has been described as qualified proprietorship with powers of alienation only when there is justifying necessity, and the restrictions on the powers of alienation are inseparable from her estate (2). For legal necessity she can convey to another an absolute title to the property vested in her. If there is no legal necessity, the transferee gets only the widows estate which is not even an (1) 46 I.A. 72 at 83-84. Vide The Collector of Masaulipatam v. Cavaly Venkata, \n M.I.A. 529, indefeasible life estate for it can come to an end not merely on her death but on the happening of other contingencies like re-marriage, adoption, etc."], "rank5": ["It may be, that it was not possible to know the actual state of affairs with regard to the receivers accounts and consequently it might well have been thought prudent to borrow money to ward off what was considered to be a danger to the estate. This might furnish some excuse or explanation for Mohinis borrowing money on the 28th January, 191 1,", "Undoubtedly the accounts were still to be investigated but what necessity there possibly could be for Rashmoni to execute, after the High Court had made the order as stated above, a security bond by which she mortgaged all the properties that were allotted to Haripada in his share as an additional security for the entire loan of Rs. 30,000 no portion of which be defied the estate of Haripada at all?", "At the most it can be regarded only as an admission by a presumptive reversioner and cannot have any higher value than the consent expressed by Mohini who figured as a co-execuitant of the security bond."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1959_134", "text": "The suit was filed by the present appellants for a declaration of their title to 136 odd bighas of Ryotikasht lands and for possession thereof either exclusively or jointly with the defendants. A claim for mesne profits and interest was also made. The suit was decreed by the Subordinate Judge, Motihari, on the ground that the defendants were in possession of the suit lands as benamidars. The trial Judge found that the consideration for the acquisition of these lands had proceeded from the predecessor of the plaintiffs, who had acquired them in the farzi names of Prahlad Rai, Gulraj Rai and Nawrang Rai. He also held that the benamidars were related to Radhumal by marriage, and that Radhumal found it convenient to use their names. These findings were accepted by the present respondents in the High Court. They, however, raised before the High Court certain contentions found against them by the trial Judge. In the plaint, the appellants had given their reasons for acquiring the property benami in the names of Prahlad Rai, Gulraj Rai and Nawrang Rai. They had stated that, according to the terms of the lease, ryoti lands taken in the names of the lessee or his relatives and servants were liable to be resumed by the Bettiah Raj after the termination of the lease, and that the benami transaction was entered into to avoid this contingency.\n The answering respondents, therefore, contended in the Court of First Instance that the predecessor of the appellants had caused these lands to be settled by the Bettiah Raj benami in their names to effectuate a fraud upon the Bettiah Raj, and the fraud having succeeded, the plaintiffs-appellants were not entitled to a judgment. They also contended that after the termination of the lease of the appellants with the Bettiah Raj these lands were settled or deemed to be settled with them. Both these grounds were accepted by the High Court. In this Court, the respondents have taken the same stand, and have also contended that the acquisition of these lands having been achieved by means of forging the signatures of Prahlad Rai, Gulraj Rai and Nawrang Rai, the present appellants are not entitled to a judgment on the application of the maxim, ex turpi causa non oritur actio. They, however, contend that if it be the view of the Court that both the parties had conspired to deceive the Bettiah Raj or were guilty of illegality, even then, potior est conditio defendantis. By the decisions of the two Courts below and the concession of the respondents, all questions of fact must be taken to be finally decided. The question as to whether the acquisition was benami or not cannot any longer be-reopened, and the case has therefore to be considered only with regard to the principles contained in the maxims above referred to and the fact whether there was any fraud intended on the Bettiah Raj and, if so, whether it was effected and who was responsible for it.\n Though the decision of the case may appear to lie within a very narrow compass, it is necessary to recount rather voluminous facts bearing upon the history of these acquisitions. On April 1, 1922, the manager of the Court of Wards, Bettiah Raj, granted a lease of village Bijbania for 10 years (Asin 1327 to Bhado 1336, vide Ex. 7, to Radhumal, who was the karta of the joint family now represented by the plaintiffs and Mahadeo, respondent 6. On June 26, 1931, the lease was renewed for a further period of 10 years (1337 to 1346). Two of the conditions of this lease will have to be referred to in the sequel, and may conveniently be quoted here for easy reference \n Not to make any settlement of land with a raiyat or other tenant without the consent of the manager, and in any application for such consent to any settlement of land recorded as zirat or bakasht in the record of rights to state the reason of the lessee for wishing to make such settlement, and the area or zirat or bakasht land which would remain in the demised property after such settlement if it were made, and when it is proposed to make any settlement with a relative or servant of the lessee to state that fact and it is hereby declared that the manager shall be entitled as a condition of giving consent to any such settlement to require that an amount to be assessed by him shall be charged as a salami on any such settlement. Not to retain possession after the expiry of lease of any raiyati holdings or other interest in the leased property, acquired during the term of the lease whether by private purchase, purchase at auction sale, mortgage, sub-lease, surrender or otherwise, and any such holding or interest thus acquired will pass to the lessor, provided that the lessee will be entitled to receive from the lessor a sum equivalent to any loss he may have suffered by purchasing holdings at auction sales for arrears of rent, the loss to be calculated by setting against the purchase price the profits made by the lessee from the land since the date of purchase subject to any general instructions which may be issued by the Board of Revenue, the Manager will determine the amount to be received by the lessee under this clause, and his decisions will be final. Between the years 1920 to 1925 Radhumal acquired 136 odd bighas of lands, now the subject of dispute, in various ways. 94 odd bighas were purchased at Court sale, 7 odd bighas by private sales and 6 odd bighas were acquired by abandonment of tenancies by the previous tenants. These 136 odd bighas also included 27 odd bighas of lands, which are described as Ghair Mazrua, Patti Kadim and Kabil Lagon. These lands were settled with Prahlad Rai, Gulraj Rai and Nawrang Rai by the Bettiah Raj. The answering respondents are Prahlad Rai and the legal representatives of the other two. In settling these lands with these persons, Radhumal himself as lessee recommended them to the Bettiah Raj, and it is now proved and admitted in the case that he had also caused the signatures of these persons to be made upon the documents filed in the Bettiah Raj by others than the apparent signatories. As has been pointed out already, this device was resorted to, to avoid the operation of clause 16 of the lease quoted above. It was also used to reduce the salami payable to the Bettiah Raj under clause 4 which in the case of a stranger was lower than in the case of the lessee, his relatives and servants. The respondents had denied all these pleas, and had stated that the lands were settled with them by the Bettiah Raj, and that they were not the benamidars of Radhumal.\n They now rely upon the facts pleaded by the appellants in regard to the device resorted to, to save the lands from the operation of cls. 16 and 4 and further plead the illegal conduct of Radhumal in causing the signatures of Prahlad Rai, Gulraj Rai and Nawrang Rai to be forged on the documents filed with the Bettiah Raj. Radhumal died on February 28, 1934. After his death, Bala Prasad, appellant No. 3, was adopted, and the adoption was also recognised by the Bettiah Raj. The lease was also transferred to the name of Bala Prasad. In 1935, it is alleged the widow denied, at the instigation of Mahadeo, respondent 6, this adoption, and Mahadeo, in his turn, started to disclaim all interest in the property. The other respondents also began asserting their title against the heirs and representatives of Radhumal. It was also alleged that Mahadeo had removed all the kabalas and some of the receipts and had given them to Prahlad Rai, which were used by the answering respondents in all subsequent proceedings. In 1936, proceedings under s. 144 of the Code of Criminal Procedure were commenced, which terminated in favour of Prahlad Rais party by an order of the Sub-Divisional Officer on June 4, 1936. The order of the Sub-Divisional Officer was, however, reversed by the District Magistrate, Champaran, and on revision to the High Court, the finding of the District Magistrate was reversed in its turn, though the rule itself was discharged. The High Court recommended the commencement of proceedings under s. 145 of the Code of Criminal Procedure, if there was any apprehension of breach of peace.\n These proceedings were commenced and finally terminated on May 18, 1942, by an order against the appellants, who were therefore compelled to bring this suit inasmuch as, according to them, the decision in the criminal courts cast a cloud upon their title. The main issue around which the controversy in the present case has revolved in the trial Court is the fifth, framed by the Subordinate Judge. It reads as follows Are the defendants farzidars of the plaintiffs in respect of the suit lands ? As we have already stated above, this issue has now been finally decided in favour of the appellants. The High Court has held that they are not entitled to a judgment in spite of this finding, on the ground that they had perpetrated a fraud upon the Bettiah Raj, and this fraud disentitles them to a judgment. The High Court has also stated that after the termination of the lease, the answering respondents must be deemed to be ryoti tenants of the Bettiah Raj, because rent was accepted from them and not from the lessee. One of the learned Judges of the High Court decided the case mainly on this ground, but the learned Chief Justice gave reasons on both the points. The learned Chief Justice also adverted to the fact that there were certain illegalities committed by Radhumal, which made the condition of the respondents stronger. We begin with the point about the creation of a new tenancy by the Bettiah Raj after the expiry of the lease granted to Radhumal. We may point out that this aspect of the case was not pleaded by the answering respondents, and it is difficult to accept this case, which requires fresh evidence and material for a finding. The case of the respondents was that they had taken settlement of these lands from the Bettiah Raj in the very beginning. There was no occasion, therefore, for a fresh settlement with them, and the plea that after the expiry of the lease there was, in fact, or there must be deemed in law, a fresh settlement with them, is not open to them. There is evidence in the case to show that B. H. forms were not issued once again after the expiry of the lease given to Radhumal. R. N. Prasad (P.W. 3) stated that a certified copy of the B. H. form under which land was settled with a ryoti tenant was issued to the settle for his information, and no such fresh B. H. forms have been produced by the respondents. In view of these two facts, we must say, with respect, that the High Court was in error in constructing a new case for the respondents. It is not open to a Court in appeal to consider media concludendi not pleaded by a party and to give judgment on their basis. This leaves over for consideration the two maxims and the question of fraud perpetrated upon the Bettiah Raj.\n The maxim, in pari delicto etc., can hardly be made applicable in this context. Neither the appellants nor the respondents at any time pleaded that Prahlad Rai, Gulraj Rai and Nawrang Rai conspired to effect a fraud upon the Bettiah Raj. In this respect, the cases of the appellants and the respondents are poles apart. While the appellants claim that Radhumal did not even consider it necessary to obtain the consent of these three persons and even did not obtain their signatures, the respondents claim that Radhumal had nothing whatever to do with the acquisition of these lands and had merely recommended them to the Bettiah Raj in his capacity as the lessee. Where both parties do not show that there was any conspiracy to defraud a third person or to commit any other illegal act, the maxim, in pari delicto etc., can hardly be made applicable. The appellants and the answering respondents were not in pari delicto. The respondents claimed to be innocent parties, who had acquired the lands themselves, and the appellants, on the other hand, stated that the respondents knew nothing about the matter and were not even consulted. In our opinion, the application of the maxim was erroneous.\n This leaves over for consideration firstly whether a fraud was effected upon the Bettiah Raj, and whether it was successful. The appellants contend that the Bettiah Raj was in full possession of the information that this was a benami transaction and salami was obtained to the tune of Rs. 1,680 and was waived only in respect of lands considered not worthy of demanding a salami. It is stated by the appellants in the evidence that the Bettiah Raj was informed about the benami nature of the transaction and Rai Bahadur Motilal Basu, the Assistant Manager of the Bettiah Raj, which was under the Court of Wards, was informed about this. R. H. Prasad (P.W. 3) stated that Rai Bahadur Moti Lal Basu was Assistant Manager of the Estate, and that he was an experienced officer. Narain Lal, (P.W. 17), deposed that in his presence Radhumal had told Moti Lal Basu that he was taking the settlements in the farzi names of his relations. It is also clear that in 1936 when the dispute went to the District Magistrate, Champar an, all these facts were set out in the rival cases of the parties - both under ss. 144 and 145 of the Code of Criminal Procedure. The District Magistrate was an officer of the Court of Wards, and he knew by 1936 that the tenancies were taken benami by Radhumal. After the expiry of the lease, the Court of Wards did not enforce clause 16 in spite of this knowledge, and it therefore appears that the fraud was not effected, because the person or authority said to be defrauded knew all the facts, and elected not to take any action. There is nothing in the record beyond the statement of the appellants in the plaint to show that the salami was unduly low. On the other hand, the answering respondents claimed to have paid proper salami from their own funds. It has been held, however, that Radhumal paid the salami, a fact not now questioned.\n The rival admissions cancel each other and leave the matter at large. The matter was never put in issue except as to who paid the salami and the sufficiency or otherwise of the salami was never tried. In view of the fact that fraud cannot be said to have been effected, we do not think that the appellants who have clearly established the benami nature of the transactions can be deprived of their judgment. The authorities do not go to that length, because public policy demands that where fraud might have been contemplated but was not perpetrated, the defendants should not be allowed to perpetrate a new fraud. Coming now to the question whether the appellants suit was rightly dismissed by the High Court on the application of the maxim, ex turpi causa etc., we have first to see what are the specific facts on which this contention is based. The case of the appellants was that the property was taken benami in the names of Prahlad Rai and others to avid the implication of clause 16. In making the application to the Bettiah Raj the signatures of Prahlad Rai and others were made by Radhumal or some one under his instructions, because the relationship between Radhumal, Prahlad Rai and others was so intimate that it was considered unnecessary to trouble them. Inasmuch, as the matter was brought to the notice of the Assistant Manager of the Court of Wards, all these facts were capable of being investigated, including the making of the signatures by Radhumal.\n No doubt, the making of the signatures of another person without his consent, express or implied, is an offence under the ordinary law, but the intention was not so much to forge the signatures but to present the application in the names of those persons. However it be, we proceed on the assumption that there was some illegality committed by Radhumal in approaching the Bettiah Raj and also in the execution of the B.H. forms, which were also signed with the names of these persons. The question is whether this illegality is sufficient to non-suit the plaintiffs on the application of the maxim.\n The law was stated as far back as 1775 by Lord Mansfield in Holman v. Johnson (1775) 1 Cowp. 341, 343 98 E.R. 1120, 1121, in the following words The principle of public policy is this ex dolo malo non oritur actio. No Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiffs own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the Court says he has no right to be assisted. It is upon that ground the Court goes not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it for where both are equally in fault, potior est conditio defendentis. There are, however, some exceptions or supposed exceptions to the rule of turpi causa. In Salmond and William on Contracts, four such exceptions have been mentioned, and the fourth of these exceptions is based on the right of restitutio in integrum, where the relationship of trustee and beneficiary is involved. Salmond stated the law in these words at p. 352 of his Book (2nd Edn.) So if A employs B to commit a robbery, A cannot sue B for the proceeds.\n And the position would be the same if A were to vest property in B upon trust to carry out some fraudulent scheme A could not sue B for an account of the profits. But if B, who is As agent or trustee, receives on As account money paid by C pursuant to an illegal contract between A and C the position is otherwise and A can recover the property from B, although he could not have claimed it from C. In such cases public policy requires that the rule of turpis causa shall be excluded by the more important and imperative rule that agents and trustees must faithfully perform the duties of their office. Williston in his Book on Contracts (revised edition), Vol. VI, has discussed this matter at p. 5069, para. 1785 and in paras. 1771 to 1774, he has noted certain exceptional cases, and has observed as follows If recovery is to be allowed by either partner or principal in any case, it must be where the illegality is of so light or venial a character that it is deemed more opposed to public policy to allow the defendant to violate his fiduciary relation with the plaintiff than to allow the plaintiff to gain the benefit of an illegal transaction. Even in India, certain exceptions to the rule of turpi causa have been accepted. Examples of those cases are found in Palaniyappa Chettiar v. Chockalingam Chettiar (1920) I.L.R. 44 Mad. 334 and Bhola Nath v. Mul Chand (1903) I.L.R. 25 All. 639. The respondents rely upon Farmers Mart Limited v. Milne 1915 A.C. 106, Alexander v. Rayson 1936 1 K.B. 169, and Berg v. Sadler Moore 1937 2 K.B. 158, to show that this case falls within the rule accepted and applied in those cases. The application of the rule is, however, conditioned by one thing, namely, that a plaintiff who is not allowed to succeed must be unable to sustain an action except upon the plea of the illegality committed by him. In Lord Dunedins speech in Farmers Mart Limited v. Milne 1915 A.C. 106, reference has been made to three cases, Simpson v. Bloss (1816) 7 Taunt. 246 129 E.R. 99, Fivaz v. Nicholls (1846) 2 C.B. 501 135 E.R. 1042 and Taylor v. Chester (1869) L.R. 4 Q.B. 309. In the first case, it was laid down that the test was whether a demand connected with an illegal transaction was capable of being enforced in law, and whether the plaintiff required any aid from the illegal transaction to establish his case. Tindal, C.J., in the second case observed as follows I think that this case may be determined on the short ground that the plaintiff is unable to establish his claim as stated upon the record, without relying upon the illegal agreement originally entered into between himself and the defendant. In the last case, Mellor, J., observed that the true test was by considering whether the plaintiff could make out his case otherwise than through the medium and by the aid of the illegal transaction to which he was himself a party.\n In Alexander v. Rayson 1936 1 K.B. 169, it was held by the Court of Appeal that there was a locus poenitentiae but that the repentance must be before the fraud or illegality had been carried out. Recently, the Court of Appeal in Bowmakers Ltd. v. Barnet Instruments, Ltd. 1945 1 K.B. 65, reviewed the law on the subject, and laid down that every illegality did not entitle the Court to refuse a judgment to a plaintiff. Du Parcq, L.J., observed as follows In our opinion, a mans right to possess his own chattels will as a general rule be enforced against one who, without any claim of right, is detaining them, or has converted them to his own use, even though it may appear either from the pleadings, or in the course of the trial, that the chattels in question came into the defendants possession by reason of an illegal contract between himself and the plaintiff, provided that the plaintiff does not seek, and is not forced, either to found his claim on the illegal contract or to plead its illegality in order to support his claim.\n We are aware that Prof. Hamson has criticised this case in (1949) 10 Cambridge Law Journal, 249, and has forborne its application, except in the clearest possible circumstances. The law has been also considered by Pritchard, J., in Bigos v. Bousted 1951 1 All. E.R. 92, where all the authorities are referred to. The correct position in law, in our opinion, is that what one has to see is whether the illegality goes so much to the root of the matter that the plaintiff cannot bring his action without relying upon the illegal transaction into which he had entered. If the illegality be trivial or venial, as stated by Williston and the plaintiff is not required to rest his case upon that illegality, then public policy demands that the defendant should not be allowed to take advantage of the position. A strict view, of course, must be taken of the plaintiffs conduct, and he should not be allowed to circumvent the illegality by resorting to some subterfuge or by mis-stating the facts. If, however, the matters is clear and the illegality is not required to be pleaded or proved as part of the cause of action and the plaintiff recanted before the illegal purpose was achieved, then, unless it be of such a gross nature as to outrage the conscience of the Court, the plea of the defendant should not prevail.\n We must remember that benami transactions are common in India, and have always been recognised. They are entered into for a variety of reasons, and the benamidar holds the property in trust for his principal. In the present case, the object of the benami transaction was merely to keep the property from being resumed by the Bettiah Raj on the expiry of the lease in favour of Radhumal, which undoubtedly the Bettiah Raj could have done, if it had been so minded. The information about the benami transaction was, however, not withheld from the Bettiah Raj, and even with that knowledge, the Bettiah Raj took no action against Radhumal or the benamidars. The plaintiffs recanted inasmuch as they asserted their true title and true facts before the occasion for the Raj to act arose. Thus, the fraud, though intended, was not perpetrated, because the fraud could only be effected at the end of the lease term, and the locus poenitentiae which the lessee possessed was duly used long before the expiry of the lease. The illegality was also of a trivial character, inasmuch as the signatures of Prahlad Rai and others were made on the relative documents on the faith of their close friendship and relationship and under the assumption that no objection from them would proceed to the making of the application on their behalf and to the signing of the B. H. forms in their names. The appellants were not required to prove this fact as part of their cause of action, and indeed, if the answering respondents are to be believed, they asserted as vehemently that the signatures were not forged but were their very own. In establishing the benami nature of a transaction, the cardinal point to be proved is the source of money and this was done, and it was also established that Prahlad Rai and others were merely farzidars. To prove these things, it did not require the proof of the signatures.\nDECISION ??", "expert_1": {"rank1": ["The correct position in law, in our opinion, is that what one has to see is whether the illegality goes so much to the root of the matter that the plaintiff cannot bring his action without relying upon the illegal transaction into which he had entered. If the illegality be trivial or venial, as stated by Williston and the plaintiff is not required to rest his case upon that illegality, then public policy demands that the defendant should not be allowed to take advantage of the position. A strict view, of course, must be taken of the plaintiffs conduct, and he should not be allowed to circumvent the illegality by resorting to some subterfuge or by mis-stating the facts. If, however, the matters is clear and the illegality is not required to be pleaded or proved as part of the cause of action and the plaintiff recanted before the illegal purpose was achieved, then, unless it be of such a gross nature as to outrage the conscience of the Court, the plea of the defendant should not prevail."], "rank2": ["The main issue around which the controversy in the present case has revolved in the trial Court is the fifth, framed by the Subordinate Judge. It reads as follows Are the defendants farzidars of the plaintiffs in respect of the suit lands ? As we have already stated above, this issue has now been finally decided in favour of the appellants.", "Thus, the fraud, though intended, was not perpetrated, because the fraud could only be effected at the end of the lease term, and the locus poenitentiae which the lessee possessed was duly used long before the expiry of the lease.", "The illegality was also of a trivial character,", "The appellants were not required to prove this fact as part of their cause of action, and indeed, if the answering respondents are to be believed, they asserted as vehemently that the signatures were not forged but were their very own. In establishing the benami nature of a transaction, the cardinal point to be proved is the source of money and this was done, and it was also established that Prahlad Rai and others were merely farzidars. To prove these things, it did not require the proof of the signatures"], "rank3": ["In view of these two facts, we must say, with respect, that the High Court was in error in constructing a new case for the respondents. It is not open to a Court in appeal to consider media concludendi not pleaded by a party and to give judgment on their basis.", "Where both parties do not show that there was any conspiracy to defraud a third person or to commit any other illegal act, the maxim, in pari delicto etc., can hardly be made applicable. The appellants and the answering respondents were not in pari delicto. The respondents claimed to be innocent parties, who had acquired the lands themselves, and the appellants, on the other hand, stated that the respondents knew nothing about the matter and were not even consulted.", "In our opinion, the application of the maxim was erroneous.", "In view of the fact that fraud cannot be said to have been effected, we do not think that the appellants who have clearly established the benami nature of the transactions can be deprived of their judgment. The authorities do not go to that length, because public policy demands that where fraud might have been contemplated but was not perpetrated, the defendants should not be allowed to perpetrate a new fraud.", "No doubt, the making of the signatures of another person without his consent, express or implied, is an offence under the ordinary law, but the intention was not so much to forge the signatures but to present the application in the names of those persons.", "we proceed on the assumption that there was some illegality committed by Radhumal in approaching the Bettiah Raj and also in the execution of the B.H. forms, which were also signed with the names of these persons. The question is whether this illegality is sufficient to non-suit the plaintiffs on the application of the maxim.", "The principle of public policy is this ex dolo malo non oritur actio. No Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiffs own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the Court says he has no right to be assisted. It is upon that ground the Court goes not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it for where both are equally in fault, potior est conditio defendentis.", "Even in India, certain exceptions to the rule of turpi causa have been accepted.", "The application of the rule is, however, conditioned by one thing, namely, that a plaintiff who is not allowed to succeed must be unable to sustain an action except upon the plea of the illegality committed by him.", "In the present case, the object of the benami transaction was merely to keep the property from being resumed by the Bettiah Raj on the expiry of the lease in favour of Radhumal, which undoubtedly the Bettiah Raj could have done, if it had been so minded. The information about the benami transaction was, however, not withheld from the Bettiah Raj, and even with that knowledge, the Bettiah Raj took no action against Radhumal or the benamidars. The plaintiffs recanted inasmuch as they asserted their true title and true facts before the occasion for the Raj to act arose."], "rank4": ["The suit was filed by the present appellants for a declaration of their title to 136 odd bighas of Ryotikasht lands and for possession thereof either exclusively or jointly with the defendants. A claim for mesne profits and interest was also made.", "The suit was decreed by the Subordinate Judge, Motihari, on the ground that the defendants were in possession of the suit lands as benamidars. The trial Judge found that the consideration for the acquisition of these lands had proceeded from the predecessor of the plaintiffs, who had acquired them in the farzi names of Prahlad Rai, Gulraj Rai and Nawrang Rai. He also held that the benamidars were related to Radhumal by marriage, and that Radhumal found it convenient to use their names. These findings were accepted by the present respondents in the High Court. They, however, raised before the High Court certain contentions found against them by the trial Judge. In the plaint, the appellants had given their reasons for acquiring the property benami in the names of Prahlad Rai, Gulraj Rai and Nawrang Rai. They had stated that, according to the terms of the lease, ryoti lands taken in the names of the lessee or his relatives and servants were liable to be resumed by the Bettiah Raj after the termination of the lease, and that the benami transaction was entered into to avoid this contingency.\n The answering respondents, therefore, contended in the Court of First Instance that the predecessor of the appellants had caused these lands to be settled by the Bettiah Raj benami in their names to effectuate a fraud upon the Bettiah Raj, and the fraud having succeeded, the plaintiffs-appellants were not entitled to a judgment. They also contended that after the termination of the lease of the appellants with the Bettiah Raj these lands were settled or deemed to be settled with them. Both these grounds were accepted by the High Court. In this Court, the respondents have taken the same stand, and have also contended that the acquisition of these lands having been achieved by means of forging the signatures of Prahlad Rai, Gulraj Rai and Nawrang Rai, the present appellants are not entitled to a judgment on the application of the maxim, ex turpi causa non oritur actio. They, however, contend that if it be the view of the Court that both the parties had conspired to deceive the Bettiah Raj or were guilty of illegality, even then, potior est conditio defendantis.", "By the decisions of the two Courts below and the concession of the respondents, all questions of fact must be taken to be finally decided. The question as to whether the acquisition was benami or not cannot any longer be-reopened, and the case has therefore to be considered only with regard to the principles contained in the maxims above referred to and the fact whether there was any fraud intended on the Bettiah Raj and, if so, whether it was effected and who was responsible for it.", "In 1936, proceedings under s. 144 of the Code of Criminal Procedure were commenced, which terminated in favour of Prahlad Rais party by an order of the Sub-Divisional Officer on June 4, 1936. The order of the Sub-Divisional Officer was, however, reversed by the District Magistrate, Champaran, and on revision to the High Court, the finding of the District Magistrate was reversed in its turn, though the rule itself was discharged. The High Court recommended the commencement of proceedings under s. 145 of the Code of Criminal Procedure, if there was any apprehension of breach of peace.\n These proceedings were commenced and finally terminated on May 18, 1942, by an order against the appellants, who were therefore compelled to bring this suit inasmuch as, according to them, the decision in the criminal courts cast a cloud upon their title.", "We begin with the point about the creation of a new tenancy by the Bettiah Raj after the expiry of the lease granted to Radhumal. We may point out that this aspect of the case was not pleaded by the answering respondents, and it is difficult to accept this case, which requires fresh evidence and material for a finding."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["The District Magistrate was an officer of the Court of Wards, and he knew by 1936 that the tenancies were taken benami by Radhumal. After the expiry of the lease, the Court of Wards did not enforce clause 16 in spite of this knowledge, and it therefore appears that the fraud was not effected, because the person or authority said to be defrauded knew all the facts, and elected not to take any action.", "The information about the benami transaction was, however, not withheld from the Bettiah Raj, and even with that knowledge, the Bettiah Raj took no action against Radhumal or the benamidars. The plaintiffs recanted inasmuch as they asserted their true title and true facts before the occasion for the Raj to act arose. Thus, the fraud, though intended, was not perpetrated, because the fraud could only be effected at the end of the lease term, and the locus poenitentiae which the lessee possessed was duly used long before the expiry of the lease."], "rank2": ["The question as to whether the acquisition was benami or not cannot any longer be-reopened, and the case has therefore to be considered only with regard to the principles contained in the maxims above referred to and the fact whether there was any fraud intended on the Bettiah Raj and, if so, whether it was effected and who was responsible for it.", "While the appellants claim that Radhumal did not even consider it necessary to obtain the consent of these three persons and even did not obtain their signatures, the respondents claim that Radhumal had nothing whatever to do with the acquisition of these lands and had merely recommended them to the Bettiah Raj in his capacity as the lessee.", "Where both parties do not show that there was any conspiracy to defraud a third person or to commit any other illegal act, the maxim, in pari delicto etc., can hardly be made applicable.", "No doubt, the making of the signatures of another person without his consent, express or implied, is an offence under the ordinary law, but the intention was not so much to forge the signatures but to present the application in the names of those persons.", "In the present case, the object of the benami transaction was merely to keep the property from being resumed by the Bettiah Raj on the expiry of the lease in favour of Radhumal, which undoubtedly the Bettiah Raj could have done, if it had been so minded.", "The appellants were not required to prove this fact as part of their cause of action, and indeed, if the answering respondents are to be believed, they asserted as vehemently that the signatures were not forged but were their very own. In establishing the benami nature of a transaction, the cardinal point to be proved is the source of money and this was done, and it was also established that Prahlad Rai and others were merely farzidars."], "rank3": ["In the plaint, the appellants had given their reasons for acquiring the property benami in the names of Prahlad Rai, Gulraj Rai and Nawrang Rai. They had stated that, according to the terms of the lease, ryoti lands taken in the names of the lessee or his relatives and servants were liable to be resumed by the Bettiah Raj after the termination of the lease, and that the benami transaction was entered into to avoid this contingency.", "However it be, we proceed on the assumption that there was some illegality committed by Radhumal in approaching the Bettiah Raj and also in the execution of the B.H. forms, which were also signed with the names of these persons. The question is whether this illegality is sufficient to non-suit the plaintiffs on the application of the maxim.", "four such exceptions have been mentioned, and the fourth of these exceptions is based on the right of restitutio in integrum, where the relationship of trustee and beneficiary is involved.", "In the first case, it was laid down that the test was whether a demand connected with an illegal transaction was capable of being enforced in law, and whether the plaintiff required any aid from the illegal transaction to establish his case. Tindal, C.J., in the second case observed as follows I think that this case may be determined on the short ground that the plaintiff is unable to establish his claim as stated upon the record, without relying upon the illegal agreement originally entered into between himself and the defendant. In the last case, Mellor, J., observed that the true test was by considering whether the plaintiff could make out his case otherwise than through the medium and by the aid of the illegal transaction to which he was himself a party.\n In Alexander v. Rayson 1936 1 K.B. 169, it was held by the Court of Appeal that there was a locus poenitentiae but that the repentance must be before the fraud or illegality had been carried out. Recently, the Court of Appeal in Bowmakers Ltd. v. Barnet Instruments, Ltd. 1945 1 K.B. 65, reviewed the law on the subject, and laid down that every illegality did not entitle the Court to refuse a judgment to a plaintiff.", "The correct position in law, in our opinion, is that what one has to see is whether the illegality goes so much to the root of the matter that the plaintiff cannot bring his action without relying upon the illegal transaction into which he had entered. If the illegality be trivial or venial, as stated by Williston and the plaintiff is not required to rest his case upon that illegality, then public policy demands that the defendant should not be allowed to take advantage of the position. A strict view, of course, must be taken of the plaintiffs conduct, and he should not be allowed to circumvent the illegality by resorting to some subterfuge or by mis-stating the facts. If, however, the matters is clear and the illegality is not required to be pleaded or proved as part of the cause of action and the plaintiff recanted before the illegal purpose was achieved, then, unless it be of such a gross nature as to outrage the conscience of the Court, the plea of the defendant should not prevail.\n We must remember that benami transactions are common in India, and have always been recognised. They are entered into for a variety of reasons, and the benamidar holds the property in trust for his principal."], "rank4": ["In this Court, the respondents have taken the same stand, and have also contended that the acquisition of these lands having been achieved by means of forging the signatures of Prahlad Rai, Gulraj Rai and Nawrang Rai, the present appellants are not entitled to a judgment on the application of the maxim, ex turpi causa non oritur actio.", "The appellants contend that the Bettiah Raj was in full possession of the information that this was a benami transaction and salami was obtained to the tune of Rs. 1,680 and was waived only in respect of lands considered not worthy of demanding a salami. It is stated by the appellants in the evidence that the Bettiah Raj was informed about the benami nature of the transaction and Rai Bahadur Motilal Basu, the Assistant Manager of the Bettiah Raj, which was under the Court of Wards, was informed about this.", "No Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiffs own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the Court says he has no right to be assisted. It is upon that ground the Court goes not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it for where both are equally in fault, potior est conditio defendentis. There are, however, some exceptions or supposed exceptions to the rule of turpi causa."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["By the decisions of the two Courts below and the concession of the respondents, all questions of fact must be taken to be finally decided. The question as to whether the acquisition was benami or not cannot any longer be-reopened, and the case has therefore to be considered only with regard to the principles contained in the maxims above referred to and the fact whether there was any fraud intended on the Bettiah Raj and, if so, whether it was effected and who was responsible for it.", "The main issue around which the controversy in the present case has revolved in the trial Court is the fifth, framed by the Subordinate Judge. It reads as follows Are the defendants farzidars of the plaintiffs in respect of the suit lands ?", "There is evidence in the case to show that B. H. forms were not issued once again after the expiry of the lease given to Radhumal.", "R. N. Prasad (P.W. 3) stated that a certified copy of the B. H. form under which land was settled with a ryoti tenant was issued to the settle for his information, and no such fresh B. H. forms have been produced by the respondents", "In view of these two facts, we must say, with respect, that the High Court was in error in constructing a new case for the respondents. It is not open to a Court in appeal to consider media concludendi not pleaded by a party and to give judgment on their basis.", "The maxim, in pari delicto etc., can hardly be made applicable in this context. Neither the appellants nor the respondents at any time pleaded that Prahlad Rai, Gulraj Rai and Nawrang Rai conspired to effect a fraud upon the Bettiah Raj.", "Where both parties do not show that there was any conspiracy to defraud a third person or to commit any other illegal act, the maxim, in pari delicto etc., can hardly be made applicable. The appellants and the answering respondents were not in pari delicto", "The respondents claimed to be innocent parties, who had acquired the lands themselves, and the appellants, on the other hand, stated that the respondents knew nothing about the matter and were not even consulted. In our opinion, the application of the maxim was erroneous", "This leaves over for consideration firstly whether a fraud was effected upon the Bettiah Raj, and whether it was successful", "R. H. Prasad (P.W. 3) stated that Rai Bahadur Moti Lal Basu was Assistant Manager of the Estate, and that he was an experienced officer. Narain Lal, (P.W. 17), deposed that in his presence Radhumal had told Moti Lal Basu that he was taking the settlements in the farzi names of his relations. It is also clear that in 1936 when the dispute went to the District Magistrate, Champar an, all these facts were set out in the rival cases of the parties - both under ss. 144 and 145 of the Code of Criminal Procedure. The District Magistrate was an officer of the Court of Wards, and he knew by 1936 that the tenancies were taken benami by Radhumal. After the expiry of the lease, the Court of Wards did not enforce clause 16 in spite of this knowledge, and it therefore appears that the fraud was not effected, because the person or authority said to be defrauded knew all the facts, and elected not to take any action", "There is nothing in the record beyond the statement of the appellants in the plaint to show that the salami was unduly low", "It has been held, however, that Radhumal paid the salami, a fact not now questioned.\n The rival admissions cancel each other and leave the matter at large. The matter was never put in issue except as to who paid the salami and the sufficiency or otherwise of the salami was never tried.", "In view of the fact that fraud cannot be said to have been effected, we do not think that the appellants who have clearly established the benami nature of the transactions can be deprived of their judgment. The authorities do not go to that length, because public policy demands that where fraud might have been contemplated but was not perpetrated, the defendants should not be allowed to perpetrate a new fraud", "Inasmuch, as the matter was brought to the notice of the Assistant Manager of the Court of Wards, all these facts were capable of being investigated, including the making of the signatures by Radhumal.\n No doubt, the making of the signatures of another person without his consent, express or implied, is an offence under the ordinary law, but the intention was not so much to forge the signatures but to present the application in the names of those persons. However it be, we proceed on the assumption that there was some illegality committed by Radhumal in approaching the Bettiah Raj and also in the execution of the B.H. forms, which were also signed with the names of these persons", "The question is whether this illegality is sufficient to non-suit the plaintiffs on the application of the maxim.", "The principle of public policy is this ex dolo malo non oritur actio. No Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiffs own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the Court says he has no right to be assisted.", "It is upon that ground the Court goes not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it for where both are equally in fault, potior est conditio defendentis", "There are, however, some exceptions or supposed exceptions to the rule of turpi causa. In Salmond and William on Contracts, four such exceptions have been mentioned, and the fourth of these exceptions is based on the right of restitutio in integrum, where the relationship of trustee and beneficiary is involved.", "In such cases public policy requires that the rule of turpis causa shall be excluded by the more important and imperative rule that agents and trustees must faithfully perform the duties of their office", "The application of the rule is, however, conditioned by one thing, namely, that a plaintiff who is not allowed to succeed must be unable to sustain an action except upon the plea of the illegality committed by him", "The correct position in law, in our opinion, is that what one has to see is whether the illegality goes so much to the root of the matter that the plaintiff cannot bring his action without relying upon the illegal transaction into which he had entered. If the illegality be trivial or venial, as stated by Williston and the plaintiff is not required to rest his case upon that illegality, then public policy demands that the defendant should not be allowed to take advantage of the position. A strict view, of course, must be taken of the plaintiffs conduct, and he should not be allowed to circumvent the illegality by resorting to some subterfuge or by mis-stating the facts.", "If, however, the matters is clear and the illegality is not required to be pleaded or proved as part of the cause of action and the plaintiff recanted before the illegal purpose was achieved, then, unless it be of such a gross nature as to outrage the conscience of the Court, the plea of the defendant should not prevail.", "In the present case, the object of the benami transaction was merely to keep the property from being resumed by the Bettiah Raj on the expiry of the lease in favour of Radhumal, which undoubtedly the Bettiah Raj could have done, if it had been so minded. The information about the benami transaction was, however, not withheld from the Bettiah Raj, and even with that knowledge, the Bettiah Raj took no action against Radhumal or the benamidars.", "The plaintiffs recanted inasmuch as they asserted their true title and true facts before the occasion for the Raj to act arose. Thus, the fraud, though intended, was not perpetrated, because the fraud could only be effected at the end of the lease term, and the locus poenitentiae which the lessee possessed was duly used long before the expiry of the lease. The illegality was also of a trivial character, inasmuch as the signatures of Prahlad Rai and others were made on the relative documents on the faith of their close friendship and relationship and under the assumption that no objection from them would proceed to the making of the application on their behalf and to the signing of the B.", "H. forms in their names. The appellants were not required to prove this fact as part of their cause of action, and indeed, if the answering respondents are to be believed, they asserted as vehemently that the signatures were not forged but were their very own", "In establishing the benami nature of a transaction, the cardinal point to be proved is the source of money and this was done, and it was also established that Prahlad Rai and others were merely farzidars. To prove these things, it did not require the proof of the signatures"], "rank2": ["Both these grounds were accepted by the High Court. In this Court, the respondents have taken the same stand, and have also contended that the acquisition of these lands having been achieved by means of forging the signatures of Prahlad Rai, Gulraj Rai and Nawrang Rai, the present appellants are not entitled to a judgment on the application of the maxim, ex turpi causa non oritur actio. They, however, contend that if it be the view of the Court that both the parties had conspired to deceive the Bettiah Raj or were guilty of illegality, even then, potior est conditio defendantis", "Two of the conditions of this lease will have to be referred to in the sequel, and may conveniently be quoted here for easy reference \n Not to make any settlement of land with a raiyat or other tenant without the consent of the manager, and in any application for such consent to any settlement of land recorded as zirat or bakasht in the record of rights to state the reason of the lessee for wishing to make such settlement, and the area or zirat or bakasht land which would remain in the demised property after such settlement if it were made, and when it is proposed to make any settlement with a relative or servant of the lessee to state that fact and it is hereby declared that the manager shall be entitled as a condition of giving consent to any such settlement to require that an amount to be assessed by him shall be charged as a salami on any such settlement. Not to retain possession after the expiry of lease of any raiyati holdings or other interest in the leased property, acquired during the term of the lease whether by private purchase, purchase at auction sale, mortgage, sub-lease, surrender or otherwise, and any such holding or interest thus acquired will pass to the lessor, provided that the lessee will be entitled to receive from the lessor a sum equivalent to any loss he may have suffered by purchasing holdings at auction sales for arrears of rent, the loss to be calculated by setting against the purchase price the profits made by the lessee from the land since the date of purchase subject to any general instructions which may be issued by the Board of Revenue, the Manager will determine the amount to be received by the lessee under this clause, and his decisions will be final.", "In settling these lands with these persons, Radhumal himself as lessee recommended them to the Bettiah Raj, and it is now proved and admitted in the case that he had also caused the signatures of these persons to be made upon the documents filed in the Bettiah Raj by others than the apparent signatories. As has been pointed out already, this device was resorted to, to avoid the operation of clause 16 of the lease quoted above. It was also used to reduce the salami payable to the Bettiah Raj under clause 4 which in the case of a stranger was lower than in the case of the lessee, his relatives and servants. The respondents had denied all these pleas, and had stated that the lands were settled with them by the Bettiah Raj, and that they were not the benamidars of Radhumal", "They now rely upon the facts pleaded by the appellants in regard to the device resorted to, to save the lands from the operation of cls. 16 and 4 and further plead the illegal conduct of Radhumal in causing the signatures of Prahlad Rai, Gulraj Rai and Nawrang Rai to be forged on the documents filed with the Bettiah Raj", "As we have already stated above, this issue has now been finally decided in favour of the appellants. The High Court has held that they are not entitled to a judgment in spite of this finding, on the ground that they had perpetrated a fraud upon the Bettiah Raj, and this fraud disentitles them to a judgment. The High Court has also stated that after the termination of the lease, the answering respondents must be deemed to be ryoti tenants of the Bettiah Raj, because rent was accepted from them and not from the lessee.", "One of the learned Judges of the High Court decided the case mainly on this ground, but the learned Chief Justice gave reasons on both the points. The learned Chief Justice also adverted to the fact that there were certain illegalities committed by Radhumal, which made the condition of the respondents stronger", "The case of the respondents was that they had taken settlement of these lands from the Bettiah Raj in the very beginning", "There was no occasion, therefore, for a fresh settlement with them, and the plea that after the expiry of the lease there was, in fact, or there must be deemed in law, a fresh settlement with them, is not open to them", "In this respect, the cases of the appellants and the respondents are poles apart. While the appellants claim that Radhumal did not even consider it necessary to obtain the consent of these three persons and even did not obtain their signatures, the respondents claim that Radhumal had nothing whatever to do with the acquisition of these lands and had merely recommended them to the Bettiah Raj in his capacity as the lessee", "The case of the appellants was that the property was taken benami in the names of Prahlad Rai and others to avid the implication of clause 16. In making the application to the Bettiah Raj the signatures of Prahlad Rai and others were made by Radhumal or some one under his instructions, because the relationship between Radhumal, Prahlad Rai and others was so intimate that it was considered unnecessary to trouble them.", "noted certain exceptional cases, and has observed as follows If recovery is to be allowed by either partner or principal in any case, it must be where the illegality is of so light or venial a character that it is deemed more opposed to public policy to allow the defendant to violate his fiduciary relation with the plaintiff than to allow the plaintiff to gain the benefit of an illegal transaction.", "Even in India, certain exceptions to the rule of turpi causa have been accepted", "In the first case, it was laid down that the test was whether a demand connected with an illegal transaction was capable of being enforced in law, and whether the plaintiff required any aid from the illegal transaction to establish his case. Tindal, C.J., in the second case observed as follows I think that this case may be determined on the short ground that the plaintiff is unable to establish his claim as stated upon the record, without relying upon the illegal agreement originally entered into between himself and the defendant. In the last case, Mellor, J., observed that the true test was by considering whether the plaintiff could make out his case otherwise than through the medium and by the aid of the illegal transaction to which he was himself a party.", "In Alexander v. Rayson 1936 1 K.B. 169, it was held by the Court of Appeal that there was a locus poenitentiae but that the repentance must be before the fraud or illegality had been carried out", "every illegality did not entitle the Court to refuse a judgment to a plaintiff. Du Parcq, L.J., observed as follows In our opinion, a mans right to possess his own chattels will as a general rule be enforced against one who, without any claim of right, is detaining them, or has converted them to his own use, even though it may appear either from the pleadings, or in the course of the trial, that the chattels in question came into the defendants possession by reason of an illegal contract between himself and the plaintiff, provided that the plaintiff does not seek, and is not forced, either to found his claim on the illegal contract or to plead its illegality in order to support his claim.", "We must remember that benami transactions are common in India, and have always been recognised. They are entered into for a variety of reasons, and the benamidar holds the property in trust for his principal"], "rank3": ["The suit was filed by the present appellants for a declaration of their title to 136 odd bighas of Ryotikasht lands and for possession thereof either exclusively or jointly with the defendants. A claim for mesne profits and interest was also made. The suit was decreed by the Subordinate Judge, Motihari, on the ground that the defendants were in possession of the suit lands as benamidars.", "The trial Judge found that the consideration for the acquisition of these lands had proceeded from the predecessor of the plaintiffs, who had acquired them in the farzi names of Prahlad Rai, Gulraj Rai and Nawrang Rai. He also held that the benamidars were related to Radhumal by marriage, and that Radhumal found it convenient to use their names. These findings were accepted by the present respondents in the High Court", "They, however, raised before the High Court certain contentions found against them by the trial Judge. In the plaint, the appellants had given their reasons for acquiring the property benami in the names of Prahlad Rai, Gulraj Rai and Nawrang Rai. They had stated that, according to the terms of the lease, ryoti lands taken in the names of the lessee or his relatives and servants were liable to be resumed by the Bettiah Raj after the termination of the lease, and that the benami transaction was entered into to avoid this contingency.\n The answering respondents, therefore, contended in the Court of First Instance that the predecessor of the appellants had caused these lands to be settled by the Bettiah Raj benami in their names to effectuate a fraud upon the Bettiah Raj, and the fraud having succeeded, the plaintiffs-appellants were not entitled to a judgment", "They also contended that after the termination of the lease of the appellants with the Bettiah Raj these lands were settled or deemed to be settled with them", "Between the years 1920 to 1925 Radhumal acquired 136 odd bighas of lands, now the subject of dispute, in various ways. 94 odd bighas were purchased at Court sale, 7 odd bighas by private sales and 6 odd bighas were acquired by abandonment of tenancies by the previous tenants. These 136 odd bighas also included 27 odd bighas of lands, which are described as Ghair Mazrua, Patti Kadim and Kabil Lagon. These lands were settled with Prahlad Rai, Gulraj Rai and Nawrang Rai by the Bettiah Raj.", "The answering respondents are Prahlad Rai and the legal representatives of the other two", "Radhumal died on February 28, 1934. After his death, Bala Prasad, appellant No. 3, was adopted, and the adoption was also recognised by the Bettiah Raj. The lease was also transferred to the name of Bala Prasad. In 1935, it is alleged the widow denied, at the instigation of Mahadeo, respondent 6, this adoption, and Mahadeo, in his turn, started to disclaim all interest in the property", "The other respondents also began asserting their title against the heirs and representatives of Radhumal", "It was also alleged that Mahadeo had removed all the kabalas and some of the receipts and had given them to Prahlad Rai, which were used by the answering respondents in all subsequent proceedings", "In 1936, proceedings under s. 144 of the Code of Criminal Procedure were commenced, which terminated in favour of Prahlad Rais party by an order of the Sub-Divisional Officer on June 4, 1936. The order of the Sub-Divisional Officer was, however, reversed by the District Magistrate, Champaran, and on revision to the High Court, the finding of the District Magistrate was reversed in its turn, though the rule itself was discharged. The High Court recommended the commencement of proceedings under s. 145 of the Code of Criminal Procedure, if there was any apprehension of breach of peace.\n These proceedings were commenced and finally terminated on May 18, 1942, by an order against the appellants, who were therefore compelled to bring this suit inasmuch as, according to them, the decision in the criminal courts cast a cloud upon their title."], "rank4": ["On April 1, 1922, the manager of the Court of Wards, Bettiah Raj, granted a lease of village Bijbania for 10 years (Asin 1327 to Bhado 1336, vide Ex. 7, to Radhumal, who was the karta of the joint family now represented by the plaintiffs and Mahadeo, respondent 6. On June 26, 1931, the lease was renewed for a further period of 10 years (1337 to 1346)"], "label": "ACCEPTED"}, "expert_4": {"rank1": ["The suit was filed by the present appellants for a declaration of their title to 136 odd bighas of Ryotikasht lands and for possession thereof either exclusively or jointly with the defendants.", "A claim for mesne profits and interest was also made."], "rank2": ["It reads as follows Are the defendants farzidars of the plaintiffs in respect of the suit lands ?", "The appellants and the answering respondents were not in pari delicto.", "The correct position in law, in our opinion, is that what one has to see is whether the illegality goes so much to the root of the matter that the plaintiff cannot bring his action without relying upon the illegal transaction into which he had entered. If the illegality be trivial or venial, as stated by Williston and the plaintiff is not required to rest his case upon that illegality, then public policy demands that the defendant should not be allowed to take advantage of the position. A strict view, of course, must be taken of the plaintiffs conduct, and he should not be allowed to circumvent the illegality by resorting to some subterfuge or by mis-stating the facts.", "If, however, the matters is clear and the illegality is not required to be pleaded or proved as part of the cause of action and the plaintiff recanted before the illegal purpose was achieved, then, unless it be of such a gross nature as to outrage the conscience of the Court, the plea of the defendant should not prevail.", "Thus, the fraud, though intended, was not perpetrated, because the fraud could only be effected at the end of the lease term, and the locus poenitentiae which the lessee possessed was duly used long before the expiry of the lease.", "The illegality was also of a trivial character, inasmuch as the signatures of Prahlad Rai and others were made on the relative documents on the faith of their close friendship and relationship and under the assumption that no objection from them would proceed to the making of the application on their behalf and to the signing of the B.", "H. forms in their names.", "The appellants were not required to prove this fact as part of their cause of action, and indeed, if the answering respondents are to be believed, they asserted as vehemently that the signatures were not forged but were their very own.", "In establishing the benami nature of a transaction, the cardinal point to be proved is the source of money and this was done, and it was also established that Prahlad Rai and others were merely farzidars. To prove these things, it did not require the proof of the signatures."], "rank3": ["The suit was decreed by the Subordinate Judge, Motihari, on the ground that the defendants were in possession of the suit lands as benamidars.", "The trial Judge found that the consideration for the acquisition of these lands had proceeded from the predecessor of the plaintiffs, who had acquired them in the farzi names of Prahlad Rai, Gulraj Rai and Nawrang Rai. He also held that the benamidars were related to Radhumal by marriage, and that Radhumal found it convenient to use their names.", "These findings were accepted by the present respondents in the High Court. They, however, raised before the High Court certain contentions found against them by the trial Judge.", "By the decisions of the two Courts below and the concession of the respondents, all questions of fact must be taken to be finally decided.", "The question as to whether the acquisition was benami or not cannot any longer be-reopened, and the case has therefore to be considered only with regard to the principles contained in the maxims above referred to and the fact whether there was any fraud intended on the Bettiah Raj and, if so, whether it was effected and who was responsible for it.", "As we have already stated above, this issue has now been finally decided in favour of the appellants.", "The High Court has held that they are not entitled to a judgment in spite of this finding, on the ground that they had perpetrated a fraud upon the Bettiah Raj, and this fraud disentitles them to a judgment.", "The High Court has also stated that after the termination of the lease, the answering respondents must be deemed to be ryoti tenants of the Bettiah Raj, because rent was accepted from them and not from the lessee.", "The learned Chief Justice also adverted to the fact that there were certain illegalities committed by Radhumal, which made the condition of the respondents stronger.", "In view of these two facts, we must say, with respect, that the High Court was in error in constructing a new case for the respondents.", "It is not open to a Court in appeal to consider media concludendi not pleaded by a party and to give judgment on their basis.", "The maxim, in pari delicto etc., can hardly be made applicable in this context.", "Neither the appellants nor the respondents at any time pleaded that Prahlad Rai, Gulraj Rai and Nawrang Rai conspired to effect a fraud upon the Bettiah Raj.", "While the appellants claim that Radhumal did not even consider it necessary to obtain the consent of these three persons and even did not obtain their signatures, the respondents claim that Radhumal had nothing whatever to do with the acquisition of these lands and had merely recommended them to the Bettiah Raj in his capacity as the lessee.", "The respondents claimed to be innocent parties, who had acquired the lands themselves, and the appellants, on the other hand, stated that the respondents knew nothing about the matter and were not even consulted.", "This leaves over for consideration firstly whether a fraud was effected upon the Bettiah Raj, and whether it was successful.", "The appellants contend that the Bettiah Raj was in full possession of the information that this was a benami transaction and salami was obtained to the tune of Rs. 1,680 and was waived only in respect of lands considered not worthy of demanding a salami.", "In view of the fact that fraud cannot be said to have been effected, we do not think that the appellants who have clearly established the benami nature of the transactions can be deprived of their judgment.", "The authorities do not go to that length, because public policy demands that where fraud might have been contemplated but was not perpetrated, the defendants should not be allowed to perpetrate a new fraud.", "Coming now to the question whether the appellants suit was rightly dismissed by the High Court on the application of the maxim, ex turpi causa etc., we have first to see what are the specific facts on which this contention is based.", "No doubt, the making of the signatures of another person without his consent, express or implied, is an offence under the ordinary law, but the intention was not so much to forge the signatures but to present the application in the names of those persons.", "However it be, we proceed on the assumption that there was some illegality committed by Radhumal in approaching the Bettiah Raj and also in the execution of the B.H. forms, which were also signed with the names of these persons.", "The question is whether this illegality is sufficient to non-suit the plaintiffs on the application of the maxim.", "The law was stated as far back as 1775 by Lord Mansfield in Holman v. Johnson (1775) 1 Cowp. 341, 343 98 E.R. 1120, 1121, in the following words The principle of public policy is this ex dolo malo non oritur actio.", "No Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiffs own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the Court says he has no right to be assisted.", "There are, however, some exceptions or supposed exceptions to the rule of turpi causa.", "In Salmond and William on Contracts, four such exceptions have been mentioned, and the fourth of these exceptions is based on the right of restitutio in integrum, where the relationship of trustee and beneficiary is involved.", "So if A employs B to commit a robbery, A cannot sue B for the proceeds.\n And the position would be the same if A were to vest property in B upon trust to carry out some fraudulent scheme A could not sue B for an account of the profits.", "But if B, who is As agent or trustee, receives on As account money paid by C pursuant to an illegal contract between A and C the position is otherwise and A can recover the property from B, although he could not have claimed it from C.", "In such cases public policy requires that the rule of turpis causa shall be excluded by the more important and imperative rule that agents and trustees must faithfully perform the duties of their office.", "Williston in his Book on Contracts (revised edition), Vol. VI, has discussed this matter at p. 5069, para. 1785 and in paras. 1771 to 1774, he has noted certain exceptional cases, and has observed as follows If recovery is to be allowed by either partner or principal in any case, it must be where the illegality is of so light or venial a character that it is deemed more opposed to public policy to allow the defendant to violate his fiduciary relation with the plaintiff than to allow the plaintiff to gain the benefit of an illegal transaction.", "Even in India, certain exceptions to the rule of turpi causa have been accepted. Examples of those cases are found in Palaniyappa Chettiar v.", "Chockalingam Chettiar (1920) I.L.R. 44 Mad. 334 and Bhola Nath v. Mul Chand (1903) I.L.R. 25 All. 639.", "The application of the rule is, however, conditioned by one thing, namely, that a plaintiff who is not allowed to succeed must be unable to sustain an action except upon the plea of the illegality committed by him.", "In Lord Dunedins speech in Farmers Mart Limited v. Milne", "it was laid down that the test was whether a demand connected with an illegal transaction was capable of being enforced in law, and whether the plaintiff required any aid from the illegal transaction to establish his case.", "I think that this case may be determined on the short ground that the plaintiff is unable to establish his claim as stated upon the record, without relying upon the illegal agreement originally entered into between himself and the defendant.", "the true test was by considering whether the plaintiff could make out his case otherwise than through the medium and by the aid of the illegal transaction to which he was himself a party.", "In Alexander v. Rayson 1936 1 K.B. 169, it was held by the Court of Appeal that there was a locus poenitentiae but that the repentance must be before the fraud or illegality had been carried out.", "Recently, the Court of Appeal in Bowmakers Ltd. v. Barnet Instruments, Ltd. 1945 1 K.B. 65, reviewed the law on the subject, and laid down that every illegality did not entitle the Court to refuse a judgment to a plaintiff.", "In our opinion, a mans right to possess his own chattels will as a general rule be enforced against one who, without any claim of right, is detaining them, or has converted them to his own use, even though it may appear either from the pleadings, or in the course of the trial, that the chattels in question came into the defendants possession by reason of an illegal contract between himself and the plaintiff, provided that the plaintiff does not seek, and is not forced, either to found his claim on the illegal contract or to plead its illegality in order to support his claim.", "The law has been also considered by Pritchard, J., in Bigos v. Bousted", "We must remember that benami transactions are common in India, and have always been recognised. They are entered into for a variety of reasons, and the benamidar holds the property in trust for his principal.", "In the present case, the object of the benami transaction was merely to keep the property from being resumed by the Bettiah Raj on the expiry of the lease in favour of Radhumal, which undoubtedly the Bettiah Raj could have done, if it had been so minded.", "The information about the benami transaction was, however, not withheld from the Bettiah Raj, and even with that knowledge, the Bettiah Raj took no action against Radhumal or the benamidars.", "The plaintiffs recanted inasmuch as they asserted their true title and true facts before the occasion for the Raj to act arose."], "rank4": ["In the plaint, the appellants had given their reasons for acquiring the property benami in the names of Prahlad Rai, Gulraj Rai and Nawrang Rai.", "They had stated that, according to the terms of the lease, ryoti lands taken in the names of the lessee or his relatives and servants were liable to be resumed by the Bettiah Raj after the termination of the lease, and that the benami transaction was entered into to avoid this contingency.", "The answering respondents, therefore, contended in the Court of First Instance that the predecessor of the appellants had caused these lands to be settled by the Bettiah Raj benami in their names to effectuate a fraud upon the Bettiah Raj, and the fraud having succeeded, the plaintiffs-appellants were not entitled to a judgment.", "They also contended that after the termination of the lease of the appellants with the Bettiah Raj these lands were settled or deemed to be settled with them.", "In this Court, the respondents have taken the same stand, and have also contended that the acquisition of these lands having been achieved by means of forging the signatures of Prahlad Rai, Gulraj Rai and Nawrang Rai, the present appellants are not entitled to a judgment on the application of the maxim, ex turpi causa non oritur actio.", "They, however, contend that if it be the view of the Court that both the parties had conspired to deceive the Bettiah Raj or were guilty of illegality, even then, potior est conditio defendantis.", "We begin with the point about the creation of a new tenancy by the Bettiah Raj after the expiry of the lease granted to Radhumal. We may point out that this aspect of the case was not pleaded by the answering respondents, and it is difficult to accept this case, which requires fresh evidence and material for a finding.", "The case of the respondents was that they had taken settlement of these lands from the Bettiah Raj in the very beginning. There was no occasion, therefore, for a fresh settlement with them, and the plea that after the expiry of the lease there was, in fact, or there must be deemed in law, a fresh settlement with them, is not open to them.", "There is evidence in the case to show that B. H. forms were not issued once again after the expiry of the lease given to Radhumal.", "Narain Lal, (P.W. 17), deposed that in his presence Radhumal had told Moti Lal Basu that he was taking the settlements in the farzi names of his relations.", "It is also clear that in 1936 when the dispute went to the District Magistrate, Champar an, all these facts were set out in the rival cases of the parties - both under ss. 144 and 145 of the Code of Criminal Procedure.", "After the expiry of the lease, the Court of Wards did not enforce clause 16 in spite of this knowledge, and it therefore appears that the fraud was not effected, because the person or authority said to be defrauded knew all the facts, and elected not to take any action.", "It has been held, however, that Radhumal paid the salami, a fact not now questioned.", "The case of the appellants was that the property was taken benami in the names of Prahlad Rai and others to avid the implication of clause 16.", "In making the application to the Bettiah Raj the signatures of Prahlad Rai and others were made by Radhumal or some one under his instructions, because the relationship between Radhumal, Prahlad Rai and others was so intimate that it was considered unnecessary to trouble them. Inasmuch, as the matter was brought to the notice of the Assistant Manager of the Court of Wards, all these facts were capable of being investigated, including the making of the signatures by Radhumal.", "It is upon that ground the Court goes not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it for where both are equally in fault, potior est conditio defendentis.", "The respondents rely upon Farmers Mart Limited v. Milne 1915 A.C. 106, Alexander v.", "Rayson 1936 1 K.B. 169, and Berg v. Sadler Moore 1937 2 K.B. 158, to show that this case falls within the rule accepted and applied in those cases."], "rank5": ["In settling these lands with these persons, Radhumal himself as lessee recommended them to the Bettiah Raj, and it is now proved and admitted in the case that he had also caused the signatures of these persons to be made upon the documents filed in the Bettiah Raj by others than the apparent signatories.", "As has been pointed out already, this device was resorted to, to avoid the operation of clause 16 of the lease quoted above. It was also used to reduce the salami payable to the Bettiah Raj under clause 4 which in the case of a stranger was lower than in the case of the lessee, his relatives and servants.", "They now rely upon the facts pleaded by the appellants in regard to the device resorted to, to save the lands from the operation of cls. 16 and 4 and further plead the illegal conduct of Radhumal in causing the signatures of Prahlad Rai, Gulraj Rai and Nawrang Rai to be forged on the documents filed with the Bettiah Raj.", "Radhumal died on February 28, 1934. After his death, Bala Prasad, appellant No. 3, was adopted, and the adoption was also recognised by the Bettiah Raj. The lease was also transferred to the name of Bala Prasad.", "In 1935, it is alleged the widow denied, at the instigation of Mahadeo, respondent 6, this adoption, and Mahadeo, in his turn, started to disclaim all interest in the property. The other respondents also began asserting their title against the heirs and representatives of Radhumal. It was also alleged that Mahadeo had removed all the kabalas and some of the receipts and had given them to Prahlad Rai, which were used by the answering respondents in all subsequent proceedings.", "The High Court recommended the commencement of proceedings under s. 145 of the Code of Criminal Procedure, if there was any apprehension of breach of peace.", "These proceedings were commenced and finally terminated on May 18, 1942, by an order against the appellants, who were therefore compelled to bring this suit inasmuch as, according to them, the decision in the criminal courts cast a cloud upon their title."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["In view of the fact that fraud cannot be said to have been effected, we do not think that the appellants who have clearly established the benami nature of the transactions can be deprived of their judgment.", "a plaintiff who is not allowed to succeed must be unable to sustain an action except upon the plea of the illegality committed by him.", "The correct position in law, in our opinion, is that what one has to see is whether the illegality goes so much to the root of the matter that the plaintiff cannot bring his action without relying upon the illegal transaction into which he had entered.", "If, however, the matters is clear and the illegality is not required to be pleaded or proved as part of the cause of action and the plaintiff recanted before the illegal purpose was achieved, then, unless it be of such a gross nature as to outrage the conscience of the Court, the plea of the defendant should not prevail.", "Thus, the fraud, though intended, was not perpetrated, because the fraud could only be effected at the end of the lease term, and the locus poenitentiae which the lessee possessed was duly used long before the expiry of the lease.", "The illegality was also of a trivial character, inasmuch as the signatures of Prahlad Rai and others were made on the relative documents on the faith of their close friendship and relationship and under the assumption that no objection from them would proceed to the making of the application on their behalf and to the signing of the B. H. forms in their names.", "In establishing the benami nature of a transaction, the cardinal point to be proved is the source of money and this was done, and it was also established that Prahlad Rai and others were merely farzidars."], "rank2": ["The maxim, in pari delicto etc., can hardly be made applicable in this context.", "In our opinion, the application of the maxim was erroneous.", "Even in India, certain exceptions to the rule of turpi causa have been accepted.", "provided that the plaintiff does not seek, and is not forced, either to found his claim on the illegal contract or to plead its illegality in order to support his claim.", "If the illegality be trivial or venial, as stated by Williston and the plaintiff is not required to rest his case upon that illegality, then public policy demands that the defendant should not be allowed to take advantage of the position."], "rank3": ["These findings were accepted by the present respondents in the High Court.", "By the decisions of the two Courts below and the concession of the respondents, all questions of fact must be taken to be finally decided.", "It is not open to a Court in appeal to consider media concludendi not pleaded by a party and to give judgment on their basis.", "Neither the appellants nor the respondents at any time pleaded that Prahlad Rai, Gulraj Rai and Nawrang Rai conspired to effect a fraud upon the Bettiah Raj.", "The appellants and the answering respondents were not in pari delicto.", "After the expiry of the lease, the Court of Wards did not enforce clause 16 in spite of this knowledge, and it therefore appears that the fraud was not effected, because the person or authority said to be defrauded knew all the facts, and elected not to take any action.", "It has been held, however, that Radhumal paid the salami, a fact not now questioned.", "There are, however, some exceptions or supposed exceptions to the rule of turpi causa.", "In Salmond and William on Contracts, four such exceptions have been mentioned, and the fourth of these exceptions is based on the right of restitutio in integrum, where the relationship of trustee and beneficiary is involved.", "Examples of those cases are found in Palaniyappa Chettiar v. Chockalingam Chettiar (1920) I.L.R. 44 Mad. 334 and Bhola Nath v. Mul Chand (1903) I.L.R. 25 All. 639.", "In Alexander v. Rayson 1936 1 K.B. 169, it was held by the Court of Appeal that there was a locus poenitentiae but that the repentance must be before the fraud or illegality had been carried out.", "Recently, the Court of Appeal in Bowmakers Ltd. v. Barnet Instruments, Ltd. 1945 1 K.B. 65, reviewed the law on the subject, and laid down that every illegality did not entitle the Court to refuse a judgment to a plaintiff.", "A strict view, of course, must be taken of the plaintiffs conduct, and he should not be allowed to circumvent the illegality by resorting to some subterfuge or by mis-stating the facts.", "the benamidar holds the property in trust for his principal.", "The information about the benami transaction was, however, not withheld from the Bettiah Raj, and even with that knowledge, the Bettiah Raj took no action against Radhumal or the benamidars.", "The appellants were not required to prove this fact as part of their cause of action, and indeed, if the answering respondents are to be believed, they asserted as vehemently that the signatures were not forged but were their very own."], "rank4": ["the defendants were in possession of the suit lands as benamidars.", "the consideration for the acquisition of these lands had proceeded from the predecessor of the plaintiffs, who had acquired them in the farzi names of Prahlad Rai, Gulraj Rai and Nawrang Rai.", "the benamidars were related to Radhumal by marriage, and that Radhumal found it convenient to use their names.", "the creation of a new tenancy by the Bettiah Raj after the expiry of the lease granted to Radhumal. We may point out that this aspect of the case was not pleaded by the answering respondents, and it is difficult to accept this case, which requires fresh evidence and material for a finding.", "In view of these two facts, we must say, with respect, that the High Court was in error in constructing a new case for the respondents.", "Where both parties do not show that there was any conspiracy to defraud a third person or to commit any other illegal act, the maxim, in pari delicto etc., can hardly be made applicable.", "public policy demands that where fraud might have been contemplated but was not perpetrated, the defendants should not be allowed to perpetrate a new fraud.", "In making the application to the Bettiah Raj the signatures of Prahlad Rai and others were made by Radhumal or some one under his instructions, because the relationship between Radhumal, Prahlad Rai and others was so intimate that it was considered unnecessary to trouble them.", "if B, who is As agent or trustee, receives on As account money paid by C pursuant to an illegal contract between A and C the position is otherwise and A can recover the property from B, although he could not have claimed it from C. In such cases public policy requires that the rule of turpis causa shall be excluded by the more important and imperative rule that agents and trustees must faithfully perform the duties of their office.", "If recovery is to be allowed by either partner or principal in any case, it must be where the illegality is of so light or venial a character that it is deemed more opposed to public policy to allow the defendant to violate his fiduciary relation with the plaintiff than to allow the plaintiff to gain the benefit of an illegal transaction.", "In the first case, it was laid down that the test was whether a demand connected with an illegal transaction was capable of being enforced in law, and whether the plaintiff required any aid from the illegal transaction to establish his case.", "Tindal, C.J., in the second case observed as follows I think that this case may be determined on the short ground that the plaintiff is unable to establish his claim as stated upon the record, without relying upon the illegal agreement originally entered into between himself and the defendant.", "In the last case, Mellor, J., observed that the true test was by considering whether the plaintiff could make out his case otherwise than through the medium and by the aid of the illegal transaction to which he was himself a party.", "a mans right to possess his own chattels will as a general rule be enforced against one who, without any claim of right, is detaining them, or has converted them to his own use, even though it may appear either from the pleadings, or in the course of the trial, that the chattels in question came into the defendants possession by reason of an illegal contract between himself and the plaintiff", "benami transactions are common in India, and have always been recognised.", "They are entered into for a variety of reasons, and the benamidar holds the property in trust for his principal.", "The plaintiffs recanted inasmuch as they asserted their true title and true facts before the occasion for the Raj to act arose."], "rank5": ["according to the terms of the lease, ryoti lands taken in the names of the lessee or his relatives and servants were liable to be resumed by the Bettiah Raj after the termination of the lease, and that the benami transaction was entered into to avoid this contingency.", "Not to make any settlement of land with a raiyat or other tenant without the consent of the manager, and in any application for such consent to any settlement of land recorded as zirat or bakasht in the record of rights to state the reason of the lessee for wishing to make such settlement, and the area or zirat or bakasht land which would remain in the demised property after such settlement if it were made, and when it is proposed to make any settlement with a relative or servant of the lessee to state that fact and it is hereby declared that the manager shall be entitled as a condition of giving consent to any such settlement to require that an amount to be assessed by him shall be charged as a salami on any such settlement.", "Not to retain possession after the expiry of lease of any raiyati holdings or other interest in the leased property, acquired during the term of the lease whether by private purchase, purchase at auction sale, mortgage, sub-lease, surrender or otherwise, and any such holding or interest thus acquired will pass to the lessor,", "In this respect, the cases of the appellants and the respondents are poles apart. While the appellants claim that Radhumal did not even consider it necessary to obtain the consent of these three persons and even did not obtain their signatures, the respondents claim that Radhumal had nothing whatever to do with the acquisition of these lands and had merely recommended them to the Bettiah Raj in his capacity as the lessee.", "The respondents claimed to be innocent parties, who had acquired the lands themselves, and the appellants, on the other hand, stated that the respondents knew nothing about the matter and were not even consulted.", "but the intention was not so much to forge the signatures but to present the application in the names of those persons", "The law was stated as far back as 1775 by Lord Mansfield in Holman v. Johnson (1775) 1 Cowp. 341, 343 98 E.R. 1120, 1121, in the following words The principle of public policy is this ex dolo malo non oritur actio. No Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiffs own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the Court says he has no right to be assisted. It is upon that ground the Court goes not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it for where both are equally in fault, potior est conditio defendentis.", "In the present case, the object of the benami transaction was merely to keep the property from being resumed by the Bettiah Raj on the expiry of the lease in favour of Radhumal, which undoubtedly the Bettiah Raj could have done, if it had been so minded."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1959_189", "text": "Directed against the refusal by the High Court of Patna to require the Income-tax Appellate Tribunal to state a case and refer to it the question of law namely Whether under the facts and circumstances of the case, the amount of Rs. 1,30,785 being the excess of sale proceeds of the building, plant and machinery over the written down value of the business of the said newspapers publications could in law be termed to be income, profits and gains of the petitioner ? The facts which led to this appeal may be shortly stated. The appellant was the sole proprietor of the business which he carried on of publishing tow news-papers, namely The Indian National and Aryavart and which business had some assets. The Income-tax authorities had from time to time allowed to the appellant depreciation on the said assets for several years. In the accounting year 1356 Fasli corresponding to the assessment year 1950-1951, the appellant converted his said proprietary business into a private limited company.\n The entire capital of the newly-floated private limited company came out of the pocket of and was subscribed for by the appellant. The said newspapers publications and their assets were transferred from the sole proprietorship of the appellant to the newly floated private limited company of which the entire share capital was subscribed for and paid by the appellant. The appellant was allotted by way of consideration for the said transfer 25,000 shares of the said company out of which he held in his own name 24,950 share, the remaining 50 shares having been allotted at his instance to the names of his nominees by way of directors qualification shares. On the said transfer certain valuation was put on these assets.\n The written down value of the building as on the 30th September, 1948, was Rs. 29,669, the original cost thereof including the cost of subsequent additions being Rs. 49,270. The written down value of the machines and the plants as on the 30th September, 1948, was Rs. 1,19,368 as against the original cost thereof including subsequent additions which came to Rs. 2,30,552. There was thus a difference of Rs. 1,30,785 which represented the total amount of depreciation which had been allowed by the Income-tax authorities on these assets up to that date. When the valuation was put on these assets for the purpose of the transfer, the valuation of the building with subsequent additions showed an appreciation of Rs. 54,599 and the appreciation in regard to the machinery and plant together with subsequent additions came to Rs. 1,51,744. The appreciated value of these assets therefore aggregated to Rs. 2,06,343 which was in excess of the depreciation amount already allowed namely, Rs. 1,30,785.\n The Income-tax Officer while assessing the appellants income for the assessment year 1950-51 was of the opinion that the appellant had sold to the private limited company these assets at an appreciated value and realised profits thereby and since the difference between the original cost and the written down value, namely Rs. 1,30,785, was less than the appreciated sale price of Rs. 2,06,343, the entire amount of Rs. 1,30,785 was income, profits or gains in the hands of the appellant liable to be assessed during the relevant assessment year, and assessed the same accordingly.\n Appeals filed by the appellant before the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal failed with the result that the appellant applied to the Tribunal to state a case inter alia in connection with this particular question and an application was made by him under section 66(1) of the Indian Income- tax asking that the aforesaid question be referred to the High Court for its opinion. The Tribunal refused to refer that question and the appellant thereupon made an application to the High Court under section 66(2) of the Act requesting the High Court to direct the Tribunal to state a case and refer the said question amongst others for its decision.\n The High Court as stated above declined to do so, and hence this appeal. Mr. Kolah appearing on behalf of the appellant has urged before us that the question whether the sum of Rs. 1,30,785 being the excess of the sale proceeds of the building, plant and machinery amounted to or could be deemed to be income, profits or gains of the appellant was a question of law and the High Court should have directed the Income-tax Appellate Tribunal to state a case and refer the said question to it for its decision. Reliance was placed by him on Doughty v. Commissioner of Taxes, Commissioner of Income-tax v. Sir Homi Mehtas Executors, and Kikabhai Premchand v. Commissioner of Income-tax and it was urged that the question whether there was a sale by the appellant to the newly floated private limited company which according to his submission was in no manner distinct and separate from the appellant himself and whether profits earned by the appellant in the matter of the said transaction of the transfer of the assets from himself as the proprietor to the newly floated private limited company as the transferee could be profits or gains in the real and commercial sense of the term was really a question of law and if regard be had to the observations of this court in the majority judgment in Kikabhai Premchand v. Commissioner of Income-tax that it was open to the court to lift the veil of corporate entity and look behind the same in order to see who were the real parties to the transaction, the present case would really come within the dictum that no man can make profit from himself.\n We are at present not concerned to express any opinion on the merits of this contention. Suffice it to say that this contention raises a question of law which should have been referred to the High Court by the Income-tax Appellate Tribunal for its decision, and when on the refusal of the Income-tax Appellate Tribunal to state a case and to refer the said question to the High Court the appellant approached the High Court, the High Court should, in the exercise of its jurisdiction under section 66(2) of the Income-tax Act, have asked the Income-tax Appellate Tribunal to state a case and refer the said question to it for its decision. The question as it has been framed is not aptly worded.\nDECISION ??", "expert_1": {"rank1": ["Suffice it to say that this contention raises a question of law which should have been referred to the High Court by the Income-tax Appellate Tribunal for its decision, and when on the refusal of the Income-tax Appellate Tribunal to state a case and to refer the said question to the High Court the appellant approached the High Court, the High Court should, in the exercise of its jurisdiction under section 66(2) of the Income-tax Act, have asked the Income-tax Appellate Tribunal to state a case and refer the said question to it for its decision."], "rank2": ["the question whether the sum of Rs. 1,30,785 being the excess of the sale proceeds of the building, plant and machinery amounted to or could be deemed to be income, profits or gains of the appellant was a question of law and the High Court should have directed the Income-tax Appellate Tribunal to state a case and refer the said question to it for its decision."], "rank3": ["Directed against the refusal by the High Court of Patna to require the Income-tax Appellate Tribunal to state a case and refer to it the question of law namely Whether under the facts and circumstances of the case, the amount of Rs. 1,30,785 being the excess of sale proceeds of the building, plant and machinery over the written down value of the business of the said newspapers publications could in law be termed to be income, profits and gains of the petitioner ?", "The Income-tax Officer while assessing the appellants income for the assessment year 1950-51 was of the opinion that the appellant had sold to the private limited company these assets at an appreciated value and realised profits thereby and since the difference between the original cost and the written down value, namely Rs. 1,30,785, was less than the appreciated sale price of Rs. 2,06,343, the entire amount of Rs. 1,30,785 was income, profits or gains in the hands of the appellant liable to be assessed during the relevant assessment year, and assessed the same accordingly.\n Appeals filed by the appellant before the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal failed with the result that the appellant applied to the Tribunal to state a case inter alia in connection with this particular question and an application was made by him under section 66(1) of the Indian Income- tax asking that the aforesaid question be referred to the High Court for its opinion. The Tribunal refused to refer that question and the appellant thereupon made an application to the High Court under section 66(2) of the Act requesting the High Court to direct the Tribunal to state a case and refer the said question amongst others for its decision.\n The High Court as stated above declined to do so, and hence this appeal."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["Suffice it to say that this contention raises a question of law which should have been referred to the High Court by the Income-tax Appellate Tribunal for its decision, and when on the refusal of the Income-tax Appellate Tribunal to state a case and to refer the said question to the High Court the appellant approached the High Court, the High Court should, in the exercise of its jurisdiction under section 66(2) of the Income-tax Act, have asked the Income-tax Appellate Tribunal to state a case and refer the said question to it for its decision."], "rank2": ["The Tribunal refused to refer that question and the appellant thereupon made an application to the High Court under section 66(2) of the Act requesting the High Court to direct the Tribunal to state a case and refer the said question amongst others for its decision.", "it was urged that the question whether there was a sale by the appellant to the newly floated private limited company which according to his submission was in no manner distinct and separate from the appellant himself and whether profits earned by the appellant in the matter of the said transaction of the transfer of the assets from himself as the proprietor to the newly floated private limited company as the transferee could be profits or gains in the real and commercial sense of the term was really a question of law and if regard be had to the observations of this court in the majority judgment in Kikabhai Premchand v. Commissioner of Income-tax that it was open to the court to lift the veil of corporate entity and look behind the same in order to see who were the real parties to the transaction, the present case would really come within the dictum that no man can make profit from himself."], "rank3": ["The Income-tax Officer while assessing the appellants income for the assessment year 1950-51 was of the opinion that the appellant had sold to the private limited company these assets at an appreciated value and realised profits thereby and since the difference between the original cost and the written down value, namely Rs. 1,30,785, was less than the appreciated sale price of Rs. 2,06,343, the entire amount of Rs. 1,30,785 was income, profits or gains in the hands of the appellant liable to be assessed during the relevant assessment year, and assessed the same accordingly."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["Whether under the facts and circumstances of the case, the amount of Rs. 1,30,785 being the excess of sale proceeds of the building, plant and machinery over the written down value of the business of the said newspapers publications could in law be termed to be income, profits and gains of the petitioner", "Appeals filed by the appellant before the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal failed with the result that the appellant applied to the Tribunal to state a case inter alia in connection with this particular question and an application was made by him under section 66(1) of the Indian Income- tax asking that the aforesaid question be referred to the High Court for its opinion. The Tribunal refused to refer that question and the appellant thereupon made an application to the High Court under section 66(2) of the Act requesting the High Court to direct the Tribunal to state a case and refer the said question amongst others for its decision.\n The High Court as stated above declined to do so, and hence this appeal", "Suffice it to say that this contention raises a question of law which should have been referred to the High Court by the Income-tax Appellate Tribunal for its decision, and when on the refusal of the Income-tax Appellate Tribunal to state a case and to refer the said question to the High Court the appellant approached the High Court, the High Court should, in the exercise of its jurisdiction under section 66(2) of the Income-tax Act, have asked the Income-tax Appellate Tribunal to state a case and refer the said question to it for its decision."], "rank2": ["The written down value of the building as on the 30th September, 1948, was Rs. 29,669, the original cost thereof including the cost of subsequent additions being Rs. 49,270. The written down value of the machines and the plants as on the 30th September, 1948, was Rs. 1,19,368 as against the original cost thereof including subsequent additions which came to Rs. 2,30,552.", "There was thus a difference of Rs. 1,30,785 which represented the total amount of depreciation which had been allowed by the Income-tax authorities on these assets up to that date. When the valuation was put on these assets for the purpose of the transfer, the valuation of the building with subsequent additions showed an appreciation of Rs. 54,599 and the appreciation in regard to the machinery and plant together with subsequent additions came to Rs. 1,51,744. The appreciated value of these assets therefore aggregated to Rs. 2,06,343 which was in excess of the depreciation amount already allowed namely, Rs. 1,30,785.", "The Income-tax Officer while assessing the appellants income for the assessment year 1950-51 was of the opinion that the appellant had sold to the private limited company these assets at an appreciated value and realised profits thereby and since the difference between the original cost and the written down value, namely Rs. 1,30,785, was less than the appreciated sale price of Rs. 2,06,343, the entire amount of Rs. 1,30,785 was income, profits or gains in the hands of the appellant liable to be assessed during the relevant assessment year, and assessed the same accordingly"], "rank3": ["The appellant was the sole proprietor of the business which he carried on of publishing tow news-papers, namely The Indian National and Aryavart and which business had some assets. The Income-tax authorities had from time to time allowed to the appellant depreciation on the said assets for several years. In the accounting year 1356 Fasli corresponding to the assessment year 1950-1951, the appellant converted his said proprietary business into a private limited company.\n The entire capital of the newly-floated private limited company came out of the pocket of and was subscribed for by the appellant", "The said newspapers publications and their assets were transferred from the sole proprietorship of the appellant to the newly floated private limited company of which the entire share capital was subscribed for and paid by the appellant. The appellant was allotted by way of consideration for the said transfer 25,000 shares of the said company out of which he held in his own name 24,950 share, the remaining 50 shares having been allotted at his instance to the names of his nominees by way of directors qualification shares. On the said transfer certain valuation was put on these assets"], "label": "ACCEPTED"}, "expert_4": {"rank1": ["Directed against the refusal by the High Court of Patna to require the Income-tax Appellate Tribunal to state a case and refer to it the question of law namely Whether under the facts and circumstances of the case, the amount of Rs. 1,30,785 being the excess of sale proceeds of the building, plant and machinery over the written down value of the business of the said newspapers publications could in law be termed to be income, profits and gains of the petitioner ?"], "rank2": ["Suffice it to say that this contention raises a question of law which should have been referred to the High Court by the Income-tax Appellate Tribunal for its decision, and when on the refusal of the Income-tax Appellate Tribunal to state a case and to refer the said question to the High Court the appellant approached the High Court, the High Court should, in the exercise of its jurisdiction under section 66(2) of the Income-tax Act, have asked the Income-tax Appellate Tribunal to state a case and refer the said question to it for its decision."], "rank3": ["The appellant was the sole proprietor of the business which he carried on of publishing tow news-papers, namely The Indian National and Aryavart and which business had some assets.", "The Income-tax authorities had from time to time allowed to the appellant depreciation on the said assets for several years.", "In the accounting year 1356 Fasli corresponding to the assessment year 1950-1951, the appellant converted his said proprietary business into a private limited company.\n The entire capital of the newly-floated private limited company came out of the pocket of and was subscribed for by the appellant.", "The said newspapers publications and their assets were transferred from the sole proprietorship of the appellant to the newly floated private limited company of which the entire share capital was subscribed for and paid by the appellant.", "On the said transfer certain valuation was put on these assets.", "The written down value of the building as on the 30th September, 1948, was Rs. 29,669, the original cost thereof including the cost of subsequent additions being Rs. 49,270.", "The written down value of the machines and the plants as on the 30th September, 1948, was Rs. 1,19,368 as against the original cost thereof including subsequent additions which came to Rs. 2,30,552.", "There was thus a difference of Rs. 1,30,785 which represented the total amount of depreciation which had been allowed by the Income-tax authorities on these assets up to that date.", "When the valuation was put on these assets for the purpose of the transfer, the valuation of the building with subsequent additions showed an appreciation of Rs. 54,599 and the appreciation in regard to the machinery and plant together with subsequent additions came to Rs. 1,51,744.", "The appreciated value of these assets therefore aggregated to Rs. 2,06,343 which was in excess of the depreciation amount already allowed namely, Rs. 1,30,785.", "Appeals filed by the appellant before the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal failed with the result that the appellant applied to the Tribunal to state a case inter alia in connection with this particular question and an application was made by him under section 66(1) of the Indian Income- tax asking that the aforesaid question be referred to the High Court for its opinion.", "The Tribunal refused to refer that question and the appellant thereupon made an application to the High Court under section 66(2) of the Act requesting the High Court to direct the Tribunal to state a case and refer the said question amongst others for its decision.\n The High Court as stated above declined to do so, and hence this appeal."], "rank4": ["The Income-tax Officer while assessing the appellants income for the assessment year 1950-51 was of the opinion that the appellant had sold to the private limited company these assets at an appreciated value and realised profits thereby and since the difference between the original cost and the written down value, namely Rs. 1,30,785, was less than the appreciated sale price of Rs. 2,06,343, the entire amount of Rs. 1,30,785 was income, profits or gains in the hands of the appellant liable to be assessed during the relevant assessment year, and assessed the same accordingly.", "Mr. Kolah appearing on behalf of the appellant has urged before us that the question whether the sum of Rs. 1,30,785 being the excess of the sale proceeds of the building, plant and machinery amounted to or could be deemed to be income, profits or gains of the appellant was a question of law and the High Court should have directed the Income-tax Appellate Tribunal to state a case and refer the said question to it for its decision.", "Reliance was placed by him on Doughty v. Commissioner of Taxes, Commissioner of Income-tax v.", "Sir Homi Mehtas Executors, and Kikabhai Premchand v. Commissioner of Income-tax", "it was urged that the question whether there was a sale by the appellant to the newly floated private limited company which according to his submission was in no manner distinct and separate from the appellant himself and whether profits earned by the appellant in the matter of the said transaction of the transfer of the assets from himself as the proprietor to the newly floated private limited company as the transferee could be profits or gains in the real and commercial sense of the term was really a question of law and if regard be had to the observations of this court in the majority judgment in Kikabhai Premchand v. Commissioner of Income-tax that it was open to the court to lift the veil of corporate entity and look behind the same in order to see who were the real parties to the transaction, the present case would really come within the dictum that no man can make profit from himself."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["We are at present not concerned to express any opinion on the merits of this contention.", "this contention raises a question of law which should have been referred to the High Court by the Income-tax Appellate Tribunal for its decision, and when on the refusal of the Income-tax Appellate Tribunal to state a case and to refer the said question to the High Court the appellant approached the High Court, the High Court should, in the exercise of its jurisdiction under section 66(2) of the Income-tax Act, have asked the Income-tax Appellate Tribunal to state a case and refer the said question to it for its decision."], "rank2": ["if regard be had to the observations of this court in the majority judgment in Kikabhai Premchand v. Commissioner of Income-tax that it was open to the court to lift the veil of corporate entity and look behind the same in order to see who were the real parties to the transaction, the present case would really come within the dictum that no man can make profit from himself."], "rank3": ["The question as it has been framed is not aptly worded."], "rank4": ["Reliance was placed by him on Doughty v. Commissioner of Taxes, Commissioner of Income-tax v. Sir Homi Mehtas Executors, and Kikabhai Premchand v. Commissioner of Income-tax and it was urged that the question whether there was a sale by the appellant to the newly floated private limited company which according to his submission was in no manner distinct and separate from the appellant himself and whether profits earned by the appellant in the matter of the said transaction of the transfer of the assets from himself as the proprietor to the newly floated private limited company as the transferee could be profits or gains in the real and commercial sense of the term was really a question of law"], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1959_26", "text": "The respondents at all material times were non-residents carrying on business at Secunderabad which was then in the territories of the Nizam of Hyderabad. They acted as agents for the supply of gas plants manufactured by Messrs. T. V. S. Iyengar Sons, Madura, to the Nizams Government, and also as agents of the Lucas Indian Services, Bombay branch, for the supply of certain goods to that Government. The year of assessment is 1945-46. There does not appear to have been any written agreement between the two manufacturers and the respondents but the goods were to be supplied on a commission basis. In pursuance of this agreement the respondents received from M s. T.V.S. lyengar Sons, Madura, cheques drawn on the Imperial Bank of India, Madras, amounting to Rs. 35,202 in respect of all goods supplied from -Madura and also from Lucas Indian Services, Bombay, by cheques drawn on Imperial Bank of India, Bombay branch, amounting to Rs. 5,302 in respect of goods supplied by them, thus making a total of Rs. 40,504. These cheques were sent by post and when received by the respondents at Secunderabad were credited in the account books of the respondents and sent to their banker G. Raghunathmal for collecting and crediting to the account of the respondents. As against these sums so deposited the respondents at once drew cheques and thus operated on these amounts deposited. In regard to the commission received from the Bombay firm it was paid into the account on December 22, 1944, but was given credit for only on January 2, 1945. The Income-tax Officer assessed these sums as taxable income holding that the entire amount of Rs. 40,504 was received in British India and not at Secunderabad. An appeal was taken by the respondents to the Appellate Assistant Commissioner who upheld the order holding that income must be held to have accrued, arisen or received in British India.\n Against this order the respondents took an appeal to the Income-tax Appellate Tribunal and it was held that the amounts were received by the respondents from Madura and Bombay firms as commission but they were received at Secunderabad. The appeal was therefore allowed. The finding Of the Appellate Tribunal in their own words was- The contention of the Appellants is that the cheques being negotiable instruments and the creditor having accepted them and passed through their books, II the receipt must be taken to be receipts in Hyderabad. We agree with the view submitted by the appellants. In Bhashyams Negotiable Instruments Act, 8th Edition, Revised, page 556, it is stated that it will be open to a creditor to accept a cheque in absolute payment of money due to him, in which case it will be equivalent to cash payment. That being the position it cannot be said that the income was received in British India . At the instance of the Commissioner a reference under s. 66(1) of the Act was made to the High Court of Orissa for their opinion on the following question - Whether in the circumstances of the case, the sums of Rs. 35,202 and Rs. 5,302 received as commission from T. V. S. lyengar Sons Ltd., and Lucas Indian Services Ltd., respectively were income that accrued, arose or were received in British India .\n The High Court found that the statement of case was imperfect and that the real question was different. It said The real question in all such cases is not merely whether the cheques were drawn on a bank in British India, and sent for collection to that bank. The question is whether when the cheques were received by the assessee having his place of business outside British India, those cheques were in fact received as absolute and final payments by way of unconditional discharge or whether they were received as mere conditional payments on realisation. The fact that cheques were drawn on a bank in British India or that they were sent for collection through a Secunderabad banker of the assessee though relevant, are not conclusive .\n It therefore remitted the case to the Appellate Tribunal for submission of supplementary statement of case. It appears that at that stage the controversy was confined to the question whether the cheques having been sent to Secunderabad and having been realised in British India would amount to a final discharge or an unconditional one. The Tribunal in its supplementary statement found that the course of conduct followed by the parties showed that the cheques were received from the Bombay and Madura firms in full satisfaction of the commission ascertained from time to time and due on such date. It said The facts that such entries were made in the assessees books, that the cheques were put into the bank immediately, that the bank at once gave credit to the assessee for these sums after charging discount thereon and immediately allowed the assessee to operate on those sums are significant .\n Therefore the finding of fact by the Tribunal although not specific was that the receipt of the cheque by the respondents operated as full discharge of the debt due on account of commission from these two firms. The matter was decided by the High Court against the appellant and in the meanwhile this Court had given a judgment in Commissioner of Income-tax v. Ogale Glass Works Ltd (1). Even after considering the decision of that case the High Court was of the opinion that the income of the respondents was not received in British India and answered the question against the Revenue.\n The High Court refused to give leave to appeal to this Court and it was this Court which gave special leave to appeal. The question is whether the amounts, of commission paid by cheques, drawn respectively on banks at Madras and Bombay and respectively posted from Madura and Bombay, can in the circumstances of this case be held to have been received in what was British India or at Secunderabad ? The Appellate Tribunal found that all the cheques whether from Madura or from Bombay were sent by the two respective firms from Madura or Bombay and were received by the respondents at Secunderabad and were treated as payment. The question still remains as to the effect of the sending of the cheques from Madura or Bombay by post. If there is an express request by the (1) 1955 1 S. C. R. 185. creditor that the amount be paid by cheques to be sent by post and they are so sent there is no doubt that the payment will be taken to be at the place where the cheque or cheques are posted. The respondents argued that there was an agreement between the Madura and Bombay firms and the respondents that the money would be paid whether in cash or by cheque at Secunderabad and therefore when the cheques were sent by post the post office was the agent of the debtor and not of the respondents. There is in support of the respondents an affidavit which was filed in the assessment proceedings and which was relied upon in the High Court. According to this affidavit it was verbally agreed that the commission would be paid at Secunderabad in cash or by cheque (as the case may be), the language used in the affidavit was The above commission was verbally decided to be paid to Messrs. Patney Co. Ltd., Secunderabad the Agent Company in Hyderabad State at Secunderabad in cash or by cheque as the case might be . In the case of payment by cheques sent by post the determination of the place of payment would depend upon the agreement between the parties or the course of conduct of the parties. If it is shown that the creditor authorised the debtor either expressly or impliedly to send a cheque by post the property in the cheque passes to the creditor as soon as it is posted.\n Therefore the post office is an agent of the person to whom the cheque is posted if there be an express or implied authority to send it by post (Commissioner of Income-tax v. Ogale Glass Works Ltd. (1)). In that case there was an express request of the assessee to remit the amount of the bills outstanding against the debtor, that is, Government of India by means of cheques. But it was observed by this Court that according to the course of business usage in general which has to be considered as a part of the surrounding circumstances the parties must have intended that the cheques should be sent by post which is the usual and normal mode of transmission and therefore the posting of cheques in Delhi amounted to payment in (1) 1955 1 S.C.R. 185. Delhi to the post office which was constituted the agent of the assessee. But it was argued for the respondents that in the absence of such a request the post office could not be constituted as the agent of the creditor and relied on a passage in Ogales case (1) at p. 204 where it was observed- Of course if there be no such request, express or implied, then the delivery of the letter or the cheque to the post office is delivery to the agent of the sender himself . It was further contended that in this case there was an express agreement that the payment was to be made at Secunderabad and therefore the matter does not fall within the rule in Ogale Glass Works case (1) and the following principle laid down in judgment by Das, J. (as he then was), is inapplicable - Applying the above principles to the facts found by the Tribunal the position appears to be this. The engagement of the Government was to make payment by cheques. The cheques were drawn in Delhi and received by the assessee in Aundh by post.\nDECISION ??", "expert_1": {"rank1": ["We agree with the view submitted by the appellants.", "Applying the above principles to the facts found by the Tribunal the position appears to be this. The engagement of the Government was to make payment by cheques. The cheques were drawn in Delhi and received by the assessee in Aundh by post."], "rank2": ["Against this order the respondents took an appeal to the Income-tax Appellate Tribunal and it was held that the amounts were received by the respondents from Madura and Bombay firms as commission but they were received at Secunderabad. The appeal was therefore allowed. The finding Of the Appellate Tribunal in their own words was- The contention of the Appellants is that the cheques being negotiable instruments and the creditor having accepted them and passed through their books, II the receipt must be taken to be receipts in Hyderabad.", "The question is whether the amounts, of commission paid by cheques, drawn respectively on banks at Madras and Bombay and respectively posted from Madura and Bombay, can in the circumstances of this case be held to have been received in what was British India or at Secunderabad ? The Appellate Tribunal found that all the cheques whether from Madura or from Bombay were sent by the two respective firms from Madura or Bombay and were received by the respondents at Secunderabad and were treated as payment. The question still remains as to the effect of the sending of the cheques from Madura or Bombay by post. If there is an express request by the (1) 1955 1 S. C. R. 185. creditor that the amount be paid by cheques to be sent by post and they are so sent there is no doubt that the payment will be taken to be at the place where the cheque or cheques are posted.", "In the case of payment by cheques sent by post the determination of the place of payment would depend upon the agreement between the parties or the course of conduct of the parties. If it is shown that the creditor authorised the debtor either expressly or impliedly to send a cheque by post the property in the cheque passes to the creditor as soon as it is posted.\n Therefore the post office is an agent of the person to whom the cheque is posted if there be an express or implied authority to send it by post (Commissioner of Income-tax v. Ogale Glass Works Ltd. (1)). In that case there was an express request of the assessee to remit the amount of the bills outstanding against the debtor, that is, Government of India by means of cheques. But it was observed by this Court that according to the course of business usage in general which has to be considered as a part of the surrounding circumstances the parties must have intended that the cheques should be sent by post which is the usual and normal mode of transmission and therefore the posting of cheques in Delhi amounted to payment in (1) 1955 1 S.C.R. 185. Delhi to the post office which was constituted the agent of the assessee."], "rank3": ["The real question in all such cases is not merely whether the cheques were drawn on a bank in British India, and sent for collection to that bank. The question is whether when the cheques were received by the assessee having his place of business outside British India, those cheques were in fact received as absolute and final payments by way of unconditional discharge or whether they were received as mere conditional payments on realisation. The fact that cheques were drawn on a bank in British India or that they were sent for collection through a Secunderabad banker of the assessee though relevant, are not conclusive .", "It appears that at that stage the controversy was confined to the question whether the cheques having been sent to Secunderabad and having been realised in British India would amount to a final discharge or an unconditional one", "The facts that such entries were made in the assessees books, that the cheques were put into the bank immediately, that the bank at once gave credit to the assessee for these sums after charging discount thereon and immediately allowed the assessee to operate on those sums are significant .", "Therefore the finding of fact by the Tribunal although not specific was that the receipt of the cheque by the respondents operated as full discharge of the debt due on account of commission from these two firms.", "The respondents argued that there was an agreement between the Madura and Bombay firms and the respondents that the money would be paid whether in cash or by cheque at Secunderabad and therefore when the cheques were sent by post the post office was the agent of the debtor and not of the respondents. There is in support of the respondents an affidavit which was filed in the assessment proceedings and which was relied upon in the High Court. According to this affidavit it was verbally agreed that the commission would be paid at Secunderabad in cash or by cheque (as the case may be), the language used in the affidavit was The above commission was verbally decided to be paid to Messrs. Patney Co. Ltd., Secunderabad the Agent Company in Hyderabad State at Secunderabad in cash or by cheque as the case might be .", "But it was argued for the respondents that in the absence of such a request the post office could not be constituted as the agent of the creditor and relied on a passage in Ogales case (1) at p. 204 where it was observed- Of course if there be no such request, express or implied, then the delivery of the letter or the cheque to the post office is delivery to the agent of the sender himself . It was further contended that in this case there was an express agreement that the payment was to be made at Secunderabad and therefore the matter does not fall within the rule in Ogale Glass Works case (1) and the following principle laid down in judgment by Das, J. (as he then was), is inapplicable"], "rank4": ["The Income-tax Officer assessed these sums as taxable income holding that the entire amount of Rs. 40,504 was received in British India and not at Secunderabad. An appeal was taken by the respondents to the Appellate Assistant Commissioner who upheld the order holding that income must be held to have accrued, arisen or received in British India"], "label": "REJECTED"}, "expert_2": {"rank1": ["the amount be paid by cheques to be sent by post and they are so sent there is no doubt that the payment will be taken to be at the place where the cheque or cheques are posted. The respondents argued that there was an agreement between the Madura and Bombay firms and the respondents that the money would be paid whether in cash or by cheque at Secunderabad and therefore when the cheques were sent by post the post office was the agent of the debtor and not of the respondents.", "In the case of payment by cheques sent by post the determination of the place of payment would depend upon the agreement between the parties or the course of conduct of the parties. If it is shown that the creditor authorised the debtor either expressly or impliedly to send a cheque by post the property in the cheque passes to the creditor as soon as it is posted.\n Therefore the post office is an agent of the person to whom the cheque is posted if there be an express or implied authority to send it by post"], "rank2": ["The real question in all such cases is not merely whether the cheques were drawn on a bank in British India, and sent for collection to that bank. The question is whether when the cheques were received by the assessee having his place of business outside British India, those cheques were in fact received as absolute and final payments by way of unconditional discharge or whether they were received as mere conditional payments on realisation."], "rank3": ["The respondents at all material times were non-residents carrying on business at Secunderabad which was then in the territories of the Nizam of Hyderabad. They acted as agents for the supply of gas plants manufactured by Messrs. T. V. S. Iyengar Sons, Madura, to the Nizams Government, and also as agents of the Lucas Indian Services, Bombay branch, for the supply of certain goods to that Government.", "In pursuance of this agreement the respondents received from M s. T.V.S. lyengar Sons, Madura, cheques drawn on the Imperial Bank of India, Madras, amounting to Rs. 35,202 in respect of all goods supplied from -Madura and also from Lucas Indian Services, Bombay, by cheques drawn on Imperial Bank of India, Bombay branch, amounting to Rs. 5,302 in respect of goods supplied by them, thus making a total of Rs. 40,504. These cheques were sent by post and when received by the respondents at Secunderabad were credited in the account books of the respondents and sent to their banker G. Raghunathmal for collecting and crediting to the account of the respondents."], "rank4": ["Court had given a judgment in Commissioner of Income-tax v. Ogale Glass Works Ltd (1). Even after considering the decision of that case the High Court was of the opinion that the income of the respondents was not received in British India and answered the question against the Revenue.\n The High Court refused to give leave to appeal to this Court and it was this Court which gave special leave to appeal. The question is whether the amounts, of commission paid by cheques, drawn respectively on banks at Madras and Bombay and respectively posted from Madura and Bombay, can in the circumstances of this case be held to have been received in what was British India or at Secunderabad ? The Appellate Tribunal found that all the cheques whether from Madura or from Bombay were sent by the two respective firms from Madura or Bombay and were received by the respondents at Secunderabad and were treated as payment."], "label": "REJECTED"}, "expert_3": {"rank1": ["it is stated that it will be open to a creditor to accept a cheque in absolute payment of money due to him, in which case it will be equivalent to cash payment. That being the position it cannot be said that the income was received in British India .", "The question is whether the amounts, of commission paid by cheques, drawn respectively on banks at Madras and Bombay and respectively posted from Madura and Bombay, can in the circumstances of this case be held to have been received in what was British India or at Secunderabad ?", "The Appellate Tribunal found that all the cheques whether from Madura or from Bombay were sent by the two respective firms from Madura or Bombay and were received by the respondents at Secunderabad and were treated as payment. The question still remains as to the effect of the sending of the cheques from Madura or Bombay by post", "If there is an express request by the (1) 1955 1 S. C. R. 185. creditor that the amount be paid by cheques to be sent by post and they are so sent there is no doubt that the payment will be taken to be at the place where the cheque or cheques are posted", "There is in support of the respondents an affidavit which was filed in the assessment proceedings and which was relied upon in the High Court. According to this affidavit it was verbally agreed that the commission would be paid at Secunderabad in cash or by cheque (as the case may be), the language used in the affidavit was The above commission was verbally decided to be paid to Messrs. Patney Co. Ltd., Secunderabad the Agent Company in Hyderabad State at Secunderabad in cash or by cheque as the case might be", "In the case of payment by cheques sent by post the determination of the place of payment would depend upon the agreement between the parties or the course of conduct of the parties", "If it is shown that the creditor authorised the debtor either expressly or impliedly to send a cheque by post the property in the cheque passes to the creditor as soon as it is posted.\n Therefore the post office is an agent of the person to whom the cheque is posted if there be an express or implied authority to send it by post", "according to the course of business usage in general which has to be considered as a part of the surrounding circumstances the parties must have intended that the cheques should be sent by post which is the usual and normal mode of transmission and therefore the posting of cheques in Delhi amounted to payment", "But it was argued for the respondents that in the absence of such a request the post office could not be constituted as the agent of the creditor and relied on a passage in Ogales case (1) at p. 204 where it was observed- Of course if there be no such request, express or implied, then the delivery of the letter or the cheque to the post office is delivery to the agent of the sender himself . It was further contended that in this case there was an express agreement that the payment was to be made at Secunderabad and therefore the matter does not fall within the rule in Ogale Glass Works case (1) and the following principle laid down in judgment by Das, J. (as he then was), is inapplicable"], "rank2": ["The Income-tax Officer assessed these sums as taxable income holding that the entire amount of Rs. 40,504 was received in British India and not at Secunderabad. An appeal was taken by the respondents to the Appellate Assistant Commissioner who upheld the order holding that income must be held to have accrued, arisen or received in British India.\n Against this order the respondents took an appeal to the Income-tax Appellate Tribunal and it was held that the amounts were received by the respondents from Madura and Bombay firms as commission but they were received at Secunderabad", "At the instance of the Commissioner a reference under s. 66(1) of the Act was made to the High Court of Orissa for their opinion on the following question - Whether in the circumstances of the case, the sums of Rs. 35,202 and Rs. 5,302 received as commission from T. V. S. lyengar Sons Ltd., and Lucas Indian Services Ltd., respectively were income that accrued, arose or were received in British India", "The High Court found that the statement of case was imperfect and that the real question was different. It said The real question in all such cases is not merely whether the cheques were drawn on a bank in British India, and sent for collection to that bank", "The question is whether when the cheques were received by the assessee having his place of business outside British India, those cheques were in fact received as absolute and final payments by way of unconditional discharge or whether they were received as mere conditional payments on realisation. The fact that cheques were drawn on a bank in British India or that they were sent for collection through a Secunderabad banker of the assessee though relevant, are not conclusive .", "It appears that at that stage the controversy was confined to the question whether the cheques having been sent to Secunderabad and having been realised in British India would amount to a final discharge or an unconditional one. The Tribunal in its supplementary statement found that the course of conduct followed by the parties showed that the cheques were received from the Bombay and Madura firms in full satisfaction of the commission ascertained from time to time and due on such date", "Therefore the finding of fact by the Tribunal although not specific was that the receipt of the cheque by the respondents operated as full discharge of the debt due on account of commission from these two firms. The matter was decided by the High Court against the appellant", "High Court was of the opinion that the income of the respondents was not received in British India and answered the question against the Revenue.\n The High Court refused to give leave to appeal to this Court and it was this Court which gave special leave to appeal."], "rank3": ["The respondents at all material times were non-residents carrying on business at Secunderabad which was then in the territories of the Nizam of Hyderabad. They acted as agents for the supply of gas plants manufactured by Messrs. T. V. S. Iyengar Sons, Madura, to the Nizams Government, and also as agents of the Lucas Indian Services, Bombay branch, for the supply of certain goods to that Government.", "The year of assessment is 1945-46", "There does not appear to have been any written agreement between the two manufacturers and the respondents but the goods were to be supplied on a commission basis. In pursuance of this agreement the respondents received from M s. T.V.S. lyengar Sons, Madura, cheques drawn on the Imperial Bank of India, Madras, amounting to Rs. 35,202 in respect of all goods supplied from -Madura and also from Lucas Indian Services, Bombay, by cheques drawn on Imperial Bank of India, Bombay branch, amounting to Rs. 5,302 in respect of goods supplied by them, thus making a total of Rs. 40,504. These cheques were sent by post and when received by the respondents at Secunderabad were credited in the account books of the respondents and sent to their banker", "for collecting and crediting to the account of the respondents", "As against these sums so deposited the respondents at once drew cheques and thus operated on these amounts deposited. In regard to the commission received from the Bombay firm it was paid into the account on December 22, 1944, but was given credit for only on January 2, 1945"], "label": "REJECTED"}, "expert_4": {"rank2": ["The respondents at all material times were non-residents carrying on business at Secunderabad which was then in the territories of the Nizam of Hyderabad.", "They acted as agents for the supply of gas plants manufactured by Messrs.", "T. V. S. Iyengar Sons, Madura, to the Nizams Government, and also as agents of the Lucas Indian Services, Bombay branch, for the supply of certain goods to that Government.", "The fact that cheques were drawn on a bank in British India or that they were sent for collection through a Secunderabad banker of the assessee though relevant, are not conclusive .", "The Appellate Tribunal found that all the cheques whether from Madura or from Bombay were sent by the two respective firms from Madura or Bombay and were received by the respondents at Secunderabad and were treated as payment.", "The question still remains as to the effect of the sending of the cheques from Madura or Bombay by post.", "If it is shown that the creditor authorised the debtor either expressly or impliedly to send a cheque by post the property in the cheque passes to the creditor as soon as it is posted.\n Therefore the post office is an agent of the person to whom the cheque is posted if there be an express or implied authority to send it by post (Commissioner of Income-tax v. Ogale Glass Works Ltd. (1))."], "rank3": ["Against this order the respondents took an appeal to the Income-tax Appellate Tribunal and it was held that the amounts were received by the respondents from Madura and Bombay firms as commission but they were received at Secunderabad. The appeal was therefore allowed.", "The finding Of the Appellate Tribunal in their own words was- The contention of the Appellants is that the cheques being negotiable instruments and the creditor having accepted them and passed through their books, II the receipt must be taken to be receipts in Hyderabad.", "We agree with the view submitted by the appellants.", "In Bhashyams Negotiable Instruments Act, 8th Edition, Revised, page 556, it is stated that it will be open to a creditor to accept a cheque in absolute payment of money due to him, in which case it will be equivalent to cash payment. That being the position it cannot be said that the income was received in British India .", "The High Court found that the statement of case was imperfect and that the real question was different.", "The question is whether when the cheques were received by the assessee having his place of business outside British India, those cheques were in fact received as absolute and final payments by way of unconditional discharge or whether they were received as mere conditional payments on realisation.", "It therefore remitted the case to the Appellate Tribunal for submission of supplementary statement of case.", "The Tribunal in its supplementary statement found that the course of conduct followed by the parties showed that the cheques were received from the Bombay and Madura firms in full satisfaction of the commission ascertained from time to time and due on such date. It said The facts that such entries were made in the assessees books, that the cheques were put into the bank immediately, that the bank at once gave credit to the assessee for these sums after charging discount thereon and immediately allowed the assessee to operate on those sums are significant .", "The matter was decided by the High Court against the appellant and in the meanwhile this Court had given a judgment in Commissioner of Income-tax v.", "Ogale Glass Works Ltd (1).", "Even after considering the decision of that case the High Court was of the opinion that the income of the respondents was not received in British India and answered the question against the Revenue.", "The question is whether the amounts, of commission paid by cheques, drawn respectively on banks at Madras and Bombay and respectively posted from Madura and Bombay, can in the circumstances of this case be held to have been received in what was British India or at Secunderabad ?", "If there is an express request by the (1) 1955 1 S. C. R. 185. creditor that the amount be paid by cheques to be sent by post and they are so sent there is no doubt that the payment will be taken to be at the place where the cheque or cheques are posted.", "In the case of payment by cheques sent by post the determination of the place of payment would depend upon the agreement between the parties or the course of conduct of the parties.", "But it was observed by this Court that according to the course of business usage in general which has to be considered as a part of the surrounding circumstances the parties must have intended that the cheques should be sent by post which is the usual and normal mode of transmission and therefore the posting of cheques in Delhi amounted to payment in (1) 1955 1 S.C.R. 185.", "Delhi to the post office which was constituted the agent of the assessee.", "It was further contended that in this case there was an express agreement that the payment was to be made at Secunderabad and therefore the matter does not fall within the rule in Ogale Glass Works case (1) and the following principle laid down in judgment by Das, J.", "is inapplicable - Applying the above principles to the facts found by the Tribunal the position appears to be this.", "The engagement of the Government was to make payment by cheques. The cheques were drawn in Delhi and received by the assessee in Aundh by post."], "rank4": ["There does not appear to have been any written agreement between the two manufacturers and the respondents but the goods were to be supplied on a commission basis.", "In pursuance of this agreement the respondents received from M s. T.V.S. lyengar Sons, Madura, cheques drawn on the Imperial Bank of India, Madras, amounting to Rs. 35,202 in respect of all goods supplied from -Madura and also from Lucas Indian Services, Bombay, by cheques drawn on Imperial Bank of India, Bombay branch, amounting to Rs. 5,302 in respect of goods supplied by them, thus making a total of Rs. 40,504.", "The Income-tax Officer assessed these sums as taxable income holding that the entire amount of Rs. 40,504 was received in British India and not at Secunderabad.", "An appeal was taken by the respondents to the Appellate Assistant Commissioner who upheld the order holding that income must be held to have accrued, arisen or received in British India.", "At the instance of the Commissioner a reference under s. 66(1) of the Act was made to the High Court of Orissa for their opinion on the following question - Whether in the circumstances of the case, the sums of Rs. 35,202 and Rs. 5,302 received as commission from T. V.", "S. lyengar Sons Ltd., and Lucas Indian Services Ltd., respectively were income that accrued, arose or were received in British India .", "The respondents argued that there was an agreement between the Madura and Bombay firms and the respondents that the money would be paid whether in cash or by cheque at Secunderabad and therefore when the cheques were sent by post the post office was the agent of the debtor and not of the respondents.", "According to this affidavit it was verbally agreed that the commission would be paid at Secunderabad in cash or by cheque (as the case may be), the language used in the affidavit was The above commission was verbally decided to be paid to Messrs. Patney Co.", "Ltd., Secunderabad the Agent Company in Hyderabad State at Secunderabad in cash or by cheque as the case might be ."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["In the case of payment by cheques sent by post the determination of the place of payment would depend upon the agreement between the parties or the course of conduct of the parties.", "in this case there was an express agreement that the payment was to be made at Secunderabad"], "rank2": ["According to this affidavit it was verbally agreed that the commission would be paid at Secunderabad in cash or by cheque (as the case may be), the language used in the affidavit was The above commission was verbally decided to be paid to Messrs. Patney Co. Ltd., Secunderabad the Agent Company in Hyderabad State at Secunderabad in cash or by cheque as the case might be ."], "rank3": ["If there is an express request by the (1) 1955 1 S. C. R. 185. creditor that the amount be paid by cheques to be sent by post and they are so sent there is no doubt that the payment will be taken to be at the place where the cheque or cheques are posted.", "Of course if there be no such request, express or implied, then the delivery of the letter or the cheque to the post office is delivery to the agent of the sender himself ."], "rank4": ["The Appellate Tribunal found that all the cheques whether from Madura or from Bombay were sent by the two respective firms from Madura or Bombay and were received by the respondents at Secunderabad and were treated as payment.", "express request of the assessee", "according to the course of business usage in general which has to be considered as a part of the surrounding circumstances the parties must have intended that the cheques should be sent by post which is the usual and normal mode of transmission and therefore the posting of cheques in Delhi amounted to payment in (1) 1955 1 S.C.R. 185. Delhi to the post office which was constituted the agent of the assessee."], "rank5": ["If it is shown that the creditor authorised the debtor either expressly or impliedly to send a cheque by post the property in the cheque passes to the creditor as soon as it is posted.\n Therefore the post office is an agent of the person to whom the cheque is posted if there be an express or implied authority to send it by post (Commissioner of Income-tax v. Ogale Glass Works Ltd. (1))."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1959_5", "text": "The facts of the case have been stated with sufficient fulness, yet briefly, in the statement of the case submitted by the Income-tax Appellate Tribunal (Calcutta Bench) and may be conveniently set out in its own words (1) 1955 27 I.T.R. 202. The applicant had received sums of Rs. 3,831, Rs. 6,606, Rs. 7,954 and Rs. 8,304 in the four assessment years, 1944- 45, 1945-46, 1946-47 and 1947-48 as income from dividends. The shares in respect of which this dividend income was received were the property of the Applicant but in the books of the various companies these stood in the names of other persons. It appears that these shares were purchased by the Applicant from other persons under a blank transfer but the transfers had not been registered with the various companies. The Applicants claim in these income-tax proceedings was that these shares although not registered in the name of the applicant were the property of the applicant. It was further claimed that this dividend income should be grossed up under s. 16(2) and credit for the tax deducted should be allowed to the Applicant under s. 18(5). The Income-tax Officer did not accept this claim, and the appeals of the assessee were rejected by the Appellate Assistant Commissioner of Income-tax, Calcutta, A Range and by the Appellate Tribunal. The Tribunal, however, on being moved, referred the following question to the High Court Whether in the facts and circumstances of this case, the Applicant (the assessee) was entitled to have this dividend income grossed up under section 16(2) and claim credit for tax deducted at source under section 18(5) of the Income-tax Act? The High Court answered the question in the negative, thus affirming the decisions of the Department and the Appellate Tribunal.\n The assessee contends that the decision of the High Court is erroneous, and that it is entitled to have the dividend income I grossed up under s. 16(2) and also to claim credit for tax deducted at source, under s.18(5) of the Income-tax Act. The relevant sections are as follows 16(2) For the purposes of inclusion in the total income of an assessee any dividend shall be deemed to be income of the previous year in which it is paid, credited or distributed or deemed to have been paid, credited or distributed to him, and shall be increased to such amount as would, if income-tax (but not super-tax) at the rate applicable to the total income of the company without taking into account any rebate allowed or additional income-tax charged for the financial year in which the dividend is paid, credited or distributed or deemed to have been paid, credited or distributed, were deducted therefrom, be equal to the amount of the dividend (proviso omitted). 18 (5) Any deduction made and paid to the account of the Central Government in accordance with the provisions of this section and any sum by which a dividend has been increased under sub-section (2) of section 16 shall be treated as a payment of incometax or super-tax on behalf of the shareholder and credit shall be given to him therefor on the production of the certificate furnished undersection 20 in the assessment, if any, made for the following year under this Act (proviso omitted). 49B(1) Where any dividend has been paid, credited or distributed or is deemed to have been paid, credited or distributed to any of the persons specified in section 3 who is a shareholder of a company which is assessed to income- tax in the taxable territories or elsewhere, such person shall, if the dividend is included in his total income, be deemed in respect of such dividend himself to have paid income-tax (exclusive of super-tax) of an amount equal to the sum by which the dividend has been increased under sub- section (2) of section 16. It was contended in the High Court that inasmuch as s. 16(2) referred to an I assessee, the assessee company was entitled to have the dividend grossed up by the addition of income- tax paid by the various companies at source and consequently to have the benefit of the credit allowed under the two remaining sections. In the opinion of the High Court, an assessee whose name was not in the register of members of the companies was not entitled to the benefit of these provisions.\n The learned Judges of the High Court were of the opinion that the word shareholder in s.18(5) had the same signification as the word member used in the Indian Companies Act and that the assessee was not qualified to be considered as a shareholder, even though by a blank transfer it had ,purchased the relevant shares. In our opinion, the High Court was right in its conclusion. A company when it pays income-tax, does not do so on behalf of the shareholders. It is itself chargeable under the Act, In Cull v. Inland Revenue Commissioners (1), Lord Atkin stated the law (which in substance is also the law in our country) thus My Lords, it is now clearly established that in the case of a limited company the company itself is chargeable to tax on its profits, and that it pays tax in discharge of its own liability and not as agent for its shareholders At one time it was thought that the company, in paying tax, paid on behalf of the shareholder but this theory is now exploded by decisions in this House, and the position of the shareholders as to tax is as I have stated it. When the company pays its own income-tax and declares a dividend from the balance of its profits, it deducts from such dividend a proportionate part of the amount of the tax paid by it.\n This principle is explained in another English case, and it is substantially also the law in this country. In Inland Revenue Commissioners v. Blott (2), Viscount Cave stated the law in these words Plainly, a company paying income-tax on its profits does not pay it as agent for its shareholders. It pays as a tax- payer, and if no dividend is declared, the shareholders have no direct concern in the payment. If a dividend is declared, -the company is entitled to deduct from such dividend a proportionate part of the amount of the tax previously paid by the company and, in that case, the payment by the company operates in relief of the shareholder. But no agency, properly so called, is involved. The share-holders, however, get the benefit of the payment of the tax by the company. Though under (1) 1940 A.C. 51, 56 (1939) 22 Tax Cas. 603, 636. (2) 1921 2 A.C. 171, 201. s.16(2) of the Act their dividend is increased by a proportionate amount of tax paid by the company, the payment of the tax by the company is deemed tinder ss. 18(5) and 49B(1) to be payment by the shareholders. The rates of income-tax applicable to the company are, in most instances, higher than the rates applicable to the individual shareholders, and by this process of grossing up, as it is commonly called, the recipient of the dividend gets some benefit. The position of a shareholder who gets dividend when his name stands in the register of members of the company causes no difficulty whatever. But transfers of shares are common, and they take place either by a fully executed document such as was contemplated by Regulation 18 of Table A of the Indian Companies Act 1913, or by what are known as blank transfers. In such blank transfers, the name of the transferor is entered, and the transfer deed signed by the transferor is handed over with the share scrip to the trans- feree, who, if he so chooses, completes the transfer by entering his name and then applying to the company to register his name in place of the previous holder of the share. The company recognises no person except one whose name is on the register of members, upon whom alone calls for unpaid capital can be made and to whom only the dividend declared by the company is legally payable.\n Of course, between the transferor and the transferee, certain equities arise even on the execution and handing over of a blank transfer, and among these equities is the right of the transferee to claim the dividend declared and paid to the transferor who is treated as a trustee on behalf of the transferee. These equities, however, do not touch the company, and no claim by the transferee whose name is not in the register of members can be made against the company, if the tranferor retains the money in his own hands and fails to pay it to him. A glance at the scheme of the Indian Companies Act, 1913, shows that the words member , shareholder and holder of a share have been used interchangeably in that Act.\n Indeed, the opinion of most of the writers on the subject is also the same. Buckley on the Companies Act, 12th Edition, page 803 has pointed out that the right of a transferee is only to call upon the company to register his name and no more.- No rights arise till such registration ,takes place. Section 2(16) of the Indian Companies Act, 1913, defines share as share in the share capital of the company Section 5 deals with the mode of forming incorporated companies, and in the case of companies limited by shares, the liability of the members is limited to the amounts, if any, unpaid on the shares respectively held by them. By s. 18, Table A is made applicable to companies, unless by the Articles of any company the terms of Table A have been excluded or modified. Regulation 18 of Table A reads as follows The instrument of transfer of any share in the company shall be executed both by the transferor and transferee, and the transferor shall be deemed to remain holder of the share until the name of the transferee is entered in the register of members in respect thereof. The words holder of a share are really equal to the word shareholder and the expression holder of a share denotes, in so far as the company is concerned, only a person who, as a shareholder, has his name entered on the register of members. A similar view of the Companies Clauses Consolidation Act, 1845, was taken in Nanney v. Morgan(1). The learned Lord Justices held that under s. 15 of that Act, the transferee bad not the benefit of a legal title till certain things were done, which were indicated by Lopes, J., in the following passage Therefore the transferor, until the delivery of the deed of transfer to the secretary, is subject to all the liabilities and entitled to all the rights which belong to a shareholder or stockholder, and, in my opinion until the requisite formalities are complied with, he continues the legal -proprietor of the stock or shares subject to that proprietorship being divested, which it may be at any moment, by a compliance with the requisite formalities. (1) (1888) 37 Ch. D. 346, 356.\n The same position obtains in India, though the completion of the transaction by having the name entered in the register of members relates it back to the time when the transfer was first made. See Nagabushanam v. Ramachandra Rao (1). During the period that the transfer exists between the transferor and the transferee without emerging as a binding document upon the company, equities exist between them, but not between the transferee and the company. The transferee can call upon the transferor to attend the meeting, vote according to his directions, sign documents in relation to the issuance of fresh capital, call for emergent meetings and inter alia, also compel the transferor to pay such dividend as he may have received. See E. D. Sassoon Co. Ltd. v. Patch-(2) approved in Mathalone v. Bombay Life Assurance Co. Ltd. (3 ). But these rights though they, no doubt, clothe the transferee with an equitable ownership-, are not sufficient to make the transferee a full owner, since the legal interest vis-a-vis the company still outstands in the transferor so much so, that the company credits the dividends only to the transferor and also calls upon him to make payment of any unpaid capital, which may be needed. The cases in Black v. Homersham (4) or Wimbush, In re Richards v. Wimbush (5) hardly advance the matter further than this. The position, therefore, under the Indian Com- panies Act, 1913, is quite clear that the expression shareholder or holder of a share in so far as that Act is concerned, denotes no other person except a member . The question that arises in the present case is whether by reason of ss. 16(2) and 18(5) the assessee, who was a transferee on a blank transfer is entitled to the benefits of the grossing up of the dividend income. Learned counsel for the assessee strenuously contends that the assessee being an owner in equity of the shares and thus also of the dividend is entitled to this benefit.\n He refers to the use of the word I assessee in s. 16(2). The Department, on the (1) (1922) I.L.R. 45 Mad. 537. (3) 1954 S.C.R. 117. (2) (1922) 45 Bom. L.R. 46. (4) (1878-79) L. R. 4 Ex. D. 24. (5) 1940 1 Ch. D. 92. other hand, says that the dividend can be increased under s. 16(2) and credit allowed under s. 18(5) if the assessee is a shareholder, because the benefit of s. 18(5) can go only to the shareholder, i. e., a person with his name on the register of members, and not to a person holding an equity against such shareholder. The assessee contends that the word shareholder includes even a person who holds a share as a result of a blank transfer, and does not necessarily mean a member of the company, whose name is on the register of members. Authorities on this point are not wanting, and indeed, in the judgment of the Calcutta High Court they have all been referred to. They are all against the assessee. See Shree Shakti Mills Ltd. v. Commissioner of Income-tax (1), Jaluram Bhikulal v. Commissioner of Income-tax (2), Arvind N. Mafatlal v. Incometax Officer (3) and Bikaner Trading Co. v. Commissioner of Income-tax (4).\n The question that falls for consideration is whether the meaning given to the expression shareholder used in s. 18(5) of the Act by these cases is correct. No valid reason exists why shareholder as used in s. 18(5) should mean a person other than the one denoted by the same expression in the Indian Companies Act, 1913. In In re Wala Wynaad Indian Gold Mining Company (5), Chitty, J., observed I use now myself the term which is common in the Courts, I a shareholder, that means the holder of the shares. It is the common term used, and only means the person who holds the shares by having his name on the register. Learned counsel for the assessee cited a number of authorities in which the ownership of the dividend was in question, and it was held that the transferee whose name was not registered, was entitled to the dividend after transfer had been made.\n These cases are Commissioners of Inland Revenue v. Sir John Oakley (6), Spence v. Commissioners of Inland Revenue (7) (1) 1948 16 I.T.R. 187. (3) 1957 32 I.T.R. 350. (5) (1882) 21 Ch. D. 849, 854. (2) 1952 22 I.T.R. 490. (4) 1953 24 I.T.R. 419. (6) (1925) 9 Tax Cas. 582, (7) (1941) 24 Tax Cas. 311. and others cited at page 367 in Multipar Syndicate, Ltd. v. Devitt (1). No one can doubt the correctness of the proposition in these cases, but from an equitable right to compel the transferor to give up the dividend to the transferee, to a claim to the dividend by him as a shareholder against the company is a wide jump. In so far as the company is concerned, it does not even issue the certificate under s. 20 of the Income-tax Act in the name of an unregistered transferee but only in the name of the transferor whom it recognises, because his name is borne on its books. Section 20 lays down The principal officer of every company shall, at the time of distribution of dividends, furnish to every person receiving a dividend a certificate to the effect that the company has paid or will pay income-tax on the profits which are being distributed, and specifying such other particulars as may be prescribed. The meaning of s. 20 as also of s. 18(5) is clear if they are read with s. 19A, under which information regarding dividends has to be supplied by the company when demanded by the Income-tax Officer.\n It lays down The principal officer of every company shall, on or before the 15th day of June in each year, furnish to the prescribed officer a return in the prescribed form and verified in the prescribed manner of the names and of the addresses, as entered in the register of shareholders maintained by the company, of the shareholders to whom a dividend or aggregate dividends exceeding Such amount as may be prescribed in this behalf has or have been, distributed during the, preceding year and of the amount so distributed to each such shareholder. (Italics supplied). Section 19A makes it clear, if any doubt existed, that by the term shareholder is meant the person whose name and address are entered in the register of shareholders maintained by the company. There is but one register maintained by the Company. There (1) (1945) 26 Tax Cas. 359. is no separate register of shareholders such as the assessee claims to be but only a register of members . This takes us immediately to the register of members, and demonstrates that even for the purpose of the Indian Income- tax Act, the words ,member and shareholder can be read as synonymous. The words of s. 18(5) must accordingly be read in the light in which the word shareholder has been used in the subsequent sections, and read in that manner, the present assessee, notwithstanding the equitable right to the dividend, was not entitled to be regarded as a shareholder for the purpose of s. 18(5) of the Act.\nDECISION ??", "expert_1": {"rank1": ["In the opinion of the High Court, an assessee whose name was not in the register of members of the companies was not entitled to the benefit of these provisions.\n The learned Judges of the High Court were of the opinion that the word shareholder in s.18(5) had the same signification as the word member used in the Indian Companies Act and that the assessee was not qualified to be considered as a shareholder, even though by a blank transfer it had ,purchased the relevant shares. In our opinion, the High Court was right in its conclusion. A company when it pays income-tax, does not do so on behalf of the shareholders. It is itself chargeable under the Act", "The position, therefore, under the Indian Com- panies Act, 1913, is quite clear that the expression shareholder or holder of a share in so far as that Act is concerned, denotes no other person except a member .", "The assessee contends that the word shareholder includes even a person who holds a share as a result of a blank transfer, and does not necessarily mean a member of the company, whose name is on the register of members. Authorities on this point are not wanting, and indeed, in the judgment of the Calcutta High Court they have all been referred to. They are all against the assessee.", "The question that falls for consideration is whether the meaning given to the expression shareholder used in s. 18(5) of the Act by these cases is correct. No valid reason exists why shareholder as used in s. 18(5) should mean a person other than the one denoted by the same expression in the Indian Companies Act, 1913.", "The words of s. 18(5) must accordingly be read in the light in which the word shareholder has been used in the subsequent sections, and read in that manner, the present assessee, notwithstanding the equitable right to the dividend, was not entitled to be regarded as a shareholder for the purpose of s. 18(5) of the Act."], "rank2": ["During the period that the transfer exists between the transferor and the transferee without emerging as a binding document upon the company, equities exist between them, but not between the transferee and the company. The transferee can call upon the transferor to attend the meeting, vote according to his directions, sign documents in relation to the issuance of fresh capital, call for emergent meetings and inter alia, also compel the transferor to pay such dividend as he may have received.", "But these rights though they, no doubt, clothe the transferee with an equitable ownership-, are not sufficient to make the transferee a full owner, since the legal interest vis-a-vis the company still outstands in the transferor so much so, that the company credits the dividends only to the transferor and also calls upon him to make payment of any unpaid capital, which may be needed.", "No one can doubt the correctness of the proposition in these cases, but from an equitable right to compel the transferor to give up the dividend to the transferee, to a claim to the dividend by him as a shareholder against the company is a wide jump. In so far as the company is concerned, it does not even issue the certificate under s. 20 of the Income-tax Act in the name of an unregistered transferee but only in the name of the transferor whom it recognises, because his name is borne on its books.", "The meaning of s. 20 as also of s. 18(5) is clear if they are read with s. 19A, under which information regarding dividends has to be supplied by the company when demanded by the Income-tax Officer.\n It lays down The principal officer of every company shall, on or before the 15th day of June in each year, furnish to the prescribed officer a return in the prescribed form and verified in the prescribed manner of the names and of the addresses, as entered in the register of shareholders maintained by the company, of the shareholders to whom a dividend or aggregate dividends exceeding Such amount as may be prescribed in this behalf has or have been, distributed during the, preceding year and of the amount so distributed to each such shareholder. (Italics supplied). Section 19A makes it clear, if any doubt existed, that by the term shareholder is meant the person whose name and address are entered in the register of shareholders maintained by the company. There is but one register maintained by the Company. There (1) (1945) 26 Tax Cas. 359. is no separate register of shareholders such as the assessee claims to be but only a register of members . This takes us immediately to the register of members, and demonstrates that even for the purpose of the Indian Income- tax Act, the words ,member and shareholder can be read as synonymous."], "rank3": ["a company paying income-tax on its profits does not pay it as agent for its shareholders. It pays as a tax- payer, and if no dividend is declared, the shareholders have no direct concern in the payment. If a dividend is declared, -the company is entitled to deduct from such dividend a proportionate part of the amount of the tax previously paid by the company and, in that case, the payment by the company operates in relief of the shareholder. But no agency, properly so called, is involved. The share-holders, however, get the benefit of the payment of the tax by the company.", "Though under (1) 1940 A.C. 51, 56 (1939) 22 Tax Cas. 603, 636. (2) 1921 2 A.C. 171, 201. s.16(2) of the Act their dividend is increased by a proportionate amount of tax paid by the company, the payment of the tax by the company is deemed tinder ss. 18(5) and 49B(1) to be payment by the shareholders. The rates of income-tax applicable to the company are, in most instances, higher than the rates applicable to the individual shareholders, and by this process of grossing up, as it is commonly called, the recipient of the dividend gets some benefit. The position of a shareholder who gets dividend when his name stands in the register of members of the company causes no difficulty whatever. But transfers of shares are common, and they take place either by a fully executed document such as was contemplated by Regulation 18 of Table A of the Indian Companies Act 1913, or by what are known as blank transfers. In such blank transfers, the name of the transferor is entered, and the transfer deed signed by the transferor is handed over with the share scrip to the trans- feree, who, if he so chooses, completes the transfer by entering his name and then applying to the company to register his name in place of the previous holder of the share. The company recognises no person except one whose name is on the register of members, upon whom alone calls for unpaid capital can be made and to whom only the dividend declared by the company is legally payable.\n Of course, between the transferor and the transferee, certain equities arise even on the execution and handing over of a blank transfer, and among these equities is the right of the transferee to claim the dividend declared and paid to the transferor who is treated as a trustee on behalf of the transferee.", "A glance at the scheme of the Indian Companies Act, 1913, shows that the words member , shareholder and holder of a share have been used interchangeably in that Act.\n Indeed, the opinion of most of the writers on the subject is also the same.", "The words holder of a share are really equal to the word shareholder and the expression holder of a share denotes, in so far as the company is concerned, only a person who, as a shareholder, has his name entered on the register of members.", "Therefore the transferor, until the delivery of the deed of transfer to the secretary, is subject to all the liabilities and entitled to all the rights which belong to a shareholder or stockholder, and, in my opinion until the requisite formalities are complied with, he continues the legal -proprietor of the stock or shares subject to that proprietorship being divested, which it may be at any moment, by a compliance with the requisite formalities. (1) (1888) 37 Ch. D. 346, 356.\n The same position obtains in India, though the completion of the transaction by having the name entered in the register of members relates it back to the time when the transfer was first made."], "rank4": ["The shares in respect of which this dividend income was received were the property of the Applicant but in the books of the various companies these stood in the names of other persons. It appears that these shares were purchased by the Applicant from other persons under a blank transfer but the transfers had not been registered with the various companies.", "The Applicants claim in these income-tax proceedings was that these shares although not registered in the name of the applicant were the property of the applicant. It was further claimed that this dividend income should be grossed up under s. 16(2) and credit for the tax deducted should be allowed to the Applicant under s. 18(5). The Income-tax Officer did not accept this claim, and the appeals of the assessee were rejected by the Appellate Assistant Commissioner of Income-tax, Calcutta, A Range and by the Appellate Tribunal.", "The Tribunal, however, on being moved, referred the following question to the High Court Whether in the facts and circumstances of this case, the Applicant (the assessee) was entitled to have this dividend income grossed up under section 16(2) and claim credit for tax deducted at source under section 18(5) of the Income-tax Act? The High Court answered the question in the negative, thus affirming the decisions of the Department and the Appellate Tribunal.", "The assessee contends that the decision of the High Court is erroneous, and that it is entitled to have the dividend income I grossed up under s. 16(2) and also to claim credit for tax deducted at source, under s.18(5) of the Income-tax Act."], "label": "REJECTED"}, "expert_2": {"rank1": ["In the opinion of the High Court, an assessee whose name was not in the register of members of the companies was not entitled to the benefit of these provisions.\n The learned Judges of the High Court were of the opinion that the word shareholder in s.18(5) had the same signification as the word member used in the Indian Companies Act and that the assessee was not qualified to be considered as a shareholder, even though by a blank transfer it had ,purchased the relevant shares. In our opinion, the High Court was right in its conclusion.", "In so far as the company is concerned, it does not even issue the certificate under s. 20 of the Income-tax Act in the name of an unregistered transferee but only in the name of the transferor whom it recognises, because his name is borne on its books.", "Section 19A makes it clear, if any doubt existed, that by the term shareholder is meant the person whose name and address are entered in the register of shareholders maintained by the company. There is but one register maintained by the Company. There (1) (1945) 26 Tax Cas. 359. is no separate register of shareholders such as the assessee claims to be but only a register of members . This takes us immediately to the register of members, and demonstrates that even for the purpose of the Indian Income- tax Act, the words ,member and shareholder can be read as synonymous. The words of s. 18(5) must accordingly be read in the light in which the word shareholder has been used in the subsequent sections, and read in that manner, the present assessee, notwithstanding the equitable right to the dividend, was not entitled to be regarded as a shareholder for the purpose of s. 18(5) of the Act."], "rank2": ["The position, therefore, under the Indian Com- panies Act, 1913, is quite clear that the expression shareholder or holder of a share in so far as that Act is concerned, denotes no other person except a member . The question that arises in the present case is whether by reason of ss. 16(2) and 18(5) the assessee, who was a transferee on a blank transfer is entitled to the benefits of the grossing up of the dividend income.", "Section 20 lays down The principal officer of every company shall, at the time of distribution of dividends, furnish to every person receiving a dividend a certificate to the effect that the company has paid or will pay income-tax on the profits which are being distributed, and specifying such other particulars as may be prescribed. The meaning of s. 20 as also of s. 18(5) is clear if they are read with s. 19A, under which information regarding dividends has to be supplied by the company when demanded by the Income-tax Officer.", "The principal officer of every company shall, on or before the 15th day of June in each year, furnish to the prescribed officer a return in the prescribed form and verified in the prescribed manner of the names and of the addresses, as entered in the register of shareholders maintained by the company, of the shareholders to whom a dividend or aggregate dividends exceeding Such amount as may be prescribed in this behalf has or have been, distributed during the, preceding year and of the amount so distributed to each such shareholder."], "rank3": ["The position of a shareholder who gets dividend when his name stands in the register of members of the company causes no difficulty whatever. But transfers of shares are common, and they take place either by a fully executed document such as was contemplated by Regulation 18 of Table A of the Indian Companies Act 1913, or by what are known as blank transfers. In such blank transfers, the name of the transferor is entered, and the transfer deed signed by the transferor is handed over with the share scrip to the trans- feree, who, if he so chooses, completes the transfer by entering his name and then applying to the company to register his name in place of the previous holder of the share. The company recognises no person except one whose name is on the register of members, upon whom alone calls for unpaid capital can be made and to whom only the dividend declared by the company is legally payable.", "The assessee contends that the word shareholder includes even a person who holds a share as a result of a blank transfer, and does not necessarily mean a member of the company, whose name is on the register of members."], "rank4": ["The applicant had received sums of Rs. 3,831, Rs. 6,606, Rs. 7,954 and Rs. 8,304 in the four assessment years, 1944- 45, 1945-46, 1946-47 and 1947-48 as income from dividends. The shares in respect of which this dividend income was received were the property of the Applicant but in the books of the various companies these stood in the names of other persons. It appears that these shares were purchased by the Applicant from other persons under a blank transfer but the transfers had not been registered with the various companies. The Applicants claim in these income-tax proceedings was that these shares although not registered in the name of the applicant were the property of the applicant. It was further claimed that this dividend income should be grossed up under s. 16(2) and credit for the tax deducted should be allowed to the Applicant under s. 18(5)."], "label": "REJECTED"}, "expert_3": {"rank1": ["In our opinion, the High Court was right in its conclusion. A company when it pays income-tax, does not do so on behalf of the shareholders", "It is itself chargeable under the Act", "in the case of a limited company the company itself is chargeable to tax on its profits, and that it pays tax in discharge of its own liability and not as agent for its shareholders At one time it was thought that the company, in paying tax, paid on behalf of the shareholder but this theory is now exploded by decisions in this House, and the position of the shareholders as to tax is as I have stated it. When the company pays its own income-tax and declares a dividend from the balance of its profits, it deducts from such dividend a proportionate part of the amount of the tax paid by it", "a company paying income-tax on its profits does not pay it as agent for its shareholders", "It pays as a tax- payer, and if no dividend is declared, the shareholders have no direct concern in the payment. If a dividend is declared, -the company is entitled to deduct from such dividend a proportionate part of the amount of the tax previously paid by the company and, in that case, the payment by the company operates in relief of the shareholder. But no agency, properly so called, is involved. The share-holders, however, get the benefit of the payment of the tax by the company", "Though under (1) 1940 A.C. 51, 56 (1939) 22 Tax Cas. 603, 636. (2) 1921 2 A.C. 171, 201. s.16(2) of the Act their dividend is increased by a proportionate amount of tax paid by the company, the payment of the tax by the company is deemed tinder ss. 18(5) and 49B(1) to be payment by the shareholders. The rates of income-tax applicable to the company are, in most instances, higher than the rates applicable to the individual shareholders, and by this process of grossing up, as it is commonly called, the recipient of the dividend gets some benefit. The position of a shareholder who gets dividend when his name stands in the register of members of the company causes no difficulty whatever. But transfers of shares are common, and they take place either by a fully executed document such as was contemplated by Regulation 18 of Table A of the Indian Companies Act 1913, or by what are known as blank transfers", "A glance at the scheme of the Indian Companies Act, 1913, shows that the words member , shareholder and holder of a share have been used interchangeably in that Act", "The same position obtains in India, though the completion of the transaction by having the name entered in the register of members relates it back to the time when the transfer was first made", "During the period that the transfer exists between the transferor and the transferee without emerging as a binding document upon the company, equities exist between them, but not between the transferee and the company. The transferee can call upon the transferor to attend the meeting, vote according to his directions, sign documents in relation to the issuance of fresh capital, call for emergent meetings and inter alia, also compel the transferor to pay such dividend as he may have received", "But these rights though they, no doubt, clothe the transferee with an equitable ownership-, are not sufficient to make the transferee a full owner, since the legal interest vis-a-vis the company still outstands in the transferor so much so, that the company credits the dividends only to the transferor and also calls upon him to make payment of any unpaid capital, which may be needed", "The position, therefore, under the Indian Com- panies Act, 1913, is quite clear that the expression shareholder or holder of a share in so far as that Act is concerned, denotes no other person except a member", "The question that arises in the present case is whether by reason of ss. 16(2) and 18(5) the assessee, who was a transferee on a blank transfer is entitled to the benefits of the grossing up of the dividend income", "The question that falls for consideration is whether the meaning given to the expression shareholder used in s. 18(5) of the Act by these cases is correct. No valid reason exists why shareholder as used in s. 18(5) should mean a person other than the one denoted by the same expression in the Indian Companies Act, 1913", "No one can doubt the correctness of the proposition in these cases, but from an equitable right to compel the transferor to give up the dividend to the transferee, to a claim to the dividend by him as a shareholder against the company is a wide jump. In so far as the company is concerned, it does not even issue the certificate under s. 20 of the Income-tax Act in the name of an unregistered transferee but only in the name of the transferor whom it recognises, because his name is borne on its books", "Section 19A makes it clear, if any doubt existed, that by the term shareholder is meant the person whose name and address are entered in the register of shareholders maintained by the company. There is but one register maintained by the Company", "There (1) (1945) 26 Tax Cas. 359. is no separate register of shareholders such as the assessee claims to be but only a register of members . This takes us immediately to the register of members, and demonstrates that even for the purpose of the Indian Income- tax Act, the words ,member and shareholder can be read as synonymous. The words of s. 18(5) must accordingly be read in the light in which the word shareholder has been used in the subsequent sections, and read in that manner, the present assessee, notwithstanding the equitable right to the dividend, was not entitled to be regarded as a shareholder for the purpose of s. 18(5) of the Act"], "rank2": ["The Income-tax Officer did not accept this claim, and the appeals of the assessee were rejected by the Appellate Assistant Commissioner of Income-tax, Calcutta, A Range and by the Appellate Tribunal. The Tribunal, however, on being moved, referred the following question to the High Court Whether in the facts and circumstances of this case, the Applicant (the assessee) was entitled to have this dividend income grossed up under section 16(2) and claim credit for tax deducted at source under section 18(5) of the Income-tax Act? The High Court answered the question in the negative, thus affirming the decisions of the Department and the Appellate Tribunal", "The assessee contends that the decision of the High Court is erroneous, and that it is entitled to have the dividend income I grossed up under s. 16(2) and also to claim credit for tax deducted at source, under s.18(5) of the Income-tax Act", "The relevant sections are as follows 16(2) For the purposes of inclusion in the total income of an assessee any dividend shall be deemed to be income of the previous year in which it is paid, credited or distributed or deemed to have been paid, credited or distributed to him, and shall be increased to such amount as would, if income-tax (but not super-tax) at the rate applicable to the total income of the company without taking into account any rebate allowed or additional income-tax charged for the financial year in which the dividend is paid, credited or distributed or deemed to have been paid, credited or distributed, were deducted therefrom, be equal to the amount of the dividend (proviso omitted). 18 (5) Any deduction made and paid to the account of the Central Government in accordance with the provisions of this section and any sum by which a dividend has been increased under sub-section (2) of section 16 shall be treated as a payment of incometax or super-tax on behalf of the shareholder and credit shall be given to him therefor on the production of the certificate furnished undersection 20 in the assessment, if any, made for the following year under this Act (proviso omitted). 49B(1) Where any dividend has been paid, credited or distributed or is deemed to have been paid, credited or distributed to any of the persons specified in section 3 who is a shareholder of a company which is assessed to income- tax in the taxable territories or elsewhere, such person shall, if the dividend is included in his total income, be deemed in respect of such dividend himself to have paid income-tax (exclusive of super-tax) of an amount equal to the sum by which the dividend has been increased under sub- section (2) of section 16", "It was contended in the High Court that inasmuch as s. 16(2) referred to an I assessee, the assessee company was entitled to have the dividend grossed up by the addition of income- tax paid by the various companies at source and consequently to have the benefit of the credit allowed under the two remaining sections. In the opinion of the High Court, an assessee whose name was not in the register of members of the companies was not entitled to the benefit of these provisions.\n The learned Judges of the High Court were of the opinion that the word shareholder in s.18(5) had the same signification as the word member used in the Indian Companies Act and that the assessee was not qualified to be considered as a shareholder, even though by a blank transfer it had ,purchased the relevant shares", "In such blank transfers, the name of the transferor is entered, and the transfer deed signed by the transferor is handed over with the share scrip to the trans- feree, who, if he so chooses, completes the transfer by entering his name and then applying to the company to register his name in place of the previous holder of the share", "The company recognises no person except one whose name is on the register of members, upon whom alone calls for unpaid capital can be made and to whom only the dividend declared by the company is legally payable.\n Of course, between the transferor and the transferee, certain equities arise even on the execution and handing over of a blank transfer, and among these equities is the right of the transferee to claim the dividend declared and paid to the transferor who is treated as a trustee on behalf of the transferee. These equities, however, do not touch the company, and no claim by the transferee whose name is not in the register of members can be made against the company, if the tranferor retains the money in his own hands and fails to pay it to him.", "the right of a transferee is only to call upon the company to register his name and no more.- No rights arise till such registration ,takes place", "Section 2(16) of the Indian Companies Act, 1913, defines share as share in the share capital of the company Section 5 deals with the mode of forming incorporated companies, and in the case of companies limited by shares, the liability of the members is limited to the amounts, if any, unpaid on the shares respectively held by them. By s. 18, Table A is made applicable to companies, unless by the Articles of any company the terms of Table A have been excluded or modified. Regulation 18 of Table A reads as follows The instrument of transfer of any share in the company shall be executed both by the transferor and transferee, and the transferor shall be deemed to remain holder of the share until the name of the transferee is entered in the register of members in respect thereof. The words holder of a share are really equal to the word shareholder and the expression holder of a share denotes, in so far as the company is concerned, only a person who, as a shareholder, has his name entered on the register of members", "under s. 15 of that Act, the transferee bad not the benefit of a legal title till certain things were done, which were indicated by Lopes, J., in the following passage Therefore the transferor, until the delivery of the deed of transfer to the secretary, is subject to all the liabilities and entitled to all the rights which belong to a shareholder or stockholder, and, in my opinion until the requisite formalities are complied with, he continues the legal -proprietor of the stock or shares subject to that proprietorship being divested, which it may be at any moment, by a compliance with the requisite formalities.", "In In re Wala Wynaad Indian Gold Mining Company (5), Chitty, J., observed I use now myself the term which is common in the Courts, I a shareholder, that means the holder of the shares. It is the common term used, and only means the person who holds the shares by having his name on the register.", "Learned counsel for the assessee cited a number of authorities in which the ownership of the dividend was in question, and it was held that the transferee whose name was not registered, was entitled to the dividend after transfer had been made", "Section 20 lays down The principal officer of every company shall, at the time of distribution of dividends, furnish to every person receiving a dividend a certificate to the effect that the company has paid or will pay income-tax on the profits which are being distributed, and specifying such other particulars as may be prescribed", "The meaning of s. 20 as also of s. 18(5) is clear if they are read with s. 19A, under which information regarding dividends has to be supplied by the company when demanded by the Income-tax Officer.\n It lays down The principal officer of every company shall, on or before the 15th day of June in each year, furnish to the prescribed officer a return in the prescribed form and verified in the prescribed manner of the names and of the addresses, as entered in the register of shareholders maintained by the company, of the shareholders to whom a dividend or aggregate dividends exceeding Such amount as may be prescribed in this behalf has or have been, distributed during the, preceding year and of the amount so distributed to each such shareholder"], "rank3": ["The applicant had received sums of Rs. 3,831, Rs. 6,606, Rs. 7,954 and Rs. 8,304 in the four assessment years, 1944- 45, 1945-46, 1946-47 and 1947-48 as income from dividends. The shares in respect of which this dividend income was received were the property of the Applicant but in the books of the various companies these stood in the names of other persons.", "It appears that these shares were purchased by the Applicant from other persons under a blank transfer but the transfers had not been registered with the various companies. The Applicants claim in these income-tax proceedings was that these shares although not registered in the name of the applicant were the property of the applicant. It was further claimed that this dividend income should be grossed up under s. 16(2) and credit for the tax deducted should be allowed to the Applicant under s. 18(5)."], "label": "REJECTED"}, "expert_4": {"rank1": ["The words of s. 18(5) must accordingly be read in the light in which the word shareholder has been used in the subsequent sections, and read in that manner, the present assessee, notwithstanding the equitable right to the dividend, was not entitled to be regarded as a shareholder for the purpose of s. 18(5) of the Act."], "rank2": ["In our opinion, the High Court was right in its conclusion.", "The position, therefore, under the Indian Com- panies Act, 1913, is quite clear that the expression shareholder or holder of a share in so far as that Act is concerned, denotes no other person except a member .", "The question that arises in the present case is whether by reason of ss. 16(2) and 18(5) the assessee, who was a transferee on a blank transfer is entitled to the benefits of the grossing up of the dividend income.", "The question that falls for consideration is whether the meaning given to the expression shareholder used in s. 18(5) of the Act by these cases is correct.", "No valid reason exists why shareholder as used in s. 18(5) should mean a person other than the one denoted by the same expression in the Indian Companies Act, 1913.", "In In re Wala Wynaad Indian Gold Mining Company (5), Chitty, J., observed I use now myself the term which is common in the Courts, I a shareholder, that means the holder of the shares.", "No one can doubt the correctness of the proposition in these cases, but from an equitable right to compel the transferor to give up the dividend to the transferee, to a claim to the dividend by him as a shareholder against the company is a wide jump.", "In so far as the company is concerned, it does not even issue the certificate under s. 20 of the Income-tax Act in the name of an unregistered transferee but only in the name of the transferor whom it recognises, because his name is borne on its books."], "rank3": ["The applicant had received sums of Rs. 3,831, Rs. 6,606, Rs. 7,954 and Rs. 8,304 in the four assessment years, 1944- 45, 1945-46, 1946-47 and 1947-48 as income from dividends.", "The shares in respect of which this dividend income was received were the property of the Applicant but in the books of the various companies these stood in the names of other persons.", "The Income-tax Officer did not accept this claim, and the appeals of the assessee were rejected by the Appellate Assistant Commissioner of Income-tax, Calcutta, A Range and by the Appellate Tribunal.", "The Tribunal, however, on being moved, referred the following question to the High Court Whether in the facts and circumstances of this case, the Applicant (the assessee) was entitled to have this dividend income grossed up under section 16(2) and claim credit for tax deducted at source under section 18(5) of the Income-tax Act?", "The High Court answered the question in the negative, thus affirming the decisions of the Department and the Appellate Tribunal.", "In the opinion of the High Court, an assessee whose name was not in the register of members of the companies was not entitled to the benefit of these provisions.", "The learned Judges of the High Court were of the opinion that the word shareholder in s.18(5) had the same signification as the word member used in the Indian Companies Act and that the assessee was not qualified to be considered as a shareholder, even though by a blank transfer it had ,purchased the relevant shares.", "It pays as a tax- payer, and if no dividend is declared, the shareholders have no direct concern in the payment.", "If a dividend is declared, -the company is entitled to deduct from such dividend a proportionate part of the amount of the tax previously paid by the company and, in that case, the payment by the company operates in relief of the shareholder.", "The share-holders, however, get the benefit of the payment of the tax by the company.", "s.16(2) of the Act their dividend is increased by a proportionate amount of tax paid by the company, the payment of the tax by the company is deemed tinder ss. 18(5) and 49B(1) to be payment by the shareholders. The rates of income-tax applicable to the company are, in most instances, higher than the rates applicable to the individual shareholders, and by this process of grossing up, as it is commonly called, the recipient of the dividend gets some benefit.", "In such blank transfers, the name of the transferor is entered, and the transfer deed signed by the transferor is handed over with the share scrip to the trans- feree, who, if he so chooses, completes the transfer by entering his name and then applying to the company to register his name in place of the previous holder of the share.", "The company recognises no person except one whose name is on the register of members, upon whom alone calls for unpaid capital can be made and to whom only the dividend declared by the company is legally payable.", "These equities, however, do not touch the company, and no claim by the transferee whose name is not in the register of members can be made against the company, if the tranferor retains the money in his own hands and fails to pay it to him. A glance at the scheme of the Indian Companies Act, 1913, shows that the words member , shareholder and holder of a share have been used interchangeably in that Act.", "Indeed, the opinion of most of the writers on the subject is also the same.", "Regulation 18 of Table A reads as follows The instrument of transfer of any share in the company shall be executed both by the transferor and transferee, and the transferor shall be deemed to remain holder of the share until the name of the transferee is entered in the register of members in respect thereof.", "The words holder of a share are really equal to the word shareholder and the expression holder of a share denotes, in so far as the company is concerned, only a person who, as a shareholder, has his name entered on the register of members.", "A similar view of the Companies Clauses Consolidation Act, 1845, was taken in Nanney v. Morgan(1).", "The learned Lord Justices held that under s. 15 of that Act, the transferee bad not the benefit of a legal title till certain things were done, which were indicated by Lopes, J., in the following passage Therefore the transferor, until the delivery of the deed of transfer to the secretary, is subject to all the liabilities and entitled to all the rights which belong to a shareholder or stockholder, and, in my opinion until the requisite formalities are complied with, he continues the legal -proprietor of the stock or shares subject to that proprietorship being divested, which it may be at any moment, by a compliance with the requisite formalities.", "The same position obtains in India, though the completion of the transaction by having the name entered in the register of members relates it back to the time when the transfer was first made.", "During the period that the transfer exists between the transferor and the transferee without emerging as a binding document upon the company, equities exist between them, but not between the transferee and the company.", "But these rights though they, no doubt, clothe the transferee with an equitable ownership-, are not sufficient to make the transferee a full owner, since the legal interest vis-a-vis the company still outstands in the transferor so much so, that the company credits the dividends only to the transferor and also calls upon him to make payment of any unpaid capital, which may be needed.", "Authorities on this point are not wanting, and indeed, in the judgment of the Calcutta High Court they have all been referred to. They are all against the assessee.", "Shree Shakti Mills Ltd. v. Commissioner of Income-tax (1), Jaluram Bhikulal v.", "Commissioner of Income-tax (2), Arvind N. Mafatlal v.", "Incometax Officer (3) and Bikaner Trading Co. v. Commissioner of Income-tax (4).", "It is the common term used, and only means the person who holds the shares by having his name on the register.", "Section 20 lays down The principal officer of every company shall, at the time of distribution of dividends, furnish to every person receiving a dividend a certificate to the effect that the company has paid or will pay income-tax on the profits which are being distributed, and specifying such other particulars as may be prescribed.", "The meaning of s. 20 as also of s. 18(5) is clear if they are read with s. 19A, under which information regarding dividends has to be supplied by the company when demanded by the Income-tax Officer.", "It lays down The principal officer of every company shall, on or before the 15th day of June in each year, furnish to the prescribed officer a return in the prescribed form and verified in the prescribed manner of the names and of the addresses, as entered in the register of shareholders maintained by the company, of the shareholders to whom a dividend or aggregate dividends exceeding Such amount as may be prescribed in this behalf has or have been, distributed during the, preceding year and of the amount so distributed to each such shareholder.", "Section 19A makes it clear, if any doubt existed, that by the term shareholder is meant the person whose name and address are entered in the register of shareholders maintained by the company. There is but one register maintained by the Company.", "There (1) (1945) 26 Tax Cas. 359. is no separate register of shareholders such as the assessee claims to be but only a register of members . This takes us immediately to the register of members, and demonstrates that even for the purpose of the Indian Income- tax Act, the words ,member and shareholder can be read as synonymous."], "rank4": ["appears that these shares were purchased by the Applicant from other persons under a blank transfer but the transfers had not been registered with the various companies.", "The Applicants claim in these income-tax proceedings was that these shares although not registered in the name of the applicant were the property of the applicant. It was further claimed that this dividend income should be grossed up under s. 16(2) and credit for the tax deducted should be allowed to the Applicant under s. 18(5).", "The assessee contends that the decision of the High Court is erroneous, and that it is entitled to have the dividend income I grossed up under s. 16(2) and also to claim credit for tax deducted at source, under s.18(5) of the Income-tax Act.", "The relevant sections are as follows 16(2) For the purposes of inclusion in the total income of an assessee any dividend shall be deemed to be income of the previous year in which it is paid, credited or distributed or deemed to have been paid, credited or distributed to him, and shall be increased to such amount as would, if income-tax (but not super-tax) at the rate applicable to the total income of the company without taking into account any rebate allowed or additional income-tax charged for the financial year in which the dividend is paid, credited or distributed or deemed to have been paid, credited or distributed, were deducted therefrom, be equal to the amount of the dividend (proviso omitted). 18 (5) Any deduction made and paid to the account of the Central Government in accordance with the provisions of this section and any sum by which a dividend has been increased under sub-section (2) of section 16 shall be treated as a payment of incometax or super-tax on behalf of the shareholder and credit shall be given to him therefor on the production of the certificate furnished undersection 20 in the assessment, if any, made for the following year under this Act (proviso omitted). 49B(1) Where any dividend has been paid, credited or distributed or is deemed to have been paid, credited or distributed to any of the persons specified in section 3 who is a shareholder of a company which is assessed to income- tax in the taxable territories or elsewhere, such person shall, if the dividend is included in his total income, be deemed in respect of such dividend himself to have paid income-tax (exclusive of super-tax) of an amount equal to the sum by which the dividend has been increased under sub- section (2) of section 16.", "A company when it pays income-tax, does not do so on behalf of the shareholders. It is itself chargeable under the Act, In Cull v. Inland Revenue Commissioners (1), Lord Atkin stated the law (which in substance is also the law in our country) thus My Lords, it is now clearly established that in the case of a limited company the company itself is chargeable to tax on its profits, and that it pays tax in discharge of its own liability and not as agent for its shareholders At one time it was thought that the company, in paying tax, paid on behalf of the shareholder but this theory is now exploded by decisions in this House, and the position of the shareholders as to tax is as I have stated it.", "When the company pays its own income-tax and declares a dividend from the balance of its profits, it deducts from such dividend a proportionate part of the amount of the tax paid by it.", "This principle is explained in another English case, and it is substantially also the law in this country. In Inland Revenue Commissioners v. Blott (2), Viscount Cave stated the law in these words Plainly, a company paying income-tax on its profits does not pay it as agent for its shareholders.", "The position of a shareholder who gets dividend when his name stands in the register of members of the company causes no difficulty whatever.", "The transferee can call upon the transferor to attend the meeting, vote according to his directions, sign documents in relation to the issuance of fresh capital, call for emergent meetings and inter alia, also compel the transferor to pay such dividend as he may have received.", "Sassoon Co. Ltd. v. Patch-(2) approved in Mathalone v. Bombay Life Assurance Co. Ltd. (3 ).", "These cases are Commissioners of Inland Revenue v. Sir John Oakley (6), Spence v. Commissioners of Inland Revenue", "Multipar Syndicate, Ltd. v.", "Devitt (1)."], "rank5": ["Learned counsel for the assessee strenuously contends that the assessee being an owner in equity of the shares and thus also of the dividend is entitled to this benefit.\n He refers to the use of the word I assessee in s. 16(2).", "The Department, on the", "other hand, says that the dividend can be increased under s. 16(2) and credit allowed under s. 18(5) if the assessee is a shareholder, because the benefit of s. 18(5) can go only to the shareholder, i. e., a person with his name on the register of members, and not to a person holding an equity against such shareholder.", "The assessee contends that the word shareholder includes even a person who holds a share as a result of a blank transfer, and does not necessarily mean a member of the company, whose name is on the register of members.", "Learned counsel for the assessee cited a number of authorities in which the ownership of the dividend was in question, and it was held that the transferee whose name was not registered, was entitled to the dividend after transfer had been made."], "label": "REJECTED"}, "expert_5": {"rank1": ["The learned Judges of the High Court were of the opinion that the word shareholder in s.18(5) had the same signification as the word member used in the Indian Companies Act and that the assessee was not qualified to be considered as a shareholder, even though by a blank transfer it had ,purchased the relevant shares. In our opinion, the High Court was right in its conclusion.", "even for the purpose of the Indian Income- tax Act, the words ,member and shareholder can be read as synonymous."], "rank2": ["The shares in respect of which this dividend income was received were the property of the Applicant but in the books of the various companies these stood in the names of other persons.", "The words holder of a share are really equal to the word shareholder and the expression holder of a share denotes, in so far as the company is concerned, only a person who, as a shareholder, has his name entered on the register of members.", "But these rights though they, no doubt, clothe the transferee with an equitable ownership-, are not sufficient to make the transferee a full owner, since the legal interest vis-a-vis the company still outstands in the transferor so much so, that the company credits the dividends only to the transferor and also calls upon him to make payment of any unpaid capital, which may be needed.", "The position, therefore, under the Indian Com- panies Act, 1913, is quite clear that the expression shareholder or holder of a share in so far as that Act is concerned, denotes no other person except a member .", "The words of s. 18(5) must accordingly be read in the light in which the word shareholder has been used in the subsequent sections, and read in that manner, the present assessee, notwithstanding the equitable right to the dividend, was not entitled to be regarded as a shareholder for the purpose of s. 18(5) of the Act."], "rank3": ["It appears that these shares were purchased by the Applicant from other persons under a blank transfer but the transfers had not been registered with the various companies.", "The company recognises no person except one whose name is on the register of members, upon whom alone calls for unpaid capital can be made and to whom only the dividend declared by the company is legally payable.", "the transferor shall be deemed to remain holder of the share until the name of the transferee is entered in the register of members in respect thereof.", "No valid reason exists why shareholder as used in s. 18(5) should mean a person other than the one denoted by the same expression in the Indian Companies Act, 1913.", "Section 19A makes it clear, if any doubt existed, that by the term shareholder is meant the person whose name and address are entered in the register of shareholders maintained by the company."], "rank4": ["A company when it pays income-tax, does not do so on behalf of the shareholders.", "and it is substantially also the law in this country.", "A glance at the scheme of the Indian Companies Act, 1913, shows that the words member , shareholder and holder of a share have been used interchangeably in that Act.", "The same position obtains in India, though the completion of the transaction by having the name entered in the register of members relates it back to the time when the transfer was first made. See Nagabushanam v. Ramachandra Rao (1)."], "rank5": ["When the company pays its own income-tax and declares a dividend from the balance of its profits, it deducts from such dividend a proportionate part of the amount of the tax paid by it.", "The rates of income-tax applicable to the company are, in most instances, higher than the rates applicable to the individual shareholders, and by this process of grossing up, as it is commonly called, the recipient of the dividend gets some benefit. The position of a shareholder who gets dividend when his name stands in the register of members of the company causes no difficulty whatever.", "These equities, however, do not touch the company, and no claim by the transferee whose name is not in the register of members can be made against the company, if the tranferor retains the money in his own hands and fails to pay it to him.", "Indeed, the opinion of most of the writers on the subject is also the same. Buckley on the Companies Act, 12th Edition, page 803 has pointed out that the right of a transferee is only to call upon the company to register his name and no more.- No rights arise till such registration ,takes place.", "A similar view of the Companies Clauses Consolidation Act, 1845, was taken in Nanney v. Morgan(1). The learned Lord Justices held that under s. 15 of that Act, the transferee bad not the benefit of a legal title till certain things were done, which were indicated by Lopes, J., in the following passage Therefore the transferor, until the delivery of the deed of transfer to the secretary, is subject to all the liabilities and entitled to all the rights which belong to a shareholder or stockholder, and, in my opinion until the requisite formalities are complied with, he continues the legal -proprietor of the stock or shares subject to that proprietorship being divested, which it may be at any moment, by a compliance with the requisite formalities.", "In In re Wala Wynaad Indian Gold Mining Company (5), Chitty, J., observed I use now myself the term which is common in the Courts, I a shareholder, that means the holder of the shares. It is the common term used, and only means the person who holds the shares by having his name on the register."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1959_66", "text": "The award made by the Industrial Tribunal, Bombay, in Reference (IT) No. 75 of 1956 between the appellant and the respondents whereby the Industrial Tribunal awarded to the respondents 4 1/2 months basic wages as bonus for the year 1954-55 (year ending June 30, 1955). The appellant is a subsidiary of the Premier Construction Co., Ltd., and manufactures Hume Pipes. It has factories in different parts of India, Pakistan and Ceylon. The respondents are the workers employed in the appellants factory at Antop Hill, Wadala, Bombay. In October 1955, respondent I who are workmen represented by the Engineering Mazdoor Sabha made a demand for the payment of six-months wages as bonus for the year 1954-55. The matter was also referred to the Conciliation Officer requesting him to initiate Conciliation Proceedings. The Conciliation Proceedings went on before the Conciliation Officer upto March 23, 1956, on which date both the parties arrived at and executed an Agreement to refer the matter to an Industrial Tribunal for adjudication.\n Accordingly, on April 30, 1956, both the parties drew up and signed a joint- application for referring the dispute for adjudication to a Tribunal and the Government of Bombay thereupon in exercise of the powers conferred by sub-s. (2) of s. 10 of the Industrial Disputes Act, 1947, by its order dated June 11, 1956, referred the following dispute to the Tribunal - DEMAND Every Workman (daily rated) should be paid bonus for the year 1954-55 (year ending 30th June, 1955) equivalent to six-months wages without it attaching any condition thereto . Respondent No. I filed their statement of claim before -the Tribunal on June 29, 1956. They alleged that the profits of the appellant during the year 195455 were higher than those during the year 1953-54 for which year the appellant had paid four months basic wages as bonus. They also alleged that the wages paid to them by the appellant fell short of the, living wage and therefore the appellant should pay the in six months basic wages as bonus for the relative year. The appellant filed its written statement in answer on August 14, 1956. The appellant submitted that, after providing for the prior charges according to the formula laid down by the Labour Appellate Tribunal the profits made during the year under consideration did riot leave any surplus and tile, respondents were not entitled to any bonus. It denied that it bad made huge profits during the year in question and submitted that the profits made were not even sufficient to provide for the prior charges , etc. The Tribunal after hearing the parties came to the conclusion that even if payment of a bonus equal to 4 1/2 months basic wages were made a fair surplus would be left in the hands of the appellant to the tune of Rs. 3.30 lacs and therefore awarded the same subject to the following conditions- \nAny employee who has been dismissed for misconduct resulting in financial loss to the company shall not be entitled to bonus to the extent of the loss caused. Persons who are eligible for bonus but who are no longer in the service of the company on the date of the payment shall be paid the same provided that they make a written application for the same within three months of publication of this award. Such bonus shall be paid within one month of receipt of application provided that no claim can be enforced before six weeks from the date this award becomes enforceable. Being aggrieved by the said award of the Tribunal, the appellant applied for and obtained from this Court special leave to appeal against the same under Art. 136 of the Constitution and hence this appeal. The formula evolved by the Full Bench of the Labour Appellate Tribunal in Millowners Association, Bombay v. Rashtreeya Mill Mazdoor Sangh, Bombay(1) is based on this idea that as both labour and capital contribute to the earnings of the industrial concerti, it is fair that labour should derive some benefit, if there is a surplus after meeting prior or necessary charges . The following were prescribed as the first charges on (1) (1950) L.L.J. 1247 gross profits, viz., (1) Provision for depreciation (2) reserves for rehabilitation (3) a return at 6on the paid up capital (4) a return on the working capital at a lesser rate than the return on paid up capital and (5) an estimated amount in respect of the payment of income-tax. The surplus that remained after making the aforesaid deductions would be available for distribution among the three sharers, viz., the shareholders, the industry and the workmen See Muir Mills Co., Ltd. v. Suti Mills Mazdoor Union, Kanpur (1) and Sree Meenakshi Mills Ltd. v. Their Workmen (2). This Full Bench -Formula has been working all throughout the country since its enunciation as aforesaid and has been found to be, in the main, fairly satisfactory. It is conducive to the benefit of both labour and capital and even though certain variations have been attempted to be made therein from time to time the main features thereof have not been substantially departed from. We feel that a formula which has been thus adopted all throughout the country and has so far worked fairly satisfactorily should be adhered, to, though there is scope for certain flexibility in the working thereof in accordance with the exigencies of the situation. In the working of the said formula, however, regard must be had both to the interests of capital and labour. In any given industry there are three interests involved, viz., the shareholders, the Company and the workmen and all these interests have got to get their proper share in the surplus profits ascertained after due provision is made for these prior charges . The shareholders may look to larger dividends commensurate with the prosperity of the industrial concern, the company would, apart from rehabilitation and replacement of buildings, plant and machinery, look forward to expansion and satisfaction of other needs of the industry and the workmen would certainly be entitled to ask for a share in the surplus profits with a view to bridge the gap between the wages earned by them and the living wages. All these interests (1) 19551 1,s.C.R. 991, 998. (2) 1958 S.C.R 878, 884, have, therefore, got to be duly and properly provided for having regard to the principles of social justice and once surplus profits available for distribution amongst these respective interests are determined after making due provision for the prior charges as aforesaid the Industrial Tribunal adjudicating upon the dispute would have a free hand in the distribution of the same having regard, of course, to the considerations mentioned hereinabove. But so far as the determination of the surplus profits is concerned the formula must be adhered to in its essential particulars as otherwise there would be no stability nor uniformity of practice in regard to the same.\n It maybe noted, however, that in regard to the depreciation which is a prior charge on the gross profits earned by a concern there is always a difference in the method of approach which is adopted by the income-tax authorities and by the industrial tribunals. It was pointed out by us in Sree Meenakshi Mills Ltd. v. Their Workmen (1) that the whole of the depreciation admissible under the Income-tax Act was not allowable in determining the available surplus. The initial depreciation and the additional depreciation were abnormal additions to the income-tax depreciation and it would not be fair to the workmen if these depreciations were rated as prior charges before the available surplus was ascertained. Considerations on which the grant of initial and additional depreciations might be justified under the Income-tax Act were different from considerations of social justice and fair apportionment on which the Full Bench Formula in regard to the payment of bonus to workmen was based. This was the reason why we held in that case that only normal depreciation including multiple shift depreciation, but not initial or additional depreciation should rank as prior charge. We approved of the decision of the Labour Appellate Tribunal in U. P. Electric Supply Co., Ltd. v. Their Workmen (2) in arriving at the above conclusion and disallowed the claim of the company there to deduct the initial or additional depreciation as prior charge in bonus calculations. (1) 1958 S.C.R. 878. (2) (1955) L.A.C. 659. When this decision was reached we had not before us the decision of the Labour Appellate Tribunal in Surat Electricity Companys Staff Union v. The Surat Electricity Co., Ltd. (1) where a Bench of the Labour Appellate Tribunal had negatived the contention that if only the normal depreciation allowed by the Income-tax law were allowed a company would be able to recoup the original cost of the assets and observed that For the purpose of bonus formula the initial and additional depreciation, which are disallowed by that formula, must be ignored in fixing the written down value and in determining the period over which the normal depreciation will be allowed. The result will be a notional amount of normal depreciation but, as we have said repeatedly the bonus formula is a notional formula. We have already expressed in the judgment delivered by us in Associated Cement Co., Ltd. v. Its Workmen (1) that for the purpose of the bonus formula the notional normal depreciation should be deducted from the gross profits calculated on the basis adopted in Surat Electric Supply Co. Staff Union v. Surat Electricity Co., Ltd. (1) and not merely the normal depreciation including multiple shift depreciation allowed by the income-tax authorities as stated in U. P. Electric Supply Co., Ltd. v. Their Workmen (3).\n It is well settled that the actual income-tax payable by the company on the basis of the full statutory depreciation allowed by the income-tax authorities for the relevant accounting year should be taken into account as a prior charge irrespective of any set off allowed by the Income-tax authorities for prior charges or any other considerations such as building up of income-tax reserves for payment of enhanced liabilities of income-tax accruing in future. It is also well settled that the calculations of the surplus available for distribution should be made having regard to the working of the industrial concern in the relevant (1) (1956) L.A.C. 443. (2) 1959 S.C.R. 925. (3) (1955) L.A.C. 659. accounting year without taking into consideration the credits or debits which are referable to the working of the previous years, e.g., the refund of excess profits tax paid in the past or loss of previous years carried forward but written off in the accounting year as also any provision that may have to be made to meet future liabilities, e.g., redemption of debenture stock, or provision for Provident Fund and Gratuity and other benefits, etc., which, however, necessary they may be, cannot be included in the category of prior charges. If regard be had to the principles enunciated above it is clear that the items of Rs. 1.14 lacs representing the Lahore factory balance written off, Rs. 0.34 lacs being patents written off, and Rs. 0.09 lacs shown as loss on sale of Tardeo property cannot be allowed as proper deductions from the gross profits for the purposes of bonus calculations. The first two items represented debits in connection with the working of previous years. Loss of the Lahore factory had been incurred during the three previous accounting years and had been carried forward from year to year and the only thing which was done during the year under consideration was that it was then written off as irre- coverable. The patents also had been worked off in previous years and the amounts spent in the purchase thereof were therefore to be written off but had reference to the working of the company during the previous years. The last item of Rs. 0.09 lacs was trivial and was therefore not pressed with the result that all these three items were rightly added back in the calculations of the gross profits of the appellant and the figure of gross profits taken at Rs. 36.21 lacs was correctly arrived at by the Tribunal. The depreciation allowed by the Tribunal was Rs. 9.82 lacs which was the full statutory depreciation allowed by the Income-tax authorities. That should not have been done and the only depreciation allowed should have been the notional normal depreciation which was agreed between the parties before us at Rs. 6.23 lacs. Working the figure of income-tax deducted by the appellant on the basis adopted in Shree Meenakshi Mills Ltd. \n Their Workmen (1) the income-tax on the gross profits of Rs. 36.21 lacs less the statutory depreciation allowed by the income-tax authorities, viz., Rs. 9.82 lacs would be equivalent to 7 annas in the rupee on Rs. 26.39 lacs, i.e., Rs. 11.55 lacs thus leaving a balance of Rs. 16.82 lacs from which the other prior charges would have to be deducted in order to ascertain the distributable surplus. 6 return on the ordinary share capital and 5 return on the preference share capital would come to Rs. 4.30 lacs. The appellant, however, claimed that even on the preference shares 6 return should be allowed and not 5 even though preference shareholders were not entitled to anything beyond 5 under the terms of issue. The appellant obviously relied upon the wording of the formula return at 6 on the paid up capital and contended that the preference shares also being paid up capital it would be entitled to a return of 6 on the preference shares for the purposes of the bonus formula even though in fact it would have to pay only 5 return on the same. We cannot accept this contention. Even though the bonus formula is a notional one we cannot ignore the fact that in no event would the appellant be bound to pay to the preference shareholders anything beyond 5 by way of return. The Full Bench Formula cannot be so literally construed. There is bound to be some flexibility therein, the 6 which is prescribed there as the return on paid up capital is not inexorable, and the Tribunals could if the circumstances warrant vary the rate of interest either by increasing or decreasing the same. On the facts of this case however there is no warrant for allowing anything beyond 5 return on preference share capital and the amount of Rs. 4.30 lacs should therefore be deducted as another prior charge from the grsos profits of the appellant. 4 return on reserves used as working capital was calculated merely at a figure of Rs. 0.29 lacs worked out on a total figure of Rs. 7,42,139. The Tribunal (1) 1938 S.C.R. 876. did not take into consideration another sum of Rs. 41,81,196 which represented the depreciation fund which according to the appellant had been used as working capital during the year. If that had been allowed a further sum of Rs. 1.67 lacs should have been added to Rs. 0.29 lacs and the total amount of 4 return on reserves used as working capital would have amounted to Rs. 1.96 lacs. Two arguments were advanced against this contention of the appellant. One was that there was nothing like a depreciation fund, that it merely represented a credit item introduced in the balance-sheet as against the value of the fixed capital at its original cost and would have disappeared as such if the proper accounting basis had been adopted, viz., the fixed block bad been showed at its depreciated value after deducting the amount of depreciation from the original cost. Such book entries, it was contended, did not convert that credit item into a depreciation fund available to the company and there was therefore no basis for the contention that such a depreciation fund ever existed and could be used as working capital in the business. The other was that there was nothing on the record to show that such a depreciation fund, if any, had been, in fact, used as working capital in the business during that year.\n The answer furnished by the appellant in regard to both these contentions was that on a true reading of the balance- sheet Rs. 41,81,196 were reserves used as working capital, vide calculations in Exhibit C-12. Provision for depreciation was Rs. 1,10,29,954 and the paid up capital was Rs. 80,00,000 thus totaling to Rs. 1,90,29,954. The total capital block as shown in page 5 of the balance-sheet for the year ending June 30, 1955, was Rs. 1,48,48,758 and the working capital therefore was Rs. 41,81,196. This was apart from Rs. 7,42,139 which was the total of the three items at page 4 of the balance-sheet Rs. 98,405 capital reserves, Rs. 4,73,734 other reserves and Rs. 1,70,000 provision for doubtful debts as also the investments, cash and bank balance. This being the true position it follows on the facts of the present case that this amount was available for use as working capital and the balance-sheet showed that it was in fact so used. Moreover, DO objection was urged in this behalf nor was any finding to the contrary recorded by the Tribunal. We are, therefore, of the opinion that the reasoning adopted by the Tribunal was not correct and the appellant was entitled to 4 return on the reserves used as working capital including the sum of Rs. 41,81,196. The appellant was thus entitled to Rs. 1.96 lacs as the 4 return on reserves used as working capital and not merely Rs. 0.29 lacs as allowed by the Tribunal. The provision for rehabilitation bad been claimed by the appellant at Rs. 1.10 lacs on the basis of 10 of the net profits relying upon para. 20 of the Report of the Committee on Profit Sharing in which the Committee had proposed that 10 of the net profits should compulsorily be set aside for reserves to meet emergencies as well as for rehabilitation, modernization and reasonable expansion. No evidence was at all led by the appellant before the Tribunal showing the cost of the machinery as purchased, the age of the machinery, the estimate for replacement etc., in order to substantiate this claim for rehabilitation and the appellant was content merely to rely upon this recommendation of the Committee on Profit-sharing. This was rightly considered by the Tribunal as insufficient to support the appellants claim, though it allowed for rehabilitation, in addition to the statutory depreciation, the amount for which the appellant had actually made provision, viz., the sum by which the depreciation written off for the year exceeded the statutory depreciation (i. e., Rs. 10,00,000 minus Rs. 9,82,799Rs. 17,201).\n The amount was really small and did not affect the bonus to be awarded. The Tribunal, in fact, allowed the same, though it appears that in the absence of evidence of the nature above referred to even that sum of Rs. 0.17 lacs ought not to have been allowed. In this state of affairs it is really impossible for us to allow the appellants claim for rehabilitation in anything beyond the sum of Rs. 0.17 lacs actually allowed by the Tribunal and the claim of the appellant for any further provision for rehabilitation must be disallowed for the purpose of the bonus calculations for the year under consideration. It will however be open to the appellant to claim higher rehabilitation for subsequent years if it can substantiate its claim by adducing proper evidence. In addition to these various sums allowed to the appellant by way of prior charges against the gross profits earned during the accounting year the Tribunal also allowed to the appellant Rs. 2.50 lacs by way of provision for debenture redemption fund. The claim of the appellant was for a sum of Rs. 3.50 lacs for the same and it arose under the following circumstances. The appellant had issued debentures of the value of Rs. 30 lacs in the year 1942-43 and they were redeemable in the year 1962-63. No annual provision had been made from profits for redemption of the same inasmuch as until the year 1949 the appellant was not working at a profit.\n Such provision was made only thereafter. For the year 1950-51, the appellant made a provision for Rs. 75,000 for debenture redemption fund, for 1951.52, Rs. 1,50,000, for 1952-53 Rs. 1,50,000, for 1953-54 Rs. 75,000 and further provision had to be made for redemption of debentures in a sum of Rs. 24,50,000. In so far as 7 more years were left before the due date for redemption the appellant claimed Rs. 3,50,000 as the annual sum to be set apart, though as a matter of fact in the balance-sheet only a provision of Rs. 2,50,000 had been made by it for debenture redemption reserve. The Tribunal pointed out that when the appellant had in its accounts appropriated Rs. 2,50,000 for the debenture redemption fund the claim to have Rs. 3,50,000 for the purposes of bonus formula was clearly untenable. It however was of the opinion that a reasonable provision for redemption fund should be allowed as a prior charge and actually allowed the sum of Rs. 2,50,000 which had been actually provided for the purpose in the balance-sheet, negativing the contention of the respondents that no provision should be allowed for debenture redemption fund in the bonus formula. We are of the opinion that the Tribunal was not justified in allowing the sum of Rs. 2,50,000/- for debenture redemption fund as a prior charge in the bonus calculations. The Full Bench Formula does not envisage any such prior charge. It is no doubt true that capital is shy and it would not be practicable for the industrial concern to raise large amounts by way of fresh debentures when they become due. It is also true that the debentures do not stand on a par with other debts of a concern because the debentureholders would in a conceivable situation be able to enforce their security by bringing the industry to a stand-still by taking over charge of the whole concern. It would therefore appear that the redemption of these debentures would be one of the primary obligations of the industrial concern and due provision has of necessity to be made for redemption thereof on due date. This however does not mean that in the calculations of the distributable surplus the provision for such redemption should be given the status of a prior charge, though of course that would be a relevant con- sideration while distributing the available surplus between the various interests entitled thereto. We are therefore of opinion that the Tribunal was wrong in allowing Rs. 2,50,000/- as a prior charge in the bonus calculations. This disposes of all the contentions which have been urged on behalf of both the parties and calculating the figure on that basis we arrive atthe following Rs. in lacs. Gross Profit as per Tribudals calculations 36.21 Less Notional Normal Depreciation 6.23 29.98 Less Tax 7 as. in a rupee 11.55 18.43 Less 6 return on ordinary share capital and 5 on preference share capital 4.30 14.13 Less 4 Return on reserves used as working capital 7,42,139 29 41,81,196 1.67 --------------------- 49,23,335 1.96 ------------- 12.17 LessProvision for Rehabilitation 0.17 ------------ Available Surplus 12.00 This would bring the available surplusfor distribution to a sum of Rs. 12 lacs and this would be distributable amongst the shareholders, the company and the workmen concerned. It is not feasible to lay down any rigid formula as to what the proportion of such distribution amongst these various interests should be.\n The shareholders as well as the company would both be naturally interested inter alia in providing the debenture redemption reserves as also meeting the needs of the industry for further expansion. The workmen would no doubt be interested in trying to bridge the gap between their actual wage and the living wage to the extent feasible. This surplus of Rs. 12 lacs would have to be distributed amongst them having regard to the facts and circumstances of the case, of course bearing in mind the various considerations indicated above. Before we arrive at the figure of the actual bonus which it will be appropriate in the circumstances of this case to allow to the workmen, we may advert to one argument which was pressed before us. on their behalf and that was that the bonus calculations should not be made on the basis of the All-India figures which were adopted by the Tribunal but on the basis of the actual amounts which the appellant had paid and would have to pay to the workmen concerned. It was pointed out that the respondents here were only the workmen in the Wadala Factory of the appellant.\n The appellant had, however, paid to the various workmen elsewhere as and by way of bonus sums varying between 4 and 29 of the basic wages for the year in question. The sum of Rs. 1,23,138/- only had been paid in full and final settlement to the workmen in some of the factories and the bonus calculations on an All-India basis would thus work to the advantage of the appellant in so far as they would result in saving to the appellant of the difference between the amounts to which those workmen would be entitled on the basis of the All-India figures adopted by the Tribunal and the amounts actually paid to them as a result of agreements, conciliation or adjudication. It was therefore contended that the calculations should be made after taking into account the savings thus effected by the appellant and only a sum of Rs. 1,23,138 - which was the actual sum paid to those workmen should be taken into account and no more. We are afraid, we cannot accept this contention. If this contention was accepted the respondents before us would have an advantage over those workmen with whom settlements have been made and would get larger amounts by way of bonus merely by reason of the fact that the appellant had managed to settle the claims of those workmen at lesser figures.\n If this contention of the respondents was pushed to its logical extent it would also mean that in the event of the non-fulfilment of the conditions imposed by the Tribunal in the award of bonus herein bringing in savings in the hands of the appellant, the respondents would be entitled to take advantage of those savings also and should be awarded larger amounts by way of bonus, which would really be the result of the claimants entitled to the same not receiving it under certain circumstances-an event which would be purely an extraneous one and unconnected with the contribution of the respondents towards the gross profits earned by the appellant. The Tribunal was, therefore, right in calculating the bonus on an All-India basis. By our order dated April 12, 1957, the appellant was ordered to pay to the respondents within a fortnight from the date thereof bonus for the year 1954-55 equivalent to two months basic wages that amount has already been paid and works out at Rs. 3.39 lacs on an All-India basis. The only question which therefore survives is what further bonus, if any, would the respondents be entitled to from the distributable surplus of Rs. 12 lacs. The sum of Rs. 3.50 lacs required for building up the debenture redemption reserve is an all-engrossing need of the appellant and that is a factor which must of necessity be taken into consideration while arriving at the ultimate figure, particularly because such redemption of the debentures would enure not only for the benefit of the Company and its shareholders but also of the workmen employed therein. Having regard to all the circumstances of the case, we feel that an award of four months basic wages as aggregate bonus for the year 1954-55 (which by the way was the bonus awarded for the previous year 1953-54 also) would give a fair share to the labour in the distributable surplus, leaving to the shareholders and the company a balance of Rs. 5.22 lacs to be utilised by them not only towards building up of the debenture redemption reserve but also for building up other reserves, which would be utilised for various other purposes indicated above.\nDECISION ??", "expert_1": {"rank1": ["This being the true position it follows on the facts of the present case that this amount was available for use as working capital and the balance-sheet showed that it was in fact so used. Moreover, DO objection was urged in this behalf nor was any finding to the contrary recorded by the Tribunal.", "We are, therefore, of the opinion that the reasoning adopted by the Tribunal was not correct and the appellant was entitled to 4 return on the reserves used as working capital including the sum of Rs. 41,81,196.", "In this state of affairs it is really impossible for us to allow the appellants claim for rehabilitation in anything beyond the sum of Rs. 0.17 lacs actually allowed by the Tribunal and the claim of the appellant for any further provision for rehabilitation must be disallowed for the purpose of the bonus calculations for the year under consideration.", "We are therefore of opinion that the Tribunal was wrong in allowing Rs. 2,50,000/- as a prior charge in the bonus calculations.", "It was therefore contended that the calculations should be made after taking into account the savings thus effected by the appellant and only a sum of Rs. 1,23,138 - which was the actual sum paid to those workmen should be taken into account and no more. We are afraid, we cannot accept this contention.", "The Tribunal was, therefore, right in calculating the bonus on an All-India basis.", "By our order dated April 12, 1957, the appellant was ordered to pay to the respondents within a fortnight from the date thereof bonus for the year 1954-55 equivalent to two months basic wages that amount has already been paid and works out at Rs. 3.39 lacs on an All-India basis.", "Having regard to all the circumstances of the case, we feel that an award of four months basic wages as aggregate bonus for the year 1954-55 (which by the way was the bonus awarded for the previous year 1953-54 also) would give a fair share to the labour in the distributable surplus, leaving to the shareholders and the company a balance of Rs. 5.22 lacs to be utilised by them not only towards building up of the debenture redemption reserve but also for building up other reserves, which would be utilised for various other purposes indicated above."], "rank2": ["We are of the opinion that the Tribunal was not justified in allowing the sum of Rs. 2,50,000/- for debenture redemption fund as a prior charge in the bonus calculations. The Full Bench Formula does not envisage any such prior charge. It is no doubt true that capital is shy and it would not be practicable for the industrial concern to raise large amounts by way of fresh debentures when they become due. It is also true that the debentures do not stand on a par with other debts of a concern because the debentureholders would in a conceivable situation be able to enforce their security by bringing the industry to a stand-still by taking over charge of the whole concern. It would therefore appear that the redemption of these debentures would be one of the primary obligations of the industrial concern and due provision has of necessity to be made for redemption thereof on due date. This however does not mean that in the calculations of the distributable surplus the provision for such redemption should be given the status of a prior charge, though of course that would be a relevant con- sideration while distributing the available surplus between the various interests entitled thereto.", "Before we arrive at the figure of the actual bonus which it will be appropriate in the circumstances of this case to allow to the workmen, we may advert to one argument which was pressed before us. on their behalf and that was that the bonus calculations should not be made on the basis of the All-India figures which were adopted by the Tribunal but on the basis of the actual amounts which the appellant had paid and would have to pay to the workmen concerned. It was pointed out that the respondents here were only the workmen in the Wadala Factory of the appellant.\n The appellant had, however, paid to the various workmen elsewhere as and by way of bonus sums varying between 4 and 29 of the basic wages for the year in question. The sum of Rs. 1,23,138/- only had been paid in full and final settlement to the workmen in some of the factories and the bonus calculations on an All-India basis would thus work to the advantage of the appellant in so far as they would result in saving to the appellant of the difference between the amounts to which those workmen would be entitled on the basis of the All-India figures adopted by the Tribunal and the amounts actually paid to them as a result of agreements, conciliation or adjudication.", "If this contention was accepted the respondents before us would have an advantage over those workmen with whom settlements have been made and would get larger amounts by way of bonus merely by reason of the fact that the appellant had managed to settle the claims of those workmen at lesser figures.\n If this contention of the respondents was pushed to its logical extent it would also mean that in the event of the non-fulfilment of the conditions imposed by the Tribunal in the award of bonus herein bringing in savings in the hands of the appellant, the respondents would be entitled to take advantage of those savings also and should be awarded larger amounts by way of bonus, which would really be the result of the claimants entitled to the same not receiving it under certain circumstances-an event which would be purely an extraneous one and unconnected with the contribution of the respondents towards the gross profits earned by the appellant.", "The only question which therefore survives is what further bonus, if any, would the respondents be entitled to from the distributable surplus of Rs. 12 lacs. The sum of Rs. 3.50 lacs required for building up the debenture redemption reserve is an all-engrossing need of the appellant and that is a factor which must of necessity be taken into consideration while arriving at the ultimate figure, particularly because such redemption of the debentures would enure not only for the benefit of the Company and its shareholders but also of the workmen employed therein."], "rank3": ["It is well settled that the actual income-tax payable by the company on the basis of the full statutory depreciation allowed by the income-tax authorities for the relevant accounting year should be taken into account as a prior charge irrespective of any set off allowed by the Income-tax authorities for prior charges or any other considerations such as building up of income-tax reserves for payment of enhanced liabilities of income-tax accruing in future. It is also well settled that the calculations of the surplus available for distribution should be made having regard to the working of the industrial concern in the relevant (1) (1956) L.A.C. 443. (2) 1959 S.C.R. 925. (3) (1955) L.A.C. 659. accounting year without taking into consideration the credits or debits which are referable to the working of the previous years, e.g., the refund of excess profits tax paid in the past or loss of previous years carried forward but written off in the accounting year as also any provision that may have to be made to meet future liabilities, e.g., redemption of debenture stock, or provision for Provident Fund and Gratuity and other benefits, etc., which, however, necessary they may be, cannot be included in the category of prior charges.", "That should not have been done and the only depreciation allowed should have been the notional normal depreciation which was agreed between the parties before us at Rs. 6.23 lacs", "We cannot accept this contention. Even though the bonus formula is a notional one we cannot ignore the fact that in no event would the appellant be bound to pay to the preference shareholders anything beyond 5 by way of return. The Full Bench Formula cannot be so literally construed. There is bound to be some flexibility therein, the 6 which is prescribed there as the return on paid up capital is not inexorable, and the Tribunals could if the circumstances warrant vary the rate of interest either by increasing or decreasing the same. On the facts of this case however there is no warrant for allowing anything beyond 5 return on preference share capital and the amount of Rs. 4.30 lacs should therefore be deducted as another prior charge from the grsos profits of the appellant. 4 return on reserves used as working capital was calculated merely at a figure of Rs. 0.29 lacs worked out on a total figure of Rs. 7,42,139. The Tribunal (1) 1938 S.C.R. 876. did not take into consideration another sum of Rs. 41,81,196 which represented the depreciation fund which according to the appellant had been used as working capital during the year.", "No evidence was at all led by the appellant before the Tribunal showing the cost of the machinery as purchased, the age of the machinery, the estimate for replacement etc., in order to substantiate this claim for rehabilitation and the appellant was content merely to rely upon this recommendation of the Committee on Profit-sharing. This was rightly considered by the Tribunal as insufficient to support the appellants claim, though it allowed for rehabilitation, in addition to the statutory depreciation, the amount for which the appellant had actually made provision, viz., the sum by which the depreciation written off for the year exceeded the statutory depreciation (i. e., Rs. 10,00,000 minus Rs. 9,82,799Rs. 17,201).\n The amount was really small and did not affect the bonus to be awarded. The Tribunal, in fact, allowed the same, though it appears that in the absence of evidence of the nature above referred to even that sum of Rs. 0.17 lacs ought not to have been allowed.", "It will however be open to the appellant to claim higher rehabilitation for subsequent years if it can substantiate its claim by adducing proper evidence. In addition to these various sums allowed to the appellant by way of prior charges against the gross profits earned during the accounting year the Tribunal also allowed to the appellant Rs. 2.50 lacs by way of provision for debenture redemption fund."], "rank4": ["They alleged that the profits of the appellant during the year 195455 were higher than those during the year 1953-54 for which year the appellant had paid four months basic wages as bonus. They also alleged that the wages paid to them by the appellant fell short of the, living wage and therefore the appellant should pay the in six months basic wages as bonus for the relative year. The appellant filed its written statement in answer on August 14, 1956. The appellant submitted that, after providing for the prior charges according to the formula laid down by the Labour Appellate Tribunal the profits made during the year under consideration did riot leave any surplus and tile, respondents were not entitled to any bonus. It denied that it bad made huge profits during the year in question and submitted that the profits made were not even sufficient to provide for the prior charges , etc. The Tribunal after hearing the parties came to the conclusion that even if payment of a bonus equal to 4 1/2 months basic wages were made a fair surplus would be left in the hands of the appellant to the tune of Rs. 3.30 lacs and therefore awarded the same subject to the following conditions- \nAny employee who has been dismissed for misconduct resulting in financial loss to the company shall not be entitled to bonus to the extent of the loss caused. Persons who are eligible for bonus but who are no longer in the service of the company on the date of the payment shall be paid the same provided that they make a written application for the same within three months of publication of this award. Such bonus shall be paid within one month of receipt of application provided that no claim can be enforced before six weeks from the date this award becomes enforceable. Being aggrieved by the said award of the Tribunal, the appellant applied for and obtained from this Court special leave to appeal against the same under Art. 136 of the Constitution and hence this appeal.", "We feel that a formula which has been thus adopted all throughout the country and has so far worked fairly satisfactorily should be adhered, to, though there is scope for certain flexibility in the working thereof in accordance with the exigencies of the situation.", "The shareholders may look to larger dividends commensurate with the prosperity of the industrial concern, the company would, apart from rehabilitation and replacement of buildings, plant and machinery, look forward to expansion and satisfaction of other needs of the industry and the workmen would certainly be entitled to ask for a share in the surplus profits with a view to bridge the gap between the wages earned by them and the living wages. All these interests (1) 19551 1,s.C.R. 991, 998. (2) 1958 S.C.R 878, 884, have, therefore, got to be duly and properly provided for having regard to the principles of social justice and once surplus profits available for distribution amongst these respective interests are determined after making due provision for the prior charges as aforesaid the Industrial Tribunal adjudicating upon the dispute would have a free hand in the distribution of the same having regard, of course, to the considerations mentioned hereinabove. But so far as the determination of the surplus profits is concerned the formula must be adhered to in its essential particulars as otherwise there would be no stability nor uniformity of practice in regard to the same.\n It maybe noted, however, that in regard to the depreciation which is a prior charge on the gross profits earned by a concern there is always a difference in the method of approach which is adopted by the income-tax authorities and by the industrial tribunals."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["The formula evolved by the Full Bench of the Labour Appellate Tribunal in Millowners Association, Bombay v. Rashtreeya Mill Mazdoor Sangh, Bombay(1) is based on this idea that as both labour and capital contribute to the earnings of the industrial concerti, it is fair that labour should derive some benefit, if there is a surplus after meeting prior or necessary charges . The following were prescribed as the first charges on (1) (1950) L.L.J. 1247 gross profits, viz., (1) Provision for depreciation (2) reserves for rehabilitation (3) a return at 6on the paid up capital (4) a return on the working capital at a lesser rate than the return on paid up capital and (5) an estimated amount in respect of the payment of income-tax. The surplus that remained after making the aforesaid deductions would be available for distribution among the three sharers, viz., the shareholders, the industry and the workmen", "That should not have been done and the only depreciation allowed should have been the notional normal depreciation which was agreed between the parties before us at Rs. 6.23 lacs.", "This being the true position it follows on the facts of the present case that this amount was available for use as working capital and the balance-sheet showed that it was in fact so used. Moreover, DO objection was urged in this behalf nor was any finding to the contrary recorded by the Tribunal. We are, therefore, of the opinion that the reasoning adopted by the Tribunal was not correct and the appellant was entitled to 4 return on the reserves used as working capital including the sum of Rs. 41,81,196. The appellant was thus entitled to Rs. 1.96 lacs as the 4 return on reserves used as working capital and not merely Rs. 0.29 lacs as allowed by the Tribunal."], "rank2": ["In any given industry there are three interests involved, viz., the shareholders, the Company and the workmen and all these interests have got to get their proper share in the surplus profits ascertained after due provision is made for these prior charges . The shareholders may look to larger dividends commensurate with the prosperity of the industrial concern, the company would, apart from rehabilitation and replacement of buildings, plant and machinery, look forward to expansion and satisfaction of other needs of the industry and the workmen would certainly be entitled to ask for a share in the surplus profits with a view to bridge the gap between the wages earned by them and the living wages. All these interests (1) 19551 1,s.C.R. 991, 998. (2) 1958 S.C.R 878, 884, have, therefore, got to be duly and properly provided for having regard to the principles of social justice and once surplus profits available for distribution amongst these respective interests are determined after making due provision for the prior charges as aforesaid the Industrial Tribunal adjudicating upon the dispute would have a free hand in the distribution of the same having regard, of course, to the considerations mentioned hereinabove.", "The initial depreciation and the additional depreciation were abnormal additions to the income-tax depreciation and it would not be fair to the workmen if these depreciations were rated as prior charges before the available surplus was ascertained. Considerations on which the grant of initial and additional depreciations might be justified under the Income-tax Act were different from considerations of social justice and fair apportionment on which the Full Bench Formula in regard to the payment of bonus to workmen was based. This was the reason why we held in that case that only normal depreciation including multiple shift depreciation, but not initial or additional depreciation should rank as prior charge", "If regard be had to the principles enunciated above it is clear that the items of Rs. 1.14 lacs representing the Lahore factory balance written off, Rs. 0.34 lacs being patents written off, and Rs. 0.09 lacs shown as loss on sale of Tardeo property cannot be allowed as proper deductions from the gross profits for the purposes of bonus calculations. The first two items represented debits in connection with the working of previous years. Loss of the Lahore factory had been incurred during the three previous accounting years and had been carried forward from year to year and the only thing which was done during the year under consideration was that it was then written off as irre- coverable. The patents also had been worked off in previous years and the amounts spent in the purchase thereof were therefore to be written off but had reference to the working of the company during the previous years.", "Even though the bonus formula is a notional one we cannot ignore the fact that in no event would the appellant be bound to pay to the preference shareholders anything beyond 5 by way of return. The Full Bench Formula cannot be so literally construed. There is bound to be some flexibility therein, the 6 which is prescribed there as the return on paid up capital is not inexorable, and the Tribunals could if the circumstances warrant vary the rate of interest either by increasing or decreasing the same.", "The Tribunal (1) 1938 S.C.R. 876. did not take into consideration another sum of Rs. 41,81,196 which represented the depreciation fund which according to the appellant had been used as working capital during the year. If that had been allowed a further sum of Rs. 1.67 lacs should have been added to Rs. 0.29 lacs and the total amount of 4 return on reserves used as working capital would have amounted to Rs. 1.96 lacs.", "The Tribunal, in fact, allowed the same, though it appears that in the absence of evidence of the nature above referred to even that sum of Rs. 0.17 lacs ought not to have been allowed. In this state of affairs it is really impossible for us to allow the appellants claim for rehabilitation in anything beyond the sum of Rs. 0.17 lacs actually allowed by the Tribunal and the claim of the appellant for any further provision for rehabilitation must be disallowed for the purpose of the bonus calculations for the year under consideration.", "Having regard to all the circumstances of the case, we feel that an award of four months basic wages as aggregate bonus for the year 1954-55 (which by the way was the bonus awarded for the previous year 1953-54 also) would give a fair share to the labour in the distributable surplus, leaving to the shareholders and the company a balance of Rs. 5.22 lacs to be utilised by them not only towards building up of the debenture redemption reserve but also for building up other reserves, which would be utilised for various other purposes indicated above."], "rank3": ["They alleged that the profits of the appellant during the year 195455 were higher than those during the year 1953-54 for which year the appellant had paid four months basic wages as bonus. They also alleged that the wages paid to them by the appellant fell short of the, living wage and therefore the appellant should pay the in six months basic wages as bonus for the relative year. The appellant filed its written statement in answer on August 14, 1956. The appellant submitted that, after providing for the prior charges according to the formula laid down by the Labour Appellate Tribunal the profits made during the year under consideration did riot leave any surplus and tile, respondents were not entitled to any bonus. It denied that it bad made huge profits during the year in question and submitted that the profits made were not even sufficient to provide for the prior charges", "Companys Staff Union v. The Surat Electricity Co., Ltd. (1) where a Bench of the Labour Appellate Tribunal had negatived the contention that if only the normal depreciation allowed by the Income-tax law were allowed a company would be able to recoup the original cost of the assets and observed that For the purpose of bonus formula the initial and additional depreciation, which are disallowed by that formula, must be ignored in fixing the written down value and in determining the period over which the normal depreciation will be allowed. The result will be a notional amount of normal depreciation but, as we have said repeatedly the bonus formula is a notional formula.", "It would therefore appear that the redemption of these debentures would be one of the primary obligations of the industrial concern and due provision has of necessity to be made for redemption thereof on due date. This however does not mean that in the calculations of the distributable surplus the provision for such redemption should be given the status of a prior charge, though of course that would be a relevant con- sideration while distributing the available surplus between the various interests entitled thereto. We are therefore of opinion that the Tribunal was wrong in allowing Rs. 2,50,000/- as a prior charge in the bonus calculations.", "This surplus of Rs. 12 lacs would have to be distributed amongst them having regard to the facts and circumstances of the case, of course bearing in mind the various considerations indicated above. Before we arrive at the figure of the actual bonus which it will be appropriate in the circumstances of this case to allow to the workmen, we may advert to one argument which was pressed before us. on their behalf and that was that the bonus calculations should not be made on the basis of the All-India figures which were adopted by the Tribunal but on the basis of the actual amounts which the appellant had paid and would have to pay to the workmen concerned."], "rank4": ["It is also well settled that the calculations of the surplus available for distribution should be made having regard to the working of the industrial concern in the relevant (1) (1956) L.A.C. 443. (2) 1959 S.C.R. 925. (3) (1955) L.A.C. 659. accounting year without taking into consideration the credits or debits which are referable to the working of the previous years, e.g., the refund of excess profits tax paid in the past or loss of previous years carried forward but written off in the accounting year as also any provision that may have to be made to meet future liabilities, e.g., redemption of debenture stock, or provision for Provident Fund and Gratuity and other benefits, etc., which, however, necessary they may be, cannot be included in the category of prior charges.", "The Tribunal pointed out that when the appellant had in its accounts appropriated Rs. 2,50,000 for the debenture redemption fund the claim to have Rs. 3,50,000 for the purposes of bonus formula was clearly untenable. It however was of the opinion that a reasonable provision for redemption fund should be allowed as a prior charge and actually allowed the sum of Rs. 2,50,000 which had been actually provided for the purpose in the balance-sheet, negativing the contention of the respondents that no provision should be allowed for debenture redemption fund in the bonus formula. We are of the opinion that the Tribunal was not justified in allowing the sum of Rs. 2,50,000/- for debenture redemption fund as a prior charge in the bonus calculations. The Full Bench Formula does not envisage any such prior charge."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["This Full Bench -Formula has been working all throughout the country since its enunciation as aforesaid and has been found to be, in the main, fairly satisfactory. It is conducive to the benefit of both labour and capital and even though certain variations have been attempted to be made therein from time to time the main features thereof have not been substantially departed from. We feel that a formula which has been thus adopted all throughout the country and has so far worked fairly satisfactorily should be adhered, to, though there is scope for certain flexibility in the working thereof in accordance with the exigencies of the situation. In the working of the said formula, however, regard must be had both to the interests of capital and labour", "In any given industry there are three interests involved, viz., the shareholders, the Company and the workmen and all these interests have got to get their proper share in the surplus profits ascertained after due provision is made for these prior charges", "But so far as the determination of the surplus profits is concerned the formula must be adhered to in its essential particulars as otherwise there would be no stability nor uniformity of practice in regard to the same.", "The result will be a notional amount of normal depreciation but, as we have said repeatedly the bonus formula is a notional formula", "for the purpose of the bonus formula the notional normal depreciation should be deducted from the gross profits calculated on the basis adopted in Surat Electric Supply Co. Staff Union v. Surat Electricity Co., Ltd. (1) and not merely the normal depreciation including multiple shift depreciation allowed by the income-tax authorities", "It is well settled that the actual income-tax payable by the company on the basis of the full statutory depreciation allowed by the income-tax authorities for the relevant accounting year should be taken into account as a prior charge irrespective of any set off allowed by the Income-tax authorities for prior charges or any other considerations such as building up of income-tax reserves for payment of enhanced liabilities of income-tax accruing in future. It is also well settled that the calculations of the surplus available for distribution should be made having regard to the working of the industrial concern in the relevant (1) (1956) L.A.C. 443. (2) 1959 S.C.R. 925. (3) (1955) L.A.C. 659. accounting year without taking into consideration the credits or debits which are referable to the working of the previous years, e.g., the refund of excess profits tax paid in the past or loss of previous years carried forward but written off in the accounting year as also any provision that may have to be made to meet future liabilities, e.g., redemption of debenture stock, or provision for Provident Fund and Gratuity and other benefits, etc., which, however, necessary they may be, cannot be included in the category of prior charges.", "If regard be had to the principles enunciated above it is clear that the items of Rs. 1.14 lacs representing the Lahore factory balance written off, Rs. 0.34 lacs being patents written off, and Rs. 0.09 lacs shown as loss on sale of Tardeo property cannot be allowed as proper deductions from the gross profits for the purposes of bonus calculations. The first two items represented debits in connection with the working of previous years. Loss of the Lahore factory had been incurred during the three previous accounting years and had been carried forward from year to year and the only thing which was done during the year under consideration was that it was then written off as irre- coverable", "The patents also had been worked off in previous years and the amounts spent in the purchase thereof were therefore to be written off but had reference to the working of the company during the previous years. The last item of Rs. 0.09 lacs was trivial and was therefore not pressed with the result that all these three items were rightly added back in the calculations of the gross profits of the appellant and the figure of gross profits taken at Rs. 36.21 lacs was correctly arrived at by the Tribunal.", "The depreciation allowed by the Tribunal was Rs. 9.82 lacs which was the full statutory depreciation allowed by the Income-tax authorities. That should not have been done and the only depreciation allowed should have been the notional normal depreciation which was agreed between the parties before us at Rs. 6.23 lacs", "Working the figure of income-tax deducted by the appellant on the basis adopted in Shree Meenakshi Mills Ltd. \n Their Workmen (1) the income-tax on the gross profits of Rs. 36.21 lacs less the statutory depreciation allowed by the income-tax authorities, viz., Rs. 9.82 lacs would be equivalent to 7 annas in the rupee on Rs. 26.39 lacs, i.e., Rs. 11.55 lacs thus leaving a balance of Rs. 16.82 lacs from which the other prior charges would have to be deducted in order to ascertain the distributable surplus. 6 return on the ordinary share capital and 5 return on the preference share capital would come to Rs. 4.30 lacs", "Even though the bonus formula is a notional one we cannot ignore the fact that in no event would the appellant be bound to pay to the preference shareholders anything beyond 5 by way of return. The Full Bench Formula cannot be so literally construed. There is bound to be some flexibility therein, the 6 which is prescribed there as the return on paid up capital is not inexorable, and the Tribunals could if the circumstances warrant vary the rate of interest either by increasing or decreasing the same", "On the facts of this case however there is no warrant for allowing anything beyond 5 return on preference share capital and the amount of Rs. 4.30 lacs should therefore be deducted as another prior charge from the grsos profits of the appellant. 4 return on reserves used as working capital was calculated merely at a figure of Rs. 0.29 lacs worked out on a total figure of Rs. 7,42,139. The Tribunal (1) 1938 S.C.R. 876. did not take into consideration another sum of Rs. 41,81,196 which represented the depreciation fund which according to the appellant had been used as working capital during the year", "If that had been allowed a further sum of Rs. 1.67 lacs should have been added to Rs. 0.29 lacs and the total amount of 4 return on reserves used as working capital would have amounted to Rs. 1.96 lacs", "This being the true position it follows on the facts of the present case that this amount was available for use as working capital and the balance-sheet showed that it was in fact so used.", "Moreover, DO objection was urged in this behalf nor was any finding to the contrary recorded by the Tribunal. We are, therefore, of the opinion that the reasoning adopted by the Tribunal was not correct and the appellant was entitled to 4 return on the reserves used as working capital including the sum of Rs. 41,81,196. The appellant was thus entitled to Rs. 1.96 lacs as the 4 return on reserves used as working capital and not merely Rs. 0.29 lacs as allowed by the Tribunal", "The provision for rehabilitation bad been claimed by the appellant at Rs. 1.10 lacs on the basis of 10 of the net profits relying upon para. 20 of the Report of the Committee on Profit Sharing in which the Committee had proposed that 10 of the net profits should compulsorily be set aside for reserves to meet emergencies as well as for rehabilitation, modernization and reasonable expansion. No evidence was at all led by the appellant before the Tribunal showing the cost of the machinery as purchased, the age of the machinery, the estimate for replacement etc., in order to substantiate this claim for rehabilitation and the appellant was content merely to rely upon this recommendation of the Committee on Profit-sharing", "This was rightly considered by the Tribunal as insufficient to support the appellants claim, though it allowed for rehabilitation, in addition to the statutory depreciation, the amount for which the appellant had actually made provision, viz., the sum by which the depreciation written off for the year exceeded the statutory depreciation (i. e., Rs. 10,00,000 minus Rs. 9,82,799Rs. 17,201).\n The amount was really small and did not affect the bonus to be awarded. The Tribunal, in fact, allowed the same, though it appears that in the absence of evidence of the nature above referred to even that sum of Rs. 0.17 lacs ought not to have been allowed", "In this state of affairs it is really impossible for us to allow the appellants claim for rehabilitation in anything beyond the sum of Rs. 0.17 lacs actually allowed by the Tribunal and the claim of the appellant for any further provision for rehabilitation must be disallowed for the purpose of the bonus calculations for the year under consideration", "The Tribunal pointed out that when the appellant had in its accounts appropriated Rs. 2,50,000 for the debenture redemption fund the claim to have Rs. 3,50,000 for the purposes of bonus formula was clearly untenable. It however was of the opinion that a reasonable provision for redemption fund should be allowed as a prior charge and actually allowed the sum of Rs. 2,50,000 which had been actually provided for the purpose in the balance-sheet, negativing the contention of the respondents that no provision should be allowed for debenture redemption fund in the bonus formula. We are of the opinion that the Tribunal was not justified in allowing the sum of Rs. 2,50,000/- for debenture redemption fund as a prior charge in the bonus calculations.", "The Full Bench Formula does not envisage any such prior charge. It is no doubt true that capital is shy and it would not be practicable for the industrial concern to raise large amounts by way of fresh debentures when they become due", "It is also true that the debentures do not stand on a par with other debts of a concern because the debentureholders would in a conceivable situation be able to enforce their security by bringing the industry to a stand-still by taking over charge of the whole concern. It would therefore appear that the redemption of these debentures would be one of the primary obligations of the industrial concern and due provision has of necessity to be made for redemption thereof on due date", "This however does not mean that in the calculations of the distributable surplus the provision for such redemption should be given the status of a prior charge, though of course that would be a relevant con- sideration while distributing the available surplus between the various interests entitled thereto. We are therefore of opinion that the Tribunal was wrong in allowing Rs. 2,50,000/- as a prior charge in the bonus calculations.", "The shareholders as well as the company would both be naturally interested inter alia in providing the debenture redemption reserves as also meeting the needs of the industry for further expansion. The workmen would no doubt be interested in trying to bridge the gap between their actual wage and the living wage to the extent feasible. This surplus of Rs. 12 lacs would have to be distributed amongst them having regard to the facts and circumstances of the case, of course bearing in mind the various considerations indicated above", "If this contention of the respondents was pushed to its logical extent it would also mean that in the event of the non-fulfilment of the conditions imposed by the Tribunal in the award of bonus herein bringing in savings in the hands of the appellant, the respondents would be entitled to take advantage of those savings also and should be awarded larger amounts by way of bonus, which would really be the result of the claimants entitled to the same not receiving it under certain circumstances-an event which would be purely an extraneous one and unconnected with the contribution of the respondents towards the gross profits earned by the appellant. The Tribunal was, therefore, right in calculating the bonus on an All-India basis", "The only question which therefore survives is what further bonus, if any, would the respondents be entitled to from the distributable surplus of Rs. 12 lacs. The sum of Rs. 3.50 lacs required for building up the debenture redemption reserve is an all-engrossing need of the appellant and that is a factor which must of necessity be taken into consideration while arriving at the ultimate figure, particularly because such redemption of the debentures would enure not only for the benefit of the Company and its shareholders but also of the workmen employed therein", "Having regard to all the circumstances of the case, we feel that an award of four months basic wages as aggregate bonus for the year 1954-55 (which by the way was the bonus awarded for the previous year 1953-54 also) would give a fair share to the labour in the distributable surplus, leaving to the shareholders and the company a balance of Rs. 5.22 lacs to be utilised by them not only towards building up of the debenture redemption reserve but also for building up other reserves, which would be utilised for various other purposes indicated above"], "rank2": ["The Tribunal after hearing the parties came to the conclusion that even if payment of a bonus equal to 4 1/2 months basic wages were made a fair surplus would be left in the hands of the appellant to the tune of Rs. 3.30 lacs and therefore awarded the same subject to the following conditions- \nAny employee who has been dismissed for misconduct resulting in financial loss to the company shall not be entitled to bonus to the extent of the loss caused. Persons who are eligible for bonus but who are no longer in the service of the company on the date of the payment shall be paid the same provided that they make a written application for the same within three months of publication of this award", "Being aggrieved by the said award of the Tribunal, the appellant applied for and obtained from this Court special leave to appeal against the same under Art. 136 of the Constitution and hence this appeal", "The formula evolved by the Full Bench of the Labour Appellate Tribunal in Millowners Association, Bombay v. Rashtreeya Mill Mazdoor Sangh, Bombay(1) is based on this idea that as both labour and capital contribute to the earnings of the industrial concerti, it is fair that labour should derive some benefit, if there is a surplus after meeting prior or necessary charges . The following were prescribed as the first charges on (1) (1950) L.L.J. 1247 gross profits, viz., (1) Provision for depreciation (2) reserves for rehabilitation (3) a return at 6on the paid up capital (4) a return on the working capital at a lesser rate than the return on paid up capital and (5) an estimated amount in respect of the payment of income-tax. The surplus that remained after making the aforesaid deductions would be available for distribution among the three sharers, viz., the shareholders, the industry and the workmen", "The shareholders may look to larger dividends commensurate with the prosperity of the industrial concern, the company would, apart from rehabilitation and replacement of buildings, plant and machinery, look forward to expansion and satisfaction of other needs of the industry and the workmen would certainly be entitled to ask for a share in the surplus profits with a view to bridge the gap between the wages earned by them and the living wages. All these interests (1) 19551 1,s.C.R. 991, 998. (2) 1958 S.C.R 878, 884, have, therefore, got to be duly and properly provided for having regard to the principles of social justice and once surplus profits available for distribution amongst these respective interests are determined after making due provision for the prior charges as aforesaid the Industrial Tribunal adjudicating upon the dispute would have a free hand in the distribution of the same having regard, of course, to the considerations mentioned hereinabove", "It maybe noted, however, that in regard to the depreciation which is a prior charge on the gross profits earned by a concern there is always a difference in the method of approach which is adopted by the income-tax authorities and by the industrial tribunals", "the whole of the depreciation admissible under the Income-tax Act was not allowable in determining the available surplus. The initial depreciation and the additional depreciation were abnormal additions to the income-tax depreciation and it would not be fair to the workmen if these depreciations were rated as prior charges before the available surplus was ascertained. Considerations on which the grant of initial and additional depreciations might be justified under the Income-tax Act were different from considerations of social justice and fair apportionment on which the Full Bench Formula in regard to the payment of bonus to workmen was based", "we held in that case that only normal depreciation including multiple shift depreciation, but not initial or additional depreciation should rank as prior charge", "When this decision was reached we had not before us the decision of the Labour Appellate Tribunal in Surat Electricity Companys Staff Union v. The Surat Electricity Co., Ltd. (1) where a Bench of the Labour Appellate Tribunal had negatived the contention that if only the normal depreciation allowed by the Income-tax law were allowed a company would be able to recoup the original cost of the assets and observed that For the purpose of bonus formula the initial and additional depreciation, which are disallowed by that formula, must be ignored in fixing the written down value and in determining the period over which the normal depreciation will be allowed", "The answer furnished by the appellant in regard to both these contentions was that on a true reading of the balance- sheet Rs. 41,81,196 were reserves used as working capital, vide calculations in Exhibit C-12. Provision for depreciation was Rs. 1,10,29,954 and the paid up capital was Rs. 80,00,000 thus totaling to Rs. 1,90,29,954. The total capital block as shown in page 5 of the balance-sheet for the year ending June 30, 1955, was Rs. 1,48,48,758 and the working capital therefore was Rs. 41,81,196. This was apart from Rs. 7,42,139 which was the total of the three items at page 4 of the balance-sheet Rs. 98,405 capital reserves, Rs. 4,73,734 other reserves and Rs. 1,70,000 provision for doubtful debts as also the investments, cash and bank balance.", "In addition to these various sums allowed to the appellant by way of prior charges against the gross profits earned during the accounting year the Tribunal also allowed to the appellant Rs. 2.50 lacs by way of provision for debenture redemption fund. The claim of the appellant was for a sum of Rs. 3.50 lacs for the same", "The appellant had issued debentures of the value of Rs. 30 lacs in the year 1942-43 and they were redeemable in the year 1962-63. No annual provision had been made from profits for redemption of the same inasmuch as until the year 1949 the appellant was not working at a profit.\n Such provision was made only thereafter", "For the year 1950-51, the appellant made a provision for Rs. 75,000 for debenture redemption fund, for 1951.52, Rs. 1,50,000, for 1952-53 Rs. 1,50,000, for 1953-54 Rs. 75,000 and further provision had to be made for redemption of debentures in a sum of Rs. 24,50,000. In so far as 7 more years were left before the due date for redemption the appellant claimed Rs. 3,50,000 as the annual sum to be set apart, though as a matter of fact in the balance-sheet only a provision of Rs. 2,50,000 had been made by it for debenture redemption reserve."], "rank3": ["The award made by the Industrial Tribunal, Bombay, in Reference (IT) No. 75 of 1956 between the appellant and the respondents whereby the Industrial Tribunal awarded to the respondents 4 1/2 months basic wages as bonus for the year 1954-55 (year ending June 30, 1955)", "In October 1955, respondent I who are workmen represented by the Engineering Mazdoor Sabha made a demand for the payment of six-months wages as bonus for the year 1954-55. The matter was also referred to the Conciliation Officer requesting him to initiate Conciliation Proceedings. The Conciliation Proceedings went on before the Conciliation Officer upto March 23, 1956, on which date both the parties arrived at and executed an Agreement to refer the matter to an Industrial Tribunal for adjudication.\n Accordingly, on April 30, 1956, both the parties drew up and signed a joint- application for referring the dispute for adjudication to a Tribunal and the Government of Bombay thereupon in exercise of the powers conferred by sub-s. (2) of s. 10 of the Industrial Disputes Act, 1947, by its order dated June 11, 1956, referred the following dispute to the Tribunal - DEMAND Every Workman (daily rated) should be paid bonus for the year 1954-55 (year ending 30th June, 1955) equivalent to six-months wages without it attaching any condition thereto", "Respondent No. I filed their statement of claim before -the Tribunal on June 29, 1956", "They alleged that the profits of the appellant during the year 195455 were higher than those during the year 1953-54 for which year the appellant had paid four months basic wages as bonus. They also alleged that the wages paid to them by the appellant fell short of the, living wage and therefore the appellant should pay the in six months basic wages as bonus for the relative year", "The appellant filed its written statement in answer on August 14, 1956. The appellant submitted that, after providing for the prior charges according to the formula laid down by the Labour Appellate Tribunal the profits made during the year under consideration did riot leave any surplus and tile, respondents were not entitled to any bonus. It denied that it bad made huge profits during the year in question and submitted that the profits made were not even sufficient to provide for the prior charges , etc"], "rank4": ["The appellant is a subsidiary of the Premier Construction Co., Ltd., and manufactures Hume Pipes. It has factories in different parts of India, Pakistan and Ceylon. The respondents are the workers employed in the appellants factory at Antop Hill, Wadala, Bombay"], "label": "ACCEPTED"}, "expert_4": {"rank1": ["The award made by the Industrial Tribunal, Bombay, in Reference (IT) No. 75 of 1956 between the appellant and the respondents whereby the Industrial Tribunal awarded to the respondents 4 1/2 months basic wages as bonus for the year 1954-55 (year ending June 30, 1955).", "We are therefore of opinion that the Tribunal was wrong in allowing Rs. 2,50,000/- as a prior charge in the bonus calculations.", "Having regard to all the circumstances of the case, we feel that an award of four months basic wages as aggregate bonus for the year 1954-55 (which by the way was the bonus awarded for the previous year 1953-54 also) would give a fair share to the labour in the distributable surplus, leaving to the shareholders and the company a balance of Rs. 5.22 lacs to be utilised by them not only towards building up of the debenture redemption reserve but also for building up other reserves, which would be utilised for various other purposes indicated above."], "rank2": ["The following were prescribed as the first charges on (1) (1950) L.L.J. 1247 gross profits, viz., (1) Provision for depreciation (2) reserves for rehabilitation (3) a return at 6on the paid up capital (4) a return on the working capital at a lesser rate than the return on paid up capital and (5) an estimated amount in respect of the payment of income-tax. The surplus that remained after making the aforesaid deductions would be available for distribution among the three sharers, viz., the shareholders, the industry and the workmen See Muir Mills Co., Ltd. v. Suti Mills Mazdoor Union, Kanpur (1) and Sree Meenakshi Mills Ltd. v. Their Workmen", "Considerations on which the grant of initial and additional depreciations might be justified under the Income-tax Act were different from considerations of social justice and fair apportionment on which the Full Bench Formula in regard to the payment of bonus to workmen was based.", "This was the reason why we held in that case that only normal depreciation including multiple shift depreciation, but not initial or additional depreciation should rank as prior charge.", "If regard be had to the principles enunciated above it is clear that the items of Rs. 1.14 lacs representing the Lahore factory balance written off, Rs. 0.34 lacs being patents written off, and Rs. 0.09 lacs shown as loss on sale of Tardeo property cannot be allowed as proper deductions from the gross profits for the purposes of bonus calculations.", "The first two items represented debits in connection with the working of previous years.", "That should not have been done and the only depreciation allowed should have been the notional normal depreciation which was agreed between the parties before us at Rs. 6.23 lacs.", "Working the figure of income-tax deducted by the appellant on the basis adopted in Shree Meenakshi Mills Ltd. \n Their Workmen (1) the income-tax on the gross profits of Rs. 36.21 lacs less the statutory depreciation allowed by the income-tax authorities, viz., Rs. 9.82 lacs would be equivalent to 7 annas in the rupee on Rs. 26.39 lacs, i.e., Rs. 11.55 lacs thus leaving a balance of Rs. 16.82 lacs from which the other prior charges would have to be deducted in order to ascertain the distributable surplus. 6 return on the ordinary share capital and 5 return on the preference share capital would come to Rs. 4.30 lacs.", "Even though the bonus formula is a notional one we cannot ignore the fact that in no event would the appellant be bound to pay to the preference shareholders anything beyond 5 by way of return. The Full Bench Formula cannot be so literally construed.", "We are, therefore, of the opinion that the reasoning adopted by the Tribunal was not correct and the appellant was entitled to 4 return on the reserves used as working capital including the sum of Rs. 41,81,196.", "The appellant was thus entitled to Rs. 1.96 lacs as the 4 return on reserves used as working capital and not merely Rs. 0.29 lacs as allowed by the Tribunal.", "It will however be open to the appellant to claim higher rehabilitation for subsequent years if it can substantiate its claim by adducing proper evidence.", "We are of the opinion that the Tribunal was not justified in allowing the sum of Rs. 2,50,000/- for debenture redemption fund as a prior charge in the bonus calculations.", "The Full Bench Formula does not envisage any such prior charge.", "This disposes of all the contentions which have been urged on behalf of both the parties and calculating the figure on that basis we arrive atthe following Rs. in lacs.", "Gross Profit as per Tribudals calculations 36.21 Less Notional Normal Depreciation 6.23 29.98 Less Tax 7 as. in a rupee 11.55 18.43 Less 6 return on ordinary share capital and 5 on preference share capital 4.30 14.13 Less 4 Return on reserves used as working capital 7,42,139 29 41,81,196 1.67 --------------------- 49,23,335 1.96 ------------- 12.17 LessProvision for Rehabilitation 0.17 ------------ Available Surplus 12.00 This would bring the available surplusfor distribution to a sum of Rs. 12 lacs and this would be distributable amongst the shareholders, the company and the workmen concerned.", "It is not feasible to lay down any rigid formula as to what the proportion of such distribution amongst these various interests should be.", "The Tribunal was, therefore, right in calculating the bonus on an All-India basis.", "By our order dated April 12, 1957, the appellant was ordered to pay to the respondents within a fortnight from the date thereof bonus for the year 1954-55 equivalent to two months basic wages that amount has already been paid and works out at Rs. 3.39 lacs on an All-India basis."], "rank3": ["The formula evolved by the Full Bench of the Labour Appellate Tribunal in Millowners Association, Bombay v. Rashtreeya Mill Mazdoor Sangh, Bombay(1) is based on this idea that as both labour and capital contribute to the earnings of the industrial concerti, it is fair that labour should derive some benefit, if there is a surplus after meeting prior or necessary charges .", "This Full Bench -Formula has been working all throughout the country since its enunciation as aforesaid and has been found to be, in the main, fairly satisfactory.", "We feel that a formula which has been thus adopted all throughout the country and has so far worked fairly satisfactorily should be adhered, to, though there is scope for certain flexibility in the working thereof in accordance with the exigencies of the situation.", "In the working of the said formula, however, regard must be had both to the interests of capital and labour. In any given industry there are three interests involved, viz., the shareholders, the Company and the workmen and all these interests have got to get their proper share in the surplus profits ascertained after due provision is made for these prior charges .", "All these interests (1) 19551 1,s.C.R. 991, 998. (2) 1958 S.C.R 878, 884, have, therefore, got to be duly and properly provided for having regard to the principles of social justice and once surplus profits available for distribution amongst these respective interests are determined after making due provision for the prior charges as aforesaid the Industrial Tribunal adjudicating upon the dispute would have a free hand in the distribution of the same having regard, of course, to the considerations mentioned hereinabove.", "But so far as the determination of the surplus profits is concerned the formula must be adhered to in its essential particulars as otherwise there would be no stability nor uniformity of practice in regard to the same.", "It was pointed out by us in Sree Meenakshi Mills Ltd. v.", "Their Workmen (1) that the whole of the depreciation admissible under the Income-tax Act was not allowable in determining the available surplus.", "The initial depreciation and the additional depreciation were abnormal additions to the income-tax depreciation and it would not be fair to the workmen if these depreciations were rated as prior charges before the available surplus was ascertained.", "We approved of the decision of the Labour Appellate Tribunal in U. P. Electric Supply Co., Ltd. v.", "Their Workmen (2) in arriving at the above conclusion and disallowed the claim of the company there to deduct the initial or additional depreciation as prior charge in bonus calculations.", "We have already expressed in the judgment delivered by us in Associated Cement Co., Ltd. v. Its Workmen (1) that for the purpose of the bonus formula the notional normal depreciation should be deducted from the gross profits calculated on the basis adopted in Surat Electric Supply Co. Staff Union v. Surat Electricity Co., Ltd. (1) and not merely the normal depreciation including multiple shift depreciation allowed by the income-tax authorities as stated in U.", "P. Electric Supply Co., Ltd. v. Their Workmen (3).", "It is well settled that the actual income-tax payable by the company on the basis of the full statutory depreciation allowed by the income-tax authorities for the relevant accounting year should be taken into account as a prior charge irrespective of any set off allowed by the Income-tax authorities for prior charges or any other considerations such as building up of income-tax reserves for payment of enhanced liabilities of income-tax accruing in future.", "It is also well settled that the calculations of the surplus available for distribution should be made having regard to the working of the industrial concern in the relevant (1) (1956) L.A.C. 443. (2) 1959 S.C.R. 925. (3) (1955) L.A.C. 659. accounting year without taking into consideration the credits or debits which are referable to the working of the previous years, e.g., the refund of excess profits tax paid in the past or loss of previous years carried forward but written off in the accounting year as also any provision that may have to be made to meet future liabilities, e.g., redemption of debenture stock, or provision for Provident Fund and Gratuity and other benefits, etc., which, however, necessary they may be, cannot be included in the category of prior charges.", "Loss of the Lahore factory had been incurred during the three previous accounting years and had been carried forward from year to year and the only thing which was done during the year under consideration was that it was then written off as irre- coverable.", "The patents also had been worked off in previous years and the amounts spent in the purchase thereof were therefore to be written off but had reference to the working of the company during the previous years.", "The last item of Rs. 0.09 lacs was trivial and was therefore not pressed with the result that all these three items were rightly added back in the calculations of the gross profits of the appellant and the figure of gross profits taken at Rs. 36.21 lacs was correctly arrived at by the Tribunal.", "The depreciation allowed by the Tribunal was Rs. 9.82 lacs which was the full statutory depreciation allowed by the Income-tax authorities.", "We cannot accept this contention.", "There is bound to be some flexibility therein, the 6 which is prescribed there as the return on paid up capital is not inexorable, and the Tribunals could if the circumstances warrant vary the rate of interest either by increasing or decreasing the same. On the facts of this case however there is no warrant for allowing anything beyond 5 return on preference share capital and the amount of Rs. 4.30 lacs should therefore be deducted as another prior charge from the grsos profits of the appellant. 4 return on reserves used as working capital was calculated merely at a figure of Rs. 0.29 lacs worked out on a total figure of Rs. 7,42,139.", "The Tribunal (1) 1938 S.C.R. 876. did not take into consideration another sum of Rs. 41,81,196 which represented the depreciation fund which according to the appellant had been used as working capital during the year.", "If that had been allowed a further sum of Rs. 1.67 lacs should have been added to Rs. 0.29 lacs and the total amount of 4 return on reserves used as working capital would have amounted to Rs. 1.96 lacs.", "Two arguments were advanced against this contention of the appellant.", "One was that there was nothing like a depreciation fund, that it merely represented a credit item introduced in the balance-sheet as against the value of the fixed capital at its original cost and would have disappeared as such if the proper accounting basis had been adopted, viz., the fixed block bad been showed at its depreciated value after deducting the amount of depreciation from the original cost.", "Such book entries, it was contended, did not convert that credit item into a depreciation fund available to the company and there was therefore no basis for the contention that such a depreciation fund ever existed and could be used as working capital in the business.", "The other was that there was nothing on the record to show that such a depreciation fund, if any, had been, in fact, used as working capital in the business during that year.", "This being the true position it follows on the facts of the present case that this amount was available for use as working capital and the balance-sheet showed that it was in fact so used.", "Moreover, DO objection was urged in this behalf nor was any finding to the contrary recorded by the Tribunal.", "This was rightly considered by the Tribunal as insufficient to support the appellants claim, though it allowed for rehabilitation, in addition to the statutory depreciation, the amount for which the appellant had actually made provision, viz., the sum by which the depreciation written off for the year exceeded the statutory depreciation (i. e., Rs. 10,00,000 minus Rs. 9,82,799Rs. 17,201).", "In this state of affairs it is really impossible for us to allow the appellants claim for rehabilitation in anything beyond the sum of Rs. 0.17 lacs actually allowed by the Tribunal and the claim of the appellant for any further provision for rehabilitation must be disallowed for the purpose of the bonus calculations for the year under consideration.", "In addition to these various sums allowed to the appellant by way of prior charges against the gross profits earned during the accounting year the Tribunal also allowed to the appellant Rs. 2.50 lacs by way of provision for debenture redemption fund.", "The claim of the appellant was for a sum of Rs. 3.50 lacs for the same", "No annual provision had been made from profits for redemption of the same inasmuch as until the year 1949 the appellant was not working at a profit.", "For the year 1950-51, the appellant made a provision for Rs. 75,000 for debenture redemption fund, for 1951.52, Rs. 1,50,000, for 1952-53 Rs. 1,50,000, for 1953-54 Rs. 75,000 and further provision had to be made for redemption of debentures in a sum of Rs. 24,50,000.", "In so far as 7 more years were left before the due date for redemption the appellant claimed Rs. 3,50,000 as the annual sum to be set apart, though as a matter of fact in the balance-sheet only a provision of Rs. 2,50,000 had been made by it for debenture redemption reserve.", "The Tribunal pointed out that when the appellant had in its accounts appropriated Rs. 2,50,000 for the debenture redemption fund the claim to have Rs. 3,50,000 for the purposes of bonus formula was clearly untenable.", "It however was of the opinion that a reasonable provision for redemption fund should be allowed as a prior charge and actually allowed the sum of Rs. 2,50,000 which had been actually provided for the purpose in the balance-sheet, negativing the contention of the respondents that no provision should be allowed for debenture redemption fund in the bonus formula.", "It is no doubt true that capital is shy and it would not be practicable for the industrial concern to raise large amounts by way of fresh debentures when they become due.", "It is also true that the debentures do not stand on a par with other debts of a concern because the debentureholders would in a conceivable situation be able to enforce their security by bringing the industry to a stand-still by taking over charge of the whole concern.", "This however does not mean that in the calculations of the distributable surplus the provision for such redemption should be given the status of a prior charge, though of course that would be a relevant con- sideration while distributing the available surplus between the various interests entitled thereto.", "The shareholders as well as the company would both be naturally interested inter alia in providing the debenture redemption reserves as also meeting the needs of the industry for further expansion.", "The workmen would no doubt be interested in trying to bridge the gap between their actual wage and the living wage to the extent feasible.", "This surplus of Rs. 12 lacs would have to be distributed amongst them having regard to the facts and circumstances of the case, of course bearing in mind the various considerations indicated above.", "Before we arrive at the figure of the actual bonus which it will be appropriate in the circumstances of this case to allow to the workmen, we may advert to one argument which was pressed before us. on their behalf and that was that the bonus calculations should not be made on the basis of the All-India figures which were adopted by the Tribunal but on the basis of the actual amounts which the appellant had paid and would have to pay to the workmen concerned.", "It was pointed out that the respondents here were only the workmen in the Wadala Factory of the appellant.\n The appellant had, however, paid to the various workmen elsewhere as and by way of bonus sums varying between 4 and 29 of the basic wages for the year in question.", "The sum of Rs. 1,23,138/- only had been paid in full and final settlement to the workmen in some of the factories and the bonus calculations on an All-India basis would thus work to the advantage of the appellant in so far as they would result in saving to the appellant of the difference between the amounts to which those workmen would be entitled on the basis of the All-India figures adopted by the Tribunal and the amounts actually paid to them as a result of agreements, conciliation or adjudication.", "If this contention was accepted the respondents before us would have an advantage over those workmen with whom settlements have been made and would get larger amounts by way of bonus merely by reason of the fact that the appellant had managed to settle the claims of those workmen at lesser figures.", "If this contention of the respondents was pushed to its logical extent it would also mean that in the event of the non-fulfilment of the conditions imposed by the Tribunal in the award of bonus herein bringing in savings in the hands of the appellant, the respondents would be entitled to take advantage of those savings also and should be awarded larger amounts by way of bonus, which would really be the result of the claimants entitled to the same not receiving it under certain circumstances-an event which would be purely an extraneous one and unconnected with the contribution of the respondents towards the gross profits earned by the appellant.", "The only question which therefore survives is what further bonus, if any, would the respondents be entitled to from the distributable surplus of Rs. 12 lacs.", "The sum of Rs. 3.50 lacs required for building up the debenture redemption reserve is an all-engrossing need of the appellant and that is a factor which must of necessity be taken into consideration while arriving at the ultimate figure, particularly because such redemption of the debentures would enure not only for the benefit of the Company and its shareholders but also of the workmen employed therein."], "rank4": ["The appellant is a subsidiary of the Premier Construction Co., Ltd., and manufactures Hume Pipes.", "The respondents are the workers employed in the appellants factory at Antop Hill, Wadala, Bombay.", "In October 1955, respondent I who are workmen represented by the Engineering Mazdoor Sabha made a demand for the payment of six-months wages as bonus for the year 1954-55. The matter was also referred to the Conciliation Officer requesting him to initiate Conciliation Proceedings. The Conciliation Proceedings went on before the Conciliation Officer upto March 23, 1956, on which date both the parties arrived at and executed an Agreement to refer the matter to an Industrial Tribunal for adjudication.", "The Tribunal after hearing the parties came to the conclusion that even if payment of a bonus equal to 4 1/2 months basic wages were made a fair surplus would be left in the hands of the appellant to the tune of Rs. 3.30 lacs and therefore awarded the same subject to the following conditions- \nAny employee who has been dismissed for misconduct resulting in financial loss to the company shall not be entitled to bonus to the extent of the loss caused.", "Persons who are eligible for bonus but who are no longer in the service of the company on the date of the payment shall be paid the same provided that they make a written application for the same within three months of publication of this award.", "Such bonus shall be paid within one month of receipt of application provided that no claim can be enforced before six weeks from the date this award becomes enforceable.", "Being aggrieved by the said award of the Tribunal, the appellant applied for and obtained from this Court special leave to appeal against the same under Art. 136 of the Constitution and hence this appeal.", "The appellant, however, claimed that even on the preference shares 6 return should be allowed and not 5 even though preference shareholders were not entitled to anything beyond 5 under the terms of issue.", "The appellant obviously relied upon the wording of the formula return at 6 on the paid up capital and contended that the preference shares also being paid up capital it would be entitled to a return of 6 on the preference shares for the purposes of the bonus formula even though in fact it would have to pay only 5 return on the same.", "The provision for rehabilitation bad been claimed by the appellant at Rs. 1.10 lacs on the basis of 10 of the net profits relying upon para. 20 of the Report of the Committee on Profit Sharing in which the Committee had proposed that 10 of the net profits should compulsorily be set aside for reserves to meet emergencies as well as for rehabilitation, modernization and reasonable expansion.", "No evidence was at all led by the appellant before the Tribunal showing the cost of the machinery as purchased, the age of the machinery, the estimate for replacement etc., in order to substantiate this claim for rehabilitation and the appellant was content merely to rely upon this recommendation of the Committee on Profit-sharing.", "It was therefore contended that the calculations should be made after taking into account the savings thus effected by the appellant and only a sum of Rs. 1,23,138 - which was the actual sum paid to those workmen should be taken into account and no more.", "We are afraid, we cannot accept this contention."], "label": "REJECTED"}, "expert_5": {"rank1": ["an award of four months basic wages as aggregate bonus for the year 1954-55 (which by the way was the bonus awarded for the previous year 1953-54 also) would give a fair share to the labour in the distributable surplus"], "rank2": ["The formula evolved by the Full Bench of the Labour Appellate Tribunal in Millowners Association, Bombay v. Rashtreeya Mill Mazdoor Sangh, Bombay(1) is based on this idea that as both labour and capital contribute to the earnings of the industrial concerti, it is fair that labour should derive some benefit, if there is a surplus after meeting prior or necessary charges", "This would bring the available surplusfor distribution to a sum of Rs. 12 lacs and this would be distributable amongst the shareholders, the company and the workmen concerned.", "The sum of Rs. 3.50 lacs required for building up the debenture redemption reserve is an all-engrossing need of the appellant and that is a factor which must of necessity be taken into consideration while arriving at the ultimate figure, particularly because such redemption of the debentures would enure not only for the benefit of the Company and its shareholders but also of the workmen employed therein."], "rank3": ["The surplus that remained after making the aforesaid deductions would be available for distribution among the three sharers, viz., the shareholders, the industry and the workmen", "Gross Profit as per Tribudals calculations 36.21 Less Notional Normal Depreciation 6.23 29.98 Less Tax 7 as. in a rupee 11.55 18.43 Less 6 return on ordinary share capital and 5 on preference share capital 4.30 14.13 Less 4 Return on reserves used as working capital 7,42,139 29 41,81,196 1.67 --------------------- 49,23,335 1.96 ------------- 12.17 LessProvision for Rehabilitation 0.17 ------------ Available Surplus 12.00", "We are afraid, we cannot accept this contention. If this contention was accepted the respondents before us would have an advantage over those workmen with whom settlements have been made and would get larger amounts by way of bonus merely by reason of the fact that the appellant had managed to settle the claims of those workmen at lesser figures.", "The Tribunal was, therefore, right in calculating the bonus on an All-India basis."], "rank4": ["The following were prescribed as the first charges on (1) (1950) L.L.J. 1247 gross profits, viz., (1) Provision for depreciation (2) reserves for rehabilitation (3) a return at 6on the paid up capital (4) a return on the working capital at a lesser rate than the return on paid up capital and (5) an estimated amount in respect of the payment of income-tax.", "The shareholders may look to larger dividends commensurate with the prosperity of the industrial concern, the company would, apart from rehabilitation and replacement of buildings, plant and machinery, look forward to expansion and satisfaction of other needs of the industry", "the workmen would certainly be entitled to ask for a share in the surplus profits with a view to bridge the gap between the wages earned by them and the living wages.", "The shareholders as well as the company would both be naturally interested inter alia in providing the debenture redemption reserves as also meeting the needs of the industry for further expansion.", "The workmen would no doubt be interested in trying to bridge the gap between their actual wage and the living wage to the extent feasible.", "what further bonus"], "rank5": ["In the working of the said formula, however, regard must be had both to the interests of capital and labour.", "In any given industry there are three interests involved, viz., the shareholders, the Company and the workmen and all these interests have got to get their proper share in the surplus profits ascertained after due provision is made for these prior charges .", "All these interests (1) 19551 1,s.C.R. 991, 998. (2) 1958 S.C.R 878, 884, have, therefore, got to be duly and properly provided for having regard to the principles of social justice and once surplus profits available for distribution amongst these respective interests are determined after making due provision for the prior charges as aforesaid the Industrial Tribunal adjudicating upon the dispute would have a free hand in the distribution of the same having regard, of course, to the considerations mentioned hereinabove. But so far as the determination of the surplus profits is concerned the formula must be adhered to in its essential particulars as otherwise there would be no stability nor uniformity of practice in regard to the same.", "This surplus of Rs. 12 lacs would have to be distributed amongst them having regard to the facts and circumstances of the case, of course bearing in mind the various considerations indicated above.", "If this contention of the respondents was pushed to its logical extent it would also mean that in the event of the non-fulfilment of the conditions imposed by the Tribunal in the award of bonus herein bringing in savings in the hands of the appellant, the respondents would be entitled to take advantage of those savings also and should be awarded larger amounts by way of bonus, which would really be the result of the claimants entitled to the same not receiving it under certain circumstances-an event which would be purely an extraneous one and unconnected with the contribution of the respondents towards the gross profits earned by the appellant."], "label": "REJECTED"}, "label": "ACCEPTED"}
{"id": "1959_76", "text": "Filed in the Court of the Subordinate Judge of Chikodi by one Tukaram Shidappa Borgavi alias Teli (since deceased) and his son Mallappa Tukaram Borgavi alis Teli (1st respondent herein) against the appellants for the redemption of certain mortgaged property and possession thereof free from encumbrances and for other ancillary reliefs. The mortgaged property consists of R. S. No. 301 which is Devasthan Inam Lands burdened with the obligation to supply oil for Nand Deep, i.e., keeping a lamp always burning before Shri Tholaba Deity in the village of Nipani. The said property originally belonged to two brothers Shiddappa and Annappa. The khata of the land, however, stood in the name of Shiddappa as the registered occupant under s. 74 of the Bombay Land Revenue Code, 1879 (Bombay Act V of 1879). The facts material for our present purpose may now be stated. On January 23, 1888, Shiddappa and Annappa executed a usufructuary mortgage (Ex.D-51) in favour of Lalchand Bhavanchand Gujar and Tuljaram Bhavanchand Gujar for Rs. 1,300 made up of Rs. 1,100 due under a previous mortgage and Rs. 200 presently advanced in cash. That deed provided that the mortgage money would be repaid within a period of three years and that the mortgagors would pay the judi and incur the expenses of the Nand Deep and that on failure of the mortgagors to meet the said out goings, the mortgagees would incur the said expenses and add the same to their claim on the mortgage. On March 10, 1900, Shiddappa alone executed a simple mortgage (Ex. D-52) for Rs. 600 in favour of the same mortgagees.\n A part of the consideration for this simple mortgage consisted of moneys borrowed by both the brothers on bonds executed by both of them. This simple mortgage deed provided that the mortgagees would bear the expenses of the Nand Deep and debit the same to the mortgagors in the mortgage account. On March 22, 1900, before the simple mortgage deed was presented for registration, Shidappa, who was the registered occupant, gave a Rajinama under s. 74 of the Bombay Revenue Code recording his desire to submit an unconditional surrender of the above mentioned khata of R. No. 307 from the end of the then current year. On the same day, the mortgagees by a Kabuliyat prayed that the occupancy in the mortgaged property may be granted to them. Both the Rajinama and the Kabuliyat were sanctioned by the Mamlatdar on May 5,1900. Shiddappa having died, Annappa in 1905 applied to the Mamlatdar alleging that the mortgaged property was Devasthan Inam and praying for the cancellation of the transfer in favour of the mortgagees and for placing the mortgaged property in his name. This application was rejected.\n In 1907 Shiddappas son Tukaram (the original first plaintiff herein)and Annappa, the brother of Shiddappa, filed suits against the mortgagees for accounts to be taken under the Deccan Agriculturists Relief Act. That suit having been dismissed, they appealed to the District Court, Belgaum, but that appeal was dismissed on March 15, 1909. Annappa again applied for the lands being put in his possession, but that application also was rejected on August 4, 1910. Thereafter, in 1911 Annappa and Tukaram, the brother and son respectively of Shiddappa, filed C. S. No. 362 of 1911 under the same Deccan Agriculturists Relief Act for the same reliefs. That suit was also dismissed and the appeal there from met with a like fate on March 17,1914. In 1922 Annappa died without any issue. The mortgagee Lalchand died issueless and the mortgagee Tuljaram died leaving a son named Lilachand Tuljaram who became entitled to the entire mortgage securities. On November 1, 1937, Tukaram and, his son Ganpat, alleging that they were the legal representatives of both Shiddappa and Annappa, filed Original Suit No. 586 of 1937, out of which this appeal arises, against the appellants Lilachand and his three sons for the redemption of the mortgages. In the written statement the defendants-appellants pleaded that the deceased Shiddappa having sold the mortgaged property to the mortgagees, the equity of redemption became extinguished and that as Shiddappa alone was the registered occupant, the Rajinama given by him, was valid and binding on Annappa. They further alleged that the plaintiffs were not the heirs of the deceased Annappa, for the latter had died after having transferred his interests in the mortgaged properties to others.\n It transpires that Annappa died in 1922 after having made and published his last will and testament bequeathing his interest in the mortgaged properties to one Krishna Kallappa, that Krishna Kallappa applied for Letters of Administration in respect of Annappas estate and that in spite of the opposition of Tukaram, Letters of Administration with a copy of the will annexed was granted to Krishna Kallappa. Krishna Kallappa having died, his four sons were added as party defendants to this suit and then on their own application they were transposed to the category of plaintiffs. The trial Court held that the Rajinama executed by Shiddappa did not extinguish the title of the mortgagors in the mortgaged property, that the plaintiffs were agriculturists, that they were bound to pay the amount also under the simple mortgage and that on taking accounts the mortgages had redeemed themselves. Accordingly the trial court passed a decree for possession declaring that both the mortgages had been satisfied. The mortgagees, defendants 1 to 4, appealed to the District Court, Belgaum, in Regular Civil Appeal No. 322 of 1940. The District Court held that by the Rajinama, Shiddappa intended to convey the title in the suit land to the mortgagees and hence Shiddappas heirs, the plaintiffs 1 and 2, could not claim redemption of Shiddappas one half share in the suit land. As regards Annappas share, the learned Judge held that the Rajinama had not the effect of transferring the interest of Annappa to the mortgagees and that inasmuch as the mortgages were subsisting, the defendants could not acquire title by adverse possession. In this view he allowed the appeal in part with the result that the suit was dismissed so far as the claims of plaintiffs 1 and 2 were concerned but the claims of plaintiffs 3 to 6 as the legal representatives of Annappa were upheld and they were allowed to redeem Annappas one half share of and in the mortgaged property on payment of one half of the amounts due under the two mortgages. The mortgagee-defendants 1 to 4 appealed to the High Court in Second Appeal No. 754 of 1942 against that part of the decree which rejected their claim to Annappas share and the plaintiffs 1 and 2 also filed Second Appeal No. 1011 of 1942 against the dismissal of their claim for redemption of one half share of Shiddappa in the mortgaged property.\n Both the appeals were disposed of by a common judgment by Weston, J. The learned Judge held that, so far as Shiddappas share was concerned, the Rajinama was a complete relinquishment of his interest, but as regards Annappas share, he agreed with the District Judges conclusion that Shiddappa could not bind Annappas share by the Rajinama and in this view of the matter he dismissed both the appeals. Against this decree both the parties preferred Letters Patent Appeals, namely, L.P.A. No. 22 of 1945 which was filed by defendants 1 to 4 and L.P.A. No. 16 of 1945 which was filed by plaintiffs 1 and 2. The Division Bench dismissed both the appeals. The present plaintiff No. 1, the son of Tukaram (the deceased son of Shiddappa who was the original plaintiff No. 1) has not come up to this Court and, therefore, the decision of the Division Bench has become final so far as he is concerned. The High Court having refused to grant leave to appeal to this Court, the mortgagees defendants 1 to 4 applied to and obtained from this Court special leave to appeal against the decision of the Division Bench in so far as it upheld the rejection of their claims to Annappas half share in the mortgaged property. Hence the present appeal. The plaintiffs respondents, who are the legal representatives of Annappa and against whom the present appeal is directed, have not entered appearance in this appeal. Learned advocate appearing in support of the appeal urges that the Rajinama and the Kabuliyat taken together evidenced a transfer of title from the mortgagors to the mortgagees and, therefore, operated to extinguish the equity of redemption not only of Shiddappa but also of Annappa, for there is sufficient evidence on record that Shiddappa was the manager and karta of the joint family and that in the matter of passing the Rajinama he had acted in that capacity and, therefore, the Rajinama was binding on his brother Annappa.\n As pointed out by the Division Bench in their judgment in the Letters Patent Appeal, this case of Shiddappa having acted as karta was nowhere made by the defendants-appellants in their written statement and, in agreement with the High Court, we declined to allow learned advocate for the appellants to make out such a new case. This case being thus out of the way, learned advocate for the appellants urges that under s. 74 of the Bombay Land Revenue Code, as Shiddappa was the registered occupant, the Rajinama filed by him operated upon the entire occupancy and amounted to a relinquishment of the rights of both the brothers Shiddappa and Annappa. Section 74 of the Bombay Land Revenue Act, as it stood at all material times, ran as follows An occupant may, by giving written notice to the Mamlatdar or Mahalkari, relinquish his occupancy, either absolutely or in favour of a specified person provided that such relinquishment applied to the entire occupancy or to whole survey numbers, or recognized shares of Survey Numbers. An absolute relinquishment shall be deemed to to have effect from the close of the current year, and notice thereof must be given before the 31st March in such year, or before such other date as may be from time to time prescribed in this behalf for each district by the Governor in Council. A relinquishment in favour of a specified person may be made at any time. When there are more occupants than one, the notice of relinquishment must be given by the registered occupant and the person, if any, in whose favour an occupancy is relinquished, or, if such occupancy is relinquished in favour of more persons than one, the principal of such persons, must enter into a written agreement to become the registered occupant, and his name shall thereupon be substituted in the records for that of the previous registered occupant. Reliance is placed on the concluding paragraph of the section which provides that when a relinquishment is made in favour of more persons than one the principal one of such persons must enter into a written agreement to become the registered occupant and his name shall thereupon be substituted in the records for that of the previous registered occupant.\n This provision, it is said, makes it clear that so far as the revenue authorities are concerned, it is the registered occupant who represents the entire occupancy and the fact that the notice of relinquishment must, under the section, be given by the registered occupant also supports the contention that the Rajinama passed by the registered occupant binds all the occupants. We are unable to accept this argument as correct. The concluding paragraph of the section clearly recognises that a relinquishment may be in favour of more persons than one. It is true that the principal one of such persons must enter into a written agreement to become the registered occupant. This is for facilitating the purpose of the Code but it does not mean that the other persons in whose favour the occupancy is relinquished cease to have any right. That their right as occupants remains is clearly recognised by the opening paragraph of the section which gives an occupant a right to relinquish his occupancy either absolutely or in favour of a specified person. This right is given to all occupants, if there are more than one, for the singular includes the plural. It is true that where there are more occupants than one, the notice of relinquishment on behalf of any occupant must be given by the registered occupant. That does not mean, in the absence of any specific pleading and cogent proof, that a notice of relinquishment given by the registered occupant must necessarily be a notice on behalf of all occupants or any particular occupant other than the registered occupant, or that the registered occupant has the right to give such a notice without reference to the other occupants so as to effect their interest in the occupancy.\n Turning to the Rajinama, it is clear that Shiddappa did not purport to file, the same on behalf of Annappa nor had he any right to do so by reason only of his being the registered occupant. In Lalchand Sakharam Marwadi v. Khendu Kedu Ughade (1) one out of four brother mortgagors, who was the registered occupant of the mortgage land, passed a Rajinama of the land in favour of the mortgagee, who executed a Kabuliyat for the same. The remaining three mortgagors sued to redeem the mortgage alleging that the Rajinama passed by their brother conveyed only his interest and nothing more. It was held that though the conveying brother was a co-mortgagor with the plaintiffs, he had no right to sell their interest in the equity of redemption and that, so far as they, were concerned, he was in the same position as an outsider. It is true that no specific reference was made in the judgment to s. 74 of the Bombay Land Revenue Code, but the actual decision in that case, the facts of which are very similar to those of the instant case, quite clearly indicates the courts understanding of the law applicable to those facts and that law was nothing but the provisions of s. 74 of the Code. In our opinion, on a correct interpretation of s. 74, where there are more occupants than one in respect of the same occupancy each occupant has his own rights and the fact of registration of one of them as the registered occupant attracts the operation of the Code and confers certain rights or imposes certain obligations on the registered occupant as laid down in the Code but does not take away the rights of other occupants.\n It is true that if any of the occupants other than the registered occupant desires to relinquish his occupancy. he cannot himself give a notice of relinquishment but must give it by and through the registered occupant Nevertheless the registered occupant, in the absence of any authority, express or implied, to be clearly pleaded and strictly proved, has no inherent or independent (1) 22 Bom L.R. 1431, right to give any such notice so as to affect the interests of the other occupants.\nDECISION ??", "expert_1": {"rank1": ["This provision, it is said, makes it clear that so far as the revenue authorities are concerned, it is the registered occupant who represents the entire occupancy and the fact that the notice of relinquishment must, under the section, be given by the registered occupant also supports the contention that the Rajinama passed by the registered occupant binds all the occupants. We are unable to accept this argument as correct.", "In our opinion, on a correct interpretation of s. 74, where there are more occupants than one in respect of the same occupancy each occupant has his own rights and the fact of registration of one of them as the registered occupant attracts the operation of the Code and confers certain rights or imposes certain obligations on the registered occupant as laid down in the Code but does not take away the rights of other occupants.\n It is true that if any of the occupants other than the registered occupant desires to relinquish his occupancy. he cannot himself give a notice of relinquishment but must give it by and through the registered occupant Nevertheless the registered occupant, in the absence of any authority, express or implied, to be clearly pleaded and strictly proved, has no inherent or independent (1) 22 Bom L.R. 1431, right to give any such notice so as to affect the interests of the other occupants."], "rank2": ["An absolute relinquishment shall be deemed to to have effect from the close of the current year, and notice thereof must be given before the 31st March in such year, or before such other date as may be from time to time prescribed in this behalf for each district by the Governor in Council. A relinquishment in favour of a specified person may be made at any time. When there are more occupants than one, the notice of relinquishment must be given by the registered occupant and the person, if any, in whose favour an occupancy is relinquished, or, if such occupancy is relinquished in favour of more persons than one, the principal of such persons, must enter into a written agreement to become the registered occupant, and his name shall thereupon be substituted in the records for that of the previous registered occupant.", "a relinquishment may be in favour of more persons than one. It is true that the principal one of such persons must enter into a written agreement to become the registered occupant. This is for facilitating the purpose of the Code but it does not mean that the other persons in whose favour the occupancy is relinquished cease to have any right. That their right as occupants remains is clearly recognised by the opening paragraph of the section which gives an occupant a right to relinquish his occupancy either absolutely or in favour of a specified person. This right is given to all occupants, if there are more than one, for the singular includes the plural.", "It is true that where there are more occupants than one, the notice of relinquishment on behalf of any occupant must be given by the registered occupant. That does not mean, in the absence of any specific pleading and cogent proof, that a notice of relinquishment given by the registered occupant must necessarily be a notice on behalf of all occupants or any particular occupant other than the registered occupant, or that the registered occupant has the right to give such a notice without reference to the other occupants so as to effect their interest in the occupancy.", "It is true that no specific reference was made in the judgment to s. 74 of the Bombay Land Revenue Code, but the actual decision in that case, the facts of which are very similar to those of the instant case, quite clearly indicates the courts understanding of the law applicable to those facts and that law was nothing but the provisions of s. 74 of the Code."], "rank3": ["As pointed out by the Division Bench in their judgment in the Letters Patent Appeal, this case of Shiddappa having acted as karta was nowhere made by the defendants-appellants in their written statement and, in agreement with the High Court, we declined to allow learned advocate for the appellants to make out such a new case."], "rank4": ["Filed in the Court of the Subordinate Judge of Chikodi by one Tukaram Shidappa Borgavi alias Teli (since deceased) and his son Mallappa Tukaram Borgavi alis Teli (1st respondent herein) against the appellants for the redemption of certain mortgaged property and possession thereof free from encumbrances and for other ancillary reliefs.", "On January 23, 1888, Shiddappa and Annappa executed a usufructuary mortgage (Ex.D-51) in favour of Lalchand Bhavanchand Gujar and Tuljaram Bhavanchand Gujar for Rs. 1,300 made up of Rs. 1,100 due under a previous mortgage and Rs. 200 presently advanced in cash. That deed provided that the mortgage money would be repaid within a period of three years and that the mortgagors would pay the judi and incur the expenses of the Nand Deep and that on failure of the mortgagors to meet the said out goings, the mortgagees would incur the said expenses and add the same to their claim on the mortgage. On March 10, 1900, Shiddappa alone executed a simple mortgage (Ex. D-52) for Rs. 600 in favour of the same mortgagees.\n A part of the consideration for this simple mortgage consisted of moneys borrowed by both the brothers on bonds executed by both of them. This simple mortgage deed provided that the mortgagees would bear the expenses of the Nand Deep and debit the same to the mortgagors in the mortgage account. On March 22, 1900, before the simple mortgage deed was presented for registration, Shidappa, who was the registered occupant, gave a Rajinama under s. 74 of the Bombay Revenue Code recording his desire to submit an unconditional surrender of the above mentioned khata of R. No. 307 from the end of the then current year. On the same day, the mortgagees by a Kabuliyat prayed that the occupancy in the mortgaged property may be granted to them. Both the Rajinama and the Kabuliyat were sanctioned by the Mamlatdar on May 5,1900. Shiddappa having died, Annappa in 1905 applied to the Mamlatdar alleging that the mortgaged property was Devasthan Inam and praying for the cancellation of the transfer in favour of the mortgagees and for placing the mortgaged property in his name. This application was rejected.\n In 1907 Shiddappas son Tukaram (the original first plaintiff herein)and Annappa, the brother of Shiddappa, filed suits against the mortgagees for accounts to be taken under the Deccan Agriculturists Relief Act. That suit having been dismissed, they appealed to the District Court, Belgaum, but that appeal was dismissed on March 15, 1909. Annappa again applied for the lands being put in his possession, but that application also was rejected on August 4, 1910. Thereafter, in 1911 Annappa and Tukaram, the brother and son respectively of Shiddappa, filed C. S. No. 362 of 1911 under the same Deccan Agriculturists Relief Act for the same reliefs. That suit was also dismissed and the appeal there from met with a like fate on March 17,1914. In 1922 Annappa died without any issue. The mortgagee Lalchand died issueless and the mortgagee Tuljaram died leaving a son named Lilachand Tuljaram who became entitled to the entire mortgage securities. On November 1, 1937, Tukaram and, his son Ganpat, alleging that they were the legal representatives of both Shiddappa and Annappa, filed Original Suit No. 586 of 1937, out of which this appeal arises, against the appellants Lilachand and his three sons for the redemption of the mortgages. In the written statement the defendants-appellants pleaded that the deceased Shiddappa having sold the mortgaged property to the mortgagees, the equity of redemption became extinguished and that as Shiddappa alone was the registered occupant, the Rajinama given by him, was valid and binding on Annappa. They further alleged that the plaintiffs were not the heirs of the deceased Annappa, for the latter had died after having transferred his interests in the mortgaged properties to others.\n It transpires that Annappa died in 1922 after having made and published his last will and testament bequeathing his interest in the mortgaged properties to one Krishna Kallappa, that Krishna Kallappa applied for Letters of Administration in respect of Annappas estate and that in spite of the opposition of Tukaram, Letters of Administration with a copy of the will annexed was granted to Krishna Kallappa. Krishna Kallappa having died, his four sons were added as party defendants to this suit and then on their own application they were transposed to the category of plaintiffs.", "The trial Court held that the Rajinama executed by Shiddappa did not extinguish the title of the mortgagors in the mortgaged property, that the plaintiffs were agriculturists, that they were bound to pay the amount also under the simple mortgage and that on taking accounts the mortgages had redeemed themselves. Accordingly the trial court passed a decree for possession declaring that both the mortgages had been satisfied. The mortgagees, defendants 1 to 4, appealed to the District Court, Belgaum, in Regular Civil Appeal No. 322 of 1940. The District Court held that by the Rajinama, Shiddappa intended to convey the title in the suit land to the mortgagees and hence Shiddappas heirs, the plaintiffs 1 and 2, could not claim redemption of Shiddappas one half share in the suit land. As regards Annappas share, the learned Judge held that the Rajinama had not the effect of transferring the interest of Annappa to the mortgagees and that inasmuch as the mortgages were subsisting, the defendants could not acquire title by adverse possession. In this view he allowed the appeal in part with the result that the suit was dismissed so far as the claims of plaintiffs 1 and 2 were concerned but the claims of plaintiffs 3 to 6 as the legal representatives of Annappa were upheld and they were allowed to redeem Annappas one half share of and in the mortgaged property on payment of one half of the amounts due under the two mortgages. The mortgagee-defendants 1 to 4 appealed to the High Court in Second Appeal No. 754 of 1942 against that part of the decree which rejected their claim to Annappas share and the plaintiffs 1 and 2 also filed Second Appeal No. 1011 of 1942 against the dismissal of their claim for redemption of one half share of Shiddappa in the mortgaged property.", "Both the appeals were disposed of by a common judgment by Weston, J. The learned Judge held that, so far as Shiddappas share was concerned, the Rajinama was a complete relinquishment of his interest, but as regards Annappas share, he agreed with the District Judges conclusion that Shiddappa could not bind Annappas share by the Rajinama and in this view of the matter he dismissed both the appeals. Against this decree both the parties preferred Letters Patent Appeals, namely, L.P.A. No. 22 of 1945 which was filed by defendants 1 to 4 and L.P.A. No. 16 of 1945 which was filed by plaintiffs 1 and 2. The Division Bench dismissed both the appeals. The present plaintiff No. 1, the son of Tukaram (the deceased son of Shiddappa who was the original plaintiff No. 1) has not come up to this Court and, therefore, the decision of the Division Bench has become final so far as he is concerned. The High Court having refused to grant leave to appeal to this Court, the mortgagees defendants 1 to 4 applied to and obtained from this Court special leave to appeal against the decision of the Division Bench in so far as it upheld the rejection of their claims to Annappas half share in the mortgaged property. Hence the present appeal."], "label": "REJECTED"}, "expert_2": {"rank1": ["The concluding paragraph of the section clearly recognises that a relinquishment may be in favour of more persons than one. It is true that the principal one of such persons must enter into a written agreement to become the registered occupant. This is for facilitating the purpose of the Code but it does not mean that the other persons in whose favour the occupancy is relinquished cease to have any right. That their right as occupants remains is clearly recognised by the opening paragraph of the section which gives an occupant a right to relinquish his occupancy either absolutely or in favour of a specified person.", "In our opinion, on a correct interpretation of s. 74, where there are more occupants than one in respect of the same occupancy each occupant has his own rights and the fact of registration of one of them as the registered occupant attracts the operation of the Code and confers certain rights or imposes certain obligations on the registered occupant as laid down in the Code but does not take away the rights of other occupants."], "rank2": ["It was held that though the conveying brother was a co-mortgagor with the plaintiffs, he had no right to sell their interest in the equity of redemption and that, so far as they, were concerned, he was in the same position as an outsider. It is true that no specific reference was made in the judgment to s. 74 of the Bombay Land Revenue Code, but the actual decision in that case, the facts of which are very similar to those of the instant case, quite clearly indicates the courts understanding of the law applicable to those facts and that law was nothing but the provisions of s. 74 of the Code."], "rank3": ["As regards Annappas share, the learned Judge held that the Rajinama had not the effect of transferring the interest of Annappa to the mortgagees and that inasmuch as the mortgages were subsisting, the defendants could not acquire title by adverse possession. In this view he allowed the appeal in part with the result that the suit was dismissed so far as the claims of plaintiffs 1 and 2 were concerned but the claims of plaintiffs 3 to 6 as the legal representatives of Annappa were upheld and they were allowed to redeem Annappas one half share of and in the mortgaged property on payment of one half of the amounts due under the two mortgages.", "The learned Judge held that, so far as Shiddappas share was concerned, the Rajinama was a complete relinquishment of his interest, but as regards Annappas share, he agreed with the District Judges conclusion that Shiddappa could not bind Annappas share by the Rajinama and in this view of the matter he dismissed both the appeals.", "Learned advocate appearing in support of the appeal urges that the Rajinama and the Kabuliyat taken together evidenced a transfer of title from the mortgagors to the mortgagees and, therefore, operated to extinguish the equity of redemption not only of Shiddappa but also of Annappa, for there is sufficient evidence on record that Shiddappa was the manager and karta of the joint family and that in the matter of passing the Rajinama he had acted in that capacity and, therefore, the Rajinama was binding on his brother Annappa."], "rank4": ["Shiddappa alone executed a simple mortgage (Ex. D-52) for Rs. 600 in favour of the same mortgagees.\n A part of the consideration for this simple mortgage consisted of moneys borrowed by both the brothers on bonds executed by both of them.", "Shidappa, who was the registered occupant, gave a Rajinama under s. 74 of the Bombay Revenue Code recording his desire to submit an unconditional surrender of the above mentioned khata of R. No. 307 from the end of the then current year.", "On the same day, the mortgagees by a Kabuliyat prayed that the occupancy in the mortgaged property may be granted to them. Both the Rajinama and the Kabuliyat were sanctioned by the Mamlatdar on May 5,1900.", "When there are more occupants than one, the notice of relinquishment must be given by the registered occupant and the person, if any, in whose favour an occupancy is relinquished, or, if such occupancy is relinquished in favour of more persons than one, the principal of such persons, must enter into a written agreement to become the registered occupant, and his name shall thereupon be substituted in the records for that of the previous registered occupant."], "label": "REJECTED"}, "expert_3": {"rank1": ["Filed in the Court of the Subordinate Judge of Chikodi by one Tukaram Shidappa Borgavi alias Teli (since deceased) and his son Mallappa Tukaram Borgavi alis Teli (1st respondent herein) against the appellants for the redemption of certain mortgaged property and possession thereof free from encumbrances and for other ancillary reliefs.", "It is true that the principal one of such persons must enter into a written agreement to become the registered occupant. This is for facilitating the purpose of the Code but it does not mean that the other persons in whose favour the occupancy is relinquished cease to have any right. That their right as occupants remains is clearly recognised by the opening paragraph of the section which gives an occupant a right to relinquish his occupancy either absolutely or in favour of a specified person. This right is given to all occupants, if there are more than one, for the singular includes the plural", "It is true that where there are more occupants than one, the notice of relinquishment on behalf of any occupant must be given by the registered occupant", "That does not mean, in the absence of any specific pleading and cogent proof, that a notice of relinquishment given by the registered occupant must necessarily be a notice on behalf of all occupants or any particular occupant other than the registered occupant, or that the registered occupant has the right to give such a notice without reference to the other occupants so as to effect their interest in the occupancy.", "Turning to the Rajinama, it is clear that Shiddappa did not purport to file, the same on behalf of Annappa nor had he any right to do so by reason only of his being the registered occupant", "In Lalchand Sakharam Marwadi v. Khendu Kedu Ughade (1) one out of four brother mortgagors, who was the registered occupant of the mortgage land, passed a Rajinama of the land in favour of the mortgagee, who executed a Kabuliyat for the same. The remaining three mortgagors sued to redeem the mortgage alleging that the Rajinama passed by their brother conveyed only his interest and nothing more. It was held that though the conveying brother was a co-mortgagor with the plaintiffs, he had no right to sell their interest in the equity of redemption and that, so far as they, were concerned, he was in the same position as an outsider", "It is true that no specific reference was made in the judgment to s. 74 of the Bombay Land Revenue Code, but the actual decision in that case, the facts of which are very similar to those of the instant case, quite clearly indicates the courts understanding of the law applicable to those facts and that law was nothing but the provisions of s. 74 of the Code", "In our opinion, on a correct interpretation of s. 74, where there are more occupants than one in respect of the same occupancy each occupant has his own rights and the fact of registration of one of them as the registered occupant attracts the operation of the Code and confers certain rights or imposes certain obligations on the registered occupant as laid down in the Code but does not take away the rights of other occupants.\n It is true that if any of the occupants other than the registered occupant desires to relinquish his occupancy. he cannot himself give a notice of relinquishment but must give it by and through the registered occupant Nevertheless the registered occupant, in the absence of any authority, express or implied, to be clearly pleaded and strictly proved, has no inherent or independent (1) 22 Bom L.R. 1431, right to give any such notice so as to affect the interests of the other occupants"], "rank2": ["On November 1, 1937, Tukaram and, his son Ganpat, alleging that they were the legal representatives of both Shiddappa and Annappa, filed Original Suit No. 586 of 1937, out of which this appeal arises, against the appellants Lilachand and his three sons for the redemption of the mortgages. In the written statement the defendants-appellants pleaded that the deceased Shiddappa having sold the mortgaged property to the mortgagees, the equity of redemption became extinguished and that as Shiddappa alone was the registered occupant, the Rajinama given by him, was valid and binding on Annappa. They further alleged that the plaintiffs were not the heirs of the deceased Annappa, for the latter had died after having transferred his interests in the mortgaged properties to others.", "It transpires that Annappa died in 1922 after having made and published his last will and testament bequeathing his interest in the mortgaged properties to one Krishna Kallappa, that Krishna Kallappa applied for Letters of Administration in respect of Annappas estate and that in spite of the opposition of Tukaram, Letters of Administration with a copy of the will annexed was granted to Krishna Kallappa.", "The trial Court held that the Rajinama executed by Shiddappa did not extinguish the title of the mortgagors in the mortgaged property, that the plaintiffs were agriculturists, that they were bound to pay the amount also under the simple mortgage and that on taking accounts the mortgages had redeemed themselves. Accordingly the trial court passed a decree for possession declaring that both the mortgages had been satisfied", "The mortgagees, defendants 1 to 4, appealed to the District Court, Belgaum, in Regular Civil Appeal No. 322 of 1940. The District Court held that by the Rajinama, Shiddappa intended to convey the title in the suit land to the mortgagees and hence Shiddappas heirs, the plaintiffs 1 and 2, could not claim redemption of Shiddappas one half share in the suit land. As regards Annappas share, the learned Judge held that the Rajinama had not the effect of transferring the interest of Annappa to the mortgagees and that inasmuch as the mortgages were subsisting, the defendants could not acquire title by adverse possession", "In this view he allowed the appeal in part with the result that the suit was dismissed so far as the claims of plaintiffs 1 and 2 were concerned but the claims of plaintiffs 3 to 6 as the legal representatives of Annappa were upheld and they were allowed to redeem Annappas one half share of and in the mortgaged property on payment of one half of the amounts due under the two mortgages. The mortgagee-defendants 1 to 4 appealed to the High Court in Second Appeal No. 754 of 1942 against that part of the decree which rejected their claim to Annappas share and the plaintiffs 1 and 2 also filed Second Appeal No. 1011 of 1942 against the dismissal of their claim for redemption of one half share of Shiddappa in the mortgaged property.", "Both the appeals were disposed of by a common judgment by Weston, J. The learned Judge held that, so far as Shiddappas share was concerned, the Rajinama was a complete relinquishment of his interest, but as regards Annappas share, he agreed with the District Judges conclusion that Shiddappa could not bind Annappas share by the Rajinama and in this view of the matter he dismissed both the appeals. Against this decree both the parties preferred Letters Patent Appeals,", "The Division Bench dismissed both the appeals. The present plaintiff No. 1, the son of Tukaram (the deceased son of Shiddappa who was the original plaintiff No. 1) has not come up to this Court and, therefore, the decision of the Division Bench has become final so far as he is concerned. The High Court having refused to grant leave to appeal to this Court, the mortgagees defendants 1 to 4 applied to and obtained from this Court special leave to appeal against the decision of the Division Bench in so far as it upheld the rejection of their claims to Annappas half share in the mortgaged property. Hence the present appeal", "Section 74 of the Bombay Land Revenue Act, as it stood at all material times, ran as follows An occupant may, by giving written notice to the Mamlatdar or Mahalkari, relinquish his occupancy, either absolutely or in favour of a specified person provided that such relinquishment applied to the entire occupancy or to whole survey numbers, or recognized shares of Survey Numbers. An absolute relinquishment shall be deemed to to have effect from the close of the current year, and notice thereof must be given before the 31st March in such year, or before such other date as may be from time to time prescribed in this behalf for each district by the Governor in Council.", "A relinquishment in favour of a specified person may be made at any time. When there are more occupants than one, the notice of relinquishment must be given by the registered occupant and the person, if any, in whose favour an occupancy is relinquished, or, if such occupancy is relinquished in favour of more persons than one, the principal of such persons, must enter into a written agreement to become the registered occupant, and his name shall thereupon be substituted in the records for that of the previous registered occupant"], "rank3": ["On January 23, 1888, Shiddappa and Annappa executed a usufructuary mortgage (Ex.D-51) in favour of Lalchand Bhavanchand Gujar and Tuljaram Bhavanchand Gujar for Rs. 1,300 made up of Rs. 1,100 due under a previous mortgage and Rs. 200 presently advanced in cash. That deed provided that the mortgage money would be repaid within a period of three years and that the mortgagors would pay the judi and incur the expenses of the Nand Deep and that on failure of the mortgagors to meet the said out goings, the mortgagees would incur the said expenses and add the same to their claim on the mortgage. On March 10, 1900, Shiddappa alone executed a simple mortgage", "for Rs. 600 in favour of the same mortgagees.\n A part of the consideration for this simple mortgage consisted of moneys borrowed by both the brothers on bonds executed by both of them", "This simple mortgage deed provided that the mortgagees would bear the expenses of the Nand Deep and debit the same to the mortgagors in the mortgage account.", "On March 22, 1900, before the simple mortgage deed was presented for registration, Shidappa, who was the registered occupant, gave a Rajinama under s. 74 of the Bombay Revenue Code recording his desire to submit an unconditional surrender of the above mentioned khata of R. No. 307 from the end of the then current year. On the same day, the mortgagees by a Kabuliyat prayed that the occupancy in the mortgaged property may be granted to them. Both the Rajinama and the Kabuliyat were sanctioned by the Mamlatdar on May 5,1900", "Shiddappa having died, Annappa in 1905 applied to the Mamlatdar alleging that the mortgaged property was Devasthan Inam and praying for the cancellation of the transfer in favour of the mortgagees and for placing the mortgaged property in his name", "This application was rejected.", "In 1907 Shiddappas son Tukaram (the original first plaintiff herein)and Annappa, the brother of Shiddappa, filed suits against the mortgagees for accounts to be taken under the Deccan Agriculturists Relief Act. That suit having been dismissed, they appealed to the District Court, Belgaum, but that appeal was dismissed on March 15, 1909. Annappa again applied for the lands being put in his possession, but that application also was rejected on August 4, 1910. Thereafter, in 1911 Annappa and Tukaram, the brother and son respectively of Shiddappa, filed C", "S. No. 362 of 1911 under the same Deccan Agriculturists Relief Act for the same reliefs. That suit was also dismissed and the appeal there from met with a like fate on March 17,1914.", "In 1922 Annappa died without any issue. The mortgagee Lalchand died issueless and the mortgagee Tuljaram died leaving a son named Lilachand Tuljaram who became entitled to the entire mortgage securities"], "rank4": ["The mortgaged property consists of R. S. No. 301 which is Devasthan Inam Lands burdened with the obligation to supply oil for Nand Deep, i.e., keeping a lamp always burning before Shri Tholaba Deity in the village of Nipani", "The said property originally belonged to two brothers Shiddappa and Annappa. The khata of the land, however, stood in the name of Shiddappa as the registered occupant under s. 74 of the Bombay Land Revenue Code, 1879"], "label": "REJECTED"}, "expert_4": {"rank1": ["Filed in the Court of the Subordinate Judge of Chikodi by one Tukaram Shidappa Borgavi alias Teli (since deceased) and his son Mallappa Tukaram Borgavi alis Teli (1st respondent herein) against the appellants for the redemption of certain mortgaged property and possession thereof free from encumbrances and for other ancillary reliefs.", "The present plaintiff No. 1, the son of Tukaram (the deceased son of Shiddappa who was the original plaintiff No. 1) has not come up to this Court and, therefore, the decision of the Division Bench has become final so far as he is concerned.", "Turning to the Rajinama, it is clear that Shiddappa did not purport to file, the same on behalf of Annappa nor had he any right to do so by reason only of his being the registered occupant.", "In our opinion, on a correct interpretation of s. 74, where there are more occupants than one in respect of the same occupancy each occupant has his own rights and the fact of registration of one of them as the registered occupant attracts the operation of the Code and confers certain rights or imposes certain obligations on the registered occupant as laid down in the Code but does not take away the rights of other occupants.", "It is true that if any of the occupants other than the registered occupant desires to relinquish his occupancy. he cannot himself give a notice of relinquishment but must give it by and through the registered occupant Nevertheless the registered occupant, in the absence of any authority, express or implied, to be clearly pleaded and strictly proved, has no inherent or independent (1) 22 Bom L.R. 1431, right to give any such notice so as to affect the interests of the other occupants."], "rank2": ["As pointed out by the Division Bench in their judgment in the Letters Patent Appeal, this case of Shiddappa having acted as karta was nowhere made by the defendants-appellants in their written statement and, in agreement with the High Court, we declined to allow learned advocate for the appellants to make out such a new case.", "We are unable to accept this argument as correct.", "The concluding paragraph of the section clearly recognises that a relinquishment may be in favour of more persons than one. It is true that the principal one of such persons must enter into a written agreement to become the registered occupant. This is for facilitating the purpose of the Code but it does not mean that the other persons in whose favour the occupancy is relinquished cease to have any right.", "That their right as occupants remains is clearly recognised by the opening paragraph of the section which gives an occupant a right to relinquish his occupancy either absolutely or in favour of a specified person.", "This right is given to all occupants, if there are more than one, for the singular includes the plural."], "rank3": ["On November 1, 1937, Tukaram and, his son Ganpat, alleging that they were the legal representatives of both Shiddappa and Annappa, filed Original Suit No. 586 of 1937, out of which this appeal arises, against the appellants Lilachand and his three sons for the redemption of the mortgages.", "The trial Court held that the Rajinama executed by Shiddappa did not extinguish the title of the mortgagors in the mortgaged property, that the plaintiffs were agriculturists, that they were bound to pay the amount also under the simple mortgage and that on taking accounts the mortgages had redeemed themselves.", "Accordingly the trial court passed a decree for possession declaring that both the mortgages had been satisfied.", "The District Court held that by the Rajinama, Shiddappa intended to convey the title in the suit land to the mortgagees and hence Shiddappas heirs, the plaintiffs 1 and 2, could not claim redemption of Shiddappas one half share in the suit land.", "As regards Annappas share, the learned Judge held that the Rajinama had not the effect of transferring the interest of Annappa to the mortgagees and that inasmuch as the mortgages were subsisting, the defendants could not acquire title by adverse possession.", "In this view he allowed the appeal in part with the result that the suit was dismissed so far as the claims of plaintiffs 1 and 2 were concerned but the claims of plaintiffs 3 to 6 as the legal representatives of Annappa were upheld and they were allowed to redeem Annappas one half share of and in the mortgaged property on payment of one half of the amounts due under the two mortgages.", "The learned Judge held that, so far as Shiddappas share was concerned, the Rajinama was a complete relinquishment of his interest, but as regards Annappas share, he agreed with the District Judges conclusion that Shiddappa could not bind Annappas share by the Rajinama and in this view of the matter he dismissed both the appeals.", "The Division Bench dismissed both the appeals.", "The plaintiffs respondents, who are the legal representatives of Annappa and against whom the present appeal is directed, have not entered appearance in this appeal.", "It is true that where there are more occupants than one, the notice of relinquishment on behalf of any occupant must be given by the registered occupant. That does not mean, in the absence of any specific pleading and cogent proof, that a notice of relinquishment given by the registered occupant must necessarily be a notice on behalf of all occupants or any particular occupant other than the registered occupant, or that the registered occupant has the right to give such a notice without reference to the other occupants so as to effect their interest in the occupancy.", "In Lalchand Sakharam Marwadi v. Khendu Kedu Ughade", "It was held that though the conveying brother was a co-mortgagor with the plaintiffs, he had no right to sell their interest in the equity of redemption and that, so far as they, were concerned, he was in the same position as an outsider.", "It is true that no specific reference was made in the judgment to s. 74 of the Bombay Land Revenue Code, but the actual decision in that case, the facts of which are very similar to those of the instant case, quite clearly indicates the courts understanding of the law applicable to those facts and that law was nothing but the provisions of s. 74 of the Code."], "rank4": ["On March 22, 1900, before the simple mortgage deed was presented for registration, Shidappa, who was the registered occupant, gave a Rajinama under s. 74 of the Bombay Revenue Code recording his desire to submit an unconditional surrender of the above mentioned khata of R. No. 307 from the end of the then current year. On the same day, the mortgagees by a Kabuliyat prayed that the occupancy in the mortgaged property may be granted to them.", "Both the Rajinama and the Kabuliyat were sanctioned by the Mamlatdar on May 5,1900.", "In the written statement the defendants-appellants pleaded that the deceased Shiddappa having sold the mortgaged property to the mortgagees, the equity of redemption became extinguished and that as Shiddappa alone was the registered occupant, the Rajinama given by him, was valid and binding on Annappa.", "They further alleged that the plaintiffs were not the heirs of the deceased Annappa, for the latter had died after having transferred his interests in the mortgaged properties to others.", "The mortgagees, defendants 1 to 4, appealed to the District Court, Belgaum, in Regular Civil Appeal No. 322 of 1940.", "The mortgagee-defendants 1 to 4 appealed to the High Court in Second Appeal No. 754 of 1942 against that part of the decree which rejected their claim to Annappas share and the plaintiffs 1 and 2 also filed Second Appeal No. 1011 of 1942 against the dismissal of their claim for redemption of one half share of Shiddappa in the mortgaged property.", "Against this decree both the parties preferred Letters Patent Appeals, namely, L.P.A.", "Learned advocate appearing in support of the appeal urges that the Rajinama and the Kabuliyat taken together evidenced a transfer of title from the mortgagors to the mortgagees and, therefore, operated to extinguish the equity of redemption not only of Shiddappa but also of Annappa, for there is sufficient evidence on record that Shiddappa was the manager and karta of the joint family and that in the matter of passing the Rajinama he had acted in that capacity and, therefore, the Rajinama was binding on his brother Annappa.", "learned advocate for the appellants urges that under s. 74 of the Bombay Land Revenue Code, as Shiddappa was the registered occupant, the Rajinama filed by him operated upon the entire occupancy and amounted to a relinquishment of the rights of both the brothers Shiddappa and Annappa.", "Section 74 of the Bombay Land Revenue Act, as it stood at all material times, ran as follows An occupant may, by giving written notice to the Mamlatdar or Mahalkari, relinquish his occupancy, either absolutely or in favour of a specified person provided that such relinquishment applied to the entire occupancy or to whole survey numbers, or recognized shares of Survey Numbers.", "An absolute relinquishment shall be deemed to to have effect from the close of the current year, and notice thereof must be given before the 31st March in such year, or before such other date as may be from time to time prescribed in this behalf for each district by the Governor in Council. A relinquishment in favour of a specified person may be made at any time. When there are more occupants than one, the notice of relinquishment must be given by the registered occupant and the person, if any, in whose favour an occupancy is relinquished, or, if such occupancy is relinquished in favour of more persons than one, the principal of such persons, must enter into a written agreement to become the registered occupant, and his name shall thereupon be substituted in the records for that of the previous registered occupant.", "Reliance is placed on the concluding paragraph of the section which provides that when a relinquishment is made in favour of more persons than one the principal one of such persons must enter into a written agreement to become the registered occupant and his name shall thereupon be substituted in the records for that of the previous registered occupant.", "This provision, it is said, makes it clear that so far as the revenue authorities are concerned, it is the registered occupant who represents the entire occupancy and the fact that the notice of relinquishment must, under the section, be given by the registered occupant also supports the contention that the Rajinama passed by the registered occupant binds all the occupants."], "rank5": ["The mortgaged property consists of R. S. No. 301 which is Devasthan Inam Lands burdened with the obligation to supply oil for Nand Deep, i.e., keeping a lamp always burning before Shri Tholaba Deity in the village of Nipani.", "On January 23, 1888, Shiddappa and Annappa executed a usufructuary mortgage (Ex.D-51) in favour of Lalchand Bhavanchand Gujar and Tuljaram Bhavanchand Gujar for Rs. 1,300 made up of Rs. 1,100 due under a previous mortgage and Rs. 200 presently advanced in cash.", "That deed provided that the mortgage money would be repaid within a period of three years and that the mortgagors would pay the judi and incur the expenses of the Nand Deep and that on failure of the mortgagors to meet the said out goings, the mortgagees would incur the said expenses and add the same to their claim on the mortgage.", "On March 10, 1900, Shiddappa alone executed a simple mortgage (Ex. D-52) for Rs. 600 in favour of the same mortgagees.", "This simple mortgage deed provided that the mortgagees would bear the expenses of the Nand Deep and debit the same to the mortgagors in the mortgage account."], "label": "REJECTED"}, "expert_5": {"rank1": ["it does not mean that the other persons in whose favour the occupancy is relinquished cease to have any right.", "Turning to the Rajinama, it is clear that Shiddappa did not purport to file, the same on behalf of Annappa nor had he any right to do so by reason only of his being the registered occupant.", "In our opinion, on a correct interpretation of s. 74, where there are more occupants than one in respect of the same occupancy each occupant has his own rights and the fact of registration of one of them as the registered occupant attracts the operation of the Code and confers certain rights or imposes certain obligations on the registered occupant as laid down in the Code but does not take away the rights of other occupants."], "rank2": ["That their right as occupants remains is clearly recognised by the opening paragraph of the section which gives an occupant a right to relinquish his occupancy either absolutely or in favour of a specified person.", "That does not mean, in the absence of any specific pleading and cogent proof, that a notice of relinquishment given by the registered occupant must necessarily be a notice on behalf of all occupants or any particular occupant other than the registered occupant, or that the registered occupant has the right to give such a notice without reference to the other occupants so as to effect their interest in the occupancy.", "Nevertheless the registered occupant, in the absence of any authority, express or implied, to be clearly pleaded and strictly proved, has no inherent or independent (1) 22 Bom L.R. 1431, right to give any such notice so as to affect the interests of the other occupants."], "rank3": ["this case of Shiddappa having acted as karta was nowhere made by the defendants-appellants in their written statement and, in agreement with the High Court, we declined to allow learned advocate for the appellants to make out such a new case.", "This right is given to all occupants, if there are more than one, for the singular includes the plural. It is true that where there are more occupants than one, the notice of relinquishment on behalf of any occupant must be given by the registered occupant.", "In Lalchand Sakharam Marwadi v. Khendu Kedu Ughade (1) one out of four brother mortgagors, who was the registered occupant of the mortgage land, passed a Rajinama of the land in favour of the mortgagee, who executed a Kabuliyat for the same. The remaining three mortgagors sued to redeem the mortgage alleging that the Rajinama passed by their brother conveyed only his interest and nothing more. It was held that though the conveying brother was a co-mortgagor with the plaintiffs, he had no right to sell their interest in the equity of redemption and that, so far as they, were concerned, he was in the same position as an outsider. It is true that no specific reference was made in the judgment to s. 74 of the Bombay Land Revenue Code, but the actual decision in that case, the facts of which are very similar to those of the instant case, quite clearly indicates the courts understanding of the law applicable to those facts and that law was nothing but the provisions of s. 74 of the Code."], "rank4": ["An occupant may, by giving written notice to the Mamlatdar or Mahalkari, relinquish his occupancy, either absolutely or in favour of a specified person provided that such relinquishment applied to the entire occupancy or to whole survey numbers, or recognized shares of Survey Numbers.", "It is true that the principal one of such persons must enter into a written agreement to become the registered occupant.", "This is for facilitating the purpose of the Code", "It is true that if any of the occupants other than the registered occupant desires to relinquish his occupancy. he cannot himself give a notice of relinquishment but must give it by and through the registered occupant"], "rank5": ["A relinquishment in favour of a specified person may be made at any time. When there are more occupants than one, the notice of relinquishment must be given by the registered occupant and the person, if any, in whose favour an occupancy is relinquished, or, if such occupancy is relinquished in favour of more persons than one, the principal of such persons, must enter into a written agreement to become the registered occupant, and his name shall thereupon be substituted in the records for that of the previous registered occupant.", "The concluding paragraph of the section clearly recognises that a relinquishment may be in favour of more persons than one."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1960_10", "text": "The appellants-companies, the employers, in these sugar industries also challenge the correctness of the order made by the Industrial Tribunal and confirmed by the Labour Appellate Tribunal awarding the workmen attending the proceedings before the Industrial Tribunal, wages, travelling allowance and halting allowance and further directing that the workmen attending these proceedings would be treated on special leave with pay for the period of such attendance. As regards these orders the appellants contend that they run counter to the pronouncements of this Court in Punjab National Bank Ltd. v. Sri Ram Kanwar, Industrial Tribunal, Delhi (1). This contention, we are bound to say, is correct. Whatever might have been said in support of the view taken by the Tribunals in ordering payment of these allowances and of granting special leave to workmen attending proceedings of necessity, if the question was res integra we are bound by the authority of Punjab National Banks Case (1) to (1) 1957 S.C.R. 220. hold that no such allowances are payable and no such order garanting leave may be made. The order of the Tribunals below allowing travelling allowance and balting allowance and special leave to workmen attending proceedings of necessity, must therefore be set aside.\n Mr. Sinha, learned counsel for the appellants, however, has undertaken on their behalf that no restitution will be claimed of allowances which have already been paid. This brings us to the main question in controversy in these appeals. That question is whether retaining allowance should be paid to unskilled workers in these industries during the off season. Disputes over this question have been going on for many years and committee after committee has wrestled with the problem for arriving at a formula acceptable to both employers and labourers but in vain. In 1950 a reference as ultimately made to Mr. Justice B. P. Sinha (as he then was) as regards these disputes about retaining allowance. The award made by him provided for retaining allowance to skilled and semiskilled workmen but none to unskilled workmen. Before the Appellate Tribunal who heard the appeal against that award the labourers and employers came to an agreement that no retaining allowance would be payable to the unskilled workmen. This award was in operation for a period of two years but was thereafter determined by notice given by workmen followed up by similar notice by employers.\n The reference out of which the present appeals arise included several other matters besides retaining allowance to seasonal employees, but with those we are no longer concerned in these appeals. Nor are we concerned with the question of retaining allowance to skilled and semiskilled workmen as that part of the award was not disputed by the present appellants. On the question of retaining allowance the main contentions on behalf of the employers were that agriculture was the primary occupation of these persons and the employment in the sugar factory was merely a subsidiary occupation, that the claim for retaining allowance was really in the nature of unemployment relief which it was the duty of the State and not the industry to give, that the relationship between the employers and these employees does not exist in off season and so no payment of anything in tile character of wages could possibly be claimed by the labour. The Tribunal overruled all these objections. It was of opinion that the working season in the factory completely covers the paddy harvesting season in North Bihar, where most of the factories are situated so that the workmen the bulk of whom belong to the landless labourers class in the rural areas do not obtain employment in the off season.\n It also pointed out that the seasonal employees are entitled to provident fund, gratuity and also bonus and that their connection with the employers is not broken during the off season. Accordingly it awarded retaining allowance of 5 to all unskilled employees-to be paid every year at the beginning of the season when they report themselves to duty. In agreeing with the Tribunals conclusion the Appellate Tribunal pointed out further that the grant of seasonal allowance to unskilled labour in the industry would promote stability, good relations and efficiency. The question whether the retaining allowance should be paid to seasonal workers during the off season is one of great complexity. A measure of the complexity is provided by the conflict in the view expressed by many committees who examined the matter. While it will serve no useful purpose to set out these different views and the reasons given in support thereof, it is proper to mention that with the exception of the Labour Enquiry Committee no committee ever recommended payment of retaining allowance to unskilled workmen, though several of these recommended payment of such allowance to skilled and semi-skilled workmen. When the matter comes before the Tribunals for adjudication they have to decide the matter on the materials before them and it is not possible to derive much assistance from these reports of the committees.\n The real difficulty in coming to a conclusion lies in the fact that while there is no doubt on the one hand of the plight of the seasonal workmen during the off season, if they during such period remain prartically unemployed, there is some force also in the argument that it is neither just nor fair to treat these unfortunate people as the special responsibility of the particular industry or the factory where they are seasonally employed. It is difficult not to agree with the opinion that the relief of unemployment by arranging suitable alternative employment or an alleviation of the distress of such seasonally unemployed persons by providing unemployment insurance benefits or by other modes is primarily the function of the government of the country. To say that, is, however, not to say that the industry where they are seasonally employed should look on unconcerned and play no part in alleviating the distress of the people who have contributed to the prosperity of the industry by their labour, even though for only a part of the year. While these considerations on either side are common to claims for retaining allowance for all seasonal workmen in all industries, the special facts and circumstances of the categories of workmen and different local circumstances in different industries play an important part in deciding the question. Thus skilled and semi-skilled workers have often been able to put forward a strong case by pointing out that the specialized skill acquired by them makes it difficult for them to obtain suitable alternative employment in the off season. Employers also often find it to their own interest to pay such categories of workmen, some retaining allowance as an inducement to them to return to their factories when the season commences. In the present appeals we are concerned with the case of unskilled workmen only.\n It is obvious as has been noticed by both the Tribunals below, that the employers feel that there is such a glut in the supply of unskilled labour in Bihar that retaining allowance or no retaining allowance a sufficient supply will be available for the industries. That is why the employers contend that they ought not to be asked in an industrial adjudication to pay retaining allowance to unskilled labour. We do no think it will be fair to say that merely because the employers have agreed to pay retaining allowance to skilled labour their opposition to such payment of some such allowance to unskilled labour is unjustified. In deciding whether the principles of social justice which it is the aim of industrial adjudication to apply justify the payment of retaining allowance to unskilled workmen in these sugar industries, it is necessary to take into account (a) the opportunities of alternative employment in the off season that will be available to such workmen (b) the degree in which such workmen can be said to have become attached to the particular factory where they work (c) the likely benefit to the industry if such workmen are induced to return to the factory by the incentive of retaining allowance to be paid when the season commences (d) the capacity of the industry to bear the burden of retaining allowance.\n The capacity of the appellant-employers to bear the additional burden resultant from the 5 retaining allowance ordered by the Tribunals below has not been disputed before us. The position is however far from clear as regards the existence of alternative opportunities available to unskilled labour in the Off season. It was found, and we must proceed on the basis, rightly found, that the working season of the sugar industry in North Bihar where most of the factories concerned in the present-appeals are situated, completely covers the paddy harvesting season. That however is slender material for any conclusion as regards the existence of opportunities of alternative employment for these unskilled workmen. The appellate Tribunal has said that the grant of seasonal allowance to unskilled labour in the industry will promote stability, good relations and efficiency. Except in so far as this conclusion is based on the general probability that newly recruited labour at the commencement of the season is likely to be less efficient and less disciplined than men who have worked in previous seasons, this does not appear to have been based on any concrete evidence on the point.\n Nor is it clear from the materials on the record that unskilled workmen employed in a particular factory consider themselves attached to, that factory. It appears to be clear that once the season is over the unskilled workmen cease to have any contractual relations with the employers and may rejoin on the com- mencement of the season or may not rejoin at their sweet will. As regards the observations of the Tribunal that seasonal employees are entitled to the benefit of provident fund, gratuity and also bonus which shows that in fact their connection with the employers is not broken the materials on the record Are too scanty for arriving at any definite conclusion. In consideration of the nature and extent of the materials on the record we are of opinion that for alleviating the distress of unskilled workmen in these sugar factories, with whom we are concerned in the present appeals a much better course will be to raise the wage structure with an eye to this fact that for a part of the off season at least when they remain unemployed than to pay a retaining allowance for the entire off season.\n The appellants counsel readily agrees that the fact that these unskilled workmen find employment in the sugar factories only for a few months and are in comparative difficulty in the matter of finding employment during the remaining months, should be taken into consideration in fixing their wages. We are informed that a Wage Board entrusted with the task of fixing the wages of the workmen concerned in these disputes is sitting at the present time. The interests of both the employers and labour will, we think, be best served if instead of confirming the order made by the Appellate Tribunal as regards the retaining allowance the workmen will raise this question of raising their wages in view of the seasonal nature of their employment before this Wage Board.\nDECISION ??", "expert_1": {"rank1": ["As regards these orders the appellants contend that they run counter to the pronouncements of this Court in Punjab National Bank Ltd. v. Sri Ram Kanwar, Industrial Tribunal, Delhi (1).", "This contention, we are bound to say, is correct.", "Whatever might have been said in support of the view taken by the Tribunals in ordering payment of these allowances and of granting special leave to workmen attending proceedings of necessity, if the question was res integra we are bound by the authority of Punjab National Banks Case (1) to (1) 1957 S.C.R. 220. hold that no such allowances are payable and no such order garanting leave may be made. The order of the Tribunals below allowing travelling allowance and balting allowance and special leave to workmen attending proceedings of necessity, must therefore be set aside.", "In consideration of the nature and extent of the materials on the record we are of opinion that for alleviating the distress of unskilled workmen in these sugar factories, with whom we are concerned in the present appeals a much better course will be to raise the wage structure with an eye to this fact that for a part of the off season at least when they remain unemployed than to pay a retaining allowance for the entire off season.", "The interests of both the employers and labour will, we think, be best served if instead of confirming the order made by the Appellate Tribunal as regards the retaining allowance the workmen will raise this question of raising their wages in view of the seasonal nature of their employment before this Wage Board."], "rank2": ["That question is whether retaining allowance should be paid to unskilled workers in these industries during the off season.", "We do no think it will be fair to say that merely because the employers have agreed to pay retaining allowance to skilled labour their opposition to such payment of some such allowance to unskilled labour is unjustified.", "The capacity of the appellant-employers to bear the additional burden resultant from the 5 retaining allowance ordered by the Tribunals below has not been disputed before us. The position is however far from clear as regards the existence of alternative opportunities available to unskilled labour in the Off season. It was found, and we must proceed on the basis, rightly found, that the working season of the sugar industry in North Bihar where most of the factories concerned in the present-appeals are situated, completely covers the paddy harvesting season. That however is slender material for any conclusion as regards the existence of opportunities of alternative employment for these unskilled workmen. The appellate Tribunal has said that the grant of seasonal allowance to unskilled labour in the industry will promote stability, good relations and efficiency. Except in so far as this conclusion is based on the general probability that newly recruited labour at the commencement of the season is likely to be less efficient and less disciplined than men who have worked in previous seasons, this does not appear to have been based on any concrete evidence on the point.", "It appears to be clear that once the season is over the unskilled workmen cease to have any contractual relations with the employers and may rejoin on the com- mencement of the season or may not rejoin at their sweet will. As regards the observations of the Tribunal that seasonal employees are entitled to the benefit of provident fund, gratuity and also bonus which shows that in fact their connection with the employers is not broken the materials on the record Are too scanty for arriving at any definite conclusion.", "The appellants counsel readily agrees that the fact that these unskilled workmen find employment in the sugar factories only for a few months and are in comparative difficulty in the matter of finding employment during the remaining months, should be taken into consideration in fixing their wages."], "rank3": ["While it will serve no useful purpose to set out these different views and the reasons given in support thereof, it is proper to mention that with the exception of the Labour Enquiry Committee no committee ever recommended payment of retaining allowance to unskilled workmen, though several of these recommended payment of such allowance to skilled and semi-skilled workmen. When the matter comes before the Tribunals for adjudication they have to decide the matter on the materials before them and it is not possible to derive much assistance from these reports of the committees.\n The real difficulty in coming to a conclusion lies in the fact that while there is no doubt on the one hand of the plight of the seasonal workmen during the off season, if they during such period remain prartically unemployed, there is some force also in the argument that it is neither just nor fair to treat these unfortunate people as the special responsibility of the particular industry or the factory where they are seasonally employed.", "It is difficult not to agree with the opinion that the relief of unemployment by arranging suitable alternative employment or an alleviation of the distress of such seasonally unemployed persons by providing unemployment insurance benefits or by other modes is primarily the function of the government of the country. To say that, is, however, not to say that the industry where they are seasonally employed should look on unconcerned and play no part in alleviating the distress of the people who have contributed to the prosperity of the industry by their labour, even though for only a part of the year.", "While these considerations on either side are common to claims for retaining allowance for all seasonal workmen in all industries, the special facts and circumstances of the categories of workmen and different local circumstances in different industries play an important part in deciding the question. Thus skilled and semi-skilled workers have often been able to put forward a strong case by pointing out that the specialized skill acquired by them makes it difficult for them to obtain suitable alternative employment in the off season.", "In deciding whether the principles of social justice which it is the aim of industrial adjudication to apply justify the payment of retaining allowance to unskilled workmen in these sugar industries, it is necessary to take into account (a) the opportunities of alternative employment in the off season that will be available to such workmen (b) the degree in which such workmen can be said to have become attached to the particular factory where they work (c) the likely benefit to the industry if such workmen are induced to return to the factory by the incentive of retaining allowance to be paid when the season commences (d) the capacity of the industry to bear the burden of retaining allowance."], "rank4": ["On the question of retaining allowance the main contentions on behalf of the employers were that agriculture was the primary occupation of these persons and the employment in the sugar factory was merely a subsidiary occupation, that the claim for retaining allowance was really in the nature of unemployment relief which it was the duty of the State and not the industry to give, that the relationship between the employers and these employees does not exist in off season and so no payment of anything in tile character of wages could possibly be claimed by the labour. The Tribunal overruled all these objections. It was of opinion that the working season in the factory completely covers the paddy harvesting season in North Bihar, where most of the factories are situated so that the workmen the bulk of whom belong to the landless labourers class in the rural areas do not obtain employment in the off season.\n It also pointed out that the seasonal employees are entitled to provident fund, gratuity and also bonus and that their connection with the employers is not broken during the off season. Accordingly it awarded retaining allowance of 5 to all unskilled employees-to be paid every year at the beginning of the season when they report themselves to duty. In agreeing with the Tribunals conclusion the Appellate Tribunal pointed out further that the grant of seasonal allowance to unskilled labour in the industry would promote stability, good relations and efficiency. The question whether the retaining allowance should be paid to seasonal workers during the off season is one of great complexity. A measure of the complexity is provided by the conflict in the view expressed by many committees who examined the matter."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["Except in so far as this conclusion is based on the general probability that newly recruited labour at the commencement of the season is likely to be less efficient and less disciplined than men who have worked in previous seasons, this does not appear to have been based on any concrete evidence on the point.\n Nor is it clear from the materials on the record that unskilled workmen employed in a particular factory consider themselves attached to, that factory. It appears to be clear that once the season is over the unskilled workmen cease to have any contractual relations with the employers and may rejoin on the com- mencement of the season or may not rejoin at their sweet will.", "As regards the observations of the Tribunal that seasonal employees are entitled to the benefit of provident fund, gratuity and also bonus which shows that in fact their connection with the employers is not broken the materials on the record Are too scanty for arriving at any definite conclusion."], "rank2": ["The appellants-companies, the employers, in these sugar industries also challenge the correctness of the order made by the Industrial Tribunal and confirmed by the Labour Appellate Tribunal awarding the workmen attending the proceedings before the Industrial Tribunal, wages, travelling allowance and halting allowance and further directing that the workmen attending these proceedings would be treated on special leave with pay for the period of such attendance.", "That question is whether retaining allowance should be paid to unskilled workers in these industries during the off season.", "In consideration of the nature and extent of the materials on the record we are of opinion that for alleviating the distress of unskilled workmen in these sugar factories, with whom we are concerned in the present appeals a much better course will be to raise the wage structure with an eye to this fact that for a part of the off season at least when they remain unemployed than to pay a retaining allowance for the entire off season."], "rank3": ["The real difficulty in coming to a conclusion lies in the fact that while there is no doubt on the one hand of the plight of the seasonal workmen during the off season, if they during such period remain prartically unemployed, there is some force also in the argument that it is neither just nor fair to treat these unfortunate people as the special responsibility of the particular industry or the factory where they are seasonally employed.", "We do no think it will be fair to say that merely because the employers have agreed to pay retaining allowance to skilled labour their opposition to such payment of some such allowance to unskilled labour is unjustified.", "In deciding whether the principles of social justice which it is the aim of industrial adjudication to apply justify the payment of retaining allowance to unskilled workmen in these sugar industries, it is necessary to take into account (a) the opportunities of alternative employment in the off season that will be available to such workmen (b) the degree in which such workmen can be said to have become attached to the particular factory where they work (c) the likely benefit to the industry if such workmen are induced to return to the factory by the incentive of retaining allowance to be paid when the season commences (d) the capacity of the industry to bear the burden of retaining allowance.", "It was found, and we must proceed on the basis, rightly found, that the working season of the sugar industry in North Bihar where most of the factories concerned in the present-appeals are situated, completely covers the paddy harvesting season"], "rank4": ["It is obvious as has been noticed by both the Tribunals below, that the employers feel that there is such a glut in the supply of unskilled labour in Bihar that retaining allowance or no retaining allowance a sufficient supply will be available for the industries."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["Whatever might have been said in support of the view taken by the Tribunals in ordering payment of these allowances and of granting special leave to workmen attending proceedings of necessity, if the question was res integra we are bound by the authority of Punjab National Banks Case (1) to (1) 1957 S.C.R. 220. hold that no such allowances are payable and no such order garanting leave may be made. The order of the Tribunals below allowing travelling allowance and balting allowance and special leave to workmen attending proceedings of necessity, must therefore be set aside", "question is whether retaining allowance should be paid to unskilled workers in these industries during the off season.", "The question whether the retaining allowance should be paid to seasonal workers during the off season is one of great complexity. A measure of the complexity is provided by the conflict in the view expressed by many committees who examined the matter. While it will serve no useful purpose to set out these different views and the reasons given in support thereof, it is proper to mention that with the exception of the Labour Enquiry Committee no committee ever recommended payment of retaining allowance to unskilled workmen, though several of these recommended payment of such allowance to skilled and semi-skilled workmen.", "The real difficulty in coming to a conclusion lies in the fact that while there is no doubt on the one hand of the plight of the seasonal workmen during the off season, if they during such period remain prartically unemployed, there is some force also in the argument that it is neither just nor fair to treat these unfortunate people as the special responsibility of the particular industry or the factory where they are seasonally employed", "It is difficult not to agree with the opinion that the relief of unemployment by arranging suitable alternative employment or an alleviation of the distress of such seasonally unemployed persons by providing unemployment insurance benefits or by other modes is primarily the function of the government of the country. To say that, is, however, not to say that the industry where they are seasonally employed should look on unconcerned and play no part in alleviating the distress of the people who have contributed to the prosperity of the industry by their labour, even though for only a part of the year", "While these considerations on either side are common to claims for retaining allowance for all seasonal workmen in all industries, the special facts and circumstances of the categories of workmen and different local circumstances in different industries play an important part in deciding the question", "In the present appeals we are concerned with the case of unskilled workmen only.\n It is obvious as has been noticed by both the Tribunals below, that the employers feel that there is such a glut in the supply of unskilled labour in Bihar that retaining allowance or no retaining allowance a sufficient supply will be available for the industries", "That is why the employers contend that they ought not to be asked in an industrial adjudication to pay retaining allowance to unskilled labour. We do no think it will be fair to say that merely because the employers have agreed to pay retaining allowance to skilled labour their opposition to such payment of some such allowance to unskilled labour is unjustified.", "In deciding whether the principles of social justice which it is the aim of industrial adjudication to apply justify the payment of retaining allowance to unskilled workmen in these sugar industries, it is necessary to take into account (a) the opportunities of alternative employment in the off season that will be available to such workmen (b) the degree in which such workmen can be said to have become attached to the particular factory where they work (c) the likely benefit to the industry if such workmen are induced to return to the factory by the incentive of retaining allowance to be paid when the season commences (d) the capacity of the industry to bear the burden of retaining allowance.\n The capacity of the appellant-employers to bear the additional burden resultant from the 5 retaining allowance ordered by the Tribunals below has not been disputed before us. The position is however far from clear as regards the existence of alternative opportunities available to unskilled labour in the Off season.", "It was found, and we must proceed on the basis, rightly found, that the working season of the sugar industry in North Bihar where most of the factories concerned in the present-appeals are situated, completely covers the paddy harvesting season. That however is slender material for any conclusion as regards the existence of opportunities of alternative employment for these unskilled workmen.", "Except in so far as this conclusion is based on the general probability that newly recruited labour at the commencement of the season is likely to be less efficient and less disciplined than men who have worked in previous seasons, this does not appear to have been based on any concrete evidence on the point.\n Nor is it clear from the materials on the record that unskilled workmen employed in a particular factory consider themselves attached to, that factory.", "It appears to be clear that once the season is over the unskilled workmen cease to have any contractual relations with the employers and may rejoin on the com- mencement of the season or may not rejoin at their sweet will. As regards the observations of the Tribunal that seasonal employees are entitled to the benefit of provident fund, gratuity and also bonus which shows that in fact their connection with the employers is not broken the materials on the record Are too scanty for arriving at any definite conclusion. In consideration of the nature and extent of the materials on the record we are of opinion that for alleviating the distress of unskilled workmen in these sugar factories, with whom we are concerned in the present appeals a much better course will be to raise the wage structure with an eye to this fact that for a part of the off season at least when they remain unemployed than to pay a retaining allowance for the entire off season", "The interests of both the employers and labour will, we think, be best served if instead of confirming the order made by the Appellate Tribunal as regards the retaining allowance the workmen will raise this question of raising their wages in view of the seasonal nature of their employment before this Wage Board"], "rank2": ["The appellants-companies, the employers, in these sugar industries also challenge the correctness of the order made by the Industrial Tribunal and confirmed by the Labour Appellate Tribunal awarding the workmen attending the proceedings before the Industrial Tribunal, wages, travelling allowance and halting allowance and further directing that the workmen attending these proceedings would be treated on special leave with pay for the period of such attendance. As regards these orders the appellants contend that they run counter to the pronouncements of this Court in Punjab National Bank Ltd. v. Sri Ram Kanwar, Industrial Tribunal, Delhi (1). This contention, we are bound to say, is correct", "The Tribunal", "was of opinion that the working season in the factory completely covers the paddy harvesting season in North Bihar, where most of the factories are situated so that the workmen the bulk of whom belong to the landless labourers class in the rural areas do not obtain employment in the off season.\n It also pointed out that the seasonal employees are entitled to provident fund, gratuity and also bonus and that their connection with the employers is not broken during the off season. Accordingly it awarded retaining allowance of 5 to all unskilled employees-to be paid every year at the beginning of the season when they report themselves to duty.", "In agreeing with the Tribunals conclusion the Appellate Tribunal pointed out further that the grant of seasonal allowance to unskilled labour in the industry would promote stability, good relations and efficiency"], "rank3": ["In 1950 a reference as ultimately made to Mr. Justice B. P. Sinha (as he then was) as regards these disputes about retaining allowance. The award made by him provided for retaining allowance to skilled and semiskilled workmen but none to unskilled workmen. Before the Appellate Tribunal who heard the appeal against that award the labourers and employers came to an agreement that no retaining allowance would be payable to the unskilled workmen. This award was in operation for a period of two years but was thereafter determined by notice given by workmen followed up by similar notice by employers."], "label": "ACCEPTED"}, "expert_4": {"rank1": ["The appellants-companies, the employers, in these sugar industries also challenge the correctness of the order made by the Industrial Tribunal and confirmed by the Labour Appellate Tribunal awarding the workmen attending the proceedings before the Industrial Tribunal, wages, travelling allowance and halting allowance and further directing that the workmen attending these proceedings would be treated on special leave with pay for the period of such attendance.", "The order of the Tribunals below allowing travelling allowance and balting allowance and special leave to workmen attending proceedings of necessity, must therefore be set aside.", "In consideration of the nature and extent of the materials on the record we are of opinion that for alleviating the distress of unskilled workmen in these sugar factories, with whom we are concerned in the present appeals a much better course will be to raise the wage structure with an eye to this fact that for a part of the off season at least when they remain unemployed than to pay a retaining allowance for the entire off season.", "The interests of both the employers and labour will, we think, be best served if instead of confirming the order made by the Appellate Tribunal as regards the retaining allowance the workmen will raise this question of raising their wages in view of the seasonal nature of their employment before this Wage Board."], "rank2": ["This contention, we are bound to say, is correct.", "Whatever might have been said in support of the view taken by the Tribunals in ordering payment of these allowances and of granting special leave to workmen attending proceedings of necessity, if the question was res integra we are bound by the authority of Punjab National Banks Case (1) to (1) 1957 S.C.R. 220. hold that no such allowances are payable and no such order garanting leave may be made.", "That question is whether retaining allowance should be paid to unskilled workers in these industries during the off season.", "While these considerations on either side are common to claims for retaining allowance for all seasonal workmen in all industries, the special facts and circumstances of the categories of workmen and different local circumstances in different industries play an important part in deciding the question.", "In deciding whether the principles of social justice which it is the aim of industrial adjudication to apply justify the payment of retaining allowance to unskilled workmen in these sugar industries, it is necessary to take into account (a) the opportunities of alternative employment in the off season that will be available to such workmen (b) the degree in which such workmen can be said to have become attached to the particular factory where they work (c) the likely benefit to the industry if such workmen are induced to return to the factory by the incentive of retaining allowance to be paid when the season commences (d) the capacity of the industry to bear the burden of retaining allowance.", "It appears to be clear that once the season is over the unskilled workmen cease to have any contractual relations with the employers and may rejoin on the com- mencement of the season or may not rejoin at their sweet will.", "As regards the observations of the Tribunal that seasonal employees are entitled to the benefit of provident fund, gratuity and also bonus which shows that in fact their connection with the employers is not broken the materials on the record Are too scanty for arriving at any definite conclusion.", "The appellants counsel readily agrees that the fact that these unskilled workmen find employment in the sugar factories only for a few months and are in comparative difficulty in the matter of finding employment during the remaining months, should be taken into consideration in fixing their wages. We are informed that a Wage Board entrusted with the task of fixing the wages of the workmen concerned in these disputes is sitting at the present time."], "rank3": ["The award made by him provided for retaining allowance to skilled and semiskilled workmen but none to unskilled workmen.", "Before the Appellate Tribunal who heard the appeal against that award the labourers and employers came to an agreement that no retaining allowance would be payable to the unskilled workmen. This award was in operation for a period of two years but was thereafter determined by notice given by workmen followed up by similar notice by employers.", "The Tribunal overruled all these objections. It was of opinion that the working season in the factory completely covers the paddy harvesting season in North Bihar, where most of the factories are situated so that the workmen the bulk of whom belong to the landless labourers class in the rural areas do not obtain employment in the off season.", "It also pointed out that the seasonal employees are entitled to provident fund, gratuity and also bonus and that their connection with the employers is not broken during the off season.", "Accordingly it awarded retaining allowance of 5 to all unskilled employees-to be paid every year at the beginning of the season when they report themselves to duty.", "In agreeing with the Tribunals conclusion the Appellate Tribunal pointed out further that the grant of seasonal allowance to unskilled labour in the industry would promote stability, good relations and efficiency.", "The real difficulty in coming to a conclusion lies in the fact that while there is no doubt on the one hand of the plight of the seasonal workmen during the off season, if they during such period remain prartically unemployed, there is some force also in the argument that it is neither just nor fair to treat these unfortunate people as the special responsibility of the particular industry or the factory where they are seasonally employed.", "It is difficult not to agree with the opinion that the relief of unemployment by arranging suitable alternative employment or an alleviation of the distress of such seasonally unemployed persons by providing unemployment insurance benefits or by other modes is primarily the function of the government of the country.", "To say that, is, however, not to say that the industry where they are seasonally employed should look on unconcerned and play no part in alleviating the distress of the people who have contributed to the prosperity of the industry by their labour, even though for only a part of the year.", "It is obvious as has been noticed by both the Tribunals below, that the employers feel that there is such a glut in the supply of unskilled labour in Bihar that retaining allowance or no retaining allowance a sufficient supply will be available for the industries. That is why the employers contend that they ought not to be asked in an industrial adjudication to pay retaining allowance to unskilled labour.", "The capacity of the appellant-employers to bear the additional burden resultant from the 5 retaining allowance ordered by the Tribunals below has not been disputed before us.", "The position is however far from clear as regards the existence of alternative opportunities available to unskilled labour in the Off season. It was found, and we must proceed on the basis, rightly found, that the working season of the sugar industry in North Bihar where most of the factories concerned in the present-appeals are situated, completely covers the paddy harvesting season.", "That however is slender material for any conclusion as regards the existence of opportunities of alternative employment for these unskilled workmen. The appellate Tribunal has said that the grant of seasonal allowance to unskilled labour in the industry will promote stability, good relations and efficiency.", "Except in so far as this conclusion is based on the general probability that newly recruited labour at the commencement of the season is likely to be less efficient and less disciplined than men who have worked in previous seasons, this does not appear to have been based on any concrete evidence on the point.\n Nor is it clear from the materials on the record that unskilled workmen employed in a particular factory consider themselves attached to, that factory."], "rank4": ["As regards these orders the appellants contend that they run counter to the pronouncements of this Court in Punjab National Bank Ltd. v. Sri Ram Kanwar, Industrial Tribunal, Delhi (1).", "Disputes over this question have been going on for many years and committee after committee has wrestled with the problem for arriving at a formula acceptable to both employers and labourers but in vain.", "On the question of retaining allowance the main contentions on behalf of the employers were that agriculture was the primary occupation of these persons and the employment in the sugar factory was merely a subsidiary occupation, that the claim for retaining allowance was really in the nature of unemployment relief which it was the duty of the State and not the industry to give, that the relationship between the employers and these employees does not exist in off season and so no payment of anything in tile character of wages could possibly be claimed by the labour."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["the opportunities of alternative employment in the off season that will be available to such workmen"], "rank2": ["In deciding whether the principles of social justice which it is the aim of industrial adjudication to apply justify the payment of retaining allowance to unskilled workmen in these sugar industries, it is necessary to take into account (a) the opportunities of alternative employment in the off season that will be available to such workmen (b) the degree in which such workmen can be said to have become attached to the particular factory where they work (c) the likely benefit to the industry if such workmen are induced to return to the factory by the incentive of retaining allowance to be paid when the season commences (d) the capacity of the industry to bear the burden of retaining allowance.", "It appears to be clear that once the season is over the unskilled workmen cease to have any contractual relations with the employers and may rejoin on the com- mencement of the season or may not rejoin at their sweet will."], "rank3": ["We do no think it will be fair to say that merely because the employers have agreed to pay retaining allowance to skilled labour their opposition to such payment of some such allowance to unskilled labour is unjustified.", "Except in so far as this conclusion is based on the general probability that newly recruited labour at the commencement of the season is likely to be less efficient and less disciplined than men who have worked in previous seasons, this does not appear to have been based on any concrete evidence on the point.", "Nor is it clear from the materials on the record that unskilled workmen employed in a particular factory consider themselves attached to, that factory.", "As regards the observations of the Tribunal that seasonal employees are entitled to the benefit of provident fund, gratuity and also bonus which shows that in fact their connection with the employers is not broken the materials on the record Are too scanty for arriving at any definite conclusion."], "rank4": ["there is some force also in the argument that it is neither just nor fair to treat these unfortunate people as the special responsibility of the particular industry or the factory where they are seasonally employed.", "It is difficult not to agree with the opinion that the relief of unemployment by arranging suitable alternative employment or an alleviation of the distress of such seasonally unemployed persons by providing unemployment insurance benefits or by other modes is primarily the function of the government of the country.", "While these considerations on either side are common to claims for retaining allowance for all seasonal workmen in all industries, the special facts and circumstances of the categories of workmen and different local circumstances in different industries play an important part in deciding the question.", "the employers feel that there is such a glut in the supply of unskilled labour in Bihar that retaining allowance or no retaining allowance a sufficient supply will be available for the industries. That is why the employers contend that they ought not to be asked in an industrial adjudication to pay retaining allowance to unskilled labour.", "It was found, and we must proceed on the basis, rightly found, that the working season of the sugar industry in North Bihar where most of the factories concerned in the present-appeals are situated, completely covers the paddy harvesting season."], "rank5": ["agriculture was the primary occupation of these persons and the employment in the sugar factory was merely a subsidiary occupation, that the claim for retaining allowance was really in the nature of unemployment relief which it was the duty of the State and not the industry to give, that the relationship between the employers and these employees does not exist in off season and so no payment of anything in tile character of wages could possibly be claimed by the labour.", "while there is no doubt on the one hand of the plight of the seasonal workmen during the off season, if they during such period remain prartically unemployed", "To say that, is, however, not to say that the industry where they are seasonally employed should look on unconcerned and play no part in alleviating the distress of the people who have contributed to the prosperity of the industry by their labour, even though for only a part of the year.", "In consideration of the nature and extent of the materials on the record we are of opinion that for alleviating the distress of unskilled workmen in these sugar factories, with whom we are concerned in the present appeals a much better course will be to raise the wage structure with an eye to this fact that for a part of the off season at least when they remain unemployed than to pay a retaining allowance for the entire off season."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1960_100", "text": "The brief facts necessary for present purposes are that the appellant was appointed as a foot- constable in 1931 in the Punjab Police and was dismissed on January 25, 1944. Shortly before, he was acting as an Assistant Sub-Inspector and actually working as a Police Censor. The charge against him was that while he was working as Police Censor, he detained certain letters illegally and had copies and photo- graphs made of them and later used these copies and photographs for blackmail. He was consequently reverted to his substantive post of head constable on January 14, 1944. Thereafter on January 21, 1944, an enquiry was started against him by the Superintendent of Police and he was eventually dismissed. He went in appeal to the Deputy Inspector General of Police, which was dismissed. He then went in revision to the Inspector General of Police, which also failed.\n Finally he made several representations and memorials to the Punjab Government but without avail. Consequently the present suit was filed by the appellant in February 1949. The plaint as originally filed, after narrating the facts relating to the appellants service, merely stated that the charge of misconduct was brought against the appellant on account of enmity and that the departmental enquiry made by the Superintendent of Police was arbitrary and not according to law, rules and regulations prescribed for the same. Besides this vague general allegation, the only specific grievance made out by the appellant in the plaint was that the Superintendent of Police had dismissed him without recording his defence evidence and without giving him an opportunity to produce the same. The appellant amended the plaint later and added one more grievance, namely, that he had been appointed by the Deputy Inspector General of Police and could only have been dismissed by him and not by the Superintendent of Police.\n As to the Departmental enquiry, certain further defects therein were pointed out besides the allegation already made that his defence had not been taken and that he had not been given an opportunity to produce it. Those further defects were (i) that he was not permitted to engage counsel, (ii) that he was not allowed full opportunity to crossexamine the prosecution witnesses, and \n that he was not asked by the enquiry officer to state what he had to say in answer to the charge against him and was not permitted to file a written-statement explaining the alleged incriminating circumstances against him. The suit was opposed on behalf of the Punjab Government and among others their main defence was that the enquiry was in accordance with the Regulations and was not arbitrary. It was also denied that no opportunity had been given to the appellant to lead defence evidence or to cross-examine prosecution witnesses or to make his own statement in answer to the charge. It was admitted that permission was refused to engage a counsel but it was finally averred that taking the enquiry as a whole there was no such defect in its conduct as to invalidate it or call for interference by the courts. Three issues, all of a general nature, were framed by the trial court, namely-- Whether the plaintiffs dismissal is void, illegal, inoperative and wrongful and what is its effect ? Whether the Civil Courts have jurisdiction to entertain the suit or to go into the question of the validity of the departmental enquiry ? Whether the suit for a declaration lies and is competent and why ? It is unfortunate that the specific points raised by the appellant whatever they were were not made the subject- matter of specific issues. However, the trial court came to the conclusion that the case of the appellant was governed by s. 240(3) of the Government India Act, 1935 and it was reinforced in this conclusion by the Police Regulations which, according to it, provided for the same safeguards as were contained in s. 240(3). It therefore held that as s. 240(3) had not been complied with, the dismissal was void and illegal As to the other two issues relating to the jurisdiction of civil courts they were decided in favour of the appellant.\n There was an appeal to the District Judge by the Punjab Government. The District Judge agreed with the conclusions of the trial court on the applicability of s. 240(3) to the case of the appellant and further referred to an amendment in the Police Regulations which required that before an order of dismissal or reduction in rank is made, the officer to be punished shall be produced before the officer empowered to punish him and shall be informed of the charges proved against him and called upon to show cause why an order of dismissal or reduction in rank should not be passed. The District Judge was conscious that this amendment in the Regulations was made in September 1946 long after the dismissal of the appellant and therefore would not apply to the appellants case but he overruled this contention on the ground that the rule was merely declaratory of the law and only removed the ambiguity that might have arisen because of s. 243 of the Government of India Act. He therefore dismissed the appeal.\n Then followed a second appeal by the Punjab Government to the High Court. The High Court held that s. 240(3) did Dot apply to the case of the appellant and that s. 243 was the governing section. In consequence the High Court further held that the appellant was not entitled to the protection of s. 240(3) and as the amendment to the Police Regulations which brought in the substance of s. 240(3) therein was made after the dismissal of the appellant, he could not take advantage of it. As to the enquiry, the High Court held that though there might have been minor procedural defects in the enquiry it was on the whole substantially in accordance with the Regulations and principles of natural justice and could not therefore be held to be invalid. The High Court pointed out that there was no serious contraven- tion of the Regulations and the witnesses who had appeared were cross-examined by the appellant who was also called upon to produce his defence within 48 hours. He however did not choose to do so and wanted a postponement which was refused and thereafter the Superintendent of Police proceeded to dismiss him. Learned counsel for the appellant challenges the cor- erectness of the view taken by the High Court and three points have been urged on his behalf before us, namely, (1) s. 240(3) of the Government of India Act applied to police officers of subordinate rank and there was nothing in s. 243 which took away from such officers the protection of s. 240(3) (2) Even if the Police Regulations alone applied, there was such violation of the relevant regulations as to vitiate the enquiry proceedings and (3) The Superintendent of Police could not hold a departmental enquiry as a criminal offence had been committed, and reliance in this connection was placed on ss. 29 and 35 of the Police Act, No. V of 1861. Re. (1). Section 243 of the Government of India Act appears in Chapter 11 of Part X dealing with Civil Services.\n That Chapter begins with s. 240 and sub-s. (3) thereof provides that no member of a civil service or holding any civil post in India shall be dismissed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. Section 243 however is in these terms- Notwithstanding anything in the foregoing provisions of this chapter, the conditions of service of the subordinate ranks of the various police forces in India shall be such as may be determined by or under the Act relating to those forces respectively. Obviously s. 243 was a special provision with regard to subordinate ranks of police forces in India and it is not in dispute that the appellant belonged to the subordinate ranks. Therefore according to s. 243, the conditions of service of the subordinate ranks are governed by or under the Acts relating to police forces and s. 240(3) can have no application to them. The non obstante clause of s. 243 makes it clear that so far as the subordinate ranks of police forces in India are concerned, a. 243 will apply and not the earlier provisions including s. 240(3). We are therefore of opinion that in view of the special provisions in s. 243 relating to the subordinate ranks of police forces in India (to which the appellant undoubtedly belonged), s. 240(3) would have no application.\n We may in this connection refer to the judgment of the Privy Council in North- West Frontier Province v. Suraj Narain Anand (1), where it was held that the non obstante clause in s. 243 excluded the operation of s. 240(2) in the case of subordinate ranks of police forces in India and that conditions of service included the right of dismissal. (1) 1948 F.C.R. 103. That case dealt with s. 240(2) but the same reasoning would in our opinion apply to s. 240(3). As has already been pointed out by the learned District Judge, the substance of s. 240(3) was brought into the Police Regulations in September 1946 long after the appellant had been dismissed and would therefore not apply to the appellant. He would therefore not be entitled to the second notice under s. 240(3) as explained in I. M. Lalls case by the Privy Council (See High Commissioner for India High Commissioner for Pakistan v. I. M. Lall (1)). Nor was such notice necessary under the Police Regulations as they existed at the time of the appellants dismissal.\nDECISION ??", "expert_1": {"rank1": ["Obviously s. 243 was a special provision with regard to subordinate ranks of police forces in India and it is not in dispute that the appellant belonged to the subordinate ranks. Therefore according to s. 243, the conditions of service of the subordinate ranks are governed by or under the Acts relating to police forces and s. 240(3) can have no application to them. The non obstante clause of s. 243 makes it clear that so far as the subordinate ranks of police forces in India are concerned, a. 243 will apply and not the earlier provisions including s. 240(3).", "We are therefore of opinion that in view of the special provisions in s. 243 relating to the subordinate ranks of police forces in India (to which the appellant undoubtedly belonged), s. 240(3) would have no application."], "rank2": ["We may in this connection refer to the judgment of the Privy Council in North- West Frontier Province v. Suraj Narain Anand (1), where it was held that the non obstante clause in s. 243 excluded the operation of s. 240(2) in the case of subordinate ranks of police forces in India and that conditions of service included the right of dismissal. (1) 1948 F.C.R. 103. That case dealt with s. 240(2) but the same reasoning would in our opinion apply to s. 240(3). As has already been pointed out by the learned District Judge, the substance of s. 240(3) was brought into the Police Regulations in September 1946 long after the appellant had been dismissed and would therefore not apply to the appellant. He would therefore not be entitled to the second notice under s. 240(3) as explained in I. M. Lalls case by the Privy Council (See High Commissioner for India High Commissioner for Pakistan v. I. M. Lall (1)). Nor was such notice necessary under the Police Regulations as they existed at the time of the appellants dismissal."], "rank3": ["Three issues, all of a general nature, were framed by the trial court, namely-- Whether the plaintiffs dismissal is void, illegal, inoperative and wrongful and what is its effect ? Whether the Civil Courts have jurisdiction to entertain the suit or to go into the question of the validity of the departmental enquiry ? Whether the suit for a declaration lies and is competent and why ? It is unfortunate that the specific points raised by the appellant whatever they were were not made the subject- matter of specific issues. However, the trial court came to the conclusion that the case of the appellant was governed by s. 240(3) of the Government India Act, 1935 and it was reinforced in this conclusion by the Police Regulations which, according to it, provided for the same safeguards as were contained in s. 240(3). It therefore held that as s. 240(3) had not been complied with, the dismissal was void and illegal As to the other two issues relating to the jurisdiction of civil courts they were decided in favour of the appellant.\n There was an appeal to the District Judge by the Punjab Government. The District Judge agreed with the conclusions of the trial court on the applicability of s. 240(3) to the case of the appellant and further referred to an amendment in the Police Regulations which required that before an order of dismissal or reduction in rank is made, the officer to be punished shall be produced before the officer empowered to punish him and shall be informed of the charges proved against him and called upon to show cause why an order of dismissal or reduction in rank should not be passed. The District Judge was conscious that this amendment in the Regulations was made in September 1946 long after the dismissal of the appellant and therefore would not apply to the appellants case but he overruled this contention on the ground that the rule was merely declaratory of the law and only removed the ambiguity that might have arisen because of s. 243 of the Government of India Act. He therefore dismissed the appeal.\n Then followed a second appeal by the Punjab Government to the High Court. The High Court held that s. 240(3) did Dot apply to the case of the appellant and that s. 243 was the governing section. In consequence the High Court further held that the appellant was not entitled to the protection of s. 240(3) and as the amendment to the Police Regulations which brought in the substance of s. 240(3) therein was made after the dismissal of the appellant, he could not take advantage of it. As to the enquiry, the High Court held that though there might have been minor procedural defects in the enquiry it was on the whole substantially in accordance with the Regulations and principles of natural justice and could not therefore be held to be invalid. The High Court pointed out that there was no serious contraven- tion of the Regulations and the witnesses who had appeared were cross-examined by the appellant who was also called upon to produce his defence within 48 hours. He however did not choose to do so and wanted a postponement which was refused and thereafter the Superintendent of Police proceeded to dismiss him. Learned counsel for the appellant challenges the cor- erectness of the view taken by the High Court and three points have been urged on his behalf before us, namely, (1) s. 240(3) of the Government of India Act applied to police officers of subordinate rank and there was nothing in s. 243 which took away from such officers the protection of s. 240(3) (2) Even if the Police Regulations alone applied, there was such violation of the relevant regulations as to vitiate the enquiry proceedings and (3) The Superintendent of Police could not hold a departmental enquiry as a criminal offence had been committed, and reliance in this connection was placed on ss. 29 and 35 of the Police Act, No. V of 1861. Re. (1)."], "label": "REJECTED"}, "expert_2": {"rank1": ["Obviously s. 243 was a special provision with regard to subordinate ranks of police forces in India and it is not in dispute that the appellant belonged to the subordinate ranks. Therefore according to s. 243, the conditions of service of the subordinate ranks are governed by or under the Acts relating to police forces and s. 240(3) can have no application to them. The non obstante clause of s. 243 makes it clear that so far as the subordinate ranks of police forces in India are concerned, a. 243 will apply and not the earlier provisions including s. 240(3). We are therefore of opinion that in view of the special provisions in s. 243 relating to the subordinate ranks of police forces in India (to which the appellant undoubtedly belonged), s. 240(3) would have no application."], "rank2": ["North- West Frontier Province v. Suraj Narain Anand (1), where it was held that the non obstante clause in s. 243 excluded the operation of s. 240(2) in the case of subordinate ranks of police forces in India and that conditions of service included the right of dismissal. (1) 1948 F.C.R. 103. That case dealt with s. 240(2) but the same reasoning would in our opinion apply to s. 240(3). As has already been pointed out by the learned District Judge, the substance of s. 240(3) was brought into the Police Regulations in September 1946 long after the appellant had been dismissed and would therefore not apply to the appellant"], "rank3": ["appellant was appointed as a foot- constable in 1931 in the Punjab Police and was dismissed on January 25, 1944. Shortly before, he was acting as an Assistant Sub-Inspector and actually working as a Police Censor. The charge against him was that while he was working as Police Censor, he detained certain letters illegally and had copies and photo- graphs made of them and later used these copies and photographs for blackmail. He was consequently reverted to his substantive post of head constable on January 14, 1944. Thereafter on January 21, 1944, an enquiry was started against him by the Superintendent of Police and he was eventually dismissed.", "the only specific grievance made out by the appellant in the plaint was that the Superintendent of Police had dismissed him without recording his defence evidence and without giving him an opportunity to produce the same. The appellant amended the plaint later and added one more grievance, namely, that he had been appointed by the Deputy Inspector General of Police and could only have been dismissed by him and not by the Superintendent of Police.", "In consequence the High Court further held that the appellant was not entitled to the protection of s. 240(3) and as the amendment to the Police Regulations which brought in the substance of s. 240(3) therein was made after the dismissal of the appellant, he could not take advantage of it. As to the enquiry, the High Court held that though there might have been minor procedural defects in the enquiry it was on the whole substantially in accordance with the Regulations and principles of natural justice and could not therefore be held to be invalid."], "label": "REJECTED"}, "expert_3": {"rank1": ["Section 243 of the Government of India Act appears in Chapter 11 of Part X dealing with Civil Services.\n That Chapter begins with s. 240 and sub-s. (3) thereof provides that no member of a civil service or holding any civil post in India shall be dismissed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him.", "Obviously s. 243 was a special provision with regard to subordinate ranks of police forces in India and it is not in dispute that the appellant belonged to the subordinate ranks. Therefore according to s. 243, the conditions of service of the subordinate ranks are governed by or under the Acts relating to police forces and s. 240(3) can have no application to them. The non obstante clause of s. 243 makes it clear that so far as the subordinate ranks of police forces in India are concerned, a. 243 will apply and not the earlier provisions including s. 240(3", "We are therefore of opinion that in view of the special provisions in s. 243 relating to the subordinate ranks of police forces in India (to which the appellant undoubtedly belonged), s. 240(3) would have no application", "We may in this connection refer to the judgment of the Privy Council in North- West Frontier Province v. Suraj Narain Anand (1), where it was held that the non obstante clause in s. 243 excluded the operation of s. 240(2) in the case of subordinate ranks of police forces in India and that conditions of service included the right of dismissal", "As has already been pointed out by the learned District Judge, the substance of s. 240(3) was brought into the Police Regulations in September 1946 long after the appellant had been dismissed and would therefore not apply to the appellant. He would therefore not be entitled to the second notice under s. 240(3) as explained in I.", "Nor was such notice necessary under the Police Regulations as they existed at the time of the appellants dismissal"], "rank2": ["The plaint as originally filed, after narrating the facts relating to the appellants service, merely stated that the charge of misconduct was brought against the appellant on account of enmity and that the departmental enquiry made by the Superintendent of Police was arbitrary and not according to law, rules and regulations prescribed for the same. Besides this vague general allegation, the only specific grievance made out by the appellant in the plaint was that the Superintendent of Police had dismissed him without recording his defence evidence and without giving him an opportunity to produce the same. The appellant amended the plaint later and added one more grievance, namely, that he had been appointed by the Deputy Inspector General of Police and could only have been dismissed by him and not by the Superintendent of Police.\n As to the Departmental enquiry, certain further defects therein were pointed out besides the allegation already made that his defence had not been taken and that he had not been given an opportunity to produce it. Those further defects were (i) that he was not permitted to engage counsel, (ii) that he was not allowed full opportunity to crossexamine the prosecution witnesses, and \n that he was not asked by the enquiry officer to state what he had to say in answer to the charge against him and was not permitted to file a written-statement explaining the alleged incriminating circumstances against him.", "Three issues, all of a general nature, were framed by the trial court, namely-- Whether the plaintiffs dismissal is void, illegal, inoperative and wrongful and what is its effect ? Whether the Civil Courts have jurisdiction to entertain the suit or to go into the question of the validity of the departmental enquiry ?", "Whether the suit for a declaration lies and is competent and why ?", "the trial court came to the conclusion that the case of the appellant was governed by s. 240(3) of the Government India Act, 1935 and it was reinforced in this conclusion by the Police Regulations which, according to it, provided for the same safeguards as were contained in s. 240(3). It therefore held that as s. 240(3) had not been complied with, the dismissal was void and illegal As to the other two issues relating to the jurisdiction of civil courts they were decided in favour of the appellant.", "The District Judge agreed with the conclusions of the trial court on the applicability of s. 240(3) to the case of the appellant and further referred to an amendment in the Police Regulations which required that before an order of dismissal or reduction in rank is made, the officer to be punished shall be produced before the officer empowered to punish him and shall be informed of the charges proved against him and called upon to show cause why an order of dismissal or reduction in rank should not be passed. The District Judge was conscious that this amendment in the Regulations was made in September 1946 long after the dismissal of the appellant and therefore would not apply to the appellants case but he overruled this contention on the ground that the rule was merely declaratory of the law and only removed the ambiguity that might have arisen because of s. 243 of the Government of India Act. He therefore dismissed the appeal", "The High Court held that s. 240(3) did Dot apply to the case of the appellant and that s. 243 was the governing section. In consequence the High Court further held that the appellant was not entitled to the protection of s. 240(3) and as the amendment to the Police Regulations which brought in the substance of s. 240(3) therein was made after the dismissal of the appellant, he could not take advantage of it. As to the enquiry, the High Court held that though there might have been minor procedural defects in the enquiry it was on the whole substantially in accordance with the Regulations and principles of natural justice and could not therefore be held to be invalid. The High Court pointed out that there was no serious contraven- tion of the Regulations and the witnesses who had appeared were cross-examined by the appellant who was also called upon to produce his defence within 48 hours", "He however did not choose to do so and wanted a postponement which was refused and thereafter the Superintendent of Police proceeded to dismiss him", "Section 243 however is in these terms- Notwithstanding anything in the foregoing provisions of this chapter, the conditions of service of the subordinate ranks of the various police forces in India shall be such as may be determined by or under the Act relating to those forces respectively"], "rank3": ["The charge against him was that while he was working as Police Censor, he detained certain letters illegally and had copies and photo- graphs made of them and later used these copies and photographs for blackmail.", "Thereafter on January 21, 1944, an enquiry was started against him by the Superintendent of Police and he was eventually dismissed. He went in appeal to the Deputy Inspector General of Police, which was dismissed. He then went in revision to the Inspector General of Police, which also failed.\n Finally he made several representations and memorials to the Punjab Government but without avail. Consequently the present suit was filed by the appellant in February 1949.", "There was an appeal to the District Judge by the Punjab Government.", "Then followed a second appeal by the Punjab Government to the High Court."], "rank4": ["The brief facts necessary for present purposes are that the appellant was appointed as a foot- constable in 1931 in the Punjab Police and was dismissed on January 25, 1944. Shortly before, he was acting as an Assistant Sub-Inspector and actually working as a Police Censor."], "label": "REJECTED"}, "expert_4": {"rank1": ["The brief facts necessary for present purposes are that the appellant was appointed as a foot- constable in 1931 in the Punjab Police and was dismissed on January 25, 1944.", "The plaint as originally filed, after narrating the facts relating to the appellants service, merely stated that the charge of misconduct was brought against the appellant on account of enmity and that the departmental enquiry made by the Superintendent of Police was arbitrary and not according to law, rules and regulations prescribed for the same.", "Besides this vague general allegation, the only specific grievance made out by the appellant in the plaint was that the Superintendent of Police had dismissed him without recording his defence evidence and without giving him an opportunity to produce the same.", "The appellant amended the plaint later and added one more grievance, namely, that he had been appointed by the Deputy Inspector General of Police and could only have been dismissed by him and not by the Superintendent of Police.", "We are therefore of opinion that in view of the special provisions in s. 243 relating to the subordinate ranks of police forces in India (to which the appellant undoubtedly belonged), s. 240(3) would have no application."], "rank2": ["Obviously s. 243 was a special provision with regard to subordinate ranks of police forces in India and it is not in dispute that the appellant belonged to the subordinate ranks.", "Therefore according to s. 243, the conditions of service of the subordinate ranks are governed by or under the Acts relating to police forces and s. 240(3) can have no application to them.", "As has already been pointed out by the learned District Judge, the substance of s. 240(3) was brought into the Police Regulations in September 1946 long after the appellant had been dismissed and would therefore not apply to the appellant. He would therefore not be entitled to the second notice under s. 240(3) as explained in I. M. Lalls case by the Privy Council (See High Commissioner for India High Commissioner for Pakistan v. I. M.", "Lall (1)).", "Nor was such notice necessary under the Police Regulations as they existed at the time of the appellants dismissal."], "rank3": ["The charge against him was that while he was working as Police Censor, he detained certain letters illegally and had copies", "and photo- graphs made of them and later used these copies and photographs for blackmail.", "he was eventually dismissed.", "He went in appeal to the Deputy Inspector General of Police, which was dismissed.", "He then went in revision to the Inspector General of Police, which also failed.", "As to the Departmental enquiry, certain further defects therein were pointed out besides the allegation already made that his defence had not been taken and that he had not been given an opportunity to produce it.", "Those further defects were (i) that he was not permitted to engage counsel, (ii) that he was not allowed full opportunity to crossexamine the prosecution witnesses, and \n that he was not asked by the enquiry officer to state what he had to say in answer to the charge against him and was not permitted to file a written-statement explaining the alleged incriminating circumstances against him.", "The suit was opposed on behalf of the Punjab Government and among others their main defence was that the enquiry was in accordance with the Regulations and was not arbitrary.", "It was also denied that no opportunity had been given to the appellant to lead defence evidence or to cross-examine prosecution witnesses or to make his own statement in answer to the charge. It was admitted that permission was refused to engage a counsel but it was finally averred that taking the enquiry as a whole there was no such defect in its conduct as to invalidate it or call for interference by the courts.", "Three issues, all of a general nature, were framed by the trial court, namely-- Whether the plaintiffs dismissal is void, illegal, inoperative and wrongful and what is its effect ? Whether the Civil Courts have jurisdiction to entertain the suit or to go into the question of the validity of the departmental enquiry ?", "Whether the suit for a declaration lies and is competent and why ?", "the trial court came to the conclusion that the case of the appellant was governed by s. 240(3) of the Government India Act, 1935 and it was reinforced in this conclusion by the Police Regulations which, according to it, provided for the same safeguards as were contained in s. 240(3). It therefore held that as s. 240(3) had not been complied with, the dismissal was void and illegal As to the other two issues relating to the jurisdiction of civil courts they were decided in favour of the appellant.", "The District Judge agreed with the conclusions of the trial court on the applicability of s. 240(3) to the case of the appellant and further referred to an amendment in the Police Regulations which required that before an order of dismissal or reduction in rank is made, the officer to be punished shall be produced before the officer empowered to punish him and shall be informed of the charges proved against him and called upon to show cause why an order of dismissal or reduction in rank should not be passed.", "The District Judge was conscious that this amendment in the Regulations was made in September 1946 long after the dismissal of the appellant and therefore would not apply to the appellants case but he overruled this contention on the ground that the rule was merely declaratory of the law and only removed the ambiguity that might have arisen because of s. 243 of the Government of India Act. He therefore dismissed the appeal.", "The High Court held that s. 240(3) did Dot apply to the case of the appellant and that s. 243 was the governing section.", "As to the enquiry, the High Court held that though there might have been minor procedural defects in the enquiry it was on the whole substantially in accordance with the Regulations and principles of natural justice and could not therefore be held to be invalid.", "The High Court pointed out that there was no serious contraven- tion of the Regulations and the witnesses who had appeared were cross-examined by the appellant who was also called upon to produce his defence within 48 hours.", "He however did not choose to do so and wanted a postponement which was refused and thereafter the Superintendent of Police proceeded to dismiss him.", "The non obstante clause of s. 243 makes it clear that so far as the subordinate ranks of police forces in India are concerned, a. 243 will apply and not the earlier provisions including s. 240(3).", "We may in this connection refer to the judgment of the Privy Council in North- West Frontier Province v. Suraj Narain Anand (1), where it was held that the non obstante clause in s. 243 excluded the operation of s. 240(2) in the case of subordinate ranks of police forces in India and that conditions of service included the right of dismissal. (1) 1948 F.C.R. 103."], "rank4": ["In consequence the High Court further held that the appellant was not entitled to the protection of s. 240(3) and as the amendment to the Police Regulations which brought in the substance of s. 240(3) therein was made after the dismissal of the appellant, he could not take advantage of it.", "Learned counsel for the appellant challenges the cor- erectness of the view taken by the High Court and three points have been urged on his behalf before us, namely, (1) s. 240(3) of the Government of India Act applied to police officers of subordinate rank and there was nothing in s. 243 which took away from such officers the protection of s. 240(3) (2) Even if the Police Regulations alone applied, there was such violation of the relevant regulations as to vitiate the enquiry proceedings and (3) The Superintendent of Police could not hold a departmental enquiry as a criminal offence had been committed, and reliance in this connection was placed on ss. 29 and 35 of the Police Act, No. V of 1861. Re. (1).", "s. 240 and sub-s. (3) thereof provides that no member of a civil service or holding any civil post in India shall be dismissed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him.", "Section 243 however is in these terms- Notwithstanding anything in the foregoing provisions of this chapter, the conditions of service of the subordinate ranks of the various police forces in India shall be such as may be determined by or under the Act relating to those forces respectively."], "label": "REJECTED"}, "expert_5": {"rank1": ["Notwithstanding anything in the foregoing provisions of this chapter", "it is not in dispute that the appellant belonged to the subordinate ranks.", "Therefore according to s. 243, the conditions of service of the subordinate ranks are governed by or under the Acts relating to police forces and s. 240(3) can have no application to them.", "The non obstante clause of s. 243 makes it clear that so far as the subordinate ranks of police forces in India are concerned, a. 243 will apply and not the earlier provisions including s. 240(3)."], "rank2": ["We may in this connection refer to the judgment of the Privy Council in North- West Frontier Province v. Suraj Narain Anand (1), where it was held that the non obstante clause in s. 243 excluded the operation of s. 240(2) in the case of subordinate ranks of police forces in India and that conditions of service included the right of dismissal. (1) 1948 F.C.R. 103. That case dealt with s. 240(2) but the same reasoning would in our opinion apply to s. 240(3)."], "rank3": ["vague general allegation", "Notwithstanding anything in the foregoing provisions of this chapter, the conditions of service of the subordinate ranks of the various police forces in India shall be such as may be determined by or under the Act relating to those forces respectively.", "As has already been pointed out by the learned District Judge, the substance of s. 240(3) was brought into the Police Regulations in September 1946 long after the appellant had been dismissed and would therefore not apply to the appellant."], "rank4": ["The charge against him was that while he was working as Police Censor, he detained certain letters illegally and had copies and photo- graphs made of them and later used these copies and photographs for blackmail.", "It was admitted that permission was refused to engage a counsel but it was finally averred that taking the enquiry as a whole there was no such defect in its conduct as to invalidate it or call for interference by the courts.", "no member of a civil service or holding any civil post in India shall be dismissed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him."], "rank5": ["the departmental enquiry made by the Superintendent of Police was arbitrary and not according to law, rules and regulations prescribed for the same.", "Superintendent of Police had dismissed him without recording his defence evidence and without giving him an opportunity to produce the same", "Those further defects were (i) that he was not permitted to engage counsel, (ii) that he was not allowed full opportunity to crossexamine the prosecution witnesses, and \n that he was not asked by the enquiry officer to state what he had to say in answer to the charge against him and was not permitted to file a written-statement explaining the alleged incriminating circumstances against him."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1960_103", "text": "Against the judgment and order of the High Court of Madras allowing a petition under Article 226 of the Constitution. The question there raised was the legality of the assessment of Sales Tax by appellant No. 2, the Deputy Commercial Sales Tax Officer, Saidapet, under the Madras General Sales Tax Act, 1939 (Act IX of 1939), hereinafter termed the Act. The respondent was a partnership firm carrying on tannery business at Chromepet near the city of Madras. Before the year of assessment, i. e., 1952-53, it was taking out licences under the relevant provisions of the Act but it did not renew the licence for the assessment year. When called upon to make a return it did not do so nor did it raise any objection to the notice served on it on February 28, 1954. It was assessed to sales tax of Rs. 10,584 on a turnover of Rs. 6,77,374-4-4. It filed a petition under Art. 226 to quash the assessment order on the ground that the order was illegal and not supported by the authority of law. This contention was accepted by the High Court and the petition was allowed with costs. The consequence of the judgment is that the respondent firm which is not a licensed dealer under the Act is not liable to any sales tax in respect of its dealings in hides and skins.\n Against this judgment and order the appellants have come to this court by special leave. The contention of the respondent firm in the High Court was that under s. 5, cl. (vi) of the Act, the liability to pay sales tax in respect of hides and skins could only be at a single point that the rule limiting the operation of this mode of taxation to licensed dealers was ultra vires and therefore r. 16(5) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, hereinafter called the Turnover and Assessment Rules, was void and inoperative and had been. so held by the Supreme Court in V. M. Syed Mohammed Co. v. The State of Madras(1) that accepting this interpretation the State of Madras had deleted cl. (5) of r. 16 by G. 0. 450, Revenue, dated February 26, 1954, i.e., two days before the making of the assessment order under dispute that r. 16(5) of the Turnover and Assessment Rules was the only provision imposing a multiple tax in respect of sales of hides and skins by unlicensed dealers and that the imposition of the sales tax after the repeal of that rule was illegal and the tax was without the authority of law.\n It was also contended that in the taxation scheme under the Act, hides and skins, because of their importance in the international market, were excluded from the direct operation of s. 3(1) of the Act which was the general charging section and were given special protection of the single point taxation under s. 5(vi). The (1) 1954 S.C.R. 1117. argument, therefore, was that in the case of sales of hides and skins the general provision was inapplicable and a special rule for taxation was laid down by s. 5(vi) of the Act. The High Court held that in the case of hides and it skins the charge levied by s. 3 is subject to the pro. visions of S. 5 and in the case of licensed dealers in hides and skins, the charging provision is r. 16 of the Turnover and Assessment Rules . The High Court further held that r. 16(5) of the Turnover and Assessment Rules which restricted the benefit of single point taxation to licensed dealers was ultra vires as it contravened s. 5(vi) of the Act and s. 6-A was not applicable to the case of a dealer who did not take out a licence for dealing in hides and skins and further that if r. 16(5) was ultra vires as being in contravention of s. 5(vi), r. 5, of the Madras General Sales Tax Rules (hereinafter called the Sales Tax Rules) which requires the taking out of the licence in order to be able to get the benefit of single point taxation would also be ultra vires. Thus on a true construction of s. 3(1) and s. 5(vi) it was of the opinion that r. 5 of the Sales Tax Rules and r. 16(5) of the Turnover and Assessment Rules were ultra vires and s. 6A was inapplicable to a person who had not taken out a licence. As a consequence it quashed the order of assessment of the respondent firm. In order to decide this appeal it is necessary to refer to and consider the relevant provisions of the Act and the two sets of Rules made thereunder. They are as follows- S. 3(1) Subject to the provisions of this Act,- (a) every dealer shall pay for each year a tax on his total turnover for such year and A dealer whose total turnover in any year is less than ten thousand rupees shall not be liable to pay any tax for that year under sub-section (1) or sub-section (2). For the purposes of this section and the other provisions of this Act, turnover shall be determined in accordance with such rules as may be prescribed \n The taxes under sub-sections (1) and (2) shall be assessed, levied and collected in such manner and in such instalments, if any, as may be prescribed S. 5. Subject to such restrictions and conditions as may be prescribed, including conditions as to licences and licence fees. the sale of hides and skins, whether tanned or untanned shall be liable to tax under section 3, subsection (1), only at such single point in the series of sales by successive dealers as may be prescribed. S. 6A. If any restrictions or conditions prescribed under section 5 or notified under section 6 are contravened or are not observed by a dealer, or in case a condition so prescribed or notified requires that a licence shall be taken out or renewed, if a licence is not taken out or renewed, by the dealer or if any of the conditions of a licence taken out or renewed by him are contravened or are not observed, the sales of the dealer, with effect from the commencement of the year in which such contravention or non- observance took place, may be assessed to tax or taxes under section 3, as if the provisions of section 5 or of the notification under section 6, as the case may be, did not apply to such sales and notwithstanding that a licence, if any, taken out or renewed by the dealer continued or continues to be in force during the year . MADRAS GENERAL SALES TAX (TURNOVER AND ASSESSMENT) RULES. Rule 4(1). Save as provided in sub-rule (2) the gross turnover of a dealer for the purposes of these rules shall be the amount for which goods are sold by the dealer. In the case of the undermentioned goods turnover of a dealer for the purposes of these rules shall be the amount for which the goods are bought by the dealer. (c) untanned hides and skins bought by a licensed tanner in the State, and (d) untanned hides and skins exported outside the State by a licensed dealer in hides or skins. Rule 15(1). Rules 6 to 13 shall not apply to licensed tanners and other licensed dealers in hides or skins in respect of their dealings in hides or skins but the provisions of this and the following rule shall apply to them in respect of such dealings. Rule 16(1). In the case of hides and skins, the tax payable under section 3(1) shall be levied in accordance with the provisions of this rule. No tax shall be levied on the sale of untanned hides or skins by a licensed dealer in hides or skins except at the stage at which such hides or skins are sold to a tanner in the State or are sold for export outside the State in the case of all untanned hides or skins sold to a tanner in the State, the tax shall be levied from the tanner on the amount for which the hides or skins are bought by him. \n In the case of all untanned hides or skins which are not sold to a tanner in the State but are exported outside the State, the tax shall be levied from the dealer who was the last dealer not exempt from taxation under section 3(3), who buys them in the State on the amount for which they were bought by him. Sale of hides or skins by dealers other than licensed dealers in hides or skins shall,subject to the provisions of section 3, be liable to taxation on each occasion of sale. Rule 5(1) of the ax Rules provides - Every person who (d) deals in hides and or skins whether as a tanner, or otherwise, or shall, if he desires to avail himself of the exemption provided in sections 5 and 8 or of the concession of single point taxation provided in section 6, submit an application in Form 1 for a licence in respect of each of his places of business to the authority specified in sub- rule (2) so as to reach him not later than the 15th day of October, 1939 . The scheme of taxation under the Act is this. Section 3 is the general charging section under which tax is levied in the manner prescribed in the turnover of a dealer, except that a dealer whose turnover is less than Rs. 10,000/- is exempted from sales tax.\n Section 3 envisages multipoint taxation on the total turnover of a dealer. In the case of the sale transactions of certain specified goods set out in s. 5 of the Act an exception is made. That section provides for single point taxation subject to certain prescribed restrictions and conditions. By sub-s. (vi) of that section sales of hides and skins are liable to tax under s.3, sub-s. (1), at one single point in the series of sales by successive dealers. The language of the section (s.5) shows however that this exemption applies subject to certain restrictions and conditions which include conditions as to licences. The rule, which deals with licences is r. 5 of the Sales Tax Rules, the relevant portion of which has already been set out It lays down that if a dealer desires to avail himself of the exemption provided in ss. 5 and 8 or of the concession as to taxation in s. 5 only at a single point, then he must obtain a licence as prescribed in that rule. If the restrictions and conditions contemplated by s. 5 read with the rules are not complied with, certain consequences follow as a result of s. 6-A of the Act which specifically states that where a condition prescribed or notified requires the taking out or the renewal of a licence, then in the case of contravention of such conditions or restrictions the tax is to be levied under s. 3 as if the provisions of s. 5 did not apply to such sales.\n This, therefore, is a clear provision which makes the single point imposition of sales tax on hides and skins to be conditional on observing the condition of taking a licence. The argument of inconsistency between r. 16(5) of the Turnover and Assessment Rules and s. 5(vi) of the Act which was accepted in the High Court receives no support from the language of that section which is a concessional provision for making the sales of hides and skins liable to taxation at a single point but that, as the opening words of the section show, is subject to restrictions and conditions prescribed in the rules and one of these conditions is the taking of a licence. All that r. 16(5) does is to emphasise the consequences of non- observance of the conditions which ss. 5(vi) 6-A have in clear terms prescribed. We find no inconsistency between the rule and the sections of the Act. But it was submitted that this Court on appeal from a judgment of the Madras High Court had sId r. 16(5) to be ultra vires the Act. That contention is based on the judgment of the Madras High Court in V. M. Syed Mohammed Company v. The State of Madras (1) which on appeal was affirmed by this Court (2).\n This contention is not well-founded. In that case, when it was in the Madras High Court, it was contended that the rules did not properly carry out the policy underlying the Act, which was to keep the price of hides and skins at a competitive level for the world market. It was there argued that hides and skins were articles much in demand in the foreign markets and their export was one of the main items of the foreign trade of the State of Madras which enjoyed considerable natural advantage in tanning because of the plentiful supply of Avaram bark which was specially suited for the purpose. It was also argued that untanned hides and skins were acquired locally or by import from other States and were either tanned in the State or exported and therefore the scheme of taxation was to levy the tax at a single point, i.e., at the stage when articles were tanned in the State or exported to foreign countries for tanning. For this reason multiple taxation was violative of s. 5(vi) of the Act. This, it appears, was not disputed by the Government and it was therefore held that r. 16(5) of the Turnover and Assessment Rules was ultra vires. But the question was really (1) (1952) 3 S.T.C. 367. V. M. Syed Mohammed and Company v. The State of Andhra, 1954 S.C.R. 1117. not relevant to the issue as was pointed out by Venkatarama Ayyar, J., at p. 394, where he said- Now the contention of the petitioners is that where there are sales by unlicensed dealers to unlicensed tanners or unlicensed dealers, there is the possibility of multiple taxation and that would be in violation of section 5(vi). It is not disputed on behalf of the Government that Rule 16(5) is repugnant to section 5(vi).\n It must therefore be held to be ultra vires. But this can bring no relief to the petitioners, as they are all licensed tanners and are in no manner hurt by the operation of r. 16(5). This was conceded by the learned Advocate for the petitioners . This case was then brought in appeal to this Court and S. R. Das, J. (as he then was), observed at p. 1121- Lastly, the learned advocate urges that rule 16 (5) clearly contravenes the provisions of section 5(vi) of the Act. This sub-rule has been held to be ultra vires by the High Court, and indeed, the learned Advocate General of Madras did not in the High Court, as before us, dispute that rule 16(5) was repugnant to ,section 5(vi). That sub-rule, however affects only unlicensed dealers and the appellants who are admittedly licensed dealers are not affected by that sub-rule .\nDECISION ??", "expert_1": {"rank1": ["We find no inconsistency between the rule and the sections of the Act.", "This contention is not well-founded."], "rank2": ["The language of the section (s.5) shows however that this exemption applies subject to certain restrictions and conditions which include conditions as to licences. The rule, which deals with licences is r. 5 of the Sales Tax Rules, the relevant portion of which has already been set out It lays down that if a dealer desires to avail himself of the exemption provided in ss. 5 and 8 or of the concession as to taxation in s. 5 only at a single point, then he must obtain a licence as prescribed in that rule. If the restrictions and conditions contemplated by s. 5 read with the rules are not complied with, certain consequences follow as a result of s. 6-A of the Act which specifically states that where a condition prescribed or notified requires the taking out or the renewal of a licence, then in the case of contravention of such conditions or restrictions the tax is to be levied under s. 3 as if the provisions of s. 5 did not apply to such sales.", "This, therefore, is a clear provision which makes the single point imposition of sales tax on hides and skins to be conditional on observing the condition of taking a licence. The argument of inconsistency between r. 16(5) of the Turnover and Assessment Rules and s. 5(vi) of the Act which was accepted in the High Court receives no support from the language of that section which is a concessional provision for making the sales of hides and skins liable to taxation at a single point but that, as the opening words of the section show, is subject to restrictions and conditions prescribed in the rules and one of these conditions is the taking of a licence. All that r. 16(5) does is to emphasise the consequences of non- observance of the conditions which ss. 5(vi) 6-A have in clear terms prescribed.", "But it was submitted that this Court on appeal from a judgment of the Madras High Court had sId r. 16(5) to be ultra vires the Act. That contention is based on the judgment of the Madras High Court in V. M. Syed Mohammed Company v. The State of Madras (1) which on appeal was affirmed by this Court (2)."], "rank3": ["In order to decide this appeal it is necessary to refer to and consider the relevant provisions of the Act and the two sets of Rules made thereunder.", "S. 3(1) Subject to the provisions of this Act,- (a) every dealer shall pay for each year a tax on his total turnover for such year and A dealer whose total turnover in any year is less than ten thousand rupees shall not be liable to pay any tax for that year under sub-section (1) or sub-section (2). For the purposes of this section and the other provisions of this Act, turnover shall be determined in accordance with such rules as may be prescribed \n The taxes under sub-sections (1) and (2) shall be assessed, levied and collected in such manner and in such instalments, if any, as may be prescribed S. 5. Subject to such restrictions and conditions as may be prescribed, including conditions as to licences and licence fees. the sale of hides and skins, whether tanned or untanned shall be liable to tax under section 3, subsection (1), only at such single point in the series of sales by successive dealers as may be prescribed. S. 6A. If any restrictions or conditions prescribed under section 5 or notified under section 6 are contravened or are not observed by a dealer, or in case a condition so prescribed or notified requires that a licence shall be taken out or renewed, if a licence is not taken out or renewed, by the dealer or if any of the conditions of a licence taken out or renewed by him are contravened or are not observed, the sales of the dealer, with effect from the commencement of the year in which such contravention or non- observance took place, may be assessed to tax or taxes under section 3, as if the provisions of section 5 or of the notification under section 6, as the case may be, did not apply to such sales and notwithstanding that a licence, if any, taken out or renewed by the dealer continued or continues to be in force during the year . MADRAS GENERAL SALES TAX (TURNOVER AND ASSESSMENT) RULES. Rule 4(1). Save as provided in sub-rule (2) the gross turnover of a dealer for the purposes of these rules shall be the amount for which goods are sold by the dealer. In the case of the undermentioned goods turnover of a dealer for the purposes of these rules shall be the amount for which the goods are bought by the dealer. (c) untanned hides and skins bought by a licensed tanner in the State, and (d) untanned hides and skins exported outside the State by a licensed dealer in hides or skins. Rule 15(1). Rules 6 to 13 shall not apply to licensed tanners and other licensed dealers in hides or skins in respect of their dealings in hides or skins but the provisions of this and the following rule shall apply to them in respect of such dealings. Rule 16(1). In the case of hides and skins, the tax payable under section 3(1) shall be levied in accordance with the provisions of this rule. No tax shall be levied on the sale of untanned hides or skins by a licensed dealer in hides or skins except at the stage at which such hides or skins are sold to a tanner in the State or are sold for export outside the State in the case of all untanned hides or skins sold to a tanner in the State, the tax shall be levied from the tanner on the amount for which the hides or skins are bought by him. \n In the case of all untanned hides or skins which are not sold to a tanner in the State but are exported outside the State, the tax shall be levied from the dealer who was the last dealer not exempt from taxation under section 3(3), who buys them in the State on the amount for which they were bought by him. Sale of hides or skins by dealers other than licensed dealers in hides or skins shall,subject to the provisions of section 3, be liable to taxation on each occasion of sale. Rule 5(1) of the ax Rules provides - Every person who (d) deals in hides and or skins whether as a tanner, or otherwise, or shall, if he desires to avail himself of the exemption provided in sections 5 and 8 or of the concession of single point taxation provided in section 6, submit an application in Form 1 for a licence in respect of each of his places of business to the authority specified in sub- rule (2) so as to reach him not later than the 15th day of October, 1939 . The scheme of taxation under the Act is this. Section 3 is the general charging section under which tax is levied in the manner prescribed in the turnover of a dealer, except that a dealer whose turnover is less than Rs. 10,000/- is exempted from sales tax.\n Section 3 envisages multipoint taxation on the total turnover of a dealer. In the case of the sale transactions of certain specified goods set out in s. 5 of the Act an exception is made. That section provides for single point taxation subject to certain prescribed restrictions and conditions. By sub-s. (vi) of that section sales of hides and skins are liable to tax under s.3, sub-s. (1), at one single point in the series of sales by successive dealers."], "rank4": ["Against the judgment and order of the High Court of Madras allowing a petition under Article 226 of the Constitution. The question there raised was the legality of the assessment of Sales Tax by appellant No. 2, the Deputy Commercial Sales Tax Officer, Saidapet, under the Madras General Sales Tax Act, 1939 (Act IX of 1939), hereinafter termed the Act. The respondent was a partnership firm carrying on tannery business at Chromepet near the city of Madras. Before the year of assessment, i. e., 1952-53, it was taking out licences under the relevant provisions of the Act but it did not renew the licence for the assessment year. When called upon to make a return it did not do so nor did it raise any objection to the notice served on it on February 28, 1954. It was assessed to sales tax of Rs. 10,584 on a turnover of Rs. 6,77,374-4-4. It filed a petition under Art. 226 to quash the assessment order on the ground that the order was illegal and not supported by the authority of law. This contention was accepted by the High Court and the petition was allowed with costs. The consequence of the judgment is that the respondent firm which is not a licensed dealer under the Act is not liable to any sales tax in respect of its dealings in hides and skins.\n Against this judgment and order the appellants have come to this court by special leave."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["This sub-rule has been held to be ultra vires by the High Court, and indeed, the learned Advocate General of Madras did not in the High Court, as before us, dispute that rule 16(5) was repugnant to ,section 5(vi). That sub-rule, however affects only unlicensed dealers and the appellants who are admittedly licensed dealers are not affected by that sub-rule ."], "rank2": ["Before the year of assessment, i. e., 1952-53, it was taking out licences under the relevant provisions of the Act but it did not renew the licence for the assessment year. When called upon to make a return it did not do so nor did it raise any objection to the notice served on it on February 28, 1954. It was assessed to sales tax of Rs. 10,584 on a turnover of Rs. 6,77,374-4-4. It filed a petition under Art. 226 to quash the assessment order on the ground that the order was illegal and not supported by the authority of law. This contention was accepted by the High Court and the petition was allowed with costs. The consequence of the judgment is that the respondent firm which is not a licensed dealer under the Act is not liable to any sales tax in respect of its dealings in hides and skins.", "s. 6-A of the Act which specifically states that where a condition prescribed or notified requires the taking out or the renewal of a licence, then in the case of contravention of such conditions or restrictions the tax is to be levied under s. 3 as if the provisions of s. 5 did not apply to such sales.", "All that r. 16(5) does is to emphasise the consequences of non- observance of the conditions which ss. 5(vi) 6-A have in clear terms prescribed. We find no inconsistency between the rule and the sections of the Act."], "rank3": ["It was also contended that in the taxation scheme under the Act, hides and skins, because of their importance in the international market, were excluded from the direct operation of s. 3(1) of the Act which was the general charging section and were given special protection of the single point taxation under s. 5(vi). The (1) 1954 S.C.R. 1117. argument, therefore, was that in the case of sales of hides and skins the general provision was inapplicable and a special rule for taxation was laid down by s. 5(vi) of the Act.", "Section 3 is the general charging section under which tax is levied in the manner prescribed in the turnover of a dealer, except that a dealer whose turnover is less than Rs. 10,000/- is exempted from sales tax.\n Section 3 envisages multipoint taxation on the total turnover of a dealer. In the case of the sale transactions of certain specified goods set out in s. 5 of the Act an exception is made. That section provides for single point taxation subject to certain prescribed restrictions and conditions. By sub-s. (vi) of that section sales of hides and skins are liable to tax under s.3, sub-s. (1), at one single point in the series of sales by successive dealers. The language of the section (s.5) shows however that this exemption applies subject to certain restrictions and conditions which include conditions as to licences. The rule, which deals with licences is r. 5 of the Sales Tax Rules, the relevant portion of which has already been set out It lays down that if a dealer desires to avail himself of the exemption provided in ss. 5 and 8 or of the concession as to taxation in s. 5 only at a single point, then he must obtain a licence as prescribed in that rule."], "rank4": ["In that case, when it was in the Madras High Court, it was contended that the rules did not properly carry out the policy underlying the Act, which was to keep the price of hides and skins at a competitive level for the world market. It was there argued that hides and skins were articles much in demand in the foreign markets and their export was one of the main items of the foreign trade of the State of Madras which enjoyed considerable natural advantage in tanning because of the plentiful supply of Avaram bark which was specially suited for the purpose. It was also argued that untanned hides and skins were acquired locally or by import from other States and were either tanned in the State or exported and therefore the scheme of taxation was to levy the tax at a single point, i.e., at the stage when articles were tanned in the State or exported to foreign countries for tanning. For this reason multiple taxation was violative of s. 5(vi) of the Act. This, it appears, was not disputed by the Government and it was therefore held that r. 16(5) of the Turnover and Assessment Rules was ultra vires."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["Against the judgment and order of the High Court of Madras allowing a petition under Article 226 of the Constitution. The question there raised was the legality of the assessment of Sales Tax by appellant No. 2, the Deputy Commercial Sales Tax Officer, Saidapet, under the Madras General Sales Tax Act, 1939 (Act IX of 1939), hereinafter termed the Act.", "In order to decide this appeal it is necessary to refer to and consider the relevant provisions of the Act and the two sets of Rules made thereunder", "Section 3 envisages multipoint taxation on the total turnover of a dealer. In the case of the sale transactions of certain specified goods set out in s. 5 of the Act an exception is made. That section provides for single point taxation subject to certain prescribed restrictions and conditions", "The language of the section (s.5) shows however that this exemption applies subject to certain restrictions and conditions which include conditions as to licences. The rule, which deals with licences is r. 5 of the Sales Tax Rules, the relevant portion of which has already been set out It lays down that if a dealer desires to avail himself of the exemption provided in ss. 5 and 8 or of the concession as to taxation in s. 5 only at a single point, then he must obtain a licence as prescribed in that rule. If the restrictions and conditions contemplated by s. 5 read with the rules are not complied with, certain consequences follow as a result of s. 6-A of the Act which specifically states that where a condition prescribed or notified requires the taking out or the renewal of a licence, then in the case of contravention of such conditions or restrictions the tax is to be levied under s. 3 as if the provisions of s. 5 did not apply to such sales", "This, therefore, is a clear provision which makes the single point imposition of sales tax on hides and skins to be conditional on observing the condition of taking a licence. The argument of inconsistency between r. 16(5) of the Turnover and Assessment Rules and s. 5(vi) of the Act which was accepted in the High Court receives no support from the language of that section which is a concessional provision for making the sales of hides and skins liable to taxation at a single point but that, as the opening words of the section show, is subject to restrictions and conditions prescribed in the rules and one of these conditions is the taking of a licence.", "All that r. 16(5) does is to emphasise the consequences of non- observance of the conditions which ss. 5(vi) 6-A have in clear terms prescribed. We find no inconsistency between the rule and the sections of the Act.", "It is not disputed on behalf of the Government that Rule 16(5) is repugnant to section 5(vi).\n It must therefore be held to be ultra vires", "But this can bring no relief to the petitioners, as they are all licensed tanners and are in no manner hurt by the operation of r. 16(5)", "Lastly, the learned advocate urges that rule 16 (5) clearly contravenes the provisions of section 5(vi) of the Act. This sub-rule has been held to be ultra vires by the High Court, and indeed, the learned Advocate General of Madras did not in the High Court, as before us, dispute that rule 16(5) was repugnant to ,section 5(vi). That sub-rule, however affects only unlicensed dealers and the appellants who are admittedly licensed dealers are not affected by that sub-rule ."], "rank2": ["It was assessed to sales tax of Rs. 10,584 on a turnover of Rs. 6,77,374-4-4. It filed a petition under Art. 226 to quash the assessment order on the ground that the order was illegal and not supported by the authority of law. This contention was accepted by the High Court and the petition was allowed with costs. The consequence of the judgment is that the respondent firm which is not a licensed dealer under the Act is not liable to any sales tax in respect of its dealings in hides and skins", "Against this judgment and order the appellants have come to this court by special leave", "The High Court held that in the case of hides and it skins the charge levied by s. 3 is subject to the pro. visions of S. 5 and in the case of licensed dealers in hides and skins, the charging provision is r. 16 of the Turnover and Assessment Rules . The High Court further held that r. 16(5) of the Turnover and Assessment Rules which restricted the benefit of single point taxation to licensed dealers was ultra vires as it contravened s. 5(vi) of the Act and s. 6-A was not applicable to the case of a dealer who did not take out a licence for dealing in hides and skins and further that if r. 16(5) was ultra vires as being in contravention of s. 5(vi), r. 5, of the Madras General Sales Tax Rules (hereinafter called the Sales Tax Rules) which requires the taking out of the licence in order to be able to get the benefit of single point taxation would also be ultra vires", "Thus on a true construction of s. 3(1) and s. 5(vi) it was of the opinion that r. 5 of the Sales Tax Rules and r. 16(5) of the Turnover and Assessment Rules were ultra vires and s. 6A was inapplicable to a person who had not taken out a licence. As a consequence it quashed the order of assessment of the respondent firm.", "They are as follows- S. 3(1) Subject to the provisions of this Act,- (a) every dealer shall pay for each year a tax on his total turnover for such year and A dealer whose total turnover in any year is less than ten thousand rupees shall not be liable to pay any tax for that year under sub-section (1) or sub-section (2). For the purposes of this section and the other provisions of this Act, turnover shall be determined in accordance with such rules as may be prescribed \n The taxes under sub-sections (1) and (2) shall be assessed, levied and collected in such manner and in such instalments, if any, as may be prescribed S. 5", "Subject to such restrictions and conditions as may be prescribed, including conditions as to licences and licence fees. the sale of hides and skins, whether tanned or untanned shall be liable to tax under section 3, subsection (1), only at such single point in the series of sales by successive dealers as may be prescribed", "If any restrictions or conditions prescribed under section 5 or notified under section 6 are contravened or are not observed by a dealer, or in case a condition so prescribed or notified requires that a licence shall be taken out or renewed, if a licence is not taken out or renewed, by the dealer or if any of the conditions of a licence taken out or renewed by him are contravened or are not observed, the sales of the dealer, with effect from the commencement of the year in which such contravention or non- observance took place, may be assessed to tax or taxes under section 3, as if the provisions of section 5 or of the notification under section 6, as the case may be, did not apply to such sales and notwithstanding that a licence, if any, taken out or renewed by the dealer continued or continues to be in force during the year", "MADRAS GENERAL SALES TAX (TURNOVER AND ASSESSMENT) RULES. Rule 4(1). Save as provided in sub-rule (2) the gross turnover of a dealer for the purposes of these rules shall be the amount for which goods are sold by the dealer. In the case of the undermentioned goods turnover of a dealer for the purposes of these rules shall be the amount for which the goods are bought by the dealer", "(c) untanned hides and skins bought by a licensed tanner in the State, and (d) untanned hides and skins exported outside the State by a licensed dealer in hides or skins.", "Rule 15(1). Rules 6 to 13 shall not apply to licensed tanners and other licensed dealers in hides or skins in respect of their dealings in hides or skins but the provisions of this and the following rule shall apply to them in respect of such dealings. Rule 16(1). In the case of hides and skins, the tax payable under section 3(1) shall be levied in accordance with the provisions of this rule.", "No tax shall be levied on the sale of untanned hides or skins by a licensed dealer in hides or skins except at the stage at which such hides or skins are sold to a tanner in the State or are sold for export outside the State in the case of all untanned hides or skins sold to a tanner in the State, the tax shall be levied from the tanner on the amount for which the hides or skins are bought by him", "In the case of all untanned hides or skins which are not sold to a tanner in the State but are exported outside the State, the tax shall be levied from the dealer who was the last dealer not exempt from taxation under section 3(3), who buys them in the State on the amount for which they were bought by him. Sale of hides or skins by dealers other than licensed dealers in hides or skins shall,subject to the provisions of section 3, be liable to taxation on each occasion of sale. Rule 5(1) of the ax Rules provides - Every person who (d) deals in hides and or skins whether as a tanner, or otherwise, or shall, if he desires to avail himself of the exemption provided in sections 5 and 8 or of the concession of single point taxation provided in section 6, submit an application in Form 1 for a licence in respect of each of his places of business to the authority specified in sub- rule (2) so as to reach him not later than the 15th day of October, 1939", "Section 3 is the general charging section under which tax is levied in the manner prescribed in the turnover of a dealer, except that a dealer whose turnover is less than Rs. 10,000/- is exempted from sales tax.", "By sub-s. (vi) of that section sales of hides and skins are liable to tax under s.3, sub-s. (1), at one single point in the series of sales by successive dealers"], "rank3": ["The respondent was a partnership firm carrying on tannery business at Chromepet near the city of Madras. Before the year of assessment, i. e., 1952-53, it was taking out licences under the relevant provisions of the Act but it did not renew the licence for the assessment year. When called upon to make a return it did not do so nor did it raise any objection to the notice served on it on February 28, 1954"], "label": "ACCEPTED"}, "expert_4": {"rank1": ["Against the judgment and order of the High Court of Madras allowing a petition under Article 226 of the Constitution."], "rank2": ["This, therefore, is a clear provision which makes the single point imposition of sales tax on hides and skins to be conditional on observing the condition of taking a licence.", "The argument of inconsistency between r. 16(5) of the Turnover and Assessment Rules and s. 5(vi) of the Act which was accepted in the High Court receives no support from the language of that section which is a concessional provision for making the sales of hides and skins liable to taxation at a single point but that, as the opening words of the section show, is subject to restrictions and conditions prescribed in the rules and one of these conditions is the taking of a licence.", "All that r. 16(5) does is to emphasise the consequences of non- observance of the conditions which ss. 5(vi) 6-A have in clear terms prescribed. We find no inconsistency between the rule and the sections of the Act.", "It is not disputed on behalf of the Government that Rule 16(5) is repugnant to section 5(vi).\n It must therefore be held to be ultra vires. But this can bring no relief to the petitioners, as they are all licensed tanners and are in no manner hurt by the operation of r. 16(5).", "That sub-rule, however affects only unlicensed dealers and the appellants who are admittedly licensed dealers are not affected by that sub-rule ."], "rank3": ["The question there raised was the legality of the assessment of Sales Tax by appellant No. 2, the Deputy Commercial Sales Tax Officer, Saidapet, under the Madras General Sales Tax Act, 1939 (Act IX of 1939), hereinafter termed the Act.", "The respondent was a partnership firm carrying on tannery business at Chromepet near the city of Madras.", "It was assessed to sales tax of Rs. 10,584 on a turnover of Rs. 6,77,374-4-4. It filed a petition under Art. 226 to quash the assessment order on the ground that the order was illegal and not supported by the authority of law.", "This contention was accepted by the High Court and the petition was allowed with costs.", "The consequence of the judgment is that the respondent firm which is not a licensed dealer under the Act is not liable to any sales tax in respect of its dealings in hides and skins.", "The (1) 1954 S.C.R. 1117. argument, therefore, was that in the case of sales of hides and skins the general provision was inapplicable and a special rule for taxation was laid down by s. 5(vi) of the Act.", "The High Court held that in the case of hides and it skins the charge levied by s. 3 is subject to the pro. visions of S. 5 and in the case of licensed dealers in hides and skins, the charging provision is r. 16 of the Turnover and Assessment Rules .", "The High Court further held that r. 16(5) of the Turnover and Assessment Rules which restricted the benefit of single point taxation to licensed dealers was ultra vires as it contravened s. 5(vi) of the Act and s. 6-A was not applicable to the case of a dealer who did not take out a licence for dealing in hides and skins and further that if r. 16(5) was ultra vires as being in contravention of s. 5(vi), r. 5, of the Madras General Sales Tax Rules (hereinafter called the Sales Tax Rules) which requires the taking out of the licence in order to be able to get the benefit of single point taxation would also be ultra vires.", "Thus on a true construction of s. 3(1) and s. 5(vi) it was of the opinion that r. 5 of the Sales Tax Rules and r. 16(5) of the Turnover and Assessment Rules were ultra vires and s. 6A was inapplicable to a person who had not taken out a licence. As a consequence it quashed the order of assessment of the respondent firm.", "The scheme of taxation under the Act is this. Section 3 is the general charging section under which tax is levied in the manner prescribed in the turnover of a dealer, except that a dealer whose turnover is less than Rs. 10,000/- is exempted from sales tax.\n Section 3 envisages multipoint taxation on the total turnover of a dealer.", "In the case of the sale transactions of certain specified goods set out in s. 5 of the Act an exception is made. That section provides for single point taxation subject to certain prescribed restrictions and conditions.", "The language of the section (s.5) shows however that this exemption applies subject to certain restrictions and conditions which include conditions as to licences.", "The rule, which deals with licences is r. 5 of the Sales Tax Rules, the relevant portion of which has already been set out It lays down that if a dealer desires to avail himself of the exemption provided in ss. 5 and 8 or of the concession as to taxation in s. 5 only at a single point, then he must obtain a licence as prescribed in that rule.", "If the restrictions and conditions contemplated by s. 5 read with the rules are not complied with, certain consequences follow as a result of s. 6-A of the Act which specifically states that where a condition prescribed or notified requires the taking out or the renewal of a licence, then in the case of contravention of such conditions or restrictions the tax is to be levied under s. 3 as if the provisions of s. 5 did not apply to such sales.", "But it was submitted that this Court on appeal from a judgment of the Madras High Court had sId r. 16(5) to be ultra vires the Act.", "That contention is based on the judgment of the Madras High Court in V. M. Syed Mohammed Company v.", "The State of Madras (1) which on appeal was affirmed by this Court (2).", "This contention is not well-founded.", "In that case, when it was in the Madras High Court, it was contended that the rules did not properly carry out the policy underlying the Act, which was to keep the price of hides and skins at a competitive level for the world market.", "For this reason multiple taxation was violative of s. 5(vi) of the Act.", "This, it appears, was not disputed by the Government and it was therefore held that r. 16(5) of the Turnover and Assessment Rules was ultra vires.", "But the question was really (", "V. M. Syed Mohammed and Company v.", "The State of Andhra, 1954 S.C.R. 1117. not relevant to the issue as was pointed out by Venkatarama Ayyar, J., at p. 394, where he said- Now the contention of the petitioners is that where there are sales by unlicensed dealers to unlicensed tanners or unlicensed dealers, there is the possibility of multiple taxation and that would be in violation of section 5(vi)."], "rank4": ["The contention of the respondent firm in the High Court was that under s. 5, cl. (vi) of the Act, the liability to pay sales tax in respect of hides and skins could only be at a single point that the rule limiting the operation of this mode of taxation to licensed dealers was ultra vires and therefore r. 16(5) of the Madras General Sales Tax (Turnover and Assessment) Rules, 1939, hereinafter called the Turnover and Assessment Rules, was void and inoperative and had been. so held by the Supreme Court in V. M. Syed Mohammed Co. v. The State of Madras(1) that accepting this interpretation the State of Madras had deleted cl. (5) of r. 16 by G. 0. 450, Revenue, dated February 26, 1954, i.e., two days before the making of the assessment order under dispute that r. 16(5) of the Turnover and Assessment Rules was the only provision imposing a multiple tax in respect of sales of hides and skins by unlicensed dealers and that the imposition of the sales tax after the repeal of that rule was illegal and the tax was without the authority of law.", "It was also contended that in the taxation scheme under the Act, hides and skins, because of their importance in the international market, were excluded from the direct operation of s. 3(1) of the Act which was the general charging section and were given special protection of the single point taxation under s. 5(vi).", "They are as follows- S. 3(1) Subject to the provisions of this Act,- (a) every dealer shall pay for each year a tax on his total turnover for such year and A dealer whose total turnover in any year is less than ten thousand rupees shall not be liable to pay any tax for that year under sub-section (1) or sub-section (2).", "For the purposes of this section and the other provisions of this Act, turnover shall be determined in accordance with such rules as may be prescribed \n The taxes under sub-sections (1) and (2) shall be assessed, levied and collected in such manner and in such instalments, if any, as may be prescribed S. 5.", "Subject to such restrictions and conditions as may be prescribed, including conditions as to licences and licence fees. the sale of hides and skins, whether tanned or untanned shall be liable to tax under section 3, subsection (1), only at such single point in the series of sales by successive dealers as may be prescribed.", "S. 6A.", "If any restrictions or conditions prescribed under section 5 or notified under section 6 are contravened or are not observed by a dealer, or in case a condition so prescribed or notified requires that a licence shall be taken out or renewed, if a licence is not taken out or renewed, by the dealer or if any of the conditions of a licence taken out or renewed by him are contravened or are not observed, the sales of the dealer, with effect from the commencement of the year in which such contravention or non- observance took place, may be assessed to tax or taxes under section 3, as if the provisions of section 5 or of the notification under section 6, as the case may be, did not apply to such sales and notwithstanding that a licence, if any, taken out or renewed by the dealer continued or continues to be in force during the year .", "MADRAS GENERAL SALES TAX (TURNOVER AND ASSESSMENT) RULES. Rule 4(1). Save as provided in sub-rule (2) the gross turnover of a dealer for the purposes of these rules shall be the amount for which goods are sold by the dealer.", "In the case of the undermentioned goods turnover of a dealer for the purposes of these rules shall be the amount for which the goods are bought by the dealer. (c) untanned hides and skins bought by a licensed tanner in the State, and (d) untanned hides and skins exported outside the State by a licensed dealer in hides or skins.", "Rule 16(1). In the case of hides and skins, the tax payable under section 3(1) shall be levied in accordance with the provisions of this rule.", "No tax shall be levied on the sale of untanned hides or skins by a licensed dealer in hides or skins except at the stage at which such hides or skins are sold to a tanner in the State or are sold for export outside the State in the case of all untanned hides or skins sold to a tanner in the State, the tax shall be levied from the tanner on the amount for which the hides or skins are bought by him.", "Sale of hides or skins by dealers other than licensed dealers in hides or skins shall,subject to the provisions of section 3, be liable to taxation on each occasion of sale.", "Rule 5(1) of the ax Rules provides - Every person who (d) deals in hides and or skins whether as a tanner, or otherwise, or shall, if he desires to avail himself of the exemption provided in sections 5 and 8 or of the concession of single point taxation provided in section 6, submit an application in Form 1 for a licence in respect of each of his places of business to the authority specified in sub- rule (2) so as to reach him not later than the 15th day of October, 1939 ."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["The argument of inconsistency between r. 16(5) of the Turnover and Assessment Rules and s. 5(vi) of the Act which was accepted in the High Court receives no support from the language of that section which is a concessional provision for making the sales of hides and skins liable to taxation at a single point but that, as the opening words of the section show, is subject to restrictions and conditions prescribed in the rules and one of these conditions is the taking of a licence.", "We find no inconsistency between the rule and the sections of the Act."], "rank2": ["But the question was really (1) (1952) 3 S.T.C. 367. V. M. Syed Mohammed and Company v. The State of Andhra, 1954 S.C.R. 1117. not relevant to the issue as was pointed out by Venkatarama Ayyar, J.", "But this can bring no relief to the petitioners, as they are all licensed tanners and are in no manner hurt by the operation of r. 16(5).", "That sub-rule, however affects only unlicensed dealers and the appellants who are admittedly licensed dealers are not affected by that sub-rule ."], "rank3": ["This, therefore, is a clear provision which makes the single point imposition of sales tax on hides and skins to be conditional on observing the condition of taking a licence.", "All that r. 16(5) does is to emphasise the consequences of non- observance of the conditions which ss. 5(vi) 6-A have in clear terms prescribed.", "Now the contention of the petitioners is that where there are sales by unlicensed dealers to unlicensed tanners or unlicensed dealers, there is the possibility of multiple taxation and that would be in violation of section 5(vi). It is not disputed on behalf of the Government that Rule 16(5) is repugnant to section 5(vi).\n It must therefore be held to be ultra vires."], "rank4": ["No tax shall be levied on the sale of untanned hides or skins by a licensed dealer in hides or skins except at the stage at which such hides or skins are sold to a tanner in the State or are sold for export outside the State in the case of all untanned hides or skins sold to a tanner in the State, the tax shall be levied from the tanner on the amount for which the hides or skins are bought by him. \n In the case of all untanned hides or skins which are not sold to a tanner in the State but are exported outside the State, the tax shall be levied from the dealer who was the last dealer not exempt from taxation under section 3(3), who buys them in the State on the amount for which they were bought by him. Sale of hides or skins by dealers other than licensed dealers in hides or skins shall,subject to the provisions of section 3, be liable to taxation on each occasion of sale.", "If the restrictions and conditions contemplated by s. 5 read with the rules are not complied with, certain consequences follow as a result of s. 6-A of the Act which specifically states that where a condition prescribed or notified requires the taking out or the renewal of a licence, then in the case of contravention of such conditions or restrictions the tax is to be levied under s. 3 as if the provisions of s. 5 did not apply to such sales."], "rank5": ["Subject to the provisions of this Act,- (a) every dealer shall pay for each year a tax on his total turnover for such year and A dealer whose total turnover in any year is less than ten thousand rupees shall not be liable to pay any tax for that year under sub-section (1) or sub-section (2).", "For the purposes of this section and the other provisions of this Act, turnover shall be determined in accordance with such rules as may be prescribed \n The taxes under sub-sections (1) and (2) shall be assessed, levied and collected in such manner and in such instalments, if any, as may be prescribed S. 5.", "Subject to such restrictions and conditions as may be prescribed, including conditions as to licences and licence fees. the sale of hides and skins, whether tanned or untanned shall be liable to tax under section 3, subsection (1), only at such single point in the series of sales by successive dealers as may be prescribed.", "Save as provided in sub-rule (2) the gross turnover of a dealer for the purposes of these rules shall be the amount for which goods are sold by the dealer. In the case of the undermentioned goods turnover of a dealer for the purposes of these rules shall be the amount for which the goods are bought by the dealer. (c) untanned hides and skins bought by a licensed tanner in the State, and (d) untanned hides and skins exported outside the State by a licensed dealer in hides or skins.", "Rules 6 to 13 shall not apply to licensed tanners and other licensed dealers in hides or skins in respect of their dealings in hides or skins but the provisions of this and the following rule shall apply to them in respect of such dealings.", "In the case of hides and skins, the tax payable under section 3(1) shall be levied in accordance with the provisions of this rule.", "if a dealer desires to avail himself of the exemption provided in ss. 5 and 8 or of the concession as to taxation in s. 5 only at a single point, then he must obtain a licence as prescribed in that rule."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1960_12", "text": "The assessee, Her Highness Maharani Kesarkunverba Saheb, the Raj Mata of Morvi State, is the appellant and the Commissioner of Income-tax, Bombay North, is the respondent. The question that arises for decision is whether the annual cash allowance paid to the appellant in circumstances stated below falls within paragraph 15(1)(i) of the Part B States (Taxation Concessions) Order, 1950 (hereinafter referred to as the Order) and is therefore exempt from income-tax. The appellant was receiving from the Morvi State since 1922 an allowance called Jiwai (maintenance allowance). By a resolution dated September 26, 1946, passed by His Highness Lukhdhirji of Morvi, the husband of the appellant, it was resolved that a sum of Rs. 5,000 per month be paid to the appellant and provision be made for the amount by the Treasury Office in the Budget in the same manner as before. On January 21, 1947, His Highness Lukhdhirji abdicated and his son His Highness Mahendra Sinhji succeeded to the rulership. The covenant for the formation of the Kathiawar States Union was signed on January 23, 1948. On February 26, 1948, a resolution was passed by the son of the appellant granting a village, Mota Dahisara, to the appellant. The relevant portion of this resolution was as follows \n From ancient times there has been a tradition in our family to grant a village to the Maharani for her enjoyment in order to maintain her status and dignity. However, since a village remains to be granted accordingly to our revered mother, Akhand-Sau-Bhagyawana Kesar Kunverba Sahib as the Maharani, it is resolved to grant her the village of Mota Dahisara, under (our) control and having the area and boundaries as per annexures hereto. We resolve to grant the said village, for enjoyment to out Maharani, Shri Vijaykunver of Rangpur, after the lifetime of our mother Kesar Kunverba Sahib in accordance with the above tradition. A formal grant was made on March 16, 1948, which was as follows In order to preserve permanently your status and dignity the village of Mouje Mota Dahisarais hereby granted to you as a gift in pursuance of the immemorial tradition of this State The said village and the land etc., thereof have been granted to you in order to maintain your status and dignity as the Queen Mother as stated above. You may enjoy the same in peace exclusively.\n On your death the right of enjoyment of the entire right, together with the restrictions mentioned in the present writing, shall vest in our Akhan Saubhagvanta Maharani Shri Vijay Kunvar of Rangpur. On March 20, 1948, the State of Morvi became a part of the Saurashtra Union. The Government of Saurashtra refused to continue the maintenance allowance or to recognise the grant of the village Mota Dahisara to the appellant. She then made certain representations and after some conferences and some discussion a copy of the order of the Political Department was sent to the appellant in which it was stated that the village would be resumed and an amount calculated on the basis of average revenue of the village for 3 years would be paid to her as cash allowance for lifetime. To this the appellant took objection and her son the Maharaja of Morvi also wrote a letter to the Rajpramukh of Saurashtra stating that the village had been illegally resumed and that her Jiwai had also been stopped. To this the Rajpramukh replied on May 19, 1949, saying that it had been decided that the village would be resumed and a cash allowance in lieu thereof would be paid to the appellant for life and he advised the Maharaja of Morvi not to press the claim as put forward in his letter and also that the appellant should accept the resumption of the village and agree to take a cash allowance instead. The appellant then wrote a letter to the Rajpramukh on May 26, 1949, in which she insisted that she should continue to have the village. On November 19, 1949, the appellants husband wrote to the Regional Commissioner, Mr. Buch, stating that he and her son, the Ruler, had with difficulty persuaded the appellant to accept Rs. 5,000 a month and not to insist on anything more. The following extract from the letter is rather important and is therefore quoted Most ladies are sentimental and she is no exception, and says her Abru would go if she loses her village, so we suggested that if she gets the income of the village, whatever it may be and any amount over and above that will be given to her as Jiwai, making a total of Rs. 60,000 a year with this she can say she got both the things and her prestige will not suffer.\n On March 30, 1950, the Government of Saurashtra passed a resolution that in pursuance of the decision taken at the Jamnagar Conference the grant of the village Mota Dahisara would be resumed and in lieu thereof a cash annuity of Rs. 35,807 would be paid. The appellant was also granted Jiwai as Rajmata of Rs. 24,193 per annum and thus a sum of Rs. 60,000 per annum, i.e., Rs. 5,000 per mensum, was continued to be paid to the appellant. On June 19, 1950, the grant of the village was liable to income-tax because in his view the appellant received that sum in exchange for two assets - right to the old maintenance allowance and the right to enjoy income from the village during her lifetime. On appeal to the Appellate Assistant Commissioner the amount of Rs. 35,807 was held to be liable to tax and not the sum of Rs. 24,193. An appeal was then taken to the Income-tax Appellate Tribunal which held that the entire sum was exempt from income-tax and super-tax, as it fell within paragraph 15(1)(i) of the Order.\n The Tribunal said In the circumstances of the case stated above, it appears to us that the sum of Rs. 60,000 is exempt from income-tax and super-tax. If you look at the substance of the transaction, it means that the assessee was granted a maintenance allowance of Rs. 60,000. The assessee wanted somehow or other to be associated with the village Mota Dahisara. To her it was a question of prestige. Again the cash annuity of Rs. 35,807 was given to the assessee in lieu of the village Mota Dahisara. The village was granted to her for the purpose of maintaining the assessees status and reputation as the Raj Mata. In other words, the village was given to her for her maintenance. At the instance of the respondent following question was referred under section 6(1) of the Income-tax Act to the High Court Whether there was material for the Tribunal to hold that the sum of Rs. 35,807 granted to the assessee was a maintenance allowance exempt within the meaning of paragraph 15(1)(i) of the Part B States (Taxation Concessions) Order, 1950 ? which was framed by the High Court as follows Whether on the facts and circumstances of the case the sum of Rs. 35,807 granted to the assessee was a maintenance allowance exempt within the meaning of paragraph 15(1)(i) of the Part B States (Taxation Concessions) Order, 1950 ? The High Court held that Rs. 35,807 and Rs. 24,193 were two distinct heads of cash annuities, the former in lieu of village Mota Dahisara and the latter by way of Jiwai, i.e., maintenance. It was of the opinion that the appellant was granted Jiwai (maintenance) of Rs. 5,000 per month by her husband as from September, 1947. It also held that the grant of the village was not by way of maintenance. After taking into consideration the several documents, that is, the grant, the letter of the appellants son dated March 23, 1949, to the Rajpramukh of Saurashtra, the letter dated November 19, 1949, of the appellants husband to Mr. Buch and the resolution of the Government dated March 30, 1950, the High Court held that under the resolution of the Saurashtra Government the appellant was given a cash annuity of Rs. 35,807 in lieu of the village and not by way of maintenance. Against this judgment, the appellant has come to this court in appeal by special leave.\n The controversy between the parties is confined to the nature of the grant of the village made to the appellant. The appellant contended that the grant of the village was as much maintenance as was the cash allowance which had been made to her before, and therefore it fell within the exemption under paragraph 15(1)(i) of the Order which is as follows \n Any income falling within the following classes shall be exempt from income-tax and super-tax and shall not be included in the total income or total world income of the person receiving them \n any sum which the widow or the mother of a person who was the Ruler of an Indian State receives as her maintenance allowance out of public revenue. The respondent on the other hand submitted that the words of the resolution dated February 26, 1949, and of the grant and particularly the following recitals therein From ancient times there has been a tradition in our family to grant a village to the Maha Rani for her enjoyment in order to maintain her status and dignity showed that the grant of the village was not by way of maintenance but merely to maintain a tradition of the family for keeping up the status and dignity of the appellant, and this, it was submitted, was fortified by the letter of the appellants husband dated November 19, 1949, where His Highness stated that the appellants Abru (prestige) would go if she were to lose the village. Reference in this connection was also made to the appellants letter dated May 26, 1949, wherein she insisted that the village should not be taken away from her as this would be unreasonable, arbitrary and contrary to the spirit of the covenant.\n In our opinion the connection of the appellant is well founded. The Tribunal has found after going into all the documents including the document containing the words to maintain her status and dignity and the letter of the appellants husband to Mr. Buch which mentioned the word Abru that the grant of the village was by way of maintenance and merely because the appellants relations wanted a face-saving device by splitting up the total amount payable per year it would not change the nature of the transaction nor would it change the grant of maintenance made to the appellant into something else.\n The grant of the village was as much by way of maintenance as was the cash allowance called Jiwai. Maintenance must vary according to the position and status of a person. It does not only mean food and raiment. The appellant was the wife of a ruling prince and at the time the grant of the village was made, she was the Raj Mata and therefore neither the use of the words status and dignity nor the reference to ancient usage could in any way change the nature of the grant. It is true that the appellant was anxious to retain the village because that gave her the satisfaction of having agricultural land which would be a tangible asset providing her a sure source of income but, merely because she wanted the village and in the resolution of March 30, 1950, mention is made of a sum an lieu of income from the village, the nature of the grant which in this case was by way of maintenance would not change.\n The question which was referred to the High Court was whether there was material to hold that the sum of Rs. 35,807 was maintenance allowance, but the High Court reformulated this question and after going into various documents it came to a conclusion different from that of the Tribunal and it reversed the findings of the Tribunal and answered the question in a manner suggestive of an appellate rather than advisory jurisdiction. \nDECISION ??", "expert_1": {"rank1": ["In our opinion the connection of the appellant is well founded.", "Maintenance must vary according to the position and status of a person. It does not only mean food and raiment.", "It is true that the appellant was anxious to retain the village because that gave her the satisfaction of having agricultural land which would be a tangible asset providing her a sure source of income but, merely because she wanted the village and in the resolution of March 30, 1950, mention is made of a sum an lieu of income from the village, the nature of the grant which in this case was by way of maintenance would not change.\n The question which was referred to the High Court was whether there was material to hold that the sum of Rs. 35,807 was maintenance allowance, but the High Court reformulated this question and after going into various documents it came to a conclusion different from that of the Tribunal and it reversed the findings of the Tribunal and answered the question in a manner suggestive of an appellate rather than advisory jurisdiction."], "rank2": ["The village was granted to her for the purpose of maintaining the assessees status and reputation as the Raj Mata. In other words, the village was given to her for her maintenance.", "The appellant contended that the grant of the village was as much maintenance as was the cash allowance which had been made to her before, and therefore it fell within the exemption under paragraph 15(1)(i) of the Order which is as follows \n Any income falling within the following classes shall be exempt from income-tax and super-tax and shall not be included in the total income or total world income of the person receiving them \n any sum which the widow or the mother of a person who was the Ruler of an Indian State receives as her maintenance allowance out of public revenue.", "The Tribunal has found after going into all the documents including the document containing the words to maintain her status and dignity and the letter of the appellants husband to Mr. Buch which mentioned the word Abru that the grant of the village was by way of maintenance and merely because the appellants relations wanted a face-saving device by splitting up the total amount payable per year it would not change the nature of the transaction nor would it change the grant of maintenance made to the appellant into something else.\n The grant of the village was as much by way of maintenance as was the cash allowance called Jiwai."], "rank3": ["At the instance of the respondent following question was referred under section 6(1) of the Income-tax Act to the High Court Whether there was material for the Tribunal to hold that the sum of Rs. 35,807 granted to the assessee was a maintenance allowance exempt within the meaning of paragraph 15(1)(i) of the Part B States (Taxation Concessions) Order, 1950 ? which was framed by the High Court as follows Whether on the facts and circumstances of the case the sum of Rs. 35,807 granted to the assessee was a maintenance allowance exempt within the meaning of paragraph 15(1)(i) of the Part B States (Taxation Concessions) Order, 1950", "The High Court held that Rs. 35,807 and Rs. 24,193 were two distinct heads of cash annuities, the former in lieu of village Mota Dahisara and the latter by way of Jiwai, i.e., maintenance. It was of the opinion that the appellant was granted Jiwai (maintenance) of Rs. 5,000 per month by her husband as from September, 1947. It also held that the grant of the village was not by way of maintenance. After taking into consideration the several documents, that is, the grant, the letter of the appellants son dated March 23, 1949, to the Rajpramukh of Saurashtra, the letter dated November 19, 1949, of the appellants husband to Mr. Buch and the resolution of the Government dated March 30, 1950, the High Court held that under the resolution of the Saurashtra Government the appellant was given a cash annuity of Rs. 35,807 in lieu of the village and not by way of maintenance. Against this judgment, the appellant has come to this court in appeal by special leave.\n The controversy between the parties is confined to the nature of the grant of the village made to the appellant."], "rank4": ["The question that arises for decision is whether the annual cash allowance paid to the appellant in circumstances stated below falls within paragraph 15(1)(i) of the Part B States (Taxation Concessions) Order, 1950 (hereinafter referred to as the Order) and is therefore exempt from income-tax.", "On June 19, 1950, the grant of the village was liable to income-tax because in his view the appellant received that sum in exchange for two assets - right to the old maintenance allowance and the right to enjoy income from the village during her lifetime. On appeal to the Appellate Assistant Commissioner the amount of Rs. 35,807 was held to be liable to tax and not the sum of Rs. 24,193. An appeal was then taken to the Income-tax Appellate Tribunal which held that the entire sum was exempt from income-tax and super-tax, as it fell within paragraph 15(1)(i) of the Order.\n The Tribunal said In the circumstances of the case stated above, it appears to us that the sum of Rs. 60,000 is exempt from income-tax and super-tax. If you look at the substance of the transaction, it means that the assessee was granted a maintenance allowance of Rs. 60,000. The assessee wanted somehow or other to be associated with the village Mota Dahisara. To her it was a question of prestige. Again the cash annuity of Rs. 35,807 was given to the assessee in lieu of the village Mota Dahisara."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["The Tribunal has found after going into all the documents including the document containing the words to maintain her status and dignity and the letter of the appellants husband to Mr. Buch which mentioned the word Abru that the grant of the village was by way of maintenance and merely because the appellants relations wanted a face-saving device by splitting up the total amount payable per year it would not change the nature of the transaction nor would it change the grant of maintenance made to the appellant into something else.\n The grant of the village was as much by way of maintenance as was the cash allowance called Jiwai."], "rank2": ["The assessee, Her Highness Maharani Kesarkunverba Saheb, the Raj Mata of Morvi State, is the appellant and the Commissioner of Income-tax, Bombay North, is the respondent. The question that arises for decision is whether the annual cash allowance paid to the appellant in circumstances stated below falls within paragraph 15(1)(i) of the Part B States (Taxation Concessions) Order, 1950 (hereinafter referred to as the Order) and is therefore exempt from income-tax.", "The controversy between the parties is confined to the nature of the grant of the village made to the appellant.", "The appellant contended that the grant of the village was as much maintenance as was the cash allowance which had been made to her before, and therefore it fell within the exemption under paragraph 15(1)(i) of the Order which is as follows \n Any income falling within the following classes shall be exempt from income-tax and super-tax and shall not be included in the total income or total world income of the person receiving them \n any sum which the widow or the mother of a person who was the Ruler of an Indian State receives as her maintenance allowance out of public revenue."], "rank3": ["resolution was passed by the son of the appellant granting a village, Mota Dahisara, to the appellant. The relevant portion of this resolution was as follows \n From ancient times there has been a tradition in our family to grant a village to the Maharani for her enjoyment in order to maintain her status and dignity.", "On March 20, 1948, the State of Morvi became a part of the Saurashtra Union. The Government of Saurashtra refused to continue the maintenance allowance or to recognise the grant of the village Mota Dahisara to the appellant.", "On March 30, 1950, the Government of Saurashtra passed a resolution that in pursuance of the decision taken at the Jamnagar Conference the grant of the village Mota Dahisara would be resumed and in lieu thereof a cash annuity of Rs. 35,807 would be paid. The appellant was also granted Jiwai as Rajmata of Rs. 24,193 per annum and thus a sum of Rs. 60,000 per annum, i.e., Rs. 5,000 per mensum, was continued to be paid to the appellant.", "The assessee wanted somehow or other to be associated with the village Mota Dahisara. To her it was a question of prestige. Again the cash annuity of Rs. 35,807 was given to the assessee in lieu of the village Mota Dahisara. The village was granted to her for the purpose of maintaining the assessees status and reputation as the Raj Mata."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["The assessee, Her Highness Maharani Kesarkunverba Saheb, the Raj Mata of Morvi State, is the appellant and the Commissioner of Income-tax, Bombay North, is the respondent. The question that arises for decision is whether the annual cash allowance paid to the appellant in circumstances stated below falls within paragraph 15(1)(i) of the Part B States (Taxation Concessions) Order, 1950 (hereinafter referred to as the Order) and is therefore exempt from income-tax.", "The controversy between the parties is confined to the nature of the grant of the village made to the appellant", "The appellant contended that the grant of the village was as much maintenance as was the cash allowance which had been made to her before, and therefore it fell within the exemption under paragraph 15(1)(i) of the Order which is as follows \n Any income falling within the following classes shall be exempt from income-tax and super-tax and shall not be included in the total income or total world income of the person receiving them \n any sum which the widow or the mother of a person who was the Ruler of an Indian State receives as her maintenance allowance out of public revenue", "In our opinion the connection of the appellant is well founded. The Tribunal has found after going into all the documents including the document containing the words to maintain her status and dignity and the letter of the appellants husband to Mr. Buch which mentioned the word Abru that the grant of the village was by way of maintenance and merely because the appellants relations wanted a face-saving device by splitting up the total amount payable per year it would not change the nature of the transaction nor would it change the grant of maintenance made to the appellant into something else.", "The grant of the village was as much by way of maintenance as was the cash allowance called Jiwai. Maintenance must vary according to the position and status of a person", "It does not only mean food and raiment", "The appellant was the wife of a ruling prince and at the time the grant of the village was made, she was the Raj Mata and therefore neither the use of the words status and dignity nor the reference to ancient usage could in any way change the nature of the grant. It is true that the appellant was anxious to retain the village because that gave her the satisfaction of having agricultural land which would be a tangible asset providing her a sure source of income but, merely because she wanted the village and in the resolution of March 30, 1950, mention is made of a sum an lieu of income from the village, the nature of the grant which in this case was by way of maintenance would not change", "The question which was referred to the High Court was whether there was material to hold that the sum of Rs. 35,807 was maintenance allowance, but the High Court reformulated this question and after going into various documents it came to a conclusion different from that of the Tribunal and it reversed the findings of the Tribunal and answered the question in a manner suggestive of an appellate rather than advisory jurisdiction."], "rank2": ["On March 30, 1950, the Government of Saurashtra passed a resolution that in pursuance of the decision taken at the Jamnagar Conference the grant of the village Mota Dahisara would be resumed and in lieu thereof a cash annuity of Rs. 35,807 would be paid. The appellant was also granted Jiwai as Rajmata of Rs. 24,193 per annum and thus a sum of Rs. 60,000 per annum, i.e., Rs. 5,000 per mensum, was continued to be paid to the appellant", "On June 19, 1950, the grant of the village was liable to income-tax because in his view the appellant received that sum in exchange for two assets - right to the old maintenance allowance and the right to enjoy income from the village during her lifetime. On appeal to the Appellate Assistant Commissioner the amount of Rs. 35,807 was held to be liable to tax and not the sum of Rs. 24,193. An appeal was then taken to the Income-tax Appellate Tribunal which held that the entire sum was exempt from income-tax and super-tax, as it fell within paragraph 15(1)(i) of the Order", "The Tribunal said In the circumstances of the case stated above, it appears to us that the sum of Rs. 60,000 is exempt from income-tax and super-tax. If you look at the substance of the transaction, it means that the assessee was granted a maintenance allowance of Rs. 60,000", "Again the cash annuity of Rs. 35,807 was given to the assessee in lieu of the village Mota Dahisara.", "The village was granted to her for the purpose of maintaining the assessees status and reputation as the Raj Mata. In other words, the village was given to her for her maintenance", "At the instance of the respondent following question was referred under section 6(1) of the Income-tax Act to the High Court Whether there was material for the Tribunal to hold that the sum of Rs. 35,807 granted to the assessee was a maintenance allowance exempt within the meaning of paragraph 15(1)(i) of the Part B States (Taxation Concessions) Order, 1950 ? which was framed by the High Court as follows Whether on the facts and circumstances of the case the sum of Rs. 35,807 granted to the assessee was a maintenance allowance exempt within the meaning of paragraph 15(1)(i) of the Part B States (Taxation Concessions) Order, 1950 ? The High Court held that Rs. 35,807 and Rs. 24,193 were two distinct heads of cash annuities, the former in lieu of village Mota Dahisara and the latter by way of Jiwai, i.e., maintenance", "It was of the opinion that the appellant was granted Jiwai (maintenance) of Rs. 5,000 per month by her husband as from September, 1947. It also held that the grant of the village was not by way of maintenance", "After taking into consideration the several documents, that is, the grant, the letter of the appellants son dated March 23, 1949, to the Rajpramukh of Saurashtra, the letter dated November 19, 1949, of the appellants husband to Mr. Buch and the resolution of the Government dated March 30, 1950, the High Court held that under the resolution of the Saurashtra Government the appellant was given a cash annuity of Rs. 35,807 in lieu of the village and not by way of maintenance. Against this judgment, the appellant has come to this court in appeal by special leave"], "rank3": ["The appellant was receiving from the Morvi State since 1922 an allowance called Jiwai (maintenance allowance). By a resolution dated September 26, 1946, passed by His Highness Lukhdhirji of Morvi, the husband of the appellant, it was resolved that a sum of Rs. 5,000 per month be paid to the appellant and provision be made for the amount by the Treasury Office in the Budget in the same manner as before.", "On February 26, 1948, a resolution was passed by the son of the appellant granting a village, Mota Dahisara, to the appellant. The relevant portion of this resolution was as follows \n From ancient times there has been a tradition in our family to grant a village to the Maharani for her enjoyment in order to maintain her status and dignity. However, since a village remains to be granted accordingly to our revered mother, Akhand-Sau-Bhagyawana Kesar Kunverba Sahib as the Maharani, it is resolved to grant her the village of Mota Dahisara, under (our) control and having the area and boundaries as per annexures hereto. We resolve to grant the said village, for enjoyment to out Maharani, Shri Vijaykunver of Rangpur, after the lifetime of our mother Kesar Kunverba Sahib in accordance with the above tradition", "A formal grant was made on March 16, 1948,", "On March 20, 1948, the State of Morvi became a part of the Saurashtra Union. The Government of Saurashtra refused to continue the maintenance allowance or to recognise the grant of the village Mota Dahisara to the appellant", "She then made certain representations and after some conferences and some discussion a copy of the order of the Political Department was sent to the appellant in which it was stated that the village would be resumed and an amount calculated on the basis of average revenue of the village for 3 years would be paid to her as cash allowance for lifetime", "On November 19, 1949, the appellants husband wrote to the Regional Commissioner, Mr. Buch, stating that he and her son, the Ruler, had with difficulty persuaded the appellant to accept Rs. 5,000 a month and not to insist on anything more", "The following extract from the letter is rather important and is therefore quoted Most ladies are sentimental and she is no exception, and says her Abru would go if she loses her village, so we suggested that if she gets the income of the village, whatever it may be and any amount over and above that will be given to her as Jiwai, making a total of Rs. 60,000 a year with this she can say she got both the things and her prestige will not suffer"], "rank4": ["On January 21, 1947, His Highness Lukhdhirji abdicated and his son His Highness Mahendra Sinhji succeeded to the rulership. The covenant for the formation of the Kathiawar States Union was signed on January 23, 1948.", "To this the appellant took objection and her son the Maharaja of Morvi also wrote a letter to the Rajpramukh of Saurashtra stating that the village had been illegally resumed and that her Jiwai had also been stopped. To this the Rajpramukh replied on May 19, 1949, saying that it had been decided that the village would be resumed and a cash allowance in lieu thereof would be paid to the appellant for life and he advised the Maharaja of Morvi not to press the claim as put forward in his letter and also that the appellant should accept the resumption of the village and agree to take a cash allowance instead. The appellant then wrote a letter to the Rajpramukh on May 26, 1949, in which she insisted that she should continue to have the village"], "label": "ACCEPTED"}, "expert_4": {"rank1": ["The assessee, Her Highness Maharani Kesarkunverba Saheb, the Raj Mata of Morvi State, is the appellant and the Commissioner of Income-tax, Bombay North, is the respondent.", "The question that arises for decision is whether the annual cash allowance paid to the appellant in circumstances stated below falls within paragraph 15(1)(i) of the Part B States (Taxation Concessions) Order, 1950 (hereinafter referred to as the Order) and is therefore exempt from income-tax.", "The grant of the village was as much by way of maintenance as was the cash allowance called Jiwai.", "The question which was referred to the High Court was whether there was material to hold that the sum of Rs. 35,807 was maintenance allowance, but the High Court reformulated this question and after going into various documents it came to a conclusion different from that of the Tribunal and it reversed the findings of the Tribunal and answered the question in a manner suggestive of an appellate rather than advisory jurisdiction."], "rank2": ["The Tribunal has found after going into all the documents including the document containing the words to maintain her status and dignity and the letter of the appellants husband to Mr. Buch which mentioned the word Abru that the grant of the village was by way of maintenance and merely because the appellants relations wanted a face-saving device by splitting up the total amount payable per year it would not change the nature of the transaction nor would it change the grant of maintenance made to the appellant into something else.", "Maintenance must vary according to the position and status of a person. It does not only mean food and raiment.", "The appellant was the wife of a ruling prince and at the time the grant of the village was made, she was the Raj Mata and therefore neither the use of the words status and dignity nor the reference to ancient usage could in any way change the nature of the grant.", "It is true that the appellant was anxious to retain the village because that gave her the satisfaction of having agricultural land which would be a tangible asset providing her a sure source of income but, merely because she wanted the village and in the resolution of March 30, 1950, mention is made of a sum an lieu of income from the village, the nature of the grant which in this case was by way of maintenance would not change."], "rank3": ["At the instance of the respondent following question was referred under section 6(1) of the Income-tax Act to the High Court Whether there was material for the Tribunal to hold that the sum of Rs. 35,807 granted to the assessee was a maintenance allowance exempt within the meaning of paragraph 15(1)(i) of the Part B States (Taxation Concessions) Order, 1950 ?", "which was framed by the High Court as follows Whether on the facts and circumstances of the case the sum of Rs. 35,807 granted to the assessee was a maintenance allowance exempt within the meaning of paragraph 15(1)(i) of the Part B States (Taxation Concessions) Order, 1950 ?", "The High Court held that Rs. 35,807 and Rs. 24,193 were two distinct heads of cash annuities, the former in lieu of village Mota Dahisara and the latter by way of Jiwai, i.e., maintenance.", "the High Court held that under the resolution of the Saurashtra Government the appellant was given a cash annuity of Rs. 35,807 in lieu of the village and not by way of maintenance.", "Against this judgment, the appellant has come to this court in appeal by special leave.", "The controversy between the parties is confined to the nature of the grant of the village made to the appellant.", "The appellant contended that the grant of the village was as much maintenance as was the cash allowance which had been made to her before, and therefore it fell within the exemption under paragraph 15(1)(i) of the Order which is as follows \n Any income falling within the following classes shall be exempt from income-tax and super-tax and shall not be included in the total income or total world income of the person receiving them \n any sum which the widow or the mother of a person who was the Ruler of an Indian State receives as her maintenance allowance out of public revenue.", "The respondent on the other hand submitted that the words of the resolution dated February 26, 1949, and of the grant and particularly the following recitals therein From ancient times there has been a tradition in our family to grant a village to the Maha Rani for her enjoyment in order to maintain her status and dignity showed that the grant of the village was not by way of maintenance but merely to maintain a tradition of the family for keeping up the status and dignity of the appellant, and this, it was submitted, was fortified by the letter of the appellants husband dated November 19, 1949, where His Highness stated that the appellants Abru (prestige) would go if she were to lose the village.", "In our opinion the connection of the appellant is well founded."], "rank4": ["The appellant was receiving from the Morvi State since 1922 an allowance called Jiwai (maintenance allowance).", "A formal grant was made on March 16, 1948, which was as follows In order to preserve permanently your status and dignity the village of Mouje Mota Dahisarais hereby granted to you as a gift in pursuance of the immemorial tradition of this State The said village and the land etc., thereof have been granted to you in order to maintain your status and dignity as the Queen Mother as stated above. You may enjoy the same in peace exclusively.", "On your death the right of enjoyment of the entire right, together with the restrictions mentioned in the present writing, shall vest in our Akhan Saubhagvanta Maharani Shri Vijay Kunvar of Rangpur.", "The Government of Saurashtra refused to continue the maintenance allowance or to recognise the grant of the village Mota Dahisara to the appellant. She then made certain representations and after some conferences and some discussion a copy of the order of the Political Department was sent to the appellant in which it was stated that the village would be resumed and an amount calculated on the basis of average revenue of the village for 3 years would be paid to her as cash allowance for lifetime.", "On March 30, 1950, the Government of Saurashtra passed a resolution that in pursuance of the decision taken at the Jamnagar Conference the grant of the village Mota Dahisara would be resumed and in lieu thereof a cash annuity of Rs. 35,807 would be paid.", "The appellant was also granted Jiwai as Rajmata of Rs. 24,193 per annum and thus a sum of Rs. 60,000 per annum, i.e., Rs. 5,000 per mensum, was continued to be paid to the appellant.", "The Tribunal said In the circumstances of the case stated above, it appears to us that the sum of Rs. 60,000 is exempt from income-tax and super-tax."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["merely because the appellants relations wanted a face-saving device by splitting up the total amount payable per year it would not change the nature of the transaction nor would it change the grant of maintenance made to the appellant into something else.", "Maintenance must vary according to the position and status of a person. It does not only mean food and raiment."], "rank2": ["her status and dignity", "In order to preserve permanently your status and dignity the village of Mouje Mota Dahisarais hereby granted to you as a gift in pursuance of the immemorial tradition of this State The said village and the land etc., thereof have been granted to you in order to maintain your status and dignity as the Queen Mother as stated above.", "The appellant was the wife of a ruling prince and at the time the grant of the village was made, she was the Raj Mata and therefore neither the use of the words status and dignity nor the reference to ancient usage could in any way change the nature of the grant."], "rank3": ["her Abru would go if she loses her village, so we suggested that if she gets the income of the village, whatever it may be", "with this she can say she got both the things and her prestige will not suffer."], "rank4": ["From ancient times there has been a tradition in our family to grant a village to the Maharani for her enjoyment in order to maintain her status and dignity.", "merely because she wanted the village and in the resolution of March 30, 1950, mention is made of a sum an lieu of income from the village, the nature of the grant which in this case was by way of maintenance would not change."], "rank5": ["To her it was a question of prestige.", "The village was granted to her for the purpose of maintaining the assessees status and reputation as the Raj Mata. In other words, the village was given to her for her maintenance."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1960_265", "text": "The State of Kerala and the Tahsildars of Kottayam and Kanjirappally Taluks are the appellants, and C.M. Francis Co., a partnership firm, is the first respondent, and the partners of the firm are the remaining respondents. The respondents were doing business in hill produce like pepper, ginger, betelnuts etc., and were assessed to sales tax under the Travancore-Cochin General Sales Tax Act XI of 1125 (referred to as the Act), for the years 1950 to 1954. The respondents have to pay a sum of Rs. 1,01,716-4-3 as tax. In 1954, proceedings were started against them under s. 13 of the Act, which provides that if the tax is not paid as laid down in that section, the whole of the amount or such part thereof as remains due, may be recovered as if it were an arrears of land revenue. It appears that the pro- ceedings were not fruitful, and a prosecution under s. 19 of the Act was instituted against the partners in the Court of the First Class Magistrate, Ponkunnam. Respondents 2 to 5 pleaded guilty, and the Magistrate passed an order on October 18, 1955 as follows The sentence or other final order A 1 to 4 sentenced to pay a fine of Rs. 50/- each and in default to undergo S. 1. for one month each.\n A 1 to 4 admit that they failed to pay on demand by the competent authority, a sum of Rs. 1,01,716-4-3 due from them as sales tax for the years 1950 to 1954. This amount will be realised from A 1 to 4, jointly or severally, individually or collectively under the provisions of the Cr.P.C. for realisation of criminal fines, as if it were a fine imposed by this court on each accused individually and all of them together. Take steps for the realisation. Warrants under s. 386 (1) (b) of the Code of Criminal Procedure were issued to the Collector of Kottayam District for recovery of the arrears of sales tax.\n The authorities, however, started proceedings again under s. 13 of the Act read with the provisions of the Travancore- Cochin Revenue Recovery Act, 1951 (VII of 1951), to recover the amount as arrears of land revenue, and attached some properties belonging to the respondents within the jurisdiction of the second and third appellants, the Tahsildars of Kottayam and Kanjirappally Taluks. The firm thereupon filed the petition under Art. 226 of the Constitution for a writ of prohibition or other order or direction to the effect that the proceedings for realisation of the arrears under the Revenue Recovery Act be quashed.\n In the petition, the respondents urged that inasmuch as they were prosecuted under s. 19 of the Act and the Magistrate had issued warrants, the procedure for recovery under s. 13 was not available. They contended that under s. 386 of the Code of Criminal Procedure the warrant is to be deemed to be a decree and has to be executed according to civil process applicable to the execution of decrees under the Code of Civil Procedure. They, therefore, submitted that the procedure under s. 19 of the Act was no longer open, and could not be proceeded with. Section 19 of the Act, so far as it is material, reads as follows Any person who (b) fails to pay within the time allowed, any tax assessed on him under this Act, or (d)fraudulently evades the payment of any tax assessed on him shall on conviction by a Magistrate of the first class, be liable to a fine which may extend to one thousand rupees and in the case of a conviction under clause (b), (d) the Magistrate shall specify in the order the tax which the person convicted has failed or evaded to pay and the tax so specified shall be recoverable as if it were a fine under the Code of Criminal Procedure for the timebeing in force.\n In dealing with the question, the learned Judges of the High Court felt that s. 13 of the Act was in the nature of a general law, over which the special procedure prescribed by s. 19 of the Act read with s. 386 of the Code of Criminal Procedure was to prevail. They, however, thought that, since all the processes available under s. 19 of the Act were also available under s. 386 of the Code of Criminal Procedure, it was not necessary to decide what would happen if the proceedings under s. 386 came to nothing. They observed that if the question arose, they would consider it.\n The writ of prohibition was granted by the High Court. The respondents did not appear in this Court. We have heard learned counsel for the appellants, who has drawn our attention to all the relevant provisions of the law. The question which arises is whether s. 19 must be taken to prevail over s. 13 of the Act. Both the sections lay down the mode for recovery of arrears of tax, and, as has already been noticed by the High Court, lead to the application of the process for recovery by attachment and sale of movable and immovable properties, belonging to the tax-evader. It cannot be said that one proceeding is more general than the other, because there is much that is common between them, in so far as the mode of recovery is concerned. Section 19, in addition to recovery of the amount, gives the power to the Magistrate to convict and sentence the offender to fine or in default of payment of fine, to imprisonment.\nDECISION ??", "expert_1": {"rank1": ["The question which arises is whether s. 19 must be taken to prevail over s. 13 of the Act. Both the sections lay down the mode for recovery of arrears of tax, and, as has already been noticed by the High Court, lead to the application of the process for recovery by attachment and sale of movable and immovable properties, belonging to the tax-evader. It cannot be said that one proceeding is more general than the other, because there is much that is common between them, in so far as the mode of recovery is concerned."], "rank2": ["The firm thereupon filed the petition under Art. 226 of the Constitution for a writ of prohibition or other order or direction to the effect that the proceedings for realisation of the arrears under the Revenue Recovery Act be quashed.\n In the petition, the respondents urged that inasmuch as they were prosecuted under s. 19 of the Act and the Magistrate had issued warrants, the procedure for recovery under s. 13 was not available. They contended that under s. 386 of the Code of Criminal Procedure the warrant is to be deemed to be a decree and has to be executed according to civil process applicable to the execution of decrees under the Code of Civil Procedure. They, therefore, submitted that the procedure under s. 19 of the Act was no longer open, and could not be proceeded with.", "In dealing with the question, the learned Judges of the High Court felt that s. 13 of the Act was in the nature of a general law, over which the special procedure prescribed by s. 19 of the Act read with s. 386 of the Code of Criminal Procedure was to prevail. They, however, thought that, since all the processes available under s. 19 of the Act were also available under s. 386 of the Code of Criminal Procedure, it was not necessary to decide what would happen if the proceedings under s. 386 came to nothing. They observed that if the question arose, they would consider it.\n The writ of prohibition was granted by the High Court.", "Section 19, in addition to recovery of the amount, gives the power to the Magistrate to convict and sentence the offender to fine or in default of payment of fine, to imprisonment."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["The question which arises is whether s. 19 must be taken to prevail over s. 13 of the Act. Both the sections lay down the mode for recovery of arrears of tax, and, as has already been noticed by the High Court, lead to the application of the process for recovery by attachment and sale of movable and immovable properties, belonging to the tax-evader. It cannot be said that one proceeding is more general than the other, because there is much that is common between them, in so far as the mode of recovery is concerned. Section 19, in addition to recovery of the amount, gives the power to the Magistrate to convict and sentence the offender to fine or in default of payment of fine, to imprisonment."], "rank2": ["A 1 to 4 admit that they failed to pay on demand by the competent authority, a sum of Rs. 1,01,716-4-3 due from them as sales tax for the years 1950 to 1954. This amount will be realised from A 1 to 4, jointly or severally, individually or collectively under the provisions of the Cr.P.C. for realisation of criminal fines, as if it were a fine imposed by this court on each accused individually and all of them together.", "The authorities, however, started proceedings again under s. 13 of the Act read with the provisions of the Travancore- Cochin Revenue Recovery Act, 1951 (VII of 1951), to recover the amount as arrears of land revenue, and attached some properties belonging to the respondents within the jurisdiction of the second and third appellants, the Tahsildars of Kottayam and Kanjirappally Taluks. The firm thereupon filed the petition under Art. 226 of the Constitution for a writ of prohibition or other order or direction to the effect that the proceedings for realisation of the arrears under the Revenue Recovery Act be quashed.\n In the petition, the respondents urged that inasmuch as they were prosecuted under s. 19 of the Act and the Magistrate had issued warrants, the procedure for recovery under s. 13 was not available."], "rank3": ["In dealing with the question, the learned Judges of the High Court felt that s. 13 of the Act was in the nature of a general law, over which the special procedure prescribed by s. 19 of the Act read with s. 386 of the Code of Criminal Procedure was to prevail. They, however, thought that, since all the processes available under s. 19 of the Act were also available under s. 386 of the Code of Criminal Procedure, it was not necessary to decide what would happen if the proceedings under s. 386 came to nothing."], "label": "REJECTED"}, "expert_3": {"rank1": ["The question which arises is whether s. 19 must be taken to prevail over s. 13 of the Act. Both the sections lay down the mode for recovery of arrears of tax, and, as has already been noticed by the High Court, lead to the application of the process for recovery by attachment and sale of movable and immovable properties, belonging to the tax-evader", "It cannot be said that one proceeding is more general than the other, because there is much that is common between them, in so far as the mode of recovery is concerned.", "Section 19, in addition to recovery of the amount, gives the power to the Magistrate to convict and sentence the offender to fine or in default of payment of fine, to imprisonment"], "rank2": ["In 1954, proceedings were started against them under s. 13 of the Act, which provides that if the tax is not paid as laid down in that section, the whole of the amount or such part thereof as remains due, may be recovered as if it were an arrears of land revenue. It appears that the pro- ceedings were not fruitful, and a prosecution under s. 19 of the Act was instituted against the partners in the Court of the First Class Magistrate, Ponkunnam.", "Respondents 2 to 5 pleaded guilty, and the Magistrate passed an order on October 18, 1955 as follows The sentence or other final order A 1 to 4 sentenced to pay a fine of Rs. 50/- each and in default to undergo S. 1. for one month each.\n A 1 to 4 admit that they failed to pay on demand by the competent authority, a sum of Rs. 1,01,716-4-3 due from them as sales tax for the years 1950 to 1954. This amount will be realised from A 1 to 4, jointly or severally, individually or collectively under the provisions of the Cr.P.C. for realisation of criminal fines, as if it were a fine imposed by this court on each accused individually and all of them together.", "The authorities, however, started proceedings again under s. 13 of the Act read with the provisions of the Travancore- Cochin Revenue Recovery Act, 1951 (VII of 1951), to recover the amount as arrears of land revenue, and attached some properties belonging to the respondents within the jurisdiction of the second and third appellants, the Tahsildars of Kottayam and Kanjirappally Taluks. The firm thereupon filed the petition under Art. 226 of the Constitution for a writ of prohibition or other order or direction to the effect that the proceedings for realisation of the arrears under the Revenue Recovery Act be quashed", "Section 19 of the Act, so far as it is material, reads as follows Any person who (b) fails to pay within the time allowed, any tax assessed on him under this Act, or (d)fraudulently evades the payment of any tax assessed on him shall on conviction by a Magistrate of the first class, be liable to a fine which may extend to one thousand rupees and in the case of a conviction under clause (b), (d) the Magistrate shall specify in the order the tax which the person convicted has failed or evaded to pay and the tax so specified shall be recoverable as if it were a fine under the Code of Criminal Procedure for the timebeing in force.", "In dealing with the question, the learned Judges of the High Court felt that s. 13 of the Act was in the nature of a general law, over which the special procedure prescribed by s. 19 of the Act read with s. 386 of the Code of Criminal Procedure was to prevail. They, however, thought that, since all the processes available under s. 19 of the Act were also available under s. 386 of the Code of Criminal Procedure, it was not necessary to decide what would happen if the proceedings under s. 386 came to nothing. They observed that if the question arose, they would consider it.\n The writ of prohibition was granted by the High Court."], "rank3": ["The respondents were doing business in hill produce like pepper, ginger, betelnuts etc., and were assessed to sales tax under the Travancore-Cochin General Sales Tax Act XI of 1125 (referred to as the Act), for the years 1950 to 1954. The respondents have to pay a sum of Rs. 1,01,716-4-3 as tax.", "Warrants under s. 386 (1) (b) of the Code of Criminal Procedure were issued to the Collector of Kottayam District for recovery of the arrears of sales tax", "In the petition, the respondents urged that inasmuch as they were prosecuted under s. 19 of the Act and the Magistrate had issued warrants, the procedure for recovery under s. 13 was not available. They contended that under s. 386 of the Code of Criminal Procedure the warrant is to be deemed to be a decree and has to be executed according to civil process applicable to the execution of decrees under the Code of Civil Procedure. They, therefore, submitted that the procedure under s. 19 of the Act was no longer open, and could not be proceeded with."], "label": "ACCEPTED"}, "expert_4": {"rank1": ["The State of Kerala and the Tahsildars of Kottayam and Kanjirappally Taluks are the appellants, and C.M. Francis Co., a partnership firm, is the first respondent, and the partners of the firm are the remaining respondents."], "rank2": ["The question which arises is whether s. 19 must be taken to prevail over s. 13 of the Act.", "Both the sections lay down the mode for recovery of arrears of tax, and, as has already been noticed by the High Court, lead to the application of the process for recovery by attachment and sale of movable and immovable properties, belonging to the tax-evader.", "It cannot be said that one proceeding is more general than the other, because there is much that is common between them, in so far as the mode of recovery is concerned.", "Section 19, in addition to recovery of the amount, gives the power to the Magistrate to convict and sentence the offender to fine or in default of payment of fine, to imprisonment."], "rank3": ["The respondents were doing business in hill produce like pepper, ginger, betelnuts etc., and were assessed to sales tax under the Travancore-Cochin General Sales Tax Act XI of 1125 (referred to as the Act), for the years 1950 to 1954.", "The respondents have to pay a sum of Rs. 1,01,716-4-3 as tax.", "In 1954, proceedings were started against them under s. 13 of the Act, which provides that if the tax is not paid as laid down in that section, the whole of the amount or such part thereof as remains due, may be recovered as if it were an arrears of land revenue.", "In dealing with the question, the learned Judges of the High Court felt that s. 13 of the Act was in the nature of a general law, over which the special procedure prescribed by s. 19 of the Act read with s. 386 of the Code of Criminal Procedure was to prevail.", "The writ of prohibition was granted by the High Court."], "rank4": ["It appears that the pro- ceedings were not fruitful, and a prosecution under s. 19 of the Act was instituted against the partners in the Court of the First Class Magistrate, Ponkunnam.", "Respondents 2 to 5 pleaded guilty, and the Magistrate passed an order on October 18, 1955 as follows The sentence or other final order A 1 to 4 sentenced to pay a fine of Rs. 50/- each and in default to undergo S. 1. for one month each.", "A 1 to 4 admit that they failed to pay on demand by the competent authority, a sum of Rs. 1,01,716-4-3 due from them as sales tax for the years 1950 to 1954. This amount will be realised from A 1 to 4, jointly or severally, individually or collectively under the provisions of the Cr.P.C. for realisation of criminal fines, as if it were a fine imposed by this court on each accused individually and all of them together.", "The authorities, however, started proceedings again under s. 13 of the Act read with the provisions of the Travancore- Cochin Revenue Recovery Act, 1951 (VII of 1951), to recover the amount as arrears of land revenue, and attached some properties belonging to the respondents within the jurisdiction of the second and third appellants, the Tahsildars of Kottayam and Kanjirappally Taluks.", "The firm thereupon filed the petition under Art. 226 of the Constitution for a writ of prohibition or other order or direction to the effect that the proceedings for realisation of the arrears under the Revenue Recovery Act be quashed.", "They, therefore, submitted that the procedure under s. 19 of the Act was no longer open, and could not be proceeded with.", "Section 19 of the Act, so far as it is material, reads as follows Any person who (b) fails to pay within the time allowed, any tax assessed on him under this Act, or (d)fraudulently evades the payment of any tax assessed on him shall on conviction by a Magistrate of the first class, be liable to a fine which may extend to one thousand rupees and in the case of a conviction under clause (b), (d) the Magistrate shall specify in the order the tax which the person convicted has failed or evaded to pay and the tax so specified shall be recoverable as if it were a fine under the Code of Criminal Procedure for the timebeing in force."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["It cannot be said that one proceeding is more general than the other, because there is much that is common between them, in so far as the mode of recovery is concerned."], "rank2": ["Both the sections lay down the mode for recovery of arrears of tax, and, as has already been noticed by the High Court, lead to the application of the process for recovery by attachment and sale of movable and immovable properties, belonging to the tax-evader."], "rank3": ["(b) fails to pay within the time allowed, any tax assessed on him under this Act, or (d)fraudulently evades the payment of any tax assessed on him shall on conviction by a Magistrate of the first class, be liable to a fine which may extend to one thousand rupees and in the case of a conviction under clause (b), (d) the Magistrate shall specify in the order the tax which the person convicted has failed or evaded to pay and the tax so specified shall be recoverable as if it were a fine under the Code of Criminal Procedure for the timebeing in force.", "Section 19, in addition to recovery of the amount, gives the power to the Magistrate to convict and sentence the offender to fine or in default of payment of fine, to imprisonment."], "rank4": ["The respondents did not appear in this Court."], "rank5": ["In dealing with the question, the learned Judges of the High Court felt that s. 13 of the Act was in the nature of a general law, over which the special procedure prescribed by s. 19 of the Act read with s. 386 of the Code of Criminal Procedure was to prevail."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1960_327", "text": "The appellant is the U. P. Electric Supply Co. Ltd., Lucknow, (hereinafter called the company). It appears that the company used to employ Messrs. s M. Choudhary (hereinafter referred to as the contractors) as its contractors for doing certain work for it. The contractors in their turn used to employ a number of persons to carry out the work which they had taken on contract. A dispute arose between the contractors and their workmen in 1956 and an application was made on June 6, 1956, by the workmen before the conciliation board. To this application both the company as well as the contractors were parties and four matters were referred by the workmen to the conciliation board, namely, (i) non-grant of bonus for the years 1953-54 and 1954-55 (ii) nongrant of festival holidays (iii) non-fixation of minimum wages of these workmen at par with the workmen employed by the company and (iv) nonabolition of the contract system. Efforts at conciliation failed and thereupon the Government of Uttar Pradesh made a reference to the Industrial Tribunal under the U. P. Industrial Disputes Act, No. XXVIII of 1947, (hereinafter called the Act).\n In this reference only three points were referred out of the four which were before the conciliation board, namely, those relating to bonus, festival holidays and payment of wages to these workmen at par with the workmen of the company. The fourth point which was raised before the conciliation board (namely, non-abolition of the contract system) was not referred. The parties to this reference were two, namely-(i) the contractors and (ii) their workmen. The appellant was not a party to this reference. On August 13, 1956, another notification was issued by the U. P. Government under ss. 3, 5 and 8 of the Act by which the company was impleaded as a party to the dispute referred by the notification of July 31, 1956. It is remarkable, however, that the matters of dispute which were specified in the reference dated July 31, 1956, were not amended as they could have been under the proviso to s. 4 of the Act, by adding the fourth point of dispute before the conciliation board, namely, the non-abolition of the contract system. When the matter came up before the industrial court it framed a number of issues and the first and most important issue ran thus Are the workmen concerned employees of the P. Electric Supply Co. Ltd., Lucknow or of Messrs. S. M. Chaudhary, contractors ? The main objection of the company was that the dispute, if any was between the contractors and their employees and that there was no dispute between the company and its workmen. It was further objected that there was no valid or legal order of the Government referring any dispute between the company and its workmen to the tribunal and therefore the tribunal had no jurisdiction. On the merits it was urged that the workmen concerned were not the workmen of the company and there was no relationship of employer and employee between the company and these workmen and therefore the company could not be regarded as a party to the dispute between the contractors and their workmen. It is therefore clear that the main question which was considered by the tribunal was whether the workmen concerned were the workmen of the company or of the contractors. As the tribunal itself says, the crux of the whole case was whether the workmen concerned were the employees of the company .\n The tribunal went into the evidence in this connection and came to the conclusion that these workmen were in fact and in reality the employees of the company. The main contention on behalf of the company before us is that even assuming that the Government had power under s. 5 read with cl. 12 of G. O. No. U-464 (LL)XXXVI-B- 257(LL)/1954, dated July 14, 1954, to implied the company as a party, the main issue decided by the tribunal was not referred to it and the tribunal could only decide the three matters of dispute included in the order of reference of July 31, 1956. Therefore, in so far as the tribunal went beyond the, three matters of dispute specified in the reference and decided the question whether the workmen concerned were in the employ of the company or of the contractors it was acting without jurisdiction as this matter was never referred to it. We are of opinion that this contention must prevail. As we have already pointed out, there were four matters before the conciliation board including the question of non-abolition of the contract system. Further before the conciliation board not only the contractors but the company was also a party, for obviously the question of non-abolition of the contract system would necessitate the presence of the company as a party to the proceedings.\n When however the Government referred the dispute to the tribunal on July 31, it did not include the fourth item which was before the conciliation board relating to the non-abolition of the contract system among the matters in dispute. It also did not include the company as one of the parties to the dispute, for the reference-order refers only to two parties to the dispute, namely, the contractors and their workmen. On such a reference there could be no jurisdiction in the tribunal to decide the question whether these workmen were the workmen of the company or of the contractors, for such a question was not referred to the tribunal. It is true that on August 13, 1956, the company was impleaded as a party to the dispute referred by the notification of July 31 but the matters in dispute remained unmended, and the question of non-abolition of the contract system or the question whether these workmen were the employees of the company in fact and in reality was not included in the matters of dispute by amendment under the proviso to s. 4 of the Act.\nDECISION ??", "expert_1": {"rank1": ["The main contention on behalf of the company before us is that even assuming that the Government had power under s. 5 read with cl. 12 of G. O. No. U-464 (LL)XXXVI-B- 257(LL)/1954, dated July 14, 1954, to implied the company as a party, the main issue decided by the tribunal was not referred to it and the tribunal could only decide the three matters of dispute included in the order of reference of July 31, 1956.", "Therefore, in so far as the tribunal went beyond the, three matters of dispute specified in the reference and decided the question whether the workmen concerned were in the employ of the company or of the contractors it was acting without jurisdiction as this matter was never referred to it. We are of opinion that this contention must prevail."], "rank2": ["Further before the conciliation board not only the contractors but the company was also a party, for obviously the question of non-abolition of the contract system would necessitate the presence of the company as a party to the proceedings.\n When however the Government referred the dispute to the tribunal on July 31, it did not include the fourth item which was before the conciliation board relating to the non-abolition of the contract system among the matters in dispute. It also did not include the company as one of the parties to the dispute, for the reference-order refers only to two parties to the dispute, namely, the contractors and their workmen. On such a reference there could be no jurisdiction in the tribunal to decide the question whether these workmen were the workmen of the company or of the contractors, for such a question was not referred to the tribunal. It is true that on August 13, 1956, the company was impleaded as a party to the dispute referred by the notification of July 31 but the matters in dispute remained unmended, and the question of non-abolition of the contract system or the question whether these workmen were the employees of the company in fact and in reality was not included in the matters of dispute by amendment under the proviso to s. 4 of the Act."], "rank3": ["The main objection of the company was that the dispute, if any was between the contractors and their employees and that there was no dispute between the company and its workmen. It was further objected that there was no valid or legal order of the Government referring any dispute between the company and its workmen to the tribunal and therefore the tribunal had no jurisdiction. On the merits it was urged that the workmen concerned were not the workmen of the company and there was no relationship of employer and employee between the company and these workmen and therefore the company could not be regarded as a party to the dispute between the contractors and their workmen. It is therefore clear that the main question which was considered by the tribunal was whether the workmen concerned were the workmen of the company or of the contractors. As the tribunal itself says, the crux of the whole case was whether the workmen concerned were the employees of the company .\n The tribunal went into the evidence in this connection and came to the conclusion that these workmen were in fact and in reality the employees of the company."], "rank4": ["The contractors in their turn used to employ a number of persons to carry out the work which they had taken on contract.", "In this reference only three points were referred out of the four which were before the conciliation board, namely, those relating to bonus, festival holidays and payment of wages to these workmen at par with the workmen of the company. The fourth point which was raised before the conciliation board (namely, non-abolition of the contract system) was not referred.", "When the matter came up before the industrial court it framed a number of issues and the first and most important issue ran thus Are the workmen concerned employees of the P."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["As we have already pointed out, there were four matters before the conciliation board including the question of non-abolition of the contract system. Further before the conciliation board not only the contractors but the company was also a party, for obviously the question of non-abolition of the contract system would necessitate the presence of the company as a party to the proceedings.\n When however the Government referred the dispute to the tribunal on July 31, it did not include the fourth item which was before the conciliation board relating to the non-abolition of the contract system among the matters in dispute. It also did not include the company as one of the parties to the dispute, for the reference-order refers only to two parties to the dispute, namely, the contractors and their workmen. On such a reference there could be no jurisdiction in the tribunal to decide the question whether these workmen were the workmen of the company or of the contractors, for such a question was not referred to the tribunal."], "rank2": ["The main objection of the company was that the dispute, if any was between the contractors and their employees and that there was no dispute between the company and its workmen. It was further objected that there was no valid or legal order of the Government referring any dispute between the company and its workmen to the tribunal and therefore the tribunal had no jurisdiction."], "rank3": ["A dispute arose between the contractors and their workmen in 1956 and an application was made on June 6, 1956, by the workmen before the conciliation board.", "In this reference only three points were referred out of the four which were before the conciliation board, namely, those relating to bonus, festival holidays and payment of wages to these workmen at par with the workmen of the company. The fourth point which was raised before the conciliation board (namely, non-abolition of the contract system) was not referred."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["As the tribunal itself says, the crux of the whole case was whether the workmen concerned were the employees of the company .\n The tribunal went into the evidence in this connection and came to the conclusion that these workmen were in fact and in reality the employees of the company", "The main contention on behalf of the company before us is that even assuming that the Government had power under s. 5 read with cl. 12 of G. O. No. U-464 (LL)XXXVI-B- 257(LL)/1954, dated July 14, 1954, to implied the company as a party, the main issue decided by the tribunal was not referred to it and the tribunal could only decide the three matters of dispute included in the order of reference of July 31, 1956. Therefore, in so far as the tribunal went beyond the, three matters of dispute specified in the reference and decided the question whether the workmen concerned were in the employ of the company or of the contractors it was acting without jurisdiction as this matter was never referred to it.", "As we have already pointed out, there were four matters before the conciliation board including the question of non-abolition of the contract system. Further before the conciliation board not only the contractors but the company was also a party, for obviously the question of non-abolition of the contract system would necessitate the presence of the company as a party to the proceedings", "When however the Government referred the dispute to the tribunal on July 31, it did not include the fourth item which was before the conciliation board relating to the non-abolition of the contract system among the matters in dispute. It also did not include the company as one of the parties to the dispute, for the reference-order refers only to two parties to the dispute, namely, the contractors and their workmen.", "On such a reference there could be no jurisdiction in the tribunal to decide the question whether these workmen were the workmen of the company or of the contractors, for such a question was not referred to the tribunal.", "It is true that on August 13, 1956, the company was impleaded as a party to the dispute referred by the notification of July 31 but the matters in dispute remained unmended, and the question of non-abolition of the contract system or the question whether these workmen were the employees of the company in fact and in reality was not included in the matters of dispute by amendment under the proviso to s. 4 of the Act"], "rank2": ["In this reference only three points were referred out of the four which were before the conciliation board, namely, those relating to bonus, festival holidays and payment of wages to these workmen at par with the workmen of the company. The fourth point which was raised before the conciliation board (namely, non-abolition of the contract system) was not referred. The parties to this reference were two, namely-(i) the contractors and (ii) their workmen", "On August 13, 1956, another notification was issued by the U. P. Government under ss. 3, 5 and 8 of the Act by which the company was impleaded as a party to the dispute referred by the notification of July 31, 1956", "When the matter came up before the industrial court it framed a number of issues and the first and most important issue ran thus Are the workmen concerned employees of the P. Electric Supply Co. Ltd., Lucknow or of Messrs. S. M. Chaudhary, contractors ?", "the main question which was considered by the tribunal was whether the workmen concerned were the workmen of the company or of the contractors"], "rank3": ["A dispute arose between the contractors and their workmen in 1956 and an application was made on June 6, 1956, by the workmen before the conciliation board. To this application both the company as well as the contractors were parties and four matters were referred by the workmen to the conciliation board, namely, (i) non-grant of bonus for the years 1953-54 and 1954-55 (ii) nongrant of festival holidays (iii) non-fixation of minimum wages of these workmen at par with the workmen employed by the company and (iv) nonabolition of the contract system. Efforts at conciliation failed and thereupon the Government of Uttar Pradesh made a reference to the Industrial Tribunal under the U. P.", "Industrial Disputes Act"], "rank4": ["The appellant is the U. P. Electric Supply Co. Ltd., Lucknow, (hereinafter called the company). It appears that the company used to employ Messrs. s M. Choudhary (hereinafter referred to as the contractors) as its contractors for doing certain work for it.", "The contractors in their turn used to employ a number of persons to carry out the work which they had taken on contract"], "label": "ACCEPTED"}, "expert_4": {"rank1": ["The appellant is the U. P. Electric Supply Co. Ltd., Lucknow, (hereinafter called the company).", "On such a reference there could be no jurisdiction in the tribunal to decide the question whether these workmen were the workmen of the company or of the contractors, for such a question was not referred to the tribunal.", "It is true that on August 13, 1956, the company was impleaded as a party to the dispute referred by the notification of July 31 but the matters in dispute remained unmended, and the question of non-abolition of the contract system or the question whether these workmen were the employees of the company in fact and in reality was not included in the matters of dispute by amendment under the proviso to s. 4 of the Act"], "rank2": ["As we have already pointed out, there were four matters before the conciliation board including the question of non-abolition of the contract system.", "Further before the conciliation board not only the contractors but the company was also a party, for obviously the question of non-abolition of the contract system would necessitate the presence of the company as a party to the proceedings.", "When however the Government referred the dispute to the tribunal on July 31, it did not include the fourth item which was before the conciliation board relating to the non-abolition of the contract system among the matters in dispute. It also did not include the company as one of the parties to the dispute, for the reference-order refers only to two parties to the dispute, namely, the contractors and their workmen."], "rank3": ["A dispute arose between the contractors and their workmen in 1956 and an application was made on June 6, 1956, by the workmen before the conciliation board.", "To this application both the company as well as the contractors were parties and four matters were referred by the workmen to the conciliation board, namely, (i) non-grant of bonus for the years 1953-54 and 1954-55 (ii) nongrant of festival holidays (iii) non-fixation of minimum wages of these workmen at par with the workmen employed by the company and (iv) nonabolition of the contract system.", "The tribunal went into the evidence in this connection and came to the conclusion that these workmen were in fact and in reality the employees of the company.", "The main contention on behalf of the company before us is that even assuming that the Government had power under s. 5 read with cl. 12 of G. O. No.", "U-464 (LL)XXXVI-B- 257(LL)/1954, dated July 14, 1954, to implied the company as a party, the main issue decided by the tribunal was not referred to it and the tribunal could only decide the three matters of dispute included in the order of reference of July 31, 1956.", "Therefore, in so far as the tribunal went beyond the, three matters of dispute specified in the reference and decided the question whether the workmen concerned were in the employ of the company or of the contractors it was acting without jurisdiction as this matter was never referred to it.", "We are of opinion that this contention must prevail."], "rank4": ["the company used to employ Messrs. s M. Choudhary (hereinafter referred to as the contractors) as its contractors for doing certain work for it.", "The contractors in their turn used to employ a number of persons to carry out the work which they had taken on contract.", "Efforts at conciliation failed and thereupon the Government of Uttar Pradesh made a reference to the Industrial Tribunal under the U. P. Industrial Disputes Act, No.", "XXVIII of 1947, (hereinafter called the Act).", "When the matter came up before the industrial court it framed a number of issues and the first and most important issue ran thus Are the workmen concerned employees of the P. Electric Supply Co. Ltd., Lucknow or of Messrs.", "S.", "M. Chaudhary, contractors ?", "The main objection of the company was that the dispute, if any was between the contractors and their employees and that there was no dispute between the company and its workmen."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["We are of opinion that this contention must prevail.", "On such a reference there could be no jurisdiction in the tribunal to decide the question whether these workmen were the workmen of the company or of the contractors, for such a question was not referred to the tribunal."], "rank2": ["The main contention on behalf of the company before us is that even assuming that the Government had power under s. 5 read with cl. 12 of G. O. No. U-464 (LL)XXXVI-B- 257(LL)/1954, dated July 14, 1954, to implied the company as a party, the main issue decided by the tribunal was not referred to it and the tribunal could only decide the three matters of dispute included in the order of reference of July 31, 1956. Therefore, in so far as the tribunal went beyond the, three matters of dispute specified in the reference and decided the question whether the workmen concerned were in the employ of the company or of the contractors it was acting without jurisdiction as this matter was never referred to it.", "It is true that on August 13, 1956, the company was impleaded as a party to the dispute referred by the notification of July 31 but the matters in dispute remained unmended, and the question of non-abolition of the contract system or the question whether these workmen were the employees of the company in fact and in reality was not included in the matters of dispute by amendment under the proviso to s. 4 of the Act."], "rank3": ["The appellant was not a party to this reference.", "When however the Government referred the dispute to the tribunal on July 31, it did not include the fourth item which was before the conciliation board relating to the non-abolition of the contract system among the matters in dispute. It also did not include the company as one of the parties to the dispute, for the reference-order refers only to two parties to the dispute, namely, the contractors and their workmen."], "rank4": ["The fourth point which was raised before the conciliation board (namely, non-abolition of the contract system) was not referred.", "before the conciliation board not only the contractors but the company was also a party, for obviously the question of non-abolition of the contract system would necessitate the presence of the company as a party to the proceedings."], "rank5": ["On August 13, 1956, another notification was issued by the U. P. Government under ss. 3, 5 and 8 of the Act by which the company was impleaded as a party to the dispute referred by the notification of July 31, 1956."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1960_44", "text": "These appeals are directed against three judgments and orders of the Punjab High Court in three Civil Revisions Nos. 166-D, 167-D and 168-D which were brought by the appellants against three of their tenants under s. 35 of the Delhi Ajmer Rent Control Act (XXXVIII of 1952), hereinafter termed the Act. The appellants in all the three appeals are the landlords and the respondents in the three appeals are three different tenants. The appellants filed three separate suits for the eviction of their three tenants under cl. (g) of proviso to s. 13(1) of the Act on the ground that the premises were bona fide required for purposes of rebuilding. On February 27, 1953, the parties in all the three suits entered into a compromise in the following terms We have compromised the case with the plaintiff. A decree may be passed for Rs. 82/8/- on account of rent in suit and for ejectment in respect of the shop in suit in favour of the plaintiff against the defendants The defendants will vacate the shop by 4-3-53 and hand over possession to the plaintiff and the plaintiff will hand over its possession again (second time) to the defendants within six months from 4-3-53 after constructing it afresh.\n We shall pay such rent as this court will fix . Thereupon the court passed the following order and a decree followed thereon- In terms of the statements of the plaintiff., defendant and counsel for defendants a decree for Rs. 82/8/- on account of rent in suit be passed in favour of the plaintiff against the defendants. Also decree for ejectment be passed in respect of the shop in suit in favour of the plaintiff against the defendants and that the defendants do give possession of the shop in suit by 4-3-53 to the plaintiff and that the plaintiff after constructing it afresh within six months from 4-3-53 give it to the defendants. From out of the money deposited, a sum of Rs. 82/8/- be paid to the plaintiff and the balance returned to the defendants. The defendants shall be responsible to pay the rent fixed by the court . According to the decree the possession was to be given to the appellants on March 4, 1953, but it was actually delivered by the three respondents between March 7 and 15, 1953. On the completion of the building the three respondents filed three separate applications under s. 15 of the Act for their being put into possession. These applications were filed on October 7, 1953. The High Court held that the compromise did not comprise any matter which was not the subject matter of the suit that the respondents could enforce the terms of the decree in the proceedings which they took, i. e., under s. 15 of the Act that time was not of the essence of the compromise and therefore of the decree and consequently in spite of the possession of the premises having been given by the respondents after the date specified in the decree, i. e., March 4, 1953, the respondents were entitled to enforce the decree by execution and apply for possession being restored to them at any rate they could apply for restitution under the inherent powers of the Court.\n Thus the High Court was of the opinion that though s. 15(2) of the Act was not applicable to the proceedings they could be treated as Execution proceedings. Against this judgment and order the appellants have come in appeal to this court by special leave. Under s. 13 of the Act the respondents are protected against eviction excepting for the reasons given in the proviso. The appellants had filed the original suits for eviction under s. 13, proviso (g), which was as under Section 13- Notwithstanding anything to the contrary contained in any other law or any contract, no decree or order for the recovery of possession of any premises shall be passed by any court in favour of the landlord against any tenant including a tenant whose tenancy is terminated) Provided that nothing in this sub-section shall apply to any suit or other proceeding for such recovery of possession if the Court is satisfied- (g) that the premises are bona fide required by the landlord for the purpose of rebuilding the premises or for the replacement of the premises by any building or for the erection of other building and that such building or rebuilding cannot be carried out without the premises being vacated . Thus when the suits were brought the provisions of the Act were invoked. The decrees passed were on the basis that the premises were required by the landlord for rebuilding which falls under s. 13 and the decrees also incorporated the requirements of s. 15 which provides- The Court shall, when passing any decree or order on the grounds specified in clause (f) or clause (g) of the proviso to sub. section (1) of section 13 ascertain from the tenant whether he elects to be placed in occupation of the premises or part thereof from which he is to be evicted and if, the tenant so elects, shall record the fact of the election in the decree or order and specify therein the date on or before which he shall deliver possession so as to enable the landlord to commence the work of repairs or building or rebuilding, as the case may be. If the tenant delivers possession on or before the date specified in the decree or order, the landlord shall, on the completion of the work of repairs or building or rebuilding place the tenant in occupation of the premises or part thereof.\n If, after the tenant has delivered possession on or before the date specified in the decree or order the landlord fails to commence the work of repairs or building or rebuilding within one month of the specified date or fails to complete the work in a reasonable time or having completed the work, fails to place the tenant in occupation of the premises in accordance with sub-section (2), the Court may, on the application of the tenant made within one year from the specified date, order the landlord to place the tenant in occupation of the premises or part thereof on the original terms and conditions or to pay to such tenant such compensation as may be fixed by the Court. The compromise, the order and the decree provided (1) that the respondents will vacate their respective shops on March 4, 1953, and hand over possession to the appellants (2) they elected to get back possession after rebuilding,which the appellants agreed to hand back on September 4, 1953 (3) the rent after such possession was to be determined by the court. It was contended on behalf of the appellants that the above facts taken with the circumstances that the decree was passed in a suit under s. 13(1), proviso (g), show that this was an order passed and a decree made in accordance with the terms of s. 15 of the Act. It is significant that the respondents themselves made the applications to the court under s. 15 of the Act. For the respondents it was argued that the decree was not one under s. 15 of the Act because the decree was based on a compromise whereby the parties fixed the date of delivery of possession to the appellants fixed the date for completion of the rebuilding and agreed between themselves as to repossession by the respondents.\n It was submitted that although the time for giving delivery to the appellants was fixed in the compromise it was not of the essence of the contract. In our opinion the contentions raised by the appellants are well founded and the appellants must succeed. The suits for eviction were brought within the framework of the Act and were based on the provisions of s. 13, proviso (g). No eviction would have been possible excepting when conditions laid down in s. 13 were satisfied. The decrees which were passed were substantially in accordance with the provisions of s. 15 of the Act and as was contended by the appellants they were decrees under which the premises had to be vacated by the respondents on a specified day. Under that section they had the right to elect and did elect to get possession after rebuilding this possession was to be given by the landlords to the tenants within a reasonable time and six months period was fixed by Consent between the parties and the rent, if the respondents were not put into possession on the same terms as before, was to be settled by court and that is what was done under the terms of the consent decree. The applications for being put into possession which were filed by the respondents were really under s. 15(3) of the Act.\n As the respondents did not deli- ver possession to the appellants on or before the dates specified in the decree the provisions of s. 15 contained in sub-s. (3) of that Act were not available to them and they were ,not entitled to be put into possession as prayed by them. It was argued that the appellants had taken possession of the premises after the specified date without protest and had even accepted rent upto then and were therefore estopped from raising that defence.\nDECISION ??", "expert_1": {"rank1": ["In our opinion the contentions raised by the appellants are well founded and the appellants must succeed."], "rank2": ["The suits for eviction were brought within the framework of the Act and were based on the provisions of s. 13, proviso (g). No eviction would have been possible excepting when conditions laid down in s. 13 were satisfied. The decrees which were passed were substantially in accordance with the provisions of s. 15 of the Act and as was contended by the appellants they were decrees under which the premises had to be vacated by the respondents on a specified day. Under that section they had the right to elect and did elect to get possession after rebuilding this possession was to be given by the landlords to the tenants within a reasonable time and six months period was fixed by Consent between the parties and the rent, if the respondents were not put into possession on the same terms as before, was to be settled by court and that is what was done under the terms of the consent decree. The applications for being put into possession which were filed by the respondents were really under s. 15(3) of the Act.\n As the respondents did not deli- ver possession to the appellants on or before the dates specified in the decree the provisions of s. 15 contained in sub-s. (3) of that Act were not available to them and they were ,not entitled to be put into possession as prayed by them."], "rank3": ["These appeals are directed against three judgments and orders of the Punjab High Court in three Civil Revisions Nos. 166-D, 167-D and 168-D which were brought by the appellants against three of their tenants under s. 35 of the Delhi Ajmer Rent Control Act (XXXVIII of 1952), hereinafter termed the Act.", "The High Court held that the compromise did not comprise any matter which was not the subject matter of the suit that the respondents could enforce the terms of the decree in the proceedings which they took, i. e., under s. 15 of the Act that time was not of the essence of the compromise and therefore of the decree and consequently in spite of the possession of the premises having been given by the respondents after the date specified in the decree, i. e., March 4, 1953, the respondents were entitled to enforce the decree by execution and apply for possession being restored to them at any rate they could apply for restitution under the inherent powers of the Court.\n Thus the High Court was of the opinion that though s. 15(2) of the Act was not applicable to the proceedings they could be treated as Execution proceedings. Against this judgment and order the appellants have come in appeal to this court by special leave.", "The compromise, the order and the decree provided (1) that the respondents will vacate their respective shops on March 4, 1953, and hand over possession to the appellants (2) they elected to get back possession after rebuilding,which the appellants agreed to hand back on September 4, 1953 (3) the rent after such possession was to be determined by the court.", "It was contended on behalf of the appellants that the above facts taken with the circumstances that the decree was passed in a suit under s. 13(1), proviso (g), show that this was an order passed and a decree made in accordance with the terms of s. 15 of the Act."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["It was submitted that although the time for giving delivery to the appellants was fixed in the compromise it was not of the essence of the contract. In our opinion the contentions raised by the appellants are well founded and the appellants must succeed.", "As the respondents did not deli- ver possession to the appellants on or before the dates specified in the decree the provisions of s. 15 contained in sub-s. (3) of that Act were not available to them and they were ,not entitled to be put into possession as prayed by them."], "rank2": ["These appeals are directed against three judgments and orders of the Punjab High Court in three Civil Revisions Nos. 166-D, 167-D and 168-D which were brought by the appellants against three of their tenants under s. 35 of the Delhi Ajmer Rent Control Act (XXXVIII of 1952), hereinafter termed the Act. The appellants in all the three appeals are the landlords and the respondents in the three appeals are three different tenants. The appellants filed three separate suits for the eviction of their three tenants under cl. (g) of proviso to s. 13(1) of the Act on the ground that the premises were bona fide required for purposes of rebuilding.", "The decrees which were passed were substantially in accordance with the provisions of s. 15 of the Act and as was contended by the appellants they were decrees under which the premises had to be vacated by the respondents on a specified day. Under that section they had the right to elect and did elect to get possession after rebuilding this possession was to be given by the landlords to the tenants within a reasonable time and six months period was fixed by Consent between the parties and the rent, if the respondents were not put into possession on the same terms as before, was to be settled by court and that is what was done under the terms of the consent decree. The applications for being put into possession which were filed by the respondents were really under s. 15(3) of the Act."], "rank3": ["Thereupon the court passed the following order and a decree followed thereon- In terms of the statements of the plaintiff., defendant and counsel for defendants a decree for Rs. 82/8/- on account of rent in suit be passed in favour of the plaintiff against the defendants. Also decree for ejectment be passed in respect of the shop in suit in favour of the plaintiff against the defendants and that the defendants do give possession of the shop in suit by 4-3-53 to the plaintiff and that the plaintiff after constructing it afresh within six months from 4-3-53 give it to the defendants.", "The decrees passed were on the basis that the premises were required by the landlord for rebuilding which falls under s. 13 and the decrees also incorporated the requirements of s. 15 which provides- The Court shall, when passing any decree or order on the grounds specified in clause (f) or clause (g) of the proviso to sub. section (1) of section 13 ascertain from the tenant whether he elects to be placed in occupation of the premises or part thereof from which he is to be evicted and if, the tenant so elects, shall record the fact of the election in the decree or order and specify therein the date on or before which he shall deliver possession so as to enable the landlord to commence the work of repairs or building or rebuilding, as the case may be. If the tenant delivers possession on or before the date specified in the decree or order, the landlord shall, on the completion of the work of repairs or building or rebuilding place the tenant in occupation of the premises or part thereof.\n If, after the tenant has delivered possession on or before the date specified in the decree or order the landlord fails to commence the work of repairs or building or rebuilding within one month of the specified date or fails to complete the work in a reasonable time or having completed the work, fails to place the tenant in occupation of the premises in accordance with sub-section (2), the Court may, on the application of the tenant made within one year from the specified date, order the landlord to place the tenant in occupation of the premises or part thereof on the original terms and conditions or to pay to such tenant such compensation as may be fixed by the Court. The compromise, the order and the decree provided (1) that the respondents will vacate their respective shops on March 4, 1953, and hand over possession to the appellants (2) they elected to get back possession after rebuilding,which the appellants agreed to hand back on September 4, 1953 (3) the rent after such possession was to be determined by the court."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["Under s. 13 of the Act the respondents are protected against eviction excepting for the reasons given in the proviso. The appellants had filed the original suits for eviction under s. 13, proviso (g), which was as under Section 13- Notwithstanding anything to the contrary contained in any other law or any contract, no decree or order for the recovery of possession of any premises shall be passed by any court in favour of the landlord against any tenant including a tenant whose tenancy is terminated) Provided that nothing in this sub-section shall apply to any suit or other proceeding for such recovery of possession if the Court is satisfied- (g) that the premises are bona fide required by the landlord for the purpose of rebuilding the premises or for the replacement of the premises by any building or for the erection of other building and that such building or rebuilding cannot be carried out without the premises being vacated . Thus when the suits were brought the provisions of the Act were invoked. The decrees passed were on the basis that the premises were required by the landlord for rebuilding which falls under s. 13 and the decrees also incorporated the requirements of s. 15 which provides- The Court shall, when passing any decree or order on the grounds specified in clause (f) or clause (g) of the proviso to sub. section (1) of section 13 ascertain from the tenant whether he elects to be placed in occupation of the premises or part thereof from which he is to be evicted and if, the tenant so elects, shall record the fact of the election in the decree or order and specify therein the date on or before which he shall deliver possession so as to enable the landlord to commence the work of repairs or building or rebuilding, as the case may be.", "The compromise, the order and the decree provided (1) that the respondents will vacate their respective shops on March 4, 1953, and hand over possession to the appellants (2) they elected to get back possession after rebuilding,which the appellants agreed to hand back on September 4, 1953 (3) the rent after such possession was to be determined by the court", "It was contended on behalf of the appellants that the above facts taken with the circumstances that the decree was passed in a suit under s. 13(1), proviso (g), show that this was an order passed and a decree made in accordance with the terms of s. 15 of the Act. It is significant that the respondents themselves made the applications to the court under s. 15 of the Act.", "In our opinion the contentions raised by the appellants are well founded and the appellants must succeed", "The suits for eviction were brought within the framework of the Act and were based on the provisions of s. 13, proviso (g). No eviction would have been possible excepting when conditions laid down in s. 13 were satisfied. The decrees which were passed were substantially in accordance with the provisions of s. 15 of the Act and as was contended by the appellants they were decrees under which the premises had to be vacated by the respondents on a specified day. Under that section they had the right to elect and did elect to get possession after rebuilding this possession was to be given by the landlords to the tenants within a reasonable time and six months period was fixed by Consent between the parties and the rent, if the respondents were not put into possession on the same terms as before, was to be settled by court and that is what was done under the terms of the consent decree.", "The applications for being put into possession which were filed by the respondents were really under s. 15(3) of the Act", "As the respondents did not deli- ver possession to the appellants on or before the dates specified in the decree the provisions of s. 15 contained in sub-s. (3) of that Act were not available to them and they were ,not entitled to be put into possession as prayed by them"], "rank2": ["According to the decree the possession was to be given to the appellants on March 4, 1953, but it was actually delivered by the three respondents between March 7 and 15, 1953. On the completion of the building the three respondents filed three separate applications under s. 15 of the Act for their being put into possession. These applications were filed on October 7, 1953", "The High Court held that the compromise did not comprise any matter which was not the subject matter of the suit that the respondents could enforce the terms of the decree in the proceedings which they took, i. e., under s. 15 of the Act that time was not of the essence of the compromise and therefore of the decree and consequently in spite of the possession of the premises having been given by the respondents after the date specified in the decree, i. e., March 4, 1953, the respondents were entitled to enforce the decree by execution and apply for possession being restored to them at any rate they could apply for restitution under the inherent powers of the Court.\n Thus the High Court was of the opinion that though s. 15(2) of the Act was not applicable to the proceedings they could be treated as Execution proceedings", "If the tenant delivers possession on or before the date specified in the decree or order, the landlord shall, on the completion of the work of repairs or building or rebuilding place the tenant in occupation of the premises or part thereof", "If, after the tenant has delivered possession on or before the date specified in the decree or order the landlord fails to commence the work of repairs or building or rebuilding within one month of the specified date or fails to complete the work in a reasonable time or having completed the work, fails to place the tenant in occupation of the premises in accordance with sub-section (2), the Court may, on the application of the tenant made within one year from the specified date, order the landlord to place the tenant in occupation of the premises or part thereof on the original terms and conditions or to pay to such tenant such compensation as may be fixed by the Court."], "rank3": ["On February 27, 1953, the parties in all the three suits entered into a compromise in the following terms We have compromised the case with the plaintiff. A decree may be passed for Rs. 82/8/- on account of rent in suit and for ejectment in respect of the shop in suit in favour of the plaintiff against the defendants The defendants will vacate the shop by 4-3-53 and hand over possession to the plaintiff and the plaintiff will hand over its possession again (second time) to the defendants within six months from 4-3-53 after constructing it afresh.\n We shall pay such rent as this court will fix", "Thereupon the court passed the following order and a decree followed thereon- In terms of the statements of the plaintiff., defendant and counsel for defendants a decree for Rs. 82/8/- on account of rent in suit be passed in favour of the plaintiff against the defendants. Also decree for ejectment be passed in respect of the shop in suit in favour of the plaintiff against the defendants and that the defendants do give possession of the shop in suit by 4-3-53 to the plaintiff and that the plaintiff after constructing it afresh within six months from 4-3-53 give it to the defendants. From out of the money deposited, a sum of Rs. 82/8/- be paid to the plaintiff and the balance returned to the defendants", "Against this judgment and order the appellants have come in appeal to this court by special leave."], "rank4": ["These appeals are directed against three judgments and orders of the Punjab High Court in three Civil Revisions Nos. 166-D, 167-D and 168-D which were brought by the appellants against three of their tenants under s. 35 of the Delhi Ajmer Rent Control Act (XXXVIII of 1952), hereinafter termed the Act. The appellants in all the three appeals are the landlords and the respondents in the three appeals are three different tenants. The appellants filed three separate suits for the eviction of their three tenants under cl. (g) of proviso to s. 13(1) of the Act on the ground that the premises were bona fide required for purposes of rebuilding."], "label": "ACCEPTED"}, "expert_4": {"rank1": ["These appeals are directed against three judgments and orders of the Punjab High Court in three Civil Revisions Nos. 166-D, 167-D and 168-D which were brought by the appellants against three of their tenants under s. 35 of the Delhi Ajmer Rent Control Act (XXXVIII of 1952), hereinafter termed the Act.", "The appellants in all the three appeals are the landlords and the respondents in the three appeals are three different tenants."], "rank2": ["Under s. 13 of the Act the respondents are protected against eviction excepting for the reasons given in the proviso.", "The decrees passed were on the basis that the premises were required by the landlord for rebuilding which falls under s. 13 and the decrees also incorporated the requirements of s. 15 which provides- The Court shall, when passing any decree or order on the grounds specified in clause (f) or clause (g) of the proviso to sub. section (1) of section 13 ascertain from the tenant whether he elects to be placed in occupation of the premises or part thereof from which he is to be evicted and if, the tenant so elects, shall record the fact of the election in the decree or order and specify therein the date on or before which he shall deliver possession so as to enable the landlord to commence the work of repairs or building or rebuilding, as the case may be.", "The compromise, the order and the decree provided (1) that the respondents will vacate their respective shops on March 4, 1953, and hand over possession to the appellants (2) they elected to get back possession after rebuilding,which the appellants agreed to hand back on September 4, 1953 (3) the rent after such possession was to be determined by the court.", "In our opinion the contentions raised by the appellants are well founded and the appellants must succeed.", "The suits for eviction were brought within the framework of the Act and were based on the provisions of s. 13, proviso (g). No eviction would have been possible excepting when conditions laid down in s. 13 were satisfied. The decrees which were passed were substantially in accordance with the provisions of s. 15 of the Act and as was contended by the appellants they were decrees under which the premises had to be vacated by the respondents on a specified day.", "Under that section they had the right to elect and did elect to get possession after rebuilding this possession was to be given by the landlords to the tenants within a reasonable time and six months period was fixed by Consent between the parties and the rent, if the respondents were not put into possession on the same terms as before, was to be settled by court and that is what was done under the terms of the consent decree."], "rank3": ["Thereupon the court passed the following order and a decree followed thereon- In terms of the statements of the plaintiff., defendant and counsel for defendants a decree for Rs. 82/8/- on account of rent in suit be passed in favour of the plaintiff against the defendants.", "Also decree for ejectment be passed in respect of the shop in suit in favour of the plaintiff against the defendants and that the defendants do give possession of the shop in suit by 4-3-53 to the plaintiff and that the plaintiff after constructing it afresh within six months from 4-3-53 give it to the defendants.", "On the completion of the building the three respondents filed three separate applications under s. 15 of the Act for their being put into possession.", "The High Court held that the compromise did not comprise any matter which was not the subject matter of the suit that the respondents could enforce the terms of the decree in the proceedings which they took, i. e., under s. 15 of the Act that time was not of the essence of the compromise and therefore of the decree and consequently in spite of the possession of the premises having been given by the respondents after the date specified in the decree, i. e., March 4, 1953, the respondents were entitled to enforce the decree by execution and apply for possession being restored to them at any rate they could apply for restitution under the inherent powers of the Court.", "Thus the High Court was of the opinion that though s. 15(2) of the Act was not applicable to the proceedings they could be treated as Execution proceedings.", "Against this judgment and order the appellants have come in appeal to this court by special leave.", "The appellants had filed the original suits for eviction under s. 13, proviso (g), which was as under Section 13- Notwithstanding anything to the contrary contained in any other law or any contract, no decree or order for the recovery of possession of any premises shall be passed by any court in favour of the landlord against any tenant including a tenant whose tenancy is terminated) Provided that nothing in this sub-section shall apply to any suit or other proceeding for such recovery of possession if the Court is satisfied- (g) that the premises are bona fide required by the landlord for the purpose of rebuilding the premises or for the replacement of the premises by any building or for the erection of other building and that such building or rebuilding cannot be carried out without the premises being vacated .", "Thus when the suits were brought the provisions of the Act were invoked.", "If the tenant delivers possession on or before the date specified in the decree or order, the landlord shall, on the completion of the work of repairs or building or rebuilding place the tenant in occupation of the premises or part thereof.", "If, after the tenant has delivered possession on or before the date specified in the decree or order the landlord fails to commence the work of repairs or building or rebuilding within one month of the specified date or fails to complete the work in a reasonable time or having completed the work, fails to place the tenant in occupation of the premises in accordance with sub-section (2), the Court may, on the application of the tenant made within one year from the specified date, order the landlord to place the tenant in occupation of the premises or part thereof on the original terms and conditions or to pay to such tenant such compensation as may be fixed by the Court.", "The applications for being put into possession which were filed by the respondents were really under s. 15(3) of the Act.", "As the respondents did not deli- ver possession to the appellants on or before the dates specified in the decree the provisions of s. 15 contained in sub-s. (3) of that Act were not available to them and they were ,not entitled to be put into possession as prayed by them.", "It was argued that the appellants had taken possession of the premises after the specified date without protest and had even accepted rent upto then and were therefore estopped from raising that defence."], "rank4": ["The appellants filed three separate suits for the eviction of their three tenants under cl. (g) of proviso to s. 13(1) of the Act on the ground that the premises were bona fide required for purposes of rebuilding.", "On February 27, 1953, the parties in all the three suits entered into a compromise", "It was contended on behalf of the appellants that the above facts taken with the circumstances that the decree was passed in a suit under s. 13(1), proviso (g), show that this was an order passed and a decree made in accordance with the terms of s. 15 of the Act.", "For the respondents it was argued that the decree was not one under s. 15 of the Act because the decree was based on a compromise whereby the parties fixed the date of delivery of possession to the appellants fixed the date for completion of the rebuilding and agreed between themselves as to repossession by the respondents.", "It was submitted that although the time for giving delivery to the appellants was fixed in the compromise it was not of the essence of the contract."], "label": "REJECTED"}, "expert_5": {"rank1": ["According to the decree the possession was to be given to the appellants on March 4, 1953, but it was actually delivered by the three respondents between March 7 and 15, 1953.", "they were decrees under which the premises had to be vacated by the respondents on a specified day.", "As the respondents did not deli- ver possession to the appellants on or before the dates specified in the decree the provisions of s. 15 contained in sub-s. (3) of that Act were not available to them and they were ,not entitled to be put into possession as prayed by them."], "rank2": ["If the tenant delivers possession on or before the date specified in the decree or order, the landlord shall, on the completion of the work of repairs or building or rebuilding place the tenant in occupation of the premises or part thereof."], "rank3": ["The defendants will vacate the shop by 4-3-53 and hand over possession to the plaintiff", "the defendants do give possession of the shop in suit by 4-3-53 to the plaintiff", "If, after the tenant has delivered possession on or before the date specified in the decree or order the landlord fails to commence the work of repairs or building or rebuilding within one month of the specified date or fails to complete the work in a reasonable time or having completed the work, fails to place the tenant in occupation of the premises in accordance with sub-section (2), the Court may, on the application of the tenant made within one year from the specified date, order the landlord to place the tenant in occupation of the premises or part thereof on the original terms and conditions or to pay to such tenant such compensation as may be fixed by the Court.", "The decrees which were passed were substantially in accordance with the provisions of s. 15 of the Act", "The applications for being put into possession which were filed by the respondents were really under s. 15(3) of the Act."], "rank4": ["The Court shall, when passing any decree or order on the grounds specified in clause (f) or clause (g) of the proviso to sub. section (1) of section 13 ascertain from the tenant whether he elects to be placed in occupation of the premises or part thereof from which he is to be evicted and if, the tenant so elects, shall record the fact of the election in the decree or order and specify therein the date on or before which he shall deliver possession so as to enable the landlord to commence the work of repairs or building or rebuilding, as the case may be."], "rank5": ["Notwithstanding anything to the contrary contained in any other law or any contract, no decree or order for the recovery of possession of any premises shall be passed by any court in favour of the landlord against any tenant including a tenant whose tenancy is terminated) Provided that nothing in this sub-section shall apply to any suit or other proceeding for such recovery of possession if the Court is satisfied- (g) that the premises are bona fide required by the landlord for the purpose of rebuilding the premises or for the replacement of the premises by any building or for the erection of other building and that such building or rebuilding cannot be carried out without the premises being vacated ."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1960_72", "text": "The short question of law which falls to be decided in the present appeal is whether a dispute raised by the employees of a General Insurance Company against their employer for payment of bonus in any particular year can be referred for adjudication by an Industrial Tribunal under S. 10(1) of the Industrial Disputes Act, 1947 (XIV of 1947). This question arises in this way. The workmen of the Hercules Insurance Co. Ltd. are the appellants and the Insurance Company is the respondent before us. On April 11, 1957, the Central Government referred the appellants claim for bonus for the years 1954 and 1955 for adjudication to the Industrial Tribunal, Dhanbad, constituted under s. 7A of the Industrial Disputes Act, and this reference has been made under S. 10(1)(d) of the Act. Before the Tribunal the respondent urged a preliminary objection against the validity of the reference itself. Its case was that the payment of bonus by an Insurance Company is conditioned entirely by the relevant provisions of the Insurance Act, 1938 (IV of 1938), and that the said provisions did not justify the reference of a dispute in that behalf for adjudication by any Industrial Tribunal. This preliminary objection was based on the provisions of S. 31A(1) and proviso (vii) of the Insurance Act.\n It was also urged by the respondent that having regard to the limitations imposed on the General Insurance Companies by s. 40C of the Insurance Act the claim for bonus made by the appellants, could not be sustained. The Tribunal has upheld the preliminary objection thus raised by the respondent and held that the reference is invalid. Incidentally it has also considered the plea raised under s. 40C and has observed that the said plea is also well founded In the result the Tribunal refused to entertain the reference and dismissed it accordingly. It is against this order of the Tribunal that the appellants have come to this Court by special leave. It is common ground that the respondent has paid the appellants bonus equivalent to two months basic wages for each of the two years 1954 and 1955. The appellants claim two months basic wages as additional bonus for each of the two years under reference. It is their case that if the trading profits made by the respondent are ascertained from the respondents balance sheet and the Full Bench formula is applied, it would appear that the respondent has in its hands a substantial amount of available surplus from which the additional bonus claimed by them can be awarded. Since the reference has been rejected on the preliminary ground the Tribunal has naturally not considered this aspect of the problem. The preliminary objection raised by the respondent is founded on the relevant provisions of s. 31A of the Insurance Act (hereafter called the Act) and so we must now turn to the said provisions. Section 31A(1)(c) of the Act provides, inter alia, that notwithstanding anything to the contrary contained in the Indian Companies Act, 1913, or in the articles of association of the insurer, if a company, or in any contract or agreement, no insurer shall after the expiry of one year from the commencement of the Insurance (Amendment) Act, 1950, be directed or managed by, or employ as manager or officer or in any capacity, any person whose remuneration or any part thereof takes the form of commission or bonus in respect of the general insurance business of the insurer. Thus looking s. at 31A(1)(c) by itself without the proviso the position is absolutely at clear.\n The respondent cannot be directed to employ the appellants in any capacity so as to include in their remuneration a liability to pay bonus in respect of the general insurance business of the respondent. Bonus under the Industrial Disputes Act is not a part of wages, but the right to claim bonus which has been universally recognised by industrial adjudication in cases of employment falling under the said Act has now attained the status of a legal right. Bonus can be claimed as a matter of right provided of course by the application of the Full Bench formula it is shown that for the relevant year the employer has sufficient available surplus in hand. Therefore a claim for bonus made by the appellants in the present proceedings is a claim in respect of the general insurance business of the respondent, and if allowed it would add to the remuneration payable to them. In other words, bonus claimed by the appellants, if awarded, would, for the purpose of s. 31A (1)(c), be a part of their remuneration, and that is precisely what is prohibited by the said provision. There are, however, certain exceptions to this general prohibition, and it is to one of these exceptions that we must now turn. Proviso (vii) to s. 31A (1)(c) lays down that nothing in this subsection shall be deemed to prohibit- the payment of bonus in any year on a uniform basis to all salaried employees or any class of them by way of additional remuneration, such bonus, in the case of any employee, not exceeding in amount the equivalent of his salary for a period which, in the opinion of the Central Government, is reasonable having regard to the circumstances of the case. This provision which constitutes an exception to the rule prescribed by s. 31A(1)(c) allows the payment of bonus to the employees of Insurance Companies subject to the condition specified by it. Bonus intended to be paid to such employees must not exceed in amount the equivalent of their salary for a period which the Central Government regards as reasonable. The result of this provision appears to be that the Central Government has to consider the circumstances of each insurer and then decide whether any bonus should be paid by the insurer to its employees.\n If the financial position of the insurer is sufficiently satisfactory, the Central Government may decide to allow the insurer to pay bonus to its employees, and in that context the Central Government would prescribe the maximum within which the payment should be made. In no case can payment exceed the maximum prescribed by the Central Government, and in all cases the matter has to be considered by the Central Government and no other authority. Having regard to the scheme of the Act which purports to supervise and regulate the working of Insurance Companies the legislature thought that the payment of bonus by the Insurance Companies to their employees should normally be prohibited and its payment should be permitted subject to the over-riding control of the Central Government to prescribe the maximum in that behalf. If the Central Government decides that no bonus should be paid, no bonus can be paid by the insurer. If the Central Government decides that bonus should be paid but not beyond specified limit the insurer cannot exceed that limit. That, in our opinion, is the effect of proviso (vii) to s. 31A(1).\n It is, however, urged that proviso (vii) merely enables the Central Government to prescribe the maximum. It does not take away the Central Governments authority to refer an industrial dispute in respect of bonus for adjudication under s. 10 of the Industrial Disputes Act. In this connection it is urged by Mr. Mazumdar that in some cases the Central Government may take the view that the financial position of the insurer justified the payment of bonus, but the quantum may be better left to the Industrial Tribunal. In such a case the Central Government should have authority to make the reference. Similarly it is urged that the Central Government may decide that within the maximum prescribed by it, bonus should be paid by an insurer, but the insurer 1000 may not comply with the Central Governments decision and in that case the only way to make the Central Governments decision effective is to refer the matter to adjudication and enable the employees to obtain an award which can be executed. That is why the appellants contend that the enabling provision contained in proviso (vii) should not be construed to constitute a bar against the Central Governments power to act under s. 10(1) of the Industrial Disputes Act. We are not impressed by this argument. In our opinion the policy of the relevant clause of the proviso is absolutely clear. Payment of bonus by insurers was intended by the legislature to be conditioned by the provisions contained in the said clause, and we feel no doubt or difficulty in reaching the conclusion that the intervention of the Industrial Tribunals was intended to be excluded and the matter was intended to be kept within the discretion of the Central Government so far as the payment of bonus by the insurers is concerned.\n Then, as to the argument that the Government directive issued under proviso (vii) may not be obeyed by any insurer, we do not think that such an event is likely to happen but theoretically it is conceivable that an insurer may refuse to comply with the decision of the Government. In that case all we can say is that there is a lacuna left and the legislature may consider whether it is necessary to provide adequate remedy for making the Government decision binding and final. Having regard to the unqualified and absolute prohibition contained in s. 31A(1)(c) it seems to us difficult to hold that the payment of bonus to the employees of Insurance Companies is not absolutely conditioned by proviso (vii). In the absence of the said provision no bonus could have been claimed by Insurance employees, and so the effect of the said provision must be to limit the said right to the conditions prescribed by it. That is why we think that the Tribunal was right in coming to the conclusion that the reference made by the Central Government is invalid. The fact that the Central Government took the view that it could make such a reference 1001 is hardly relevant in determining the scope and effect of the relevant provisions of the Act. This question must be considered on what we regard to be the fair construction of the relevant statutory provision, and as we have just indicated the construction of the relevant provision clearly supports the view taken by the Tribunal.\n Incidentally, it may be pointed out that in its award the Tribunal has referred to several other decisions of Industrial Tribunals which have taken the same view though there are one or two decisions which have upheld the validity of the reference without duly considering the effect of s. 31A(1). In this connection we may refer to the decision of this court in The Central Bank of India v. Their Workmen (1), where a similar question has been considered. In that case the Court had to consider the effect of s. 10 of the Banking Companies Act, 1949, prior to its amendment in 1956. The said section, according to that decision, prohibited the grant of industrial bonus to bank employees inasmuch as such bonus is remuneration which takes the form of a share in the profits of a banking company. In dealing with the character of bonus in relation to remuneration specified by s. 10, S. \n Das, J., who spoke for the Court, observed that bonus in the industrial sense as understood in our country does come out of the available surplus gap, wholly or in the actual wage. id it fills the wage and age in that sense, whether it be called contingent or supplementary.\nDECISION ??", "expert_1": {"rank1": ["That is why the appellants contend that the enabling provision contained in proviso (vii) should not be construed to constitute a bar against the Central Governments power to act under s. 10(1) of the Industrial Disputes Act. We are not impressed by this argument. In our opinion the policy of the relevant clause of the proviso is absolutely clear. Payment of bonus by insurers was intended by the legislature to be conditioned by the provisions contained in the said clause, and we feel no doubt or difficulty in reaching the conclusion that the intervention of the Industrial Tribunals was intended to be excluded and the matter was intended to be kept within the discretion of the Central Government so far as the payment of bonus by the insurers is concerned.\n Then, as to the argument that the Government directive issued under proviso (vii) may not be obeyed by any insurer, we do not think that such an event is likely to happen but theoretically it is conceivable that an insurer may refuse to comply with the decision of the Government. In that case all we can say is that there is a lacuna left and the legislature may consider whether it is necessary to provide adequate remedy for making the Government decision binding and final. Having regard to the unqualified and absolute prohibition contained in s. 31A(1)(c) it seems to us difficult to hold that the payment of bonus to the employees of Insurance Companies is not absolutely conditioned by proviso (vii). In the absence of the said provision no bonus could have been claimed by Insurance employees, and so the effect of the said provision must be to limit the said right to the conditions prescribed by it. That is why we think that the Tribunal was right in coming to the conclusion that the reference made by the Central Government is invalid."], "rank2": ["This provision which constitutes an exception to the rule prescribed by s. 31A(1)(c) allows the payment of bonus to the employees of Insurance Companies subject to the condition specified by it. Bonus intended to be paid to such employees must not exceed in amount the equivalent of their salary for a period which the Central Government regards as reasonable. The result of this provision appears to be that the Central Government has to consider the circumstances of each insurer and then decide whether any bonus should be paid by the insurer to its employees.\n If the financial position of the insurer is sufficiently satisfactory, the Central Government may decide to allow the insurer to pay bonus to its employees, and in that context the Central Government would prescribe the maximum within which the payment should be made. In no case can payment exceed the maximum prescribed by the Central Government, and in all cases the matter has to be considered by the Central Government and no other authority. Having regard to the scheme of the Act which purports to supervise and regulate the working of Insurance Companies the legislature thought that the payment of bonus by the Insurance Companies to their employees should normally be prohibited and its payment should be permitted subject to the over-riding control of the Central Government to prescribe the maximum in that behalf. If the Central Government decides that no bonus should be paid, no bonus can be paid by the insurer. If the Central Government decides that bonus should be paid but not beyond specified limit the insurer cannot exceed that limit. That, in our opinion, is the effect of proviso (vii) to s. 31A(1).\n It is, however, urged that proviso (vii) merely enables the Central Government to prescribe the maximum. It does not take away the Central Governments authority to refer an industrial dispute in respect of bonus for adjudication under s. 10 of the Industrial Disputes Act.", "The fact that the Central Government took the view that it could make such a reference 1001 is hardly relevant in determining the scope and effect of the relevant provisions of the Act. This question must be considered on what we regard to be the fair construction of the relevant statutory provision, and as we have just indicated the construction of the relevant provision clearly supports the view taken by the Tribunal.\n Incidentally, it may be pointed out that in its award the Tribunal has referred to several other decisions of Industrial Tribunals which have taken the same view though there are one or two decisions which have upheld the validity of the reference without duly considering the effect of s. 31A(1).", "The said section, according to that decision, prohibited the grant of industrial bonus to bank employees inasmuch as such bonus is remuneration which takes the form of a share in the profits of a banking company.", "bonus in the industrial sense as understood in our country does come out of the available surplus gap, wholly or in the actual wage. id it fills the wage and age in that sense, whether it be called contingent or supplementary."], "rank3": ["The short question of law which falls to be decided in the present appeal is whether a dispute raised by the employees of a General Insurance Company against their employer for payment of bonus in any particular year can be referred for adjudication by an Industrial Tribunal under S. 10(1) of the Industrial Disputes Act, 1947 (XIV of 1947).", "On April 11, 1957, the Central Government referred the appellants claim for bonus for the years 1954 and 1955 for adjudication to the Industrial Tribunal, Dhanbad, constituted under s. 7A of the Industrial Disputes Act, and this reference has been made under S. 10(1)(d) of the Act. Before the Tribunal the respondent urged a preliminary objection against the validity of the reference itself. Its case was that the payment of bonus by an Insurance Company is conditioned entirely by the relevant provisions of the Insurance Act, 1938 (IV of 1938), and that the said provisions did not justify the reference of a dispute in that behalf for adjudication by any Industrial Tribunal. This preliminary objection was based on the provisions of S. 31A(1) and proviso (vii) of the Insurance Act.\n It was also urged by the respondent that having regard to the limitations imposed on the General Insurance Companies by s. 40C of the Insurance Act the claim for bonus made by the appellants, could not be sustained. The Tribunal has upheld the preliminary objection thus raised by the respondent and held that the reference is invalid. Incidentally it has also considered the plea raised under s. 40C and has observed that the said plea is also well founded In the result the Tribunal refused to entertain the reference and dismissed it accordingly. It is against this order of the Tribunal that the appellants have come to this Court by special leave.", "It is common ground that the respondent has paid the appellants bonus equivalent to two months basic wages for each of the two years 1954 and 1955. The appellants claim two months basic wages as additional bonus for each of the two years under reference. It is their case that if the trading profits made by the respondent are ascertained from the respondents balance sheet and the Full Bench formula is applied, it would appear that the respondent has in its hands a substantial amount of available surplus from which the additional bonus claimed by them can be awarded. Since the reference has been rejected on the preliminary ground the Tribunal has naturally not considered this aspect of the problem.", "Thus looking s. at 31A(1)(c) by itself without the proviso the position is absolutely at clear.\n The respondent cannot be directed to employ the appellants in any capacity so as to include in their remuneration a liability to pay bonus in respect of the general insurance business of the respondent. Bonus under the Industrial Disputes Act is not a part of wages, but the right to claim bonus which has been universally recognised by industrial adjudication in cases of employment falling under the said Act has now attained the status of a legal right. Bonus can be claimed as a matter of right provided of course by the application of the Full Bench formula it is shown that for the relevant year the employer has sufficient available surplus in hand. Therefore a claim for bonus made by the appellants in the present proceedings is a claim in respect of the general insurance business of the respondent, and if allowed it would add to the remuneration payable to them. In other words, bonus claimed by the appellants, if awarded, would, for the purpose of s. 31A (1)(c), be a part of their remuneration, and that is precisely what is prohibited by the said provision."], "label": "REJECTED"}, "expert_2": {"rank1": ["Thus looking s. at 31A(1)(c) by itself without the proviso the position is absolutely at clear.\n The respondent cannot be directed to employ the appellants in any capacity so as to include in their remuneration a liability to pay bonus in respect of the general insurance business of the respondent.", "This provision which constitutes an exception to the rule prescribed by s. 31A(1)(c) allows the payment of bonus to the employees of Insurance Companies subject to the condition specified by it. Bonus intended to be paid to such employees must not exceed in amount the equivalent of their salary for a period which the Central Government regards as reasonable. The result of this provision appears to be that the Central Government has to consider the circumstances of each insurer and then decide whether any bonus should be paid by the insurer to its employees.\n If the financial position of the insurer is sufficiently satisfactory, the Central Government may decide to allow the insurer to pay bonus to its employees, and in that context the Central Government would prescribe the maximum within which the payment should be made.", "Payment of bonus by insurers was intended by the legislature to be conditioned by the provisions contained in the said clause, and we feel no doubt or difficulty in reaching the conclusion that the intervention of the Industrial Tribunals was intended to be excluded and the matter was intended to be kept within the discretion of the Central Government so far as the payment of bonus by the insurers is concerned", "That is why we think that the Tribunal was right in coming to the conclusion that the reference made by the Central Government is invalid."], "rank2": ["The short question of law which falls to be decided in the present appeal is whether a dispute raised by the employees of a General Insurance Company against their employer for payment of bonus in any particular year can be referred for adjudication by an Industrial Tribunal under S. 10(1) of the Industrial Disputes Act, 1947 (XIV of 1947).", "Its case was that the payment of bonus by an Insurance Company is conditioned entirely by the relevant provisions of the Insurance Act, 1938 (IV of 1938), and that the said provisions did not justify the reference of a dispute in that behalf for adjudication by any Industrial Tribunal.", "This preliminary objection was based on the provisions of S. 31A(1) and proviso (vii) of the Insurance Act."], "rank3": ["The appellants claim two months basic wages as additional bonus for each of the two years under reference.", "Then, as to the argument that the Government directive issued under proviso (vii) may not be obeyed by any insurer, we do not think that such an event is likely to happen but theoretically it is conceivable that an insurer may refuse to comply with the decision of the Government. In that case all we can say is that there is a lacuna left and the legislature may consider whether it is necessary to provide adequate remedy for making the Government decision binding and final.", "The Central Bank of India v. Their Workmen (1), where a similar question has been considered. In that case the Court had to consider the effect of s. 10 of the Banking Companies Act, 1949, prior to its amendment in 1956. The said section, according to that decision, prohibited the grant of industrial bonus to bank employees inasmuch as such bonus is remuneration which takes the form of a share in the profits of a banking company. In dealing with the character of bonus in relation to remuneration specified by s. 10, S. \n Das, J., who spoke for the Court, observed that bonus in the industrial sense as understood in our country does come out of the available surplus gap, wholly or in the actual wage. id it fills the wage and age in that sense, whether it be called contingent or supplementary."], "rank4": ["however, urged that proviso (vii) merely enables the Central Government to prescribe the maximum. It does not take away the Central Governments authority to refer an industrial dispute in respect of bonus for adjudication under s. 10 of the Industrial Disputes Act."], "label": "REJECTED"}, "expert_3": {"rank1": ["The short question of law which falls to be decided in the present appeal is whether a dispute raised by the employees of a General Insurance Company against their employer for payment of bonus in any particular year can be referred for adjudication by an Industrial Tribunal under S. 10(1) of the Industrial Disputes Act, 1947", "Since the reference has been rejected on the preliminary ground the Tribunal has naturally not considered this aspect of the problem", "The preliminary objection raised by the respondent is founded on the relevant provisions of s. 31A of the Insurance Act (hereafter called the Act) and so we must now turn to the said provisions", "Thus looking s. at 31A(1)(c) by itself without the proviso the position is absolutely at clear.\n The respondent cannot be directed to employ the appellants in any capacity so as to include in their remuneration a liability to pay bonus in respect of the general insurance business of the respondent.", "Bonus under the Industrial Disputes Act is not a part of wages, but the right to claim bonus which has been universally recognised by industrial adjudication in cases of employment falling under the said Act has now attained the status of a legal right. Bonus can be claimed as a matter of right provided of course by the application of the Full Bench formula it is shown that for the relevant year the employer has sufficient available surplus in hand. Therefore a claim for bonus made by the appellants in the present proceedings is a claim in respect of the general insurance business of the respondent, and if allowed it would add to the remuneration payable to them", "In other words, bonus claimed by the appellants, if awarded, would, for the purpose of s. 31A (1)(c), be a part of their remuneration, and that is precisely what is prohibited by the said provision. There are, however, certain exceptions to this general prohibition, and it is to one of these exceptions that we must now turn", "The result of this provision appears to be that the Central Government has to consider the circumstances of each insurer and then decide whether any bonus should be paid by the insurer to its employees.\n If the financial position of the insurer is sufficiently satisfactory, the Central Government may decide to allow the insurer to pay bonus to its employees, and in that context the Central Government would prescribe the maximum within which the payment should be made. In no case can payment exceed the maximum prescribed by the Central Government, and in all cases the matter has to be considered by the Central Government and no other authority. Having regard to the scheme of the Act which purports to supervise and regulate the working of Insurance Companies the legislature thought that the payment of bonus by the Insurance Companies to their employees should normally be prohibited and its payment should be permitted subject to the over-riding control of the Central Government to prescribe the maximum in that behalf. If the Central Government decides that no bonus should be paid, no bonus can be paid by the insurer", "If the Central Government decides that bonus should be paid but not beyond specified limit the insurer cannot exceed that limit. That, in our opinion, is the effect of proviso (vii) to s. 31A(1).", "In our opinion the policy of the relevant clause of the proviso is absolutely clear. Payment of bonus by insurers was intended by the legislature to be conditioned by the provisions contained in the said clause, and we feel no doubt or difficulty in reaching the conclusion that the intervention of the Industrial Tribunals was intended to be excluded and the matter was intended to be kept within the discretion of the Central Government so far as the payment of bonus by the insurers is concerned", "Then, as to the argument that the Government directive issued under proviso (vii) may not be obeyed by any insurer, we do not think that such an event is likely to happen but theoretically it is conceivable that an insurer may refuse to comply with the decision of the Government. In that case all we can say is that there is a lacuna left and the legislature may consider whether it is necessary to provide adequate remedy for making the Government decision binding and final. Having regard to the unqualified and absolute prohibition contained in s. 31A(1)(c) it seems to us difficult to hold that the payment of bonus to the employees of Insurance Companies is not absolutely conditioned by proviso (vii)", "In the absence of the said provision no bonus could have been claimed by Insurance employees, and so the effect of the said provision must be to limit the said right to the conditions prescribed by it. That is why we think that the Tribunal was right in coming to the conclusion that the reference made by the Central Government is invalid", "The fact that the Central Government took the view that it could make such a reference 1001 is hardly relevant in determining the scope and effect of the relevant provisions of the Act. This question must be considered on what we regard to be the fair construction of the relevant statutory provision, and as we have just indicated the construction of the relevant provision clearly supports the view taken by the Tribunal", "In dealing with the character of bonus in relation to remuneration specified by s. 10, S. \n Das, J., who spoke for the Court, observed that bonus in the industrial sense as understood in our country does come out of the available surplus gap, wholly or in the actual wage. id it fills the wage and age in that sense, whether it be called contingent or supplementary"], "rank2": ["Before the Tribunal the respondent urged a preliminary objection against the validity of the reference itself. Its case was that the payment of bonus by an Insurance Company is conditioned entirely by the relevant provisions of the Insurance Act, 1938 (IV of 1938), and that the said provisions did not justify the reference of a dispute in that behalf for adjudication by any Industrial Tribunal. This preliminary objection was based on the provisions of S. 31A(1) and proviso (vii) of the Insurance Act", "It was also urged by the respondent that having regard to the limitations imposed on the General Insurance Companies by s. 40C of the Insurance Act the claim for bonus made by the appellants, could not be sustained", "The appellants claim two months basic wages as additional bonus for each of the two years under reference. It is their case that if the trading profits made by the respondent are ascertained from the respondents balance sheet and the Full Bench formula is applied, it would appear that the respondent has in its hands a substantial amount of available surplus from which the additional bonus claimed by them can be awarded", "Section 31A(1)(c) of the Act provides, inter alia, that notwithstanding anything to the contrary contained in the Indian Companies Act, 1913, or in the articles of association of the insurer, if a company, or in any contract or agreement, no insurer shall after the expiry of one year from the commencement of the Insurance (Amendment) Act, 1950, be directed or managed by, or employ as manager or officer or in any capacity, any person whose remuneration or any part thereof takes the form of commission or bonus in respect of the general insurance business of the insurer", "Proviso (vii) to s. 31A (1)(c) lays down that nothing in this subsection shall be deemed to prohibit- the payment of bonus in any year on a uniform basis to all salaried employees or any class of them by way of additional remuneration, such bonus, in the case of any employee, not exceeding in amount the equivalent of his salary for a period which, in the opinion of the Central Government, is reasonable having regard to the circumstances of the case. This provision which constitutes an exception to the rule prescribed by s. 31A(1)(c) allows the payment of bonus to the employees of Insurance Companies subject to the condition specified by it. Bonus intended to be paid to such employees must not exceed in amount the equivalent of their salary for a period which the Central Government regards as reasonable"], "rank3": ["On April 11, 1957, the Central Government referred the appellants claim for bonus for the years 1954 and 1955 for adjudication to the Industrial Tribunal, Dhanbad, constituted under s. 7A of the Industrial Disputes Act, and this reference has been made under S. 10(1)(d) of the Act.", "The Tribunal has upheld the preliminary objection thus raised by the respondent and held that the reference is invalid. Incidentally it has also considered the plea raised under s. 40C and has observed that the said plea is also well founded In the result the Tribunal refused to entertain the reference and dismissed it accordingly. It is against this order of the Tribunal that the appellants have come to this Court by special leave"], "label": "REJECTED"}, "expert_4": {"rank1": ["The short question of law which falls to be decided in the present appeal is whether a dispute raised by the employees of a General Insurance Company against their employer for payment of bonus in any particular year can be referred for adjudication by an Industrial Tribunal under S. 10(1) of the Industrial Disputes Act, 1947 (XIV of 1947)."], "rank2": ["The respondent cannot be directed to employ the appellants in any capacity so as to include in their remuneration a liability to pay bonus in respect of the general insurance business of the respondent.", "In other words, bonus claimed by the appellants, if awarded, would, for the purpose of s. 31A (1)(c), be a part of their remuneration, and that is precisely what is prohibited by the said provision.", "There are, however, certain exceptions to this general prohibition, and it is to one of these exceptions that we must now turn.", "If the financial position of the insurer is sufficiently satisfactory, the Central Government may decide to allow the insurer to pay bonus to its employees, and in that context the Central Government would prescribe the maximum within which the payment should be made.", "It does not take away the Central Governments authority to refer an industrial dispute in respect of bonus for adjudication under s. 10 of the Industrial Disputes Act.", "In the absence of the said provision no bonus could have been claimed by Insurance employees, and so the effect of the said provision must be to limit the said right to the conditions prescribed by it.", "That is why we think that the Tribunal was right in coming to the conclusion that the reference made by the Central Government is invalid."], "rank3": ["The workmen of the Hercules Insurance Co. Ltd. are the appellants and the Insurance Company is the respondent before us.", "The Tribunal has upheld the preliminary objection thus raised by the respondent and held that the reference is invalid.", "Incidentally it has also considered the plea raised under s. 40C and has observed that the said plea is also well founded In the result the Tribunal refused to entertain the reference and dismissed it accordingly.", "Thus looking s. at 31A(1)(c) by itself without the proviso the position is absolutely at clear.", "Bonus under the Industrial Disputes Act is not a part of wages, but the right to claim bonus which has been universally recognised by industrial adjudication in cases of employment falling under the said Act has now attained the status of a legal right.", "Bonus can be claimed as a matter of right provided of course by the application of the Full Bench formula it is shown that for the relevant year the employer has sufficient available surplus in hand.", "Therefore a claim for bonus made by the appellants in the present proceedings is a claim in respect of the general insurance business of the respondent, and if allowed it would add to the remuneration payable to them.", "Proviso (vii) to s. 31A (1)(c) lays down that nothing in this subsection shall be deemed to prohibit- the payment of bonus in any year on a uniform basis to all salaried employees or any class of them by way of additional remuneration, such bonus, in the case of any employee, not exceeding in amount the equivalent of his salary for a period which, in the opinion of the Central Government, is reasonable having regard to the circumstances of the case.", "This provision which constitutes an exception to the rule prescribed by s. 31A(1)(c) allows the payment of bonus to the employees of Insurance Companies subject to the condition specified by it.", "Bonus intended to be paid to such employees must not exceed in amount the equivalent of their salary for a period which the Central Government regards as reasonable. The result of this provision appears to be that the Central Government has to consider the circumstances of each insurer and then decide whether any bonus should be paid by the insurer to its employees.", "In no case can payment exceed the maximum prescribed by the Central Government, and in all cases the matter has to be considered by the Central Government and no other authority.", "If the Central Government decides that no bonus should be paid, no bonus can be paid by the insurer. If the Central Government decides that bonus should be paid but not beyond specified limit the insurer cannot exceed that limit.", "That, in our opinion, is the effect of proviso (vii) to s. 31A(1).", "It is, however, urged that proviso (vii) merely enables the Central Government to prescribe the maximum.", "We are not impressed by this argument.", "In our opinion the policy of the relevant clause of the proviso is absolutely clear. Payment of bonus by insurers was intended by the legislature to be conditioned by the provisions contained in the said clause, and we feel no doubt or difficulty in reaching the conclusion that the intervention of the Industrial Tribunals was intended to be excluded and the matter was intended to be kept within the discretion of the Central Government so far as the payment of bonus by the insurers is concerned.", "Having regard to the unqualified and absolute prohibition contained in s. 31A(1)(c) it seems to us difficult to hold that the payment of bonus to the employees of Insurance Companies is not absolutely conditioned by proviso (vii).", "The fact that the Central Government took the view that it could make such a reference 1001 is hardly relevant in determining the scope and effect of the relevant provisions of the Act. This question must be considered on what we regard to be the fair construction of the relevant statutory provision, and as we have just indicated the construction of the relevant provision clearly supports the view taken by the Tribunal.", "Incidentally, it may be pointed out that in its award the Tribunal has referred to several other decisions of Industrial Tribunals which have taken the same view though there are one or two decisions which have upheld the validity of the reference without duly considering the effect of s. 31A(1).", "The Central Bank of India v. Their Workmen (1), where a similar question has been considered", "In dealing with the character of bonus in relation to remuneration specified by s. 10, S. \n Das, J., who spoke for the Court, observed that bonus in the industrial sense as understood in our country does come out of the available surplus gap, wholly or in the actual wage. id it fills the wage and age in that sense, whether it be called contingent or supplementary."], "rank4": ["Before the Tribunal the respondent urged a preliminary objection against the validity of the reference itself.", "Its case was that the payment of bonus by an Insurance Company is conditioned entirely by the relevant provisions of the Insurance Act, 1938 (IV of 1938), and that the said provisions did not justify the reference of a dispute in that behalf for adjudication by any Industrial Tribunal. This preliminary objection was based on the provisions of S. 31A(1) and proviso (vii) of the Insurance Act.", "It is against this order of the Tribunal that the appellants have come to this Court by special leave.", "It is common ground that the respondent has paid the appellants bonus equivalent to two months basic wages for each of the two years 1954 and 1955. The appellants claim two months basic wages as additional bonus for each of the two years under reference.", "It is their case that if the trading profits made by the respondent are ascertained from the respondents balance sheet and the Full Bench formula is applied, it would appear that the respondent has in its hands a substantial amount of available surplus from which the additional bonus claimed by them can be awarded.", "The preliminary objection raised by the respondent is founded on the relevant provisions of s. 31A of the Insurance Act (hereafter called the Act) and so we must now turn to the said provisions. Section 31A(1)(c) of the Act provides, inter alia, that notwithstanding anything to the contrary contained in the Indian Companies Act, 1913, or in the articles of association of the insurer, if a company, or in any contract or agreement, no insurer shall after the expiry of one year from the commencement of the Insurance (Amendment) Act, 1950, be directed or managed by, or employ as manager or officer or in any capacity, any person whose remuneration or any part thereof takes the form of commission or bonus in respect of the general insurance business of the insurer.", "In this connection it is urged by Mr. Mazumdar that in some cases the Central Government may take the view that the financial position of the insurer justified the payment of bonus, but the quantum may be better left to the Industrial Tribunal. In such a case the Central Government should have authority to make the reference.", "Similarly it is urged that the Central Government may decide that within the maximum prescribed by it, bonus should be paid by an insurer, but the insurer 1000 may not comply with the Central Governments decision and in that case the only way to make the Central Governments decision effective is to refer the matter to adjudication and enable the employees to obtain an award which can be executed.", "That is why the appellants contend that the enabling provision contained in proviso (vii) should not be construed to constitute a bar against the Central Governments power to act under s. 10(1) of the Industrial Disputes Act."], "label": "REJECTED"}, "expert_5": {"rank1": ["we feel no doubt or difficulty in reaching the conclusion that the intervention of the Industrial Tribunals was intended to be excluded and the matter was intended to be kept within the discretion of the Central Government so far as the payment of bonus by the insurers is concerned.", "Having regard to the unqualified and absolute prohibition contained in s. 31A(1)(c) it seems to us difficult to hold that the payment of bonus to the employees of Insurance Companies is not absolutely conditioned by proviso (vii). In the absence of the said provision no bonus could have been claimed by Insurance employees, and so the effect of the said provision must be to limit the said right to the conditions prescribed by it."], "rank2": ["Payment of bonus by insurers was intended by the legislature to be conditioned by the provisions contained in the said clause, and we feel no doubt or difficulty in reaching the conclusion that the intervention of the Industrial Tribunals was intended to be excluded and the matter was intended to be kept within the discretion of the Central Government so far as the payment of bonus by the insurers is concerned.", "there is a lacuna left and the legislature may consider whether it is necessary to provide adequate remedy for making the Government decision binding and final.", "This question must be considered on what we regard to be the fair construction of the relevant statutory provision, and as we have just indicated the construction of the relevant provision clearly supports the view taken by the Tribunal."], "rank3": ["Proviso (vii) to s. 31A (1)(c) lays down that nothing in this subsection shall be deemed to prohibit- the payment of bonus in any year on a uniform basis to all salaried employees or any class of them by way of additional remuneration, such bonus, in the case of any employee, not exceeding in amount the equivalent of his salary for a period which, in the opinion of the Central Government, is reasonable having regard to the circumstances of the case.", "Having regard to the scheme of the Act which purports to supervise and regulate the working of Insurance Companies the legislature thought that the payment of bonus by the Insurance Companies to their employees should normally be prohibited and its payment should be permitted subject to the over-riding control of the Central Government to prescribe the maximum in that behalf. If the Central Government decides that no bonus should be paid, no bonus can be paid by the insurer. If the Central Government decides that bonus should be paid but not beyond specified limit the insurer cannot exceed that limit."], "rank4": ["Section 31A(1)(c) of the Act provides, inter alia, that notwithstanding anything to the contrary contained in the Indian Companies Act, 1913, or in the articles of association of the insurer, if a company, or in any contract or agreement, no insurer shall after the expiry of one year from the commencement of the Insurance (Amendment) Act, 1950, be directed or managed by, or employ as manager or officer or in any capacity, any person whose remuneration or any part thereof takes the form of commission or bonus in respect of the general insurance business of the insurer.", "This provision which constitutes an exception to the rule prescribed by s. 31A(1)(c) allows the payment of bonus to the employees of Insurance Companies subject to the condition specified by it. Bonus intended to be paid to such employees must not exceed in amount the equivalent of their salary for a period which the Central Government regards as reasonable. The result of this provision appears to be that the Central Government has to consider the circumstances of each insurer and then decide whether any bonus should be paid by the insurer to its employees.\n If the financial position of the insurer is sufficiently satisfactory, the Central Government may decide to allow the insurer to pay bonus to its employees, and in that context the Central Government would prescribe the maximum within which the payment should be made.", "theoretically it is conceivable that an insurer may refuse to comply with the decision of the Government.", "The fact that the Central Government took the view that it could make such a reference 1001 is hardly relevant in determining the scope and effect of the relevant provisions of the Act."], "rank5": ["The respondent cannot be directed to employ the appellants in any capacity so as to include in their remuneration a liability to pay bonus in respect of the general insurance business of the respondent.", "Bonus can be claimed as a matter of right provided of course by the application of the Full Bench formula it is shown that for the relevant year the employer has sufficient available surplus in hand. Therefore a claim for bonus made by the appellants in the present proceedings is a claim in respect of the general insurance business of the respondent, and if allowed it would add to the remuneration payable to them. In other words, bonus claimed by the appellants, if awarded, would, for the purpose of s. 31A (1)(c), be a part of their remuneration, and that is precisely what is prohibited by the said provision.", "In no case can payment exceed the maximum prescribed by the Central Government, and in all cases the matter has to be considered by the Central Government and no other authority."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1960_87", "text": "The appellant is a Sugar Mill in District Saran in the State of Bihar. One Ramkrishna Prasad was appointed as clerk in this mill in 1933. Gradually, he worked his way up and was drawing Rs. 140 per month in October 1952. The mill created a new post of store in-charge about that time as the work in the Stores Department of the Mill had increased. On October 4, 1952, Babulal Parekh was appointed to this new post on a consolidated salary of Rs. 180 per menses. A letter of appointment was issued to him on that date and he was told that he would be on probation for one year. He was also asked by another letter to take charge immediately. He took charge on October 7, 1952.\n On November 28, 1952, an order was passed by the mill distributing the duties between the various clerks employed in the Stores Department and it was stated therein that all the staff of the Stores Department would work as subordinate to Babulal Parekh. On December 2, 1952, another order was passed by which Ramkrishna Prasad was ordered to hand over the keys of the stores to Babulal Parekh. Thereafter Ramkrishna Prasad made a representation against his being made subordinate to the stores in-charge. This representation was rejected. A dispute was then raised by the union and a reference was made by the Government of Bihar on May 9, 1956, in which the following three matters were referred to the tribunal- \n Whether the status of workman, Sri Ramkrishna Prasad, Store-keeper, and the nature of the job performed by him has been changed to his prejudice with the appointment of a separate store in charge \n Whether in view of the satisfactory performance of duties of store-keeper for the last 20 years by the above- named workman, it was at all necessary to appoint a separate store in-charge over him with higher emoluments and whether Shri Ramkrishna Prasad is entitled to be appointed to the post of store in-charge and \n Whether the claim of the above-named workman for promotion to higher grades has been overlooked by the management, and if so, what relief the workman is entitled to.\n When the matter came up before the tribunal, the main contention on behalf of the mill was that it was exclusively the management function to decide its labour strength, both qualitatively and quantitatively, and that so far as Ramkrishna Prasad was concerned his position had not been prejudicially affected by the creation of the new post of a store in-charge. The workmen on the other hand contended that Babulal Parekh was first appointed as a mere clerk under Ramkrishna Prasad to begin with and it was only on November 28, 1952, that he was promoted over the head of Ramkrishna Prasad as a store in-charge, thus superseding Ramkrishna Prasad. This stand of the workmen was controverted by the mill and its case was that Babulal Parekh was from the very beginning appointed as store in- charge. The tribunal came to the conclusion after a consideration of the evidence produced that Babulal was first appointed as an ordinary clerk in the Stores Department and was subsequently made a store incharge.\n It held that this caused reasonable heart burning to Ramkrishna Prasad. The tribunal was conscious of the principle that promotion to a higher post was the exclusive function of the management and should not ordinarily be interfered with. But in spite of that it was of the view that this was a fit case for interference but on other considerations which were not specified in the order by the tribunal it held that it would not interfere with the arrangement made by the mill it instead granted an increment of Rs. 30 per month from the date of its order to Ramkrishna Prasad to meet the ends of justice. It is this order which is being challenged before us. Two points have been urged before us on behalf of the appellant.\n In the first place it is urged that the reference was incompetent as sugar was a controlled industry and only the Central Government could have made the reference and not the State Government. Secondly, it is urged that the order of the tribunal granting an increment of Rs. 30 per month to Ramkrishna Prasad was patently perverse and that there was no change in the status or emoluments of Ramkrishna Prasad by the creation of the new post and the employment of Babulal Parekh on it. So far as the question of the competence of the reference is concerned, we are of opinion that there is no force in it, A similar question was raised before this Court in The Bijoy Cotton Mills Ltd. v. Their Workmen and Another (1) and it was held there on the language of s. 2(a)(1) of the Industrial Disputes Act, 1947, that before that provision could apply to a controlled industry there must be a notification by the Central Government for the purposes of s. 2(a)(1) of the Industrial Disputes Act. Section 2(a)(1) is in these terms- I Appropriate Government means in relation to any industrial dispute concerning any industry carried on by or under the authority of the Central Government or by a railway company or concerning any such controlled industry as maybe specified in this behalf by the Central Government, or in relation to an industrial dispute concerning a banking or an insurance company, a mine, an oil-field or a, major port, the Central Government.\n The argument is that as sugar is a controlled industry under the Schedule to the Industries (Development and Regulation) Act, No. 65 of 1951, the appropriate (1) 1960 2 S.C.R- 982, Government for the purposes of s. 2(a)(1) with reference to the sugar Industry is the Central Government. Reliance is placed on the words concerning any such controlled industry as may be specified in this behalf by the Central Government appearing in s. 2 (a)(1). It is true that sugar is a controlled industry under the Industries (Development and Regulation) Act, 1951, but that in our opinion does not conclude the matter. In order that the appropriate government under s. 2(a)(1) may be the Central Government for a controlled industry, it is necessary that such controlled industry should be specified by the Central Government for the purposes of s. 2(a)(1). This in our opinion is obvious from the words controlled industry as may be specified in this behalf by the Central Government appearing in s. 2(a)(1).\n It is not enough that an industry should be a controlled industry to attract this provision of s. 2(a)(1) it is further necessary that it should be specified in this behalf, namely for the purposes of s. 2(a)(1), as a controlled industry by the Central Government, before the Central Government can become the appropriate government within the meaning of s. 2(a)(1). We may in this connection refer to Firebricks and Potteries Ltd., etc. v. Firebricks and Potteries Ltd. Workers Union Ltd. (1) where the same view has been taken. We are of opinion that is the correct meaning of these words appearing in s. 2(a)(1), as already held in The Bijoy Cotton Mills Ltd. (2) . The objection that the reference was not competent therefore fails. We next come to the contention raised on behalf of the mill that there was in fact no prejudice whatsoever so far as the status and emoluments of Ramkrishna Prasad were concerned by the creation of the new post and the appointment of Babulal Parekh on it, and that the tribunal was not justified in any case in granting an increment of Rs. 30 per menses to Ramkrishna Prasad. The main consideration which influenced the tribunal in passing the order which it did was that in the view of the tribunal Ramkrishna Prasad was superseded by Babulal Parekh who was first appointed as a clerk under him. This view of I.L.R. 1955 MYS. 546. (2) 1960 2 S.C.R. 982. the tribunal in our opinion is patently erroneous. The appointment order dated October 4, 1952, clearly shows that Babulal Parekh was appointed as store inches from the very beginning at Rs. 180 per month. The tribunal referred to certain entries in the attendance register to hold that Babulal Parekh worked as clerk to begin with.\n It appears from the attendance register for the months of October, November and December that Babulal Parekh was marked present from October 7 to November 9. Thereafter from November 11 to the end of December he signed the attendance register. The statement of Cbaudhari, Labour Welfare Officer of the mill was that the practice in the mill was that officers used to be marked present in the attendance register while clerks used to sign it themselves. The tribunal has concluded from the fact that Babulal. Parekh signed the register in November that he must have been a clerk to begin with. The tribunal, however, completely overlooked that from October 7 to November 9, Babulal Parekh was marked present which would show that he was not a clerk.\n The tribunal also overlooked that even from November 28 to the end of December when Babulal Parekh admittedly was not a clerk but store in- charge he still signed the register, though he should have been marked present. Chaudhari was unable to explain how this happened, but he was hardly the person to explain this. It is, however, clear from this confusion that no importance can be attached to whether Babulal Parekh was marked present in the register or signed it. The real thing which determined the status of Babulal Parekh was the appointment order dated October 4, 1952, which the tribunal has accepted as correct. A question was certainly put to Chaudhari at the end of his cross-examination that he had manufactured the statements put in by him only the night before but he denied it. We cannot accept the suggestion on behalf of the respondents that the appointment order was ante-dated, for no such suggestion was made to Chaudhari and the tribunal itself does not find so. It is clear therefore that the finding of the tribunal that Babulal Parekh was appointed as clerk under Ramkrishna Prasad to begin with is patently perverse and it must be held that Babulal Parekh was from the very beginning working as store in-charge. Now in so far as Ramkrishna Prasad was concerned his work and emoluments remained the same after the appointment of Babulal Parekh. If a higher post was created in the Stores Department because of the increase in work, Ramkrishna Prasad could not claim promotion to it merely because he was working as a store-keeper before.\nDECISION ??", "expert_1": {"rank1": ["This in our opinion is obvious from the words controlled industry as may be specified in this behalf by the Central Government appearing in s. 2(a)(1).\n It is not enough that an industry should be a controlled industry to attract this provision of s. 2(a)(1) it is further necessary that it should be specified in this behalf, namely for the purposes of s. 2(a)(1), as a controlled industry by the Central Government, before the Central Government can become the appropriate government within the meaning of s. 2(a)(1).", "We are of opinion that is the correct meaning of these words appearing in s. 2(a)(1), as already held in The Bijoy Cotton Mills Ltd. (2) . The objection that the reference was not competent therefore fails. We next come to the contention raised on behalf of the mill that there was in fact no prejudice whatsoever so far as the status and emoluments of Ramkrishna Prasad were concerned by the creation of the new post and the appointment of Babulal Parekh on it, and that the tribunal was not justified in any case in granting an increment of Rs. 30 per menses to Ramkrishna Prasad.", "The main consideration which influenced the tribunal in passing the order which it did was that in the view of the tribunal Ramkrishna Prasad was superseded by Babulal Parekh who was first appointed as a clerk under him. This view of I.L.R. 1955 MYS. 546. (2) 1960 2 S.C.R. 982. the tribunal in our opinion is patently erroneous.", "The tribunal, however, completely overlooked that from October 7 to November 9, Babulal Parekh was marked present which would show that he was not a clerk.\n The tribunal also overlooked that even from November 28 to the end of December when Babulal Parekh admittedly was not a clerk but store in- charge he still signed the register, though he should have been marked present. Chaudhari was unable to explain how this happened, but he was hardly the person to explain this. It is, however, clear from this confusion that no importance can be attached to whether Babulal Parekh was marked present in the register or signed it. The real thing which determined the status of Babulal Parekh was the appointment order dated October 4, 1952, which the tribunal has accepted as correct.", "We cannot accept the suggestion on behalf of the respondents that the appointment order was ante-dated, for no such suggestion was made to Chaudhari and the tribunal itself does not find so. It is clear therefore that the finding of the tribunal that Babulal Parekh was appointed as clerk under Ramkrishna Prasad to begin with is patently perverse and it must be held that Babulal Parekh was from the very beginning working as store in-charge."], "rank2": ["In the first place it is urged that the reference was incompetent as sugar was a controlled industry and only the Central Government could have made the reference and not the State Government. Secondly, it is urged that the order of the tribunal granting an increment of Rs. 30 per month to Ramkrishna Prasad was patently perverse and that there was no change in the status or emoluments of Ramkrishna Prasad by the creation of the new post and the employment of Babulal Parekh on it. So far as the question of the competence of the reference is concerned, we are of opinion that there is no force in it, A similar question was raised before this Court in The Bijoy Cotton Mills Ltd. v. Their Workmen and Another (1) and it was held there on the language of s. 2(a)(1) of the Industrial Disputes Act, 1947, that before that provision could apply to a controlled industry there must be a notification by the Central Government for the purposes of s. 2(a)(1) of the Industrial Disputes Act.", "It is true that sugar is a controlled industry under the Industries (Development and Regulation) Act, 1951, but that in our opinion does not conclude the matter. In order that the appropriate government under s. 2(a)(1) may be the Central Government for a controlled industry, it is necessary that such controlled industry should be specified by the Central Government for the purposes of s. 2(a)(1).", "The appointment order dated October 4, 1952, clearly shows that Babulal Parekh was appointed as store inches from the very beginning at Rs. 180 per month.", "Now in so far as Ramkrishna Prasad was concerned his work and emoluments remained the same after the appointment of Babulal Parekh. If a higher post was created in the Stores Department because of the increase in work, Ramkrishna Prasad could not claim promotion to it merely because he was working as a store-keeper before."], "rank3": ["When the matter came up before the tribunal, the main contention on behalf of the mill was that it was exclusively the management function to decide its labour strength, both qualitatively and quantitatively, and that so far as Ramkrishna Prasad was concerned his position had not been prejudicially affected by the creation of the new post of a store in-charge. The workmen on the other hand contended that Babulal Parekh was first appointed as a mere clerk under Ramkrishna Prasad to begin with and it was only on November 28, 1952, that he was promoted over the head of Ramkrishna Prasad as a store in-charge, thus superseding Ramkrishna Prasad. This stand of the workmen was controverted by the mill and its case was that Babulal Parekh was from the very beginning appointed as store in- charge. The tribunal came to the conclusion after a consideration of the evidence produced that Babulal was first appointed as an ordinary clerk in the Stores Department and was subsequently made a store incharge.\n It held that this caused reasonable heart burning to Ramkrishna Prasad. The tribunal was conscious of the principle that promotion to a higher post was the exclusive function of the management and should not ordinarily be interfered with. But in spite of that it was of the view that this was a fit case for interference but on other considerations which were not specified in the order by the tribunal it held that it would not interfere with the arrangement made by the mill it instead granted an increment of Rs. 30 per month from the date of its order to Ramkrishna Prasad to meet the ends of justice. It is this order which is being challenged before us."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["The real thing which determined the status of Babulal Parekh was the appointment order dated October 4, 1952, which the tribunal has accepted as correct.", "It is clear therefore that the finding of the tribunal that Babulal Parekh was appointed as clerk under Ramkrishna Prasad to begin with is patently perverse and it must be held that Babulal Parekh was from the very beginning working as store in-charge. Now in so far as Ramkrishna Prasad was concerned his work and emoluments remained the same after the appointment of Babulal Parekh. If a higher post was created in the Stores Department because of the increase in work, Ramkrishna Prasad could not claim promotion to it merely because he was working as a store-keeper before."], "rank2": ["On November 28, 1952, an order was passed by the mill distributing the duties between the various clerks employed in the Stores Department and it was stated therein that all the staff of the Stores Department would work as subordinate to Babulal Parekh. On December 2, 1952, another order was passed by which Ramkrishna Prasad was ordered to hand over the keys of the stores to Babulal Parekh. Thereafter Ramkrishna Prasad made a representation against his being made subordinate to the stores in-charge.", "the reference was incompetent as sugar was a controlled industry and only the Central Government could have made the reference and not the State Government.", "The argument is that as sugar is a controlled industry under the Schedule to the Industries (Development and Regulation) Act, No. 65 of 1951, the appropriate (1) 1960 2 S.C.R- 982, Government for the purposes of s. 2(a)(1) with reference to the sugar Industry is the Central Government.", "It is not enough that an industry should be a controlled industry to attract this provision of s. 2(a)(1) it is further necessary that it should be specified in this behalf, namely for the purposes of s. 2(a)(1), as a controlled industry by the Central Government, before the Central Government can become the appropriate government within the meaning of s. 2(a)(1). We may in this connection refer to Firebricks and Potteries Ltd., etc. v. Firebricks and Potteries Ltd. Workers Union Ltd. (1) where the same view has been taken. We are of opinion that is the correct meaning of these words appearing in s. 2(a)(1), as already held in The Bijoy Cotton Mills Ltd. (2) .", "The main consideration which influenced the tribunal in passing the order which it did was that in the view of the tribunal Ramkrishna Prasad was superseded by Babulal Parekh who was first appointed as a clerk under him."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["So far as the question of the competence of the reference is concerned, we are of opinion that there is no force in it, A similar question was raised before this Court in The Bijoy Cotton Mills Ltd. v. Their Workmen and Another (1) and it was held there on the language of s. 2(a)(1) of the Industrial Disputes Act, 1947, that before that provision could apply to a controlled industry there must be a notification by the Central Government for the purposes of s. 2(a)(1) of the Industrial Disputes Act", "It is true that sugar is a controlled industry under the Industries (Development and Regulation) Act, 1951, but that in our opinion does not conclude the matter. In order that the appropriate government under s. 2(a)(1) may be the Central Government for a controlled industry, it is necessary that such controlled industry should be specified by the Central Government for the purposes of s. 2(a)(1). This in our opinion is obvious from the words controlled industry as may be specified in this behalf by the Central Government appearing in s. 2(a)(1).", "It is not enough that an industry should be a controlled industry to attract this provision of s. 2(a)(1) it is further necessary that it should be specified in this behalf, namely for the purposes of s. 2(a)(1), as a controlled industry by the Central Government, before the Central Government can become the appropriate government within the meaning of s. 2(a)(1)", "The objection that the reference was not competent therefore fails", "The main consideration which influenced the tribunal in passing the order which it did was that in the view of the tribunal Ramkrishna Prasad was superseded by Babulal Parekh who was first appointed as a clerk under him. This view of I.L.R. 1955 MYS. 546. (2) 1960 2 S.C.R. 982. the tribunal in our opinion is patently erroneous. The appointment order dated October 4, 1952, clearly shows that Babulal Parekh was appointed as store inches from the very beginning at Rs. 180 per month.", "The tribunal has concluded from the fact that Babulal. Parekh signed the register in November that he must have been a clerk to begin with. The tribunal, however, completely overlooked that from October 7 to November 9, Babulal Parekh was marked present which would show that he was not a clerk.\n The tribunal also overlooked that even from November 28 to the end of December when Babulal Parekh admittedly was not a clerk but store in- charge he still signed the register, though he should have been marked present", "It is, however, clear from this confusion that no importance can be attached to whether Babulal Parekh was marked present in the register or signed it. The real thing which determined the status of Babulal Parekh was the appointment order dated October 4, 1952, which the tribunal has accepted as correct", "A question was certainly put to Chaudhari at the end of his cross-examination that he had manufactured the statements put in by him only the night before but he denied it. We cannot accept the suggestion on behalf of the respondents that the appointment order was ante-dated, for no such suggestion was made to Chaudhari and the tribunal itself does not find so. It is clear therefore that the finding of the tribunal that Babulal Parekh was appointed as clerk under Ramkrishna Prasad to begin with is patently perverse and it must be held that Babulal Parekh was from the very beginning working as store in-charge", "Now in so far as Ramkrishna Prasad was concerned his work and emoluments remained the same after the appointment of Babulal Parekh. If a higher post was created in the Stores Department because of the increase in work, Ramkrishna Prasad could not claim promotion to it merely because he was working as a store-keeper before"], "rank2": ["A dispute was then raised by the union and a reference was made by the Government of Bihar on May 9, 1956, in which the following three matters were referred to the tribunal- \n Whether the status of workman, Sri Ramkrishna Prasad, Store-keeper, and the nature of the job performed by him has been changed to his prejudice with the appointment of a separate store in charge \n Whether in view of the satisfactory performance of duties of store-keeper for the last 20 years by the above- named workman, it was at all necessary to appoint a separate store in-charge over him with higher emoluments and whether Shri Ramkrishna Prasad is entitled to be appointed to the post of store in-charge and \n Whether the claim of the above-named workman for promotion to higher grades has been overlooked by the management, and if so, what relief the workman is entitled to", "The tribunal came to the conclusion after a consideration of the evidence produced that Babulal was first appointed as an ordinary clerk in the Stores Department and was subsequently made a store incharge", "It held that this caused reasonable heart burning to Ramkrishna Prasad. The tribunal was conscious of the principle that promotion to a higher post was the exclusive function of the management and should not ordinarily be interfered with. But in spite of that it was of the view that this was a fit case for interference but on other considerations which were not specified in the order by the tribunal it held that it would not interfere with the arrangement made by the mill it instead granted an increment of Rs. 30 per month from the date of its order to Ramkrishna Prasad to meet the ends of justice. It is this order which is being challenged before us.", "The argument is that as sugar is a controlled industry under the Schedule to the Industries (Development and Regulation) Act, No. 65 of 1951, the appropriate (1) 1960 2 S.C.R- 982, Government for the purposes of s. 2(a)(1) with reference to the sugar Industry is the Central Government. Reliance is placed on the words concerning any such controlled industry as may be specified in this behalf by the Central Government appearing in s. 2 (a)(1", "We next come to the contention raised on behalf of the mill that there was in fact no prejudice whatsoever so far as the status and emoluments of Ramkrishna Prasad were concerned by the creation of the new post and the appointment of Babulal Parekh on it, and that the tribunal was not justified in any case in granting an increment of Rs. 30 per menses to Ramkrishna Prasad.", "The tribunal referred to certain entries in the attendance register to hold that Babulal Parekh worked as clerk to begin with.\n It appears from the attendance register for the months of October, November and December that Babulal Parekh was marked present from October 7 to November 9. Thereafter from November 11 to the end of December he signed the attendance register. The statement of Cbaudhari, Labour Welfare Officer of the mill was that the practice in the mill was that officers used to be marked present in the attendance register while clerks used to sign it themselves"], "rank3": ["On November 28, 1952, an order was passed by the mill distributing the duties between the various clerks employed in the Stores Department and it was stated therein that all the staff of the Stores Department would work as subordinate to Babulal Parekh. On December 2, 1952, another order was passed by which Ramkrishna Prasad was ordered to hand over the keys of the stores to Babulal Parekh.", "Thereafter Ramkrishna Prasad made a representation against his being made subordinate to the stores in-charge. This representation was rejected"], "rank4": ["The appellant is a Sugar Mill in District Saran in the State of Bihar. One Ramkrishna Prasad was appointed as clerk in this mill in 1933. Gradually, he worked his way up and was drawing Rs. 140 per month in October 1952", "The mill created a new post of store in-charge about that time as the work in the Stores Department of the Mill had increased. On October 4, 1952, Babulal Parekh was appointed to this new post on a consolidated salary of Rs. 180 per menses. A letter of appointment was issued to him on that date and he was told that he would be on probation for one year. He was also asked by another letter to take charge immediately. He took charge on October 7, 1952."], "label": "ACCEPTED"}, "expert_4": {"rank1": ["The appellant is a Sugar Mill in District Saran in the State of Bihar.", "The objection that the reference was not competent therefore fails.", "It is clear therefore that the finding of the tribunal that Babulal Parekh was appointed as clerk under Ramkrishna Prasad to begin with is patently perverse and it must be held that Babulal Parekh was from the very beginning working as store in-charge.", "Now in so far as Ramkrishna Prasad was concerned his work and emoluments remained the same after the appointment of Babulal Parekh. If a higher post was created in the Stores Department because of the increase in work, Ramkrishna Prasad could not claim promotion to it merely because he was working as a store-keeper before."], "rank2": ["So far as the question of the competence of the reference is concerned, we are of opinion that there is no force in it, A similar question was raised before this Court in The Bijoy Cotton Mills Ltd. v. Their Workmen and Another (1) and it was held there on the language of s. 2(a)(1) of the Industrial Disputes Act, 1947, that before that provision could apply to a controlled industry there must be a notification by the Central Government for the purposes of s. 2(a)(1) of the Industrial Disputes Act.", "We may in this connection refer to Firebricks and Potteries Ltd., etc. v. Firebricks and Potteries Ltd. Workers Union Ltd. (1) where the same view has been taken.", "We are of opinion that is the correct meaning of these words appearing in s. 2(a)(1), as already held in The Bijoy Cotton Mills Ltd. (2)", "This view of I.L.R. 1955 MYS. 546. (2) 1960 2 S.C.R. 982. the tribunal in our opinion is patently erroneous.", "The appointment order dated October 4, 1952, clearly shows that Babulal Parekh was appointed as store inches from the very beginning at Rs. 180 per month.", "The tribunal, however, completely overlooked that from October 7 to November 9, Babulal Parekh was marked present which would show that he was not a clerk.", "The tribunal also overlooked that even from November 28 to the end of December when Babulal Parekh admittedly was not a clerk but store in- charge he still signed the register, though he should have been marked present.", "We cannot accept the suggestion on behalf of the respondents that the appointment order was ante-dated, for no such suggestion was made to Chaudhari and the tribunal itself does not find so."], "rank3": ["One Ramkrishna Prasad was appointed as clerk in this mill in 1933.", "The mill created a new post of store in-charge about that time as the work in the Stores Department of the Mill had increased. On October 4, 1952, Babulal Parekh was appointed to this new post on a consolidated salary of Rs. 180 per menses.", "The tribunal came to the conclusion after a consideration of the evidence produced that Babulal was first appointed as an ordinary clerk in the Stores Department and was subsequently made a store incharge.", "The tribunal was conscious of the principle that promotion to a higher post was the exclusive function of the management and should not ordinarily be interfered with.", "But in spite of that it was of the view that this was a fit case for interference but on other considerations which were not specified in the order by the tribunal it held that it would not interfere with the arrangement made by the mill it instead granted an increment of Rs. 30 per month from the date of its order to Ramkrishna Prasad to meet the ends of justice.", "Two points have been urged before us on behalf of the appellant.", "Section 2(a)(1) is in these terms- I Appropriate Government means in relation to any industrial dispute concerning any industry carried on by or under the authority of the Central Government or by a railway company or concerning any such controlled industry as maybe specified in this behalf by the Central Government, or in relation to an industrial dispute concerning a banking or an insurance company, a mine, an oil-field or a, major port, the Central Government.", "It is true that sugar is a controlled industry under the Industries (Development and Regulation) Act, 1951, but that in our opinion does not conclude the matter.", "In order that the appropriate government under s. 2(a)(1) may be the Central Government for a controlled industry, it is necessary that such controlled industry should be specified by the Central Government for the purposes of s. 2(a)(1). This in our opinion is obvious from the words controlled industry as may be specified in this behalf by the Central Government appearing in s. 2(a)(1).\n It is not enough that an industry should be a controlled industry to attract this provision of s. 2(a)(1) it is further necessary that it should be specified in this behalf, namely for the purposes of s. 2(a)(1), as a controlled industry by the Central", "Government, before the Central Government can become the appropriate government within the meaning of s. 2(a)(1).", "We next come to the contention raised on behalf of the mill that there was in fact no prejudice whatsoever so far as the status and emoluments of Ramkrishna Prasad were concerned by the creation of the new post and the appointment of Babulal Parekh on it, and that the tribunal was not justified in any case in granting an increment of Rs. 30 per menses to Ramkrishna Prasad.", "The main consideration which influenced the tribunal in passing the order which it did was that in the view of the tribunal Ramkrishna Prasad was superseded by Babulal Parekh who was first appointed as a clerk under him.", "It appears from the attendance register for the months of October, November and December that Babulal Parekh was marked present from October 7 to November 9. Thereafter from November 11 to the end of December he signed the attendance register. The statement of Cbaudhari, Labour Welfare Officer of the mill was that the practice in the mill was that officers used to be marked present in the attendance register while clerks used to sign it themselves.", "The tribunal has concluded from the fact that Babulal.", "Parekh signed the register in November that he must have been a clerk to begin with.", "Chaudhari was unable to explain how this happened, but he was hardly the person to explain this. It is, however, clear from this confusion that no importance can be attached to whether Babulal Parekh was marked present in the register or signed it. The real thing which determined the status of Babulal Parekh was the appointment order dated October 4, 1952, which the tribunal has accepted as correct.", "A question was certainly put to Chaudhari at the end of his cross-examination that he had manufactured the statements put in by him only the night before but he denied it."], "rank4": ["On November 28, 1952, an order was passed by the mill distributing the duties between the various clerks employed in the Stores Department and it was stated therein that all the staff of the Stores Department would work as subordinate to Babulal Parekh.", "Thereafter Ramkrishna Prasad made a representation against his being made subordinate to the stores in-charge.", "This representation was rejected.", "A dispute was then raised by the union and a reference was made by the Government of Bihar on May 9, 1956, in which the following three matters were referred to the tribunal- \n Whether the status of workman, Sri Ramkrishna Prasad, Store-keeper, and the nature of the job performed by him has been changed to his prejudice with the appointment of a separate store in charge \n Whether in view of the satisfactory performance of duties of store-keeper for the last 20 years by the above- named workman, it was at all necessary to appoint a separate store in-charge over him with higher emoluments and whether Shri Ramkrishna Prasad is entitled to be appointed to the post of store in-charge and \n Whether the claim of the above-named workman for promotion to higher grades has been overlooked by the management, and if so, what relief the workman is entitled to.", "When the matter came up before the tribunal, the main contention on behalf of the mill was that it was exclusively the management function to decide its labour strength, both qualitatively and quantitatively, and that so far as Ramkrishna Prasad was concerned his position had not been prejudicially affected by the creation of the new post of a store in-charge.", "In the first place it is urged that the reference was incompetent as sugar was a controlled industry and only the Central Government could have made the reference and not the State Government. Secondly, it is urged that the order of the tribunal granting an increment of Rs. 30 per month to Ramkrishna Prasad was patently perverse and that there was no change in the status or emoluments of Ramkrishna Prasad by the creation of the new post and the employment of Babulal Parekh on it."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["The appointment order dated October 4, 1952, clearly shows that Babulal Parekh was appointed as store inches from the very beginning at Rs. 180 per month.", "The real thing which determined the status of Babulal Parekh was the appointment order dated October 4, 1952, which the tribunal has accepted as correct.", "It is clear therefore that the finding of the tribunal that Babulal Parekh was appointed as clerk under Ramkrishna Prasad to begin with is patently perverse and it must be held that Babulal Parekh was from the very beginning working as store in-charge."], "rank2": ["He took charge on October 7, 1952.", "The tribunal, however, completely overlooked that from October 7 to November 9, Babulal Parekh was marked present which would show that he was not a clerk.", "The tribunal also overlooked that even from November 28 to the end of December when Babulal Parekh admittedly was not a clerk but store in- charge he still signed the register, though he should have been marked present."], "rank3": ["This view of I.L.R. 1955 MYS. 546. (2) 1960 2 S.C.R. 982. the tribunal in our opinion is patently erroneous.", "It is, however, clear from this confusion that no importance can be attached to whether Babulal Parekh was marked present in the register or signed it.", "If a higher post was created in the Stores Department because of the increase in work, Ramkrishna Prasad could not claim promotion to it merely because he was working as a store-keeper before."], "rank4": ["in October 1952. The mill created a new post of store in-charge about that time as the work in the Stores Department of the Mill had increased. On October 4, 1952, Babulal Parekh was appointed to this new post on a consolidated salary of Rs. 180 per menses. A letter of appointment was issued to him on that date and he was told that he would be on probation for one year. He was also asked by another letter to take charge immediately.", "Section 2(a)(1) is in these terms- I Appropriate Government means in relation to any industrial dispute concerning any industry carried on by or under the authority of the Central Government or by a railway company or concerning any such controlled industry as maybe specified in this behalf by the Central Government, or in relation to an industrial dispute concerning a banking or an insurance company, a mine, an oil-field or a, major port, the Central Government.", "In order that the appropriate government under s. 2(a)(1) may be the Central Government for a controlled industry, it is necessary that such controlled industry should be specified by the Central Government for the purposes of s. 2(a)(1). This in our opinion is obvious from the words controlled industry as may be specified in this behalf by the Central Government appearing in s. 2(a)(1).", "It is not enough that an industry should be a controlled industry to attract this provision of s. 2(a)(1) it is further necessary that it should be specified in this behalf, namely for the purposes of s. 2(a)(1), as a controlled industry by the Central Government, before the Central Government can become the appropriate government within the meaning of s. 2(a)(1).", "It appears from the attendance register for the months of October, November and December that Babulal Parekh was marked present from October 7 to November 9. Thereafter from November 11 to the end of December he signed the attendance register."], "rank5": ["So far as the question of the competence of the reference is concerned, we are of opinion that there is no force in it,"], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1961_344", "text": "Appeal by special leave from the judgment and decree dated June 23, 1959, of the Calcutta High Court in Appeal from Original Decree No. 50 of 1955. Veda Vyasa, S. K. Kapur and B.P. Maheshwari, for the appellant. L. Gosain and K. L. Mehta, for the respondent. 1961. December 20. The Judgment of the Court was delivered by SHAH, J.-Mr. Justice Bachawat of the High Court of Judicature at Calcutta decreed Suit No. 1039 of 1948 filed by one Pearey Lal-hereinafter called the plaintiff-for a decree for Rs. 1,35,000/- with interest against the New Bank of India Ltd. \nThe appeal of the Bank against the decree was dismissed by a Division Bench of the High Court. With special leave the Bank has appealed to this Court. The Bank had its registered office, originally at Lahore but after the partition of India the office was transferred to Amritsar. The plaintiff who was a resident of Lahore had accounts with several banks including the New Bank of India Ltd. In view of the impending partition, the plaintiff was anxious to transfer his moveable property outside the territory it was apprehended would be included in Pakistan, and he gave instructions for transferring his accounts with the Bank to its other branches in India. He also paid an amount of Rs. 1,25,000/- on July 18, 1947, into the Bank at Lahore with instructions to transmit the same the to Bank branch at Calcutta which it then proposed to open in the near future. An amount of Rs. 10,000/- was also paid into the Bank at Lahore on July 19, 1947, with similar instructions. In respect of these two transactions the Bank executed receipts which are set out below Received the sum of Rs. 1,25,000/- (Rs. One Lac twenty five thousand) only from Mr. Pearey Lal on account of amount to be remitted to Calcutta branch for preparing various F.D. Receipts subject to his instructions on or after the opening date when he would call upon them personally. Lahore for the New Bank of India Ltd. The 18th day of Sd. Illegible July, 1947. Manager. Received the sum of Rs. 10,000/-(Rupees ten thousand) only through Mr. Pearey Lal for transmission to our Calcutta Office for making up various F. D. Receipts at his instance when he calls upon them personally on or after the opening date of the Branch. Lahore for the New Bank of India Ltd. 19-7-47. Sd. Illegible Manager. The two amounts were transmitted by the Bank to Calcutta. A branch of the Bank was opened at Calcutta on September 24, 1947, but within a few days thereafter the Bank ceased making payments. It appears that a moratorium for a limited period was declared under an Ordinance issued by the Governer-General restraining the Bank from making payments to its depositors.\nIn December, 1947, after the expiry of the period of the moratorium the plaintiff applied to the Banks branch at Calcutta for facility to withdraw the whole amount but the Calcutta Branch raised certain technical objections against such a course. On March 24, 1948 the plaintiff commenced an action against the Bank inter alia for a decree of Rs. 1,35,000/- in the Calcutta High Court on its original side. During the pendency of the suit the High Court of East Punjab sanctioned a scheme for arrangement under ss. 153 and 153A of the Indian Companies Act, 1913, for settlement of the liability of the Bank. By the first clause of the scheme the expression deposit was to include Fixed Deposits, Banks own Cash Certificates, Current Accounts, Deposits at Call, Savings Fund Accounts Amounts lying in Sundries or in any other kind of Credit Accounts, Bank Drafts, Cash Orders, and documents of the like nature and amounts due to Bankers over and above the value of Government Securities lying with them against such depositors. It was directed by the scheme, as it finally emerged, that the depositors were to be paid 701/2 of the deposits held by them and to he allotted shares of the face value of 5 of the deposits. The plaintiff claimed by his suit that he had entrusted to the Bank at its registered office at Lahore Rs. 1,35,000/- on July 18 and 19, 1947, with instructions to transmit the same to the branch of the Bank which it proposed to open at Calcutta and to hold the amount subject to further instructions to be given by him when he would call personally at the branch at Calcutta on or after the opening date, that prior to the opening of the said Calcutta Branch the plaintiff countermanded his instructions on or about September 13, 1947 and demanded at Lahore that it be returned, but the Bank wrongfully claimed to have remitted the two sums to its Calcutta Branch and to have kept the same in a fixed deposit account in the name of the plaintiff, even though the plaintiff, had opened no such account at the Calcutta Branch and had given no instructions to put the same into any account by way of fixed deposit or otherwise. The plaintiff, accordingly, claimed that the Bank was a trustee for transmission of the amount and in the absence of any instructions given by him for opening a fixed deposit account, in respect of the amount transmitted the Bank stood qua the plaintiff in a fiduciary relation and was liable to refund the full amount. In substance, it was claimed by the plaintiff that the amount lying with the Bank at Calcutta was not a deposit within the meaning of the scheme and was not liable to any reduction. The Bank submitted that the amount of Rs. 1,35,000/- was deposited by the plaintiff at its head office at Lahore for the purpose of opening a fixed deposit account in the name of the plaintiff upon the terms that the fixed deposit would carry interest as on the respective dates of the deposits, that it was agreed that the plaintiff would be allowed to take loans upto 90 of the deposit at a rate of interest of half percent above the current fixed deposit rates and that the amount would be transmitted to the Calcutta Branch of the Bank for the purpose of crediting the same to the fixed deposit account of the plaintiff. The Bank denied the alleged instructions in September, 1947, countermanding the original arrangement and contended that the plaintiff was bound by the scheme of arrangement sanctioned by the High Court of East Punjab.\nThe Bank offered to pay the amount due to the plaintiff under the scheme of arrangement and also to allot shares of the value of 5 in accordance with the scheme. A decree on admission was passed against the Bank for Rs. 81,000/- and the suit was contested by the Bank for the balance of the claim. The trial Court held that even though the plaintiff failed to prove the instructions in the month of September, 1947, set up by him countermanding transmission, it was established on the evidence, that the plaintiff had entrusted to the Bank Rs. 1,35,000/- for transmission and the plaintiff having given no further instructions, the Bank held the amount as trustee for the plaintiff and that the plaintiffs claim was not liable to be reduced under the scheme sanctioned by the High Court of East Punjab. The Court also negatived the plea of the Bank that the amount of Rs. 1,35,000/- was deposited with the Bank at Lahore for opening a fixed deposit account subject to the conditions which the Bank set up. The finding of the trial Court were confirmed, in appeal, by a Division Bench of the High Court at Calcutta. The facts found proved, according to the findings of the trial Court and confirmed by the High Court are therefore that the plaintiff delivered an amount of Rs. 1,25,000/- on July 19, 1947, and Rs. 10,000/- on July 19, 1947, to the Bank at Lahore for transmission to Calcutta, with instructions to await the directions of the plaintiff regarding the opening of accounts for keeping the same in fixed deposit or otherwise in the Calcutta Branch of the Bank, and the plaintiff never gave instructions for opening any account, fixed deposit or otherwise, in regard to the amounts after they reached Calcutta. Delivery of the amount for transmission to the Bank created ex facie a relationship of a fiduciary character. But counsel for the Bank contends that when the amount was handed over at Lahore to the Bank by the plaintiff who was an old constituent of the Bank it must be presumed that a relationship of debtor and creditor arose and by the addition of instructions for transmissions of the amount to another branch the relationship of trustee and cestuique-trust did not arise. He submitted that the contention that the relation between the plaintiff and the Bank was of creditor and debtor was supported by three important circumstances (1) that the Bank agreed to pay interest on the amount delivered by the plaintiff (2) that the Bank charged no commission or remuneration for transmission of the amount and (3) that even on the plaintiffs case the amount was to be utilized for opening fixed deposit accounts at Calcutta. It is true that in the absence of other evidence a person paying money into a Bank, whether he is a constituent of the Bank or not, may be presumed to have paid the money to be held as bankers ordinarily hold the moneys of their constituents. If no specific instructions are given at the time of payment or thereafter, and even if the money is held in a suspense account the bank does not thereby become a trustee for the amount paid. In other words, when a person dealing with a bank delivers money to the Bank an intention to create a relation of creditor and debtor between him and the Bank is presumed, it being the normal course of the business of the Bank to accept deposits from its customers. But this presumption is one of fact arising from the nature of the business carried on by the Bank and is rebutted by proof of special instructions, or circumstances attending the transaction. Where the money is paid to a bank with special instructions to retain the same pending further instructions (The Official Assignee, Madras v. Natesam Pillai (1)) or to pay over the same to another person who has no banking account with the bank and the bank accepts the instructions and holds the money pending instructions from that other person (Arbuthnot Co. v. D. Rajam Ayyar (2)), or where instructions are given by a customer to his banker that a part of the amount lying in his account be forwarded to another bank to meet a bill to become due and payable by him and the amount is sent by the banker as directed (Farley v. Turner (3)), a trust results and the presumption which ordinarily arises by reason of payment of the money to the bank is rebutted. It is not necessary in this appeal to consider whether because of an agreement to pay interest the relationship may be deemed to be of debtor and creditor, because it was held by both the courts below that no such agreement is proved, and according to the settled practice of this court the finding is regarded a binding. The Bank charged no commission or remuneration for transmitting the amount to Calcutta, but that, in our judgment, is a circumstance which permits of no inference against the plaintiff. Undoubtedly, when the amount was delivered to the Bank by the plaintiff it was his intention to open fixed deposit account in Calcutta with the Banks branch but the fixed deposit accounts were to be opened after instructions were received. \nThe transaction, as evidenced by the two receipts, was primarily one of entrustment of the amount to the Bank for transmission to Calcutta. After the purpose for which the moneys were entrusted was carried out, in the absence of further instructions the defendant did not cease to be a trustee. So long as instructions were not given by the plaintiff for appropriation of the amounts the Bank continued to hold the amounts transmitted for and on behalf of the plaintiff and there is no evidence that the plaintiff gave instructions or acquiesced in the opening of a fixed deposit account after the same reached Calcutta. It is immaterial that the Bank purported to open fixed deposit account in the name of the plaintiff with the amounts received at its head office at Lahore. That course of action was adopted without the consent of the plaintiff and it could not bind the plaintiff. The High Court was, therefore, right in holding that the amount delivered by the plaintiff to the Bank at Lahore remained in trust even after it reached Calcutta, and it was not held by the Bank, in deposit for the plaintiff within the meaning of the scheme sanctioned by the High Court of East Punjab.\nDECISION ??", "expert_1": {"rank1": ["The High Court was, therefore, right in holding that the amount delivered by the plaintiff to the Bank at Lahore remained in trust even after it reached Calcutta, and it was not held by the Bank, in deposit for the plaintiff within the meaning of the scheme sanctioned by the High Court of East Punjab."], "rank2": ["It is true that in the absence of other evidence a person paying money into a Bank, whether he is a constituent of the Bank or not, may be presumed to have paid the money to be held as bankers ordinarily hold the moneys of their constituents. If no specific instructions are given at the time of payment or thereafter, and even if the money is held in a suspense account the bank does not thereby become a trustee for the amount paid. In other words, when a person dealing with a bank delivers money to the Bank an intention to create a relation of creditor and debtor between him and the Bank is presumed, it being the normal course of the business of the Bank to accept deposits from its customers. But this presumption is one of fact arising from the nature of the business carried on by the Bank and is rebutted by proof of special instructions, or circumstances attending the transaction. Where the money is paid to a bank with special instructions to retain the same pending further instructions (The Official Assignee, Madras v. Natesam Pillai (1)) or to pay over the same to another person who has no banking account with the bank and the bank accepts the instructions and holds the money pending instructions from that other person (Arbuthnot Co. v. D. Rajam Ayyar (2)), or where instructions are given by a customer to his banker that a part of the amount lying in his account be forwarded to another bank to meet a bill to become due and payable by him and the amount is sent by the banker as directed (Farley v. Turner (3)), a trust results and the presumption which ordinarily arises by reason of payment of the money to the bank is rebutted.", "It is not necessary in this appeal to consider whether because of an agreement to pay interest the relationship may be deemed to be of debtor and creditor, because it was held by both the courts below that no such agreement is proved, and according to the settled practice of this court the finding is regarded a binding. The Bank charged no commission or remuneration for transmitting the amount to Calcutta, but that, in our judgment, is a circumstance which permits of no inference against the plaintiff. Undoubtedly, when the amount was delivered to the Bank by the plaintiff it was his intention to open fixed deposit account in Calcutta with the Banks branch but the fixed deposit accounts were to be opened after instructions were received. \nThe transaction, as evidenced by the two receipts, was primarily one of entrustment of the amount to the Bank for transmission to Calcutta. After the purpose for which the moneys were entrusted was carried out, in the absence of further instructions the defendant did not cease to be a trustee. So long as instructions were not given by the plaintiff for appropriation of the amounts the Bank continued to hold the amounts transmitted for and on behalf of the plaintiff and there is no evidence that the plaintiff gave instructions or acquiesced in the opening of a fixed deposit account after the same reached Calcutta. It is immaterial that the Bank purported to open fixed deposit account in the name of the plaintiff with the amounts received at its head office at Lahore. That course of action was adopted without the consent of the plaintiff and it could not bind the plaintiff."], "rank3": ["In substance, it was claimed by the plaintiff that the amount lying with the Bank at Calcutta was not a deposit within the meaning of the scheme and was not liable to any reduction.", "The Bank submitted that the amount of Rs. 1,35,000/- was deposited by the plaintiff at its head office at Lahore for the purpose of opening a fixed deposit account in the name of the plaintiff upon the terms that the fixed deposit would carry interest as on the respective dates of the deposits, that it was agreed that the plaintiff would be allowed to take loans upto 90 of the deposit at a rate of interest of half percent above the current fixed deposit rates and that the amount would be transmitted to the Calcutta Branch of the Bank for the purpose of crediting the same to the fixed deposit account of the plaintiff.", "The Bank denied the alleged instructions in September, 1947, countermanding the original arrangement and contended that the plaintiff was bound by the scheme of arrangement sanctioned by the High Court of East Punjab.\nThe Bank offered to pay the amount due to the plaintiff under the scheme of arrangement and also to allot shares of the value of 5 in accordance with the scheme. A decree on admission was passed against the Bank for Rs. 81,000/- and the suit was contested by the Bank for the balance of the claim.", "The trial Court held that even though the plaintiff failed to prove the instructions in the month of September, 1947, set up by him countermanding transmission, it was established on the evidence, that the plaintiff had entrusted to the Bank Rs. 1,35,000/- for transmission and the plaintiff having given no further instructions, the Bank held the amount as trustee for the plaintiff and that the plaintiffs claim was not liable to be reduced under the scheme sanctioned by the High Court of East Punjab. The Court also negatived the plea of the Bank that the amount of Rs. 1,35,000/- was deposited with the Bank at Lahore for opening a fixed deposit account subject to the conditions which the Bank set up. The finding of the trial Court were confirmed, in appeal, by a Division Bench of the High Court at Calcutta. The facts found proved, according to the findings of the trial Court and confirmed by the High Court are therefore that the plaintiff delivered an amount of Rs. 1,25,000/- on July 19, 1947, and Rs. 10,000/- on July 19, 1947, to the Bank at Lahore for transmission to Calcutta, with instructions to await the directions of the plaintiff regarding the opening of accounts for keeping the same in fixed deposit or otherwise in the Calcutta Branch of the Bank, and the plaintiff never gave instructions for opening any account, fixed deposit or otherwise, in regard to the amounts after they reached Calcutta. Delivery of the amount for transmission to the Bank created ex facie a relationship of a fiduciary character. But counsel for the Bank contends that when the amount was handed over at Lahore to the Bank by the plaintiff who was an old constituent of the Bank it must be presumed that a relationship of debtor and creditor arose and by the addition of instructions for transmissions of the amount to another branch the relationship of trustee and cestuique-trust did not arise. He submitted that the contention that the relation between the plaintiff and the Bank was of creditor and debtor was supported by three important circumstances (1) that the Bank agreed to pay interest on the amount delivered by the plaintiff (2) that the Bank charged no commission or remuneration for transmission of the amount and (3) that even on the plaintiffs case the amount was to be utilized for opening fixed deposit accounts at Calcutta.", "It is not necessary in this appeal to consider whether because of an agreement to pay interest the relationship may be deemed to be of debtor and creditor, because it was held by both the courts below that no such agreement is proved, and according to the settled practice of this court the finding is regarded a binding. The Bank charged no commission or remuneration for transmitting the amount to Calcutta, but that, in our judgment, is a circumstance which permits of no inference against the plaintiff."], "rank4": ["Appeal by special leave from the judgment and decree dated June 23, 1959, of the Calcutta High Court in Appeal from Original Decree No. 50 of 1955.", "The Judgment of the Court was delivered by SHAH, J.-Mr. Justice Bachawat of the High Court of Judicature at Calcutta decreed Suit No. 1039 of 1948 filed by one Pearey Lal-hereinafter called the plaintiff-for a decree for Rs. 1,35,000/- with interest against the New Bank of India Ltd. \nThe appeal of the Bank against the decree was dismissed by a Division Bench of the High Court. With special leave the Bank has appealed to this Court.", "The plaintiff claimed by his suit that he had entrusted to the Bank at its registered office at Lahore Rs. 1,35,000/- on July 18 and 19, 1947, with instructions to transmit the same to the branch of the Bank which it proposed to open at Calcutta and to hold the amount subject to further instructions to be given by him when he would call personally at the branch at Calcutta on or after the opening date, that prior to the opening of the said Calcutta Branch the plaintiff countermanded his instructions on or about September 13, 1947 and demanded at Lahore that it be returned, but the Bank wrongfully claimed to have remitted the two sums to its Calcutta Branch and to have kept the same in a fixed deposit account in the name of the plaintiff, even though the plaintiff, had opened no such account at the Calcutta Branch and had given no instructions to put the same into any account by way of fixed deposit or otherwise. The plaintiff, accordingly, claimed that the Bank was a trustee for transmission of the amount and in the absence of any instructions given by him for opening a fixed deposit account, in respect of the amount transmitted the Bank stood qua the plaintiff in a fiduciary relation and was liable to refund the full amount."], "label": "REJECTED"}, "expert_2": {"rank1": ["After the purpose for which the moneys were entrusted was carried out, in the absence of further instructions the defendant did not cease to be a trustee. So long as instructions were not given by the plaintiff for appropriation of the amounts the Bank continued to hold the amounts transmitted for and on behalf of the plaintiff and there is no evidence that the plaintiff gave instructions or acquiesced in the opening of a fixed deposit account after the same reached Calcutta. It is immaterial that the Bank purported to open fixed deposit account in the name of the plaintiff with the amounts received at its head office at Lahore. That course of action was adopted without the consent of the plaintiff and it could not bind the plaintiff."], "rank2": ["In view of the impending partition, the plaintiff was anxious to transfer his moveable property outside the territory it was apprehended would be included in Pakistan, and he gave instructions for transferring his accounts with the Bank to its other branches in India.", "If no specific instructions are given at the time of payment or thereafter, and even if the money is held in a suspense account the bank does not thereby become a trustee for the amount paid. In other words, when a person dealing with a bank delivers money to the Bank an intention to create a relation of creditor and debtor between him and the Bank is presumed, it being the normal course of the business of the Bank to accept deposits from its customers. But this presumption is one of fact arising from the nature of the business carried on by the Bank and is rebutted by proof of special instructions, or circumstances attending the transaction."], "rank3": ["During the pendency of the suit the High Court of East Punjab sanctioned a scheme for arrangement under ss. 153 and 153A of the Indian Companies Act, 1913, for settlement of the liability of the Bank. By the first clause of the scheme the expression deposit was to include Fixed Deposits, Banks own Cash Certificates, Current Accounts, Deposits at Call, Savings Fund Accounts Amounts lying in Sundries or in any other kind of Credit Accounts, Bank Drafts, Cash Orders, and documents of the like nature and amounts due to Bankers over and above the value of Government Securities lying with them against such depositors. It was directed by the scheme, as it finally emerged, that the depositors were to be paid 701/2 of the deposits held by them and to he allotted shares of the face value of 5 of the deposits.", "In substance, it was claimed by the plaintiff that the amount lying with the Bank at Calcutta was not a deposit within the meaning of the scheme and was not liable to any reduction.", "The Bank denied the alleged instructions in September, 1947, countermanding the original arrangement and contended that the plaintiff was bound by the scheme of arrangement sanctioned by the High Court of East Punjab."], "rank4": ["the Bank held the amount as trustee for the plaintiff and that the plaintiffs claim was not liable to be reduced under the scheme sanctioned by the High Court of East Punjab.", "The finding of the trial Court were confirmed, in appeal, by a Division Bench of the High Court at Calcutta.", "Undoubtedly, when the amount was delivered to the Bank by the plaintiff it was his intention to open fixed deposit account in Calcutta with the Banks branch but the fixed deposit accounts were to be opened after instructions were received."], "label": "REJECTED"}, "expert_3": {"rank1": ["the plaintiff delivered an amount of Rs. 1,25,000/- on July 19, 1947, and Rs. 10,000/- on July 19, 1947, to the Bank at Lahore for transmission to Calcutta, with instructions to await the directions of the plaintiff regarding the opening of accounts for keeping the same in fixed deposit or otherwise in the Calcutta Branch of the Bank, and the plaintiff never gave instructions for opening any account, fixed deposit or otherwise, in regard to the amounts after they reached Calcutta.", "Delivery of the amount for transmission to the Bank created ex facie a relationship of a fiduciary character.", "It is true that in the absence of other evidence a person paying money into a Bank, whether he is a constituent of the Bank or not, may be presumed to have paid the money to be held as bankers ordinarily hold the moneys of their constituents. If no specific instructions are given at the time of payment or thereafter, and even if the money is held in a suspense account the bank does not thereby become a trustee for the amount paid.", "In other words, when a person dealing with a bank delivers money to the Bank an intention to create a relation of creditor and debtor between him and the Bank is presumed, it being the normal course of the business of the Bank to accept deposits from its customers. But this presumption is one of fact arising from the nature of the business carried on by the Bank and is rebutted by proof of special instructions, or circumstances attending the transaction.", "Where the money is paid to a bank with special instructions to retain the same pending further instructions", "or to pay over the same to another person who has no banking account with the bank and the bank accepts the instructions and holds the money pending instructions from that other person", "or where instructions are given by a customer to his banker that a part of the amount lying in his account be forwarded to another bank to meet a bill to become due and payable by him and the amount is sent by the banker as directed", "a trust results and the presumption which ordinarily arises by reason of payment of the money to the bank is rebutted", "The Bank charged no commission or remuneration for transmitting the amount to Calcutta, but that, in our judgment, is a circumstance which permits of no inference against the plaintiff.", "Undoubtedly, when the amount was delivered to the Bank by the plaintiff it was his intention to open fixed deposit account in Calcutta with the Banks branch but the fixed deposit accounts were to be opened after instructions were received. \nThe transaction, as evidenced by the two receipts, was primarily one of entrustment of the amount to the Bank for transmission to Calcutta. After the purpose for which the moneys were entrusted was carried out, in the absence of further instructions the defendant did not cease to be a trustee. So long as instructions were not given by the plaintiff for appropriation of the amounts the Bank continued to hold the amounts transmitted for and on behalf of the plaintiff and there is no evidence that the plaintiff gave instructions or acquiesced in the opening of a fixed deposit account after the same reached Calcutta.", "It is immaterial that the Bank purported to open fixed deposit account in the name of the plaintiff with the amounts received at its head office at Lahore. That course of action was adopted without the consent of the plaintiff and it could not bind the plaintiff.", "The High Court was, therefore, right in holding that the amount delivered by the plaintiff to the Bank at Lahore remained in trust even after it reached Calcutta, and it was not held by the Bank, in deposit for the plaintiff within the meaning of the scheme sanctioned by the High Court of East Punjab"], "rank2": ["The two amounts were transmitted by the Bank to Calcutta. A branch of the Bank was opened at Calcutta on September 24, 1947, but within a few days thereafter the Bank ceased making payments. It appears that a moratorium for a limited period was declared under an Ordinance issued by the Governer-General restraining the Bank from making payments to its depositors", "In December, 1947, after the expiry of the period of the moratorium the plaintiff applied to the Banks branch at Calcutta for facility to withdraw the whole amount but the Calcutta Branch raised certain technical objections against such a course. On March 24, 1948 the plaintiff commenced an action against the Bank inter alia for a decree of Rs. 1,35,000/- in the Calcutta High Court on its original side", "The plaintiff claimed by his suit that he had entrusted to the Bank at its registered office at Lahore Rs. 1,35,000/- on July 18 and 19, 1947, with instructions to transmit the same to the branch of the Bank which it proposed to open at Calcutta and to hold the amount subject to further instructions to be given by him when he would call personally at the branch at Calcutta on or after the opening date, that prior to the opening of the said Calcutta Branch the plaintiff countermanded his instructions on or about September 13, 1947 and demanded at Lahore that it be returned, but the Bank wrongfully claimed to have remitted the two sums to its Calcutta Branch and to have kept the same in a fixed deposit account in the name of the plaintiff, even though the plaintiff, had opened no such account at the Calcutta Branch and had given no instructions to put the same into any account by way of fixed deposit or otherwise. The plaintiff, accordingly, claimed that the Bank was a trustee for transmission of the amount and in the absence of any instructions given by him for opening a fixed deposit account, in respect of the amount transmitted the Bank stood qua the plaintiff in a fiduciary relation and was liable to refund the full amount", "In substance, it was claimed by the plaintiff that the amount lying with the Bank at Calcutta was not a deposit within the meaning of the scheme and was not liable to any reduction.", "The Bank offered to pay the amount due to the plaintiff under the scheme of arrangement and also to allot shares of the value of 5 in accordance with the scheme. A decree on admission was passed against the Bank for Rs. 81,000/- and the suit was contested by the Bank for the balance of the claim.", "The trial Court held that even though the plaintiff failed to prove the instructions in the month of September, 1947, set up by him countermanding transmission, it was established on the evidence, that the plaintiff had entrusted to the Bank Rs. 1,35,000/- for transmission and the plaintiff having given no further instructions, the Bank held the amount as trustee for the plaintiff and that the plaintiffs claim was not liable to be reduced under the scheme sanctioned by the High Court of East Punjab. The Court also negatived the plea of the Bank that the amount of Rs. 1,35,000/- was deposited with the Bank at Lahore for opening a fixed deposit account subject to the conditions which the Bank set up. The finding of the trial Court were confirmed, in appeal, by a Division Bench of the High Court at Calcutta"], "rank3": ["Justice Bachawat of the High Court of Judicature at Calcutta decreed Suit No. 1039 of 1948 filed by one Pearey Lal-hereinafter called the plaintiff-for a decree for Rs. 1,35,000/- with interest against the New Bank of India Ltd. \nThe appeal of the Bank against the decree was dismissed by a Division Bench of the High Court. With special leave the Bank has appealed to this Court", "The Bank had its registered office, originally at Lahore but after the partition of India the office was transferred to Amritsar. The plaintiff who was a resident of Lahore had accounts with several banks including the New Bank of India Ltd.", "In view of the impending partition, the plaintiff was anxious to transfer his moveable property outside the territory it was apprehended would be included in Pakistan, and he gave instructions for transferring his accounts with the Bank to its other branches in India. He also paid an amount of Rs. 1,25,000/- on July 18, 1947, into the Bank at Lahore with instructions to transmit the same the to Bank branch at Calcutta which it then proposed to open in the near future. An amount of Rs. 10,000/- was also paid into the Bank at Lahore on July 19, 1947, with similar instructions. In respect of these two transactions the Bank executed receipts which are set out below Received the sum of Rs. 1,25,000/- (Rs. One Lac twenty five thousand) only from Mr", "Pearey Lal on account of amount to be remitted to Calcutta branch for preparing various F.D. Receipts subject to his instructions on or after the opening date when he would call upon them personally. Lahore for the New Bank of India Ltd.", "During the pendency of the suit the High Court of East Punjab sanctioned a scheme for arrangement under ss. 153 and 153A of the Indian Companies Act, 1913, for settlement of the liability of the Bank. By the first clause of the scheme the expression deposit was to include Fixed Deposits, Banks own Cash Certificates, Current Accounts, Deposits at Call, Savings Fund Accounts Amounts lying in Sundries or in any other kind of Credit Accounts, Bank Drafts, Cash Orders, and documents of the like nature and amounts due to Bankers over and above the value of Government Securities lying with them against such depositors. It was directed by the scheme, as it finally emerged, that the depositors were to be paid 701/2 of the deposits held by them and to he allotted shares of the face value of 5 of the deposits"], "label": "REJECTED"}, "expert_4": {"rank1": ["Justice Bachawat of the High Court of Judicature at Calcutta decreed Suit No. 1039 of 1948 filed by one Pearey Lal-hereinafter called the plaintiff-for a decree for Rs. 1,35,000/- with interest against the New Bank of India Ltd.", "The High Court was, therefore, right in holding that the amount delivered by the plaintiff to the Bank at Lahore remained in trust even after it reached Calcutta, and it was not held by the Bank, in deposit for the plaintiff within the meaning of the scheme sanctioned by the High Court of East Punjab."], "rank2": ["The facts found proved, according to the findings of the trial Court and confirmed by the High Court are therefore that the plaintiff delivered an amount of Rs. 1,25,000/- on July 19, 1947, and Rs. 10,000/- on July 19, 1947, to the Bank at Lahore for transmission to Calcutta, with instructions to await the directions of the plaintiff regarding the opening of accounts for keeping the same in fixed deposit or otherwise in the Calcutta Branch of the Bank, and the plaintiff never gave instructions for opening any account, fixed deposit or otherwise, in regard to the amounts after they reached Calcutta.", "Delivery of the amount for transmission to the Bank created ex facie a relationship of a fiduciary character.", "It is not necessary in this appeal to consider whether because of an agreement to pay interest the relationship may be deemed to be of debtor and creditor, because it was held by both the courts below that no such agreement is proved, and according to the settled practice of this court the finding is regarded a binding.", "The Bank charged no commission or remuneration for transmitting the amount to Calcutta, but that, in our judgment, is a circumstance which permits of no inference against the plaintiff.", "Undoubtedly, when the amount was delivered to the Bank by the plaintiff it was his intention to open fixed deposit account in Calcutta with the Banks branch but the fixed deposit accounts were to be opened after instructions were received. \nThe transaction, as evidenced by the two receipts, was primarily one of entrustment of the amount to the Bank for transmission to Calcutta.", "After the purpose for which the moneys were entrusted was carried out, in the absence of further instructions the defendant did not cease to be a trustee.", "That course of action was adopted without the consent of the plaintiff and it could not bind the plaintiff."], "rank3": ["The appeal of the Bank against the decree was dismissed by a Division Bench of the High Court.", "With special leave the Bank has appealed to this Court.", "A decree on admission was passed against the Bank for Rs. 81,000/- and the suit was contested by the Bank for the balance of the claim.", "The trial Court held that even though the plaintiff failed to prove the instructions in the month of September, 1947, set up by him countermanding transmission, it was established on the evidence, that the plaintiff had entrusted to the Bank Rs. 1,35,000/- for transmission and the plaintiff having given no further instructions, the Bank held the amount as trustee for the plaintiff and that the plaintiffs claim was not liable to be reduced under the scheme sanctioned by the High Court of East Punjab.", "The Court also negatived the plea of the Bank that the amount of Rs. 1,35,000/- was deposited with the Bank at Lahore for opening a fixed deposit account subject to the conditions which the Bank set up.", "The finding of the trial Court were confirmed, in appeal, by a Division Bench of the High Court at Calcutta.", "In other words, when a person dealing with a bank delivers money to the Bank an intention to create a relation of creditor and debtor between him and the Bank is presumed, it being the normal course of the business of the Bank to accept deposits from its customers.", "But this presumption is one of fact arising from the nature of the business carried on by the Bank and is rebutted by proof of special instructions, or circumstances attending the transaction.", "Where the money is paid to a bank with special instructions to retain the same pending further instructions (The Official Assignee, Madras v. Natesam Pillai (1)) or to pay over the same to another person who has no banking account with the bank and the bank accepts the instructions and holds the money pending instructions from that other person (Arbuthnot Co. v. D.", "Rajam Ayyar (2)), or where instructions are given by a customer to his banker that a part of the amount lying in his account be forwarded to another bank to meet a bill to become due and payable by him and the amount is sent by the banker as directed (Farley v.", "Turner (3)), a trust results and the presumption which ordinarily arises by reason of payment of the money to the bank is rebutted.", "So long as instructions were not given by the plaintiff for appropriation of the amounts the Bank continued to hold the amounts transmitted for and on behalf of the plaintiff and there is no evidence that the plaintiff gave instructions or acquiesced in the opening of a fixed deposit account after the same reached Calcutta.", "It is immaterial that the Bank purported to open fixed deposit account in the name of the plaintiff with the amounts received at its head office at Lahore."], "rank4": ["In view of the impending partition, the plaintiff was anxious to transfer his moveable property outside the territory it was apprehended would be included in Pakistan, and he gave instructions for transferring his accounts with the Bank to its other branches in India.", "He also paid an amount of Rs. 1,25,000/- on July 18, 1947, into the Bank at Lahore with instructions to transmit the same the to Bank branch at Calcutta which it then proposed to open in the near future. An amount of Rs. 10,000/- was also paid into the Bank at Lahore on July 19, 1947, with similar instructions.", "In respect of these two transactions the Bank executed receipts which are set out below Received the sum of Rs. 1,25,000/- (Rs. One Lac twenty five thousand) only from Mr. Pearey Lal on account of amount to be remitted to Calcutta branch for preparing various F.D.", "The two amounts were transmitted by the Bank to Calcutta.", "A branch of the Bank was opened at Calcutta on September 24, 1947, but within a few days thereafter the Bank ceased making payments.", "On March 24, 1948 the plaintiff commenced an action against the Bank inter alia for a decree of Rs. 1,35,000/- in the Calcutta High Court on its original side.", "During the pendency of the suit the High Court of East Punjab sanctioned a scheme for arrangement under ss. 153 and 153A of the Indian Companies Act, 1913, for settlement of the liability of the Bank.", "It was directed by the scheme, as it finally emerged, that the depositors were to be paid 701/2 of the deposits held by them and to he allotted shares of the face value of 5 of the deposits.", "The plaintiff claimed by his suit that he had entrusted to the Bank at its registered office at Lahore Rs. 1,35,000/- on July 18 and 19, 1947, with instructions to transmit the same to the branch of the Bank which it proposed to open at Calcutta and to hold the amount subject to further instructions to be given by him when he would call personally at the branch at Calcutta on or after the opening date, that prior to the opening of the said Calcutta Branch the plaintiff countermanded his instructions on or about September 13, 1947 and demanded at Lahore that it be returned, but the Bank wrongfully claimed to have remitted the two sums to its Calcutta Branch and to have kept the same in a fixed deposit account in the name of the plaintiff, even though the plaintiff, had opened no such account at the Calcutta Branch and had given no instructions to put the same into any account by way of fixed deposit or otherwise.", "The plaintiff, accordingly, claimed that the Bank was a trustee for transmission of the amount and in the absence of any instructions given by him for opening a fixed deposit account, in respect of the amount transmitted the Bank stood qua the plaintiff in a fiduciary relation and was liable to refund the full amount.", "The Bank submitted that the amount of Rs. 1,35,000/- was deposited by the plaintiff at its head office at Lahore for the purpose of opening a fixed deposit account in the name of the plaintiff upon the terms that the fixed deposit would carry interest as on the respective dates of the deposits, that it was agreed that the plaintiff would be allowed to take loans upto 90 of the deposit at a rate of interest of half percent above the current fixed deposit rates and that the amount would be transmitted to the Calcutta Branch of the Bank for the purpose of crediting the same to the fixed deposit account of the plaintiff.", "The Bank denied the alleged instructions in September, 1947, countermanding the original arrangement and contended that the plaintiff was bound by the scheme of arrangement sanctioned by the High Court of East Punjab.", "But counsel for the Bank contends that when the amount was handed over at Lahore to the Bank by the plaintiff who was an old constituent of the Bank it must be presumed that a relationship of debtor and creditor arose and by the addition of instructions for transmissions of the amount to another branch the relationship of trustee and cestuique-trust did not arise.", "He submitted that the contention that the relation between the plaintiff and the Bank was of creditor and debtor was supported by three important circumstances (1) that the Bank agreed to pay interest on the amount delivered by the plaintiff (2) that the Bank charged no commission or remuneration for transmission of the amount and (3) that even on the plaintiffs case the amount was to be utilized for opening fixed deposit accounts at Calcutta."], "label": "REJECTED"}, "expert_5": {"rank1": ["even though the plaintiff, had opened no such account at the Calcutta Branch and had given no instructions to put the same into any account by way of fixed deposit or otherwise.", "Where the money is paid to a bank with special instructions to retain the same pending further instructions (The Official Assignee, Madras v. Natesam Pillai (1)) or to pay over the same to another person who has no banking account with the bank and the bank accepts the instructions and holds the money pending instructions from that other person (Arbuthnot Co. v. D. Rajam Ayyar (2)), or where instructions are given by a customer to his banker that a part of the amount lying in his account be forwarded to another bank to meet a bill to become due and payable by him and the amount is sent by the banker as directed (Farley v. Turner (3)), a trust results and the presumption which ordinarily arises by reason of payment of the money to the bank is rebutted.", "but the fixed deposit accounts were to be opened after instructions were received.", "The transaction, as evidenced by the two receipts, was primarily one of entrustment of the amount to the Bank for transmission to Calcutta."], "rank2": ["Receipts subject to his instructions on or after the opening date when he would call upon them personally.", "Receipts at his instance when he calls upon them personally on or after the opening date of the Branch.", "to hold the amount subject to further instructions to be given by him when he would call personally at the branch at Calcutta on or after the opening date, that prior to the opening of the said Calcutta Branch the plaintiff countermanded his instructions on or about September 13, 1947 and demanded at Lahore that it be returned,", "It is not necessary in this appeal to consider whether because of an agreement to pay interest the relationship may be deemed to be of debtor and creditor, because it was held by both the courts below that no such agreement is proved, and according to the settled practice of this court the finding is regarded a binding.", "So long as instructions were not given by the plaintiff for appropriation of the amounts the Bank continued to hold the amounts transmitted for and on behalf of the plaintiff and there is no evidence that the plaintiff gave instructions or acquiesced in the opening of a fixed deposit account after the same reached Calcutta.", "That course of action was adopted without the consent of the plaintiff and it could not bind the plaintiff."], "rank3": ["with instructions to transmit the same the to Bank branch at Calcutta which it then proposed to open in the near future.", "similar instructions.", "the plaintiff had entrusted to the Bank Rs. 1,35,000/- for transmission and the plaintiff having given no further instructions, the Bank held the amount as trustee for the plaintiff", "The facts found proved, according to the findings of the trial Court and confirmed by the High Court are therefore that the plaintiff delivered an amount of Rs. 1,25,000/- on July 19, 1947, and Rs. 10,000/- on July 19, 1947, to the Bank at Lahore for transmission to Calcutta, with instructions to await the directions of the plaintiff regarding the opening of accounts for keeping the same in fixed deposit or otherwise in the Calcutta Branch of the Bank, and the plaintiff never gave instructions for opening any account, fixed deposit or otherwise, in regard to the amounts after they reached Calcutta.", "But this presumption is one of fact arising from the nature of the business carried on by the Bank and is rebutted by proof of special instructions, or circumstances attending the transaction.", "The Bank charged no commission or remuneration for transmitting the amount to Calcutta, but that, in our judgment, is a circumstance which permits of no inference against the plaintiff.", "in the absence of further instructions the defendant did not cease to be a trustee."], "rank4": ["that prior to the opening of the said Calcutta Branch the plaintiff countermanded his instructions on or about September 13, 1947 and demanded at Lahore that it be returned", "the fixed deposit would carry interest as on the respective dates of the deposits, that it was agreed that the plaintiff would be allowed to take loans upto 90 of the deposit at a rate of interest of half percent above the current fixed deposit rates", "The finding of the trial Court were confirmed, in appeal, by a Division Bench of the High Court at Calcutta.", "It is true that in the absence of other evidence a person paying money into a Bank, whether he is a constituent of the Bank or not, may be presumed to have paid the money to be held as bankers ordinarily hold the moneys of their constituents. If no specific instructions are given at the time of payment or thereafter, and even if the money is held in a suspense account the bank does not thereby become a trustee for the amount paid. In other words, when a person dealing with a bank delivers money to the Bank an intention to create a relation of creditor and debtor between him and the Bank is presumed, it being the normal course of the business of the Bank to accept deposits from its customers."], "rank5": ["on account of amount to be remitted to Calcutta branch for preparing various F.D.", "for making up various F. D.", "for the purpose of opening a fixed deposit account in the name of the plaintiff", "Undoubtedly, when the amount was delivered to the Bank by the plaintiff it was his intention to open fixed deposit account in Calcutta with the Banks branch"], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1961_363", "text": "Appeal by special leave from the judgment and order dated April 17, 1961 of the Calcutta High Court in Appeal from Original Order No. 132 of 1960. C. Setalvad, Attorney-General of India, M. Banerji and S. N. Mukherji, for the appellant. Mukherjee and P. K. Bose, for the respondent. 1961. December, 5. The Judgment of the Court was delivered by SHAH. J.-Ballygunge Real Property and Building Society Ltd.-hereinafter called the Company-was on January 8, 1958, ordered by the High Court of Judicature at Calcutta to be wound up. On January 18, 1960, the Official Liquidator submitted an application accompanied by a signed statement for an order that the appellant be examined under s. 477 of the Indian Companies Act, 1956. This application was granted ex-parte by Mr. Justice \n K. Mitter on January 18, 1960, and the appellant was served with the order to attend the Court on March 22, 1960, for the purpose of being examined concerning the affairs of the company, and to bring with him and produce at the said time and place the following books and papers, mentioned in Schedule B to the order, viz., \n Ballygunge Estate (Private) Ltd.-Cash Books, General Ledger, Journal, Minutes Books from 1939 to 1948, Property Register. Ballygunge Building Society Private Ltd.- Cash Books, General Ledger, Journal, Minute Books, Property Register. Ballygunge Real Property Building Society Ltd. (In liquidation)-General Ledger for 1949, and all such other books, papers, deeds, writings and other documents in his custody or power in any way relating to the affairs of the Company. This order was published in public newspapers. The solicitors of the appellant by letters dated February 29, 1960, and March 10, 1960, called upon the Official Liquidator to furnish them with copies of the petition and the report on the basis of which the order was made. The Official Liquidator having informed the solicitors of the appellant that the latter were not entitled to a copy of the report of the official liquidator, the appellant applied by a judges summons for an order recalling vacating, setting aside or modifying the order dated January 18, 1960, and for a direction to the official liquidator requiring him to supply copies of the report of the official liquidator and of the other documents relating to the application and alternatively for an order granting leave to inspect the court records and proceedings of the application and to take copies thereof. The appellant contended that the order made by Mr. Justice Mitter on January 18, 1960, was obtained by suppression of material facts and that, in any event, the order made without notice to the appellant was vexatious and oppressive and amounted to an abuse of the process of Court. He submitted that he was a Director of the Company between the years 1939 to 1953 and had attended meetings of the Board of Directors of the Company and without reference to the records of the meetings of the Board and particularly without reference to the Minute Books, it was not possible for him to recollect any details as to transactions which might have taken place in the Boards meetings. He stated that he was not concerned with the administration, management or the day to day working of the Company, except to the extent of taking part in the Boards meetings, that he never had in his custody the books referred to in the order and that the official liquidator had never asked for or enquired of him about any documents, that he was not aware of the matters on which information was required by the official liquidator and unless those matters were made known to him, it was not possible for him, to answer questions or to give information required of him, that to enable him to answer questions or supply information, it was necessary for him to know the nature of the enquiry and the charges and to inspect the records and documents of the Company and without the assistance of such records and documents his proposed examination would be highly oppressive and harsh and was likely to prove futile. The official liquidator submitted that all the available papers in the books with the liquidator will be made available at the time of the examination of the appellant but he-the official liquidator-was not bound to give information in advance about the nature of the enquiry to do so, he contended, would defeat the purpose of the enquiry. He also submitted that the appellant had no right claim inspection or to obtain copies of the statement which accompanied the judges summons dated January 18, 1960. Mr. Justice Law rejected the application filed by the appellant, holding that the order dated January 18, 1960, was final and that he had no power to review, modify, alter or vary the same, that the order merely summoning for examination under s. 477 of the Companies Act did not affect a partys rights, there being no charge, no complaint and no allegation against him. The learned Judge observed that it was not necessary for the Court in the first instance to determine that the person called upon to furnish information actually possessed that information if the Court has reasons to think, or if even an allegation is made that a certain person is in possession of information which would be of use in the course of winding up, the Court can call upon him to appear in Court and examine him, and that rr. 243 (1) and 243 (2) of Companies (Court) Rules laid down the same procedure as was laid down in In re Gold Company (1879 12 Ch. D. 77 at page 82) and different from the procedure which was laid by r. 195 of the Indian Companies Act, 1913. In the view of the learned Judge the statement of the official liquidator on which the order dated January 18, 1960, was made not being on oath or affirmation was not legal evidence and did not form part of the proceedings of the Court and the appellant could not demand facility for inspection of the statement or copy thereof. Against the order of Mr. Justice Law an appeal was preferred to a Division Bench of the High Court. The High Court held that the order having been initially pass ex parte an application for discharging or modifying the order was in law maintainable at the instance of the appellant but the order in so far as it directed the appellant who was a director of the Company to appear before the Court to be examined touching upon the affairs of the Company was, in the circumstances of the case, desirable and necessary, and that the statement of the official liquidator on which the order dated January 18, 1960, was issued not being an affidavit was not required by the Companies (Court) Rules 1959 to be kept on the file of the liquidation proceedings the statement was a confidential document and was-save by order of the Court-not open to inspection of any person other than the liquidator. The learned judges modified the order in so far as it directed production of the books of account relating to the Ballygunge Estate (Private) Ltd. and the Ballygunge Building Society Private Ltd., because those companies were not parties to the liquidation proceedings. Against the order of the High Court this appeal with special leave has been preferred to this Court. Three questions fall to be determined \n Whether an ex parte order directing the examination of a person under s. 477 of the Indian Companies Act, 1956 is liable to be modified, or vacated on the application of the persons affected thereby \n Whether there is any ground for discharging or modifying the order dated January 18, 1960 and \n Whether the appellant is entitled before his examination to inspect the statement submitted by the official liquidator in support of the application for the order dated January 18, 1960, or to be furnished with a copy thereof. Section 477 of the Indian Companies Act, 1956, provides 477 (1) The Court may, at any time after the appointment of a provisional liquidator or the making of a winding up order summon before it any officer of the company or person known or suspected to have in his possession any property or books or papers of the company, or known or suspected to be indebted to the company, or any person whom the Court deems capable of giving information concerning the promotion, formation, trade, dealings, property, books or papers, or affairs of the company. The Court may examine any officer or person so summoned on oath concerning the matters aforesaid, either by word of mouth or on written interrogatories and may, in the former case, reduce his answers to writing and require him to sign them. The Court may require any officer or person so summoned to produce any books and papers in his custody or power relating to the company but, where he claims any lien on books or papers, produced by him, the production shall be without prejudice to that lien, and the Court shall have jurisdiction in the winding up to determine all questions relating to that lien. If any officer or person so summoned, after being paid or tendered a reasonable sum for his expenses, fails to appear before the Court at the time appointed, not having a lawful impediment (made known to the Court at the time of its sitting and allowed by it), the Court may cause him to be apprehended and brought before the Court for examination. If, on his examination, any officer or person so summoned admits that he is indebted to the company, the Court may order him to pay to the provisional liquidator or, as the case may be, the liquidator at such time and in such manner as to the Court may seem just the amount in which he is indebted, or any part thereof, either in full discharge of the whole amount or not, as the Court thinks fit, with or without costs of the examination. If, on his examination, any such officer or person admits that he has in his possession any property belonging to the company, the Court may order him to deliver to the provisional liquidator or, as the case may be, the liquidator, that property or any part thereof, at such time, in such manner and on such terms as to the Court may seem just. Orders made under sub-sections (5) and (6) shall be executed in the same manner as decrees for the payment of money or for delivery of property under the Code of Civil Procedure, 1908 respectively. Any person making any payment or delivery in pursuance of an order made under subsection (5) or sub-section (6) shall by such payment or delivery be, unless otherwise directed by such order, discharged from all liability whatsoever in respect of such debt or property. Clauses (5), (6), (7) and (8) it may be noted, were inserted by Act 65 of 1960. Section 463 of the Companies Act authorises this Court to make rules for all matters relating to winding up of companies which by the Act are to be prescribed and for other matters. This court has framed Companies (Court) Rules, 1959, out of which rr. 243, 244 and 249, which are material, are as follows - \n Application for examination under Section 477.-(1) An application for the examination of a person under Section 477 may be made ex parte provided that where the application is made by any person other than the Official Liquidator, notice of the application shall be given to the Official Liquidator. The summons shall be in Form 109 and, where the application is by the Official Liquidator, shall be accompanied by a statement signed by him setting forth the facts on which the application is based. Where the application is made by a person other than the Official Liquidator, the summons shall be supported by an affidavit of the applicant setting forth the matters in respect of which the examination is sought and the grounds relied on in support of the summons. Directions at hearing of summons.-Upon the hearing of the summons the Judge may, if satisfied that there are grounds for making the orders, make an order directing the issue of summons against the person named in the order for his examination and or for the production of documents. Unless the Judge otherwise directs, the examination of such person shall be held in Chambers. The order shall be in Form No. 110. Order for public examination under section 478.-(1) where an order is made for the examination of any person or persons under Section 478, the examination shall be held before the Judge provided that in the case of High Court, the Judge may direct that the whole or any part of the examination of any such person or persons, be held before any of the officers mentioned in sub-section (10) of the said Section as may be mentioned in the order Where the date of the examination has not been fixed by the order, the Official Liquidator shall take an appointment from the Judge or officer before whom the examination is to be held as to the date of the examination. The order directing a public examination shall be in Form No. 112. The Judge may, if he things fit, either in the order for examination or by any subsequent order, give directions to the specific matters on which such person is to be examined. By s. 477 the Court is authorised to summon before it (1) any officer of the Company, (2) any person known or suspected to have in his possession any property or books or papers of the Company, and (3) any person known or suspected to be indebted to the company, or any person whom the Court deems capable of giving information concerning the promotion, formation, trade, dealings, property, books or papers or affairs of the company. By r. 243 an application for an order for examination may be made ex parte, and the Company Judge may, if he is satisfied that the interest of the company will be served by the examination of a person-be he an officer of the company or other person make the order. The primary test for making the order is whether it is just and beneficial to the business of the company, But the power conferred by the section is very wide and the Court must guard itself against being made an instrument of vexation or oppression. The order which is made ex-parte is not final it is always open to a person summoned to apply for vacating or modifying the order on the ground that it has been obtained without placing all the requisite materials before the Court or by mis-statement of facts or on other adequate grounds. Rule 9 of the Companies (Court) Rules preserves to the Court its inherent powers to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of Court, and a direction to vacate an order previously made, is in a proper case within the Courts inherent jurisdiction. The relevant provisions of the English Companies Act, 1862 (25 26 Vict. c. 89), the English Companies Act, 1929 (19 20 Geo V c.3) and the English Companies Act, 1948 (11 12 Geo VI c,88) on the question relating to examination of officers of the company or other persons are substantially the same as s. 477 of the Indians Companies Act, 1956, and the principles laid down by the superior Courts in England, which have been assimilated in the practice of Company winding up by the Courts in India are useful in determining the nature of the proceeding. In re North Australian Territory Company (1), Lord Justice Cotton vacated an order in appeal where the order for examination was not made in the interest of the Company in liquidation, but was made with a view to assist the interest of the company in prosecuting an action which has been brought up by the liquidator. In that case the liquidator filed with leave of the Court an action against another company for setting aside an agreement of purchase and obtained an order for affidavit of document, but the Court refused to order production of certain documents, or the examination of the defendant companys secretary on interrogatories, on the ground that discovery was premature. The liquidator then obtained an order under s. 115 of the Companies Act, 1862 for the examination of the secretary before an examiner. The Secretary refused to answer certain questions relating to the matters in issue in the action and the Court held that the liquidator had shown no reason for seeking discovery except to assist him in the action and so to evade the order of the Judge postponing discovery in the action and therefore the witness was justified in refusing to answer the question. Lord Justice Bowen in that case observed that the power conferred by s. 115 is an extra-ordinary power. It is a power of an inquisitorial kind which enables the Court to direct to be examined-not merely before itself, but before the examiner appointed by the Court-some third person who is no party to a litigation. That is an inquisitorial power, which may work with great severity against third persons, and it seems to me to be obvious that such a section ought to be used with the greatest care, so as not unnecessarily put in motion the machinery of justice when it is not wanted or to put it in motion at a stage when it is not clear that it is wanted, and certainly not to put it is motion if unnecessary mischief is going to be done or hardship inflicted upon the third person who is called upon to appear and give information. In re Metropolitan Bank (Heirons case)(1) a similar situation arose. The liquidator who had brought an action on behalf of the company against an officer exhibited interrogatories which had been fully answered by the defendant, and thereafter, the liquidator sought an order from the Court to examine the defendant under s. 115 of the Companies Act, 1862. It was held that the liquidator must satisfy the Court that it would be just and beneficial for the purposes of the winding up. The Court in that case held that the action of the liquidator was vexatious. In In re Mavile Hose, Limited, (2) an order which was regarded as premature and oppressive in the circumstances of the case was discharged by the Court. The Court has therefore jurisdiction in proper cases, i.e. where it is satisfied that the order is vexatious, or oppressive, or where other adequate grounds exist to discharge the same. In our view, the High Court was right in holding that in a proper case it would be open to the Company Judge to vacate an ex-parte order obtained under r. 243 of the Companies (Court) Rules. The jurisdiction to vacate or modify an ex- parte order under r. 243 being granted, the question which falls to be determined is whether the order passed by Mr. Justice Mitter was oppressive or vexatious or otherwise liable to be vacated or modified for adequate grounds. In our view, there is no ground for holding that the order is liable to be vacated or modified. It was never even suggested in the High Court that the order for examination was per se oppressive or vexatious. This is not a case in which the order is sought to facilitate the progress of an action filed by the official liquidator against the appellant, nor is there reason to hold that the order is sought in aid of some collateral purpose-a purpose other than effective progress of the winding up in the interest of the company. The appellant was for many years a director of the company, and therefore concerned with guiding the affairs of the company. He was prima facie a person who would be able to give information likely to promote the purpose of the winding up. It appears also that Mr. Justice Mitter was satisfied on the statement filed by the official liquidator that the appellant had the custody of certain important books of the company. The plea of the appellant that compelling him to submit to examination without permitting him to have access to the books before answering questions put to him is oppressive has no substance. The affidavit filed on behalf of the liquidator clearly states that the relevant records of the company will be made available to the appellant at the time of the examination. The High Court, in appeal, expressed the view that on the merits there was no ground for interference and it was satisfied that it was desirable and necessary that the appellant as a director should be examined. The appellant having been a director of the company during the period when it is alleged the affairs were mismanaged, is likely to be aware of the management and in possession of information conducive to effective prosecution of the winding up and if the learned Judge thought it fit to order that the appellant be examined the order cannot be regarded as either vexatious or oppressive or otherwise liable to be set aside. Counsel for the appellant submitted that the order for examination must be made after considering all the facts and circumstances of the case and that there was nothing on the record to show that the facts and circumstances were considered by Mr. Justice Mitter before he made the order for examination.\nThe appellant has admitted in his affidavit that he was served with a copy of the order, but he has not chosen to produce it in the Court of First Instance, nor is the order printed in the record prepared for the use of the Court in this appeal. It was never suggested before the High Court that the order was made without considering the material facts and circumstances. The Court has made the order in exercise of the jurisdiction vested in it and in the absence of any material to show that the order was made for a collateral purpose or by the misleading the Court, the appellant is not entitled to have the order vacated. As pointed out by the Master of the Rolls in In re Gold Company Ltd., (1) It must be remembered that both the Chief Clerk and the Judge know a great deal more of the proceedings in the winding-up than the Court of Appeal can know, and there may be various grounds for exercising the discretion, upon which the Court of Appeal cannot possibly form any opinion. We must recollect also that it is not necessary to make out a prima facie case-the probability of a case is enough. A fair suspicion may be well worthy of further investigation, and it may well be worth the expense and trouble of examining witnesses to see whether it is well founded. It is not necessary that the applicant should establish his case before he applies to the Judge he may say to the Judge, I have a strong ground for suspecting that a certain transaction was fraudulent if it is proved to be so we shall get a large some of money will you let me lay out a small sum of money in order to examine a witness or two, so as to ascertain the facts? In that case the Court will exercise a discretion. Mr. Justice Mitter was the company Judge in charge of the liquidation proceedings of the Company. Before him a statement of the official liquidator was produced and in the light of the materials placed before him, he passed the order which is now sought to be modified. This Court cannot proceed upon an assumption that the order for examination of a person who has ceased to be a director prior to the date of the winding up must necessarily be regarded as oppressive or vexatious. A director of a company, past or present, is ordinarily in a position to give useful information about the affairs of the Company in winding up. In the circumstances, we think that the High Court was right in holding that no case was made out for modification of the ex parte order. Two grounds were set up in support of the plea that the appellant before he is examined is entitled to inspect the statement of the official liquidator (a) that it is contrary to rules of natural justice to disallow inspection of the statement on which a judicial order imposing an obligation upon a party is made, and (b) that the rules of procedure prescribed under the Companies (Court) Rules authorise the person summoned to inspect the statement of the official liquidator on which the order is made. Rule 243 expressly contemplates that an application for examination under s. 477 may be made ex parte. An application by an official liquidator is required to be supported by a statement signed by him, but the rule does not contemplate any notice to the parties likely to be affected by the issue of the summons. The proceedings are intended to be confidential. As observed in In re Gold Company (1) by Sir George Jessel R in these mattersthe object being to keep the proceedings secret from the person sought to be affected, and the practice is, and as far as I know always has been, that the liquidator, instead of making an affidavit, simply makes a written statement which he leaves with the Chief Clerk, who thereupon issues an order, and the written statement cannot, be got at by anybody whereas an affidavit can. This practice in our judgement is consonant with right and justice. That proceedings for examination of officers and other persons are confidential is emphasised by rr. 247 and 248. By cl. (2) of r. 247 no person is entitled to take part in the examination under s. 477 except the official liquidator and his advocate but the court may, if it thinks fit, permit any creditor or contributory to attend the examination subject to such conditions as it may impose. Clause (3) provides that notes of the examination may be permitted to be taken by a witness or any person on his behalf on his giving an undertaking that such notes shall be used only for the purposes of re-examination of the witness. It is also provided that on the conclusion of the examination, the notes shall, unless otherwise directed, be handed over to the Court for destruction. Rule 248 provides inter alia, that the notes shall not be open to the inspection of any creditor, contributory or other person, except the official liquidator, nor shall a copy thereof or extract there from be supplied to any person other than the official liquidator, save upon orders of the Court. The proceedings for examination under s. 477 being intended to be commenced only in the interest of the Company and for the purpose of collecting evidence for the effective prosecution of the liquidation are by rules expressly to be commenced by order which may on the application of the official liquidator be made ex parte. The order does not purport to decide any question in dispute between the Company and the persons sought to be examined. It only proceeds upon the satisfaction of the Court that the person should be examined in the interest of the Company, it appearing to the Court just proper that he should be so examined. There is nothing in the scheme of the Act which indicates that an order passed for the examination of a person under. s. 477 may be made only after serving a notice upon such person the Rules expressly contemplate that the order may be made ex parte. Rules of natural justice are therefore not violated merely by the issue of an order requiring a person or persons to appear before a Court for his examination under s. 477. Nor do the rules of procedure framed by this Court for examination under s. 477 contemplate and right of inspection of the statement of the official liquidator. As we have already pointed out, r. 243 contemplates an order ex parte and the scheme of the Rule further emphasises the fact that all these enquiries are intended as already discussed to be confidential proceedings. The person whose examination is sought to be held, has therefore no right to inspect the statement made by the liquidator on which the order of the Court proceeds. Rule 360 of the Companies (Court) Rules provides that every duly authorised officer of a the Central Government, and, save as otherwise provided by these Rules, every persons who has been a director or officer of a company which is being wound up, shall be entitled, free of charge, at all reasonable times to inspect the file of proceedings of the liquidation and to take copies or extracts from any document therein, and, on payment of the prescribed charges to be furnished with such copies or extracts. The right to inspection is given in respect of the file of the proceedings of the liquidation. But the statement made by the official liquidator under Rule 243 does not form part of the file of the proceedings of the liquidation. The statement is not to be made on oath it has to be shown to the Company Judge and the Judge has to apply his mind to the contents thereof, but it does not, as pointed out by Mr. Justice Law, form part of the liquidation proceedings. In the Company (Court) Rules, there is no rule specifying the documents which are to be included in the file of the liquidation proceedings. The order passed by the Court and the summons issued thereon may be regarded as forming part of the file of the proceeding of liquidation, but having regard to the nature of the statement made by the official liquidator on which this Judges order is passed, it is not part of the file of the proceedings of liquidation. \nThe person summoned even if he is an officer or director of the company, is therefore not entitled to inspection thereof relying upon Rule 360. It was urged by counsel for the appellant that the petition for an order under s.477 was inexorably connected with the statement of the official liquidator, and if the party affected by the order was entitled to inspect the petition, he was entitled to inspect the statement which formed part of the petition. There is however, no warrant for the view that the petition and the statement form part of the same document. The petition has, it is true, to be supported by a statement, but the statement is independent of the petition. It appears that the practice of the Calcutta High Court, prior to the promulgation of the Companies (Court) Rules, was different. Under r. 195 an application for examination of a person under s 195 of the Indian Companies Act 1913, could be made ex parte to the Judge but it had to be by petition verified by the official liquidator stating the facts upon which the application was based. It was also provided that at the hearing, the Judge may, if satisfied that a prima facie case for examination had been made out, direct the issue of a summons or summonses against the person or persons named in the order for examination and or for the production of the documents. Manifestly, the order could be obtained on a petition which was required to be verified by the official liquidator and there had to be a formal hearing and only if a prima facie case for hearing had been made out the order could be made. Under the Companies (Court) Rules a different practice, which approaches the practice prevailing in the English Courts has been set up. The mere fact that under r. 195 of the Calcutta High Court Rules under Act of 1913 the appellant might have had a right of access to the statement on which the order was founded will not be an adequate ground for holding that the earlier practice must continue to prevail. If the appellant is not entitled to inspection of the statement he would certainly, for the same reason, not be entitled to a copy of that statement.\nDECISION ??", "expert_1": {"rank1": ["In the circumstances, we think that the High Court was right in holding that no case was made out for modification of the ex parte order.", "There is nothing in the scheme of the Act which indicates that an order passed for the examination of a person under. s. 477 may be made only after serving a notice upon such person the Rules expressly contemplate that the order may be made ex parte. Rules of natural justice are therefore not violated merely by the issue of an order requiring a person or persons to appear before a Court for his examination under s. 477.", "Nor do the rules of procedure framed by this Court for examination under s. 477 contemplate and right of inspection of the statement of the official liquidator.", "As we have already pointed out, r. 243 contemplates an order ex parte and the scheme of the Rule further emphasises the fact that all these enquiries are intended as already discussed to be confidential proceedings. The person whose examination is sought to be held, has therefore no right to inspect the statement made by the liquidator on which the order of the Court proceeds.", "The mere fact that under r. 195 of the Calcutta High Court Rules under Act of 1913 the appellant might have had a right of access to the statement on which the order was founded will not be an adequate ground for holding that the earlier practice must continue to prevail. If the appellant is not entitled to inspection of the statement he would certainly, for the same reason, not be entitled to a copy of that statement."], "rank2": ["The Court has therefore jurisdiction in proper cases, i.e. where it is satisfied that the order is vexatious, or oppressive, or where other adequate grounds exist to discharge the same. In our view, the High Court was right in holding that in a proper case it would be open to the Company Judge to vacate an ex-parte order obtained under r. 243 of the Companies (Court) Rules. The jurisdiction to vacate or modify an ex- parte order under r. 243 being granted, the question which falls to be determined is whether the order passed by Mr. Justice Mitter was oppressive or vexatious or otherwise liable to be vacated or modified for adequate grounds. In our view, there is no ground for holding that the order is liable to be vacated or modified. It was never even suggested in the High Court that the order for examination was per se oppressive or vexatious. This is not a case in which the order is sought to facilitate the progress of an action filed by the official liquidator against the appellant, nor is there reason to hold that the order is sought in aid of some collateral purpose-a purpose other than effective progress of the winding up in the interest of the company.", "This Court cannot proceed upon an assumption that the order for examination of a person who has ceased to be a director prior to the date of the winding up must necessarily be regarded as oppressive or vexatious. A director of a company, past or present, is ordinarily in a position to give useful information about the affairs of the Company in winding up.", "An application by an official liquidator is required to be supported by a statement signed by him, but the rule does not contemplate any notice to the parties likely to be affected by the issue of the summons. The proceedings are intended to be confidential.", "This practice in our judgement is consonant with right and justice. That proceedings for examination of officers and other persons are confidential is emphasised by rr. 247 and 248.", "The right to inspection is given in respect of the file of the proceedings of the liquidation. But the statement made by the official liquidator under Rule 243 does not form part of the file of the proceedings of the liquidation. The statement is not to be made on oath it has to be shown to the Company Judge and the Judge has to apply his mind to the contents thereof, but it does not, as pointed out by Mr. Justice Law, form part of the liquidation proceedings. In the Company (Court) Rules, there is no rule specifying the documents which are to be included in the file of the liquidation proceedings. The order passed by the Court and the summons issued thereon may be regarded as forming part of the file of the proceeding of liquidation, but having regard to the nature of the statement made by the official liquidator on which this Judges order is passed, it is not part of the file of the proceedings of liquidation. \nThe person summoned even if he is an officer or director of the company, is therefore not entitled to inspection thereof relying upon Rule 360.", "It appears that the practice of the Calcutta High Court, prior to the promulgation of the Companies (Court) Rules, was different. Under r. 195 an application for examination of a person under s 195 of the Indian Companies Act 1913, could be made ex parte to the Judge but it had to be by petition verified by the official liquidator stating the facts upon which the application was based. It was also provided that at the hearing, the Judge may, if satisfied that a prima facie case for examination had been made out, direct the issue of a summons or summonses against the person or persons named in the order for examination and or for the production of the documents. Manifestly, the order could be obtained on a petition which was required to be verified by the official liquidator and there had to be a formal hearing and only if a prima facie case for hearing had been made out the order could be made. Under the Companies (Court) Rules a different practice, which approaches the practice prevailing in the English Courts has been set up."], "rank3": ["Three questions fall to be determined \n Whether an ex parte order directing the examination of a person under s. 477 of the Indian Companies Act, 1956 is liable to be modified, or vacated on the application of the persons affected thereby \n Whether there is any ground for discharging or modifying the order dated January 18, 1960 and \n Whether the appellant is entitled before his examination to inspect the statement submitted by the official liquidator in support of the application for the order dated January 18, 1960, or to be furnished with a copy thereof.", "The primary test for making the order is whether it is just and beneficial to the business of the company, But the power conferred by the section is very wide and the Court must guard itself against being made an instrument of vexation or oppression. The order which is made ex-parte is not final it is always open to a person summoned to apply for vacating or modifying the order on the ground that it has been obtained without placing all the requisite materials before the Court or by mis-statement of facts or on other adequate grounds.", "We must recollect also that it is not necessary to make out a prima facie case-the probability of a case is enough. A fair suspicion may be well worthy of further investigation, and it may well be worth the expense and trouble of examining witnesses to see whether it is well founded. It is not necessary that the applicant should establish his case before he applies to the Judge he may say to the Judge, I have a strong ground for suspecting that a certain transaction was fraudulent if it is proved to be so we shall get a large some of money will you let me lay out a small sum of money in order to examine a witness or two, so as to ascertain the facts? In that case the Court will exercise a discretion."], "rank4": ["Appeal by special leave from the judgment and order dated April 17, 1961 of the Calcutta High Court in Appeal from Original Order No. 132 of 1960.", "The appellant contended that the order made by Mr. Justice Mitter on January 18, 1960, was obtained by suppression of material facts and that, in any event, the order made without notice to the appellant was vexatious and oppressive and amounted to an abuse of the process of Court. He submitted that he was a Director of the Company between the years 1939 to 1953 and had attended meetings of the Board of Directors of the Company and without reference to the records of the meetings of the Board and particularly without reference to the Minute Books, it was not possible for him to recollect any details as to transactions which might have taken place in the Boards meetings. He stated that he was not concerned with the administration, management or the day to day working of the Company, except to the extent of taking part in the Boards meetings, that he never had in his custody the books referred to in the order and that the official liquidator had never asked for or enquired of him about any documents, that he was not aware of the matters on which information was required by the official liquidator and unless those matters were made known to him, it was not possible for him, to answer questions or to give information required of him, that to enable him to answer questions or supply information, it was necessary for him to know the nature of the enquiry and the charges and to inspect the records and documents of the Company and without the assistance of such records and documents his proposed examination would be highly oppressive and harsh and was likely to prove futile. The official liquidator submitted that all the available papers in the books with the liquidator will be made available at the time of the examination of the appellant but he-the official liquidator-was not bound to give information in advance about the nature of the enquiry to do so, he contended, would defeat the purpose of the enquiry. He also submitted that the appellant had no right claim inspection or to obtain copies of the statement which accompanied the judges summons dated January 18, 1960. Mr. Justice Law rejected the application filed by the appellant, holding that the order dated January 18, 1960, was final and that he had no power to review, modify, alter or vary the same, that the order merely summoning for examination under s. 477 of the Companies Act did not affect a partys rights, there being no charge, no complaint and no allegation against him. The learned Judge observed that it was not necessary for the Court in the first instance to determine that the person called upon to furnish information actually possessed that information if the Court has reasons to think, or if even an allegation is made that a certain person is in possession of information which would be of use in the course of winding up, the Court can call upon him to appear in Court and examine him, and that rr. 243 (1) and 243 (2) of Companies (Court) Rules laid down the same procedure as was laid down in In re Gold Company (1879 12 Ch. D. 77 at page 82) and different from the procedure which was laid by r. 195 of the Indian Companies Act, 1913. In the view of the learned Judge the statement of the official liquidator on which the order dated January 18, 1960, was made not being on oath or affirmation was not legal evidence and did not form part of the proceedings of the Court and the appellant could not demand facility for inspection of the statement or copy thereof. Against the order of Mr. Justice Law an appeal was preferred to a Division Bench of the High Court. The High Court held that the order having been initially pass ex parte an application for discharging or modifying the order was in law maintainable at the instance of the appellant but the order in so far as it directed the appellant who was a director of the Company to appear before the Court to be examined touching upon the affairs of the Company was, in the circumstances of the case, desirable and necessary, and that the statement of the official liquidator on which the order dated January 18, 1960, was issued not being an affidavit was not required by the Companies (Court) Rules 1959 to be kept on the file of the liquidation proceedings the statement was a confidential document and was-save by order of the Court-not open to inspection of any person other than the liquidator. The learned judges modified the order in so far as it directed production of the books of account relating to the Ballygunge Estate (Private) Ltd. and the Ballygunge Building Society Private Ltd., because those companies were not parties to the liquidation proceedings. Against the order of the High Court this appeal with special leave has been preferred to this Court.", "It is a power of an inquisitorial kind which enables the Court to direct to be examined-not merely before itself, but before the examiner appointed by the Court-some third person who is no party to a litigation. That is an inquisitorial power, which may work with great severity against third persons, and it seems to me to be obvious that such a section ought to be used with the greatest care, so as not unnecessarily put in motion the machinery of justice when it is not wanted or to put it in motion at a stage when it is not clear that it is wanted, and certainly not to put it is motion if unnecessary mischief is going to be done or hardship inflicted upon the third person who is called upon to appear and give information.", "Mr. Justice Mitter was satisfied on the statement filed by the official liquidator that the appellant had the custody of certain important books of the company. The plea of the appellant that compelling him to submit to examination without permitting him to have access to the books before answering questions put to him is oppressive has no substance. The affidavit filed on behalf of the liquidator clearly states that the relevant records of the company will be made available to the appellant at the time of the examination. The High Court, in appeal, expressed the view that on the merits there was no ground for interference and it was satisfied that it was desirable and necessary that the appellant as a director should be examined. The appellant having been a director of the company during the period when it is alleged the affairs were mismanaged, is likely to be aware of the management and in possession of information conducive to effective prosecution of the winding up and if the learned Judge thought it fit to order that the appellant be examined the order cannot be regarded as either vexatious or oppressive or otherwise liable to be set aside.", "It was never suggested before the High Court that the order was made without considering the material facts and circumstances. The Court has made the order in exercise of the jurisdiction vested in it and in the absence of any material to show that the order was made for a collateral purpose or by the misleading the Court, the appellant is not entitled to have the order vacated."], "label": "REJECTED"}, "expert_2": {"rank1": ["The order which is made ex-parte is not final it is always open to a person summoned to apply for vacating or modifying the order on the ground that it has been obtained without placing all the requisite materials before the Court or by mis-statement of facts or on other adequate grounds. Rule 9 of the Companies (Court) Rules preserves to the Court its inherent powers to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of Court, and a direction to vacate an order previously made, is in a proper case within the Courts inherent jurisdiction.", "In the circumstances, we think that the High Court was right in holding that no case was made out for modification of the ex parte order.", "Rule 243 expressly contemplates that an application for examination under s. 477 may be made ex parte. An application by an official liquidator is required to be supported by a statement signed by him, but the rule does not contemplate any notice to the parties likely to be affected by the issue of the summons. The proceedings are intended to be confidential.", "The proceedings for examination under s. 477 being intended to be commenced only in the interest of the Company and for the purpose of collecting evidence for the effective prosecution of the liquidation are by rules expressly to be commenced by order which may on the application of the official liquidator be made ex parte. The order does not purport to decide any question in dispute between the Company and the persons sought to be examined.", "Rules of natural justice are therefore not violated merely by the issue of an order requiring a person or persons to appear before a Court for his examination under s. 477. Nor do the rules of procedure framed by this Court for examination under s. 477 contemplate and right of inspection of the statement of the official liquidator."], "rank2": ["Three questions fall to be determined \n Whether an ex parte order directing the examination of a person under s. 477 of the Indian Companies Act, 1956 is liable to be modified, or vacated on the application of the persons affected thereby \n Whether there is any ground for discharging or modifying the order dated January 18, 1960 and \n Whether the appellant is entitled before his examination to inspect the statement submitted by the official liquidator in support of the application for the order dated January 18, 1960, or to be furnished with a copy thereof.", "By r. 243 an application for an order for examination may be made ex parte, and the Company Judge may, if he is satisfied that the interest of the company will be served by the examination of a person-be he an officer of the company or other person make the order. The primary test for making the order is whether it is just and beneficial to the business of the company, But the power conferred by the section is very wide and the Court must guard itself against being made an instrument of vexation or oppression", "The Court has therefore jurisdiction in proper cases, i.e. where it is satisfied that the order is vexatious, or oppressive, or where other adequate grounds exist to discharge the same. In our view, the High Court was right in holding that in a proper case it would be open to the Company Judge to vacate an ex-parte order obtained under r. 243 of the Companies (Court) Rules. The jurisdiction to vacate or modify an ex- parte order under r. 243 being granted, the question which falls to be determined is whether the order passed by Mr. Justice Mitter was oppressive or vexatious or otherwise liable to be vacated or modified for adequate grounds. In our view, there is no ground for holding that the order is liable to be vacated or modified.", "Before him a statement of the official liquidator was produced and in the light of the materials placed before him, he passed the order which is now sought to be modified. This Court cannot proceed upon an assumption that the order for examination of a person who has ceased to be a director prior to the date of the winding up must necessarily be regarded as oppressive or vexatious. A director of a company, past or present, is ordinarily in a position to give useful information about the affairs of the Company in winding up", "Two grounds were set up in support of the plea that the appellant before he is examined is entitled to inspect the statement of the official liquidator (a) that it is contrary to rules of natural justice to disallow inspection of the statement on which a judicial order imposing an obligation upon a party is made, and (b) that the rules of procedure prescribed under the Companies (Court) Rules authorise the person summoned to inspect the statement of the official liquidator on which the order is made.", "As observed in In re Gold Company (1) by Sir George Jessel R in these mattersthe object being to keep the proceedings secret from the person sought to be affected, and the practice is, and as far as I know always has been, that the liquidator, instead of making an affidavit, simply makes a written statement which he leaves with the Chief Clerk, who thereupon issues an order, and the written statement cannot, be got at by anybody whereas an affidavit can. This practice in our judgement is consonant with right and justice. That proceedings for examination of officers and other persons are confidential is emphasised by rr. 247 and 248.", "If the appellant is not entitled to inspection of the statement he would certainly, for the same reason, not be entitled to a copy of that statement."], "rank3": ["Ballygunge Real Property and Building Society Ltd.-hereinafter called the Company-was on January 8, 1958, ordered by the High Court of Judicature at Calcutta to be wound up. On January 18, 1960, the Official Liquidator submitted an application accompanied by a signed statement for an order that the appellant be examined under s. 477 of the Indian Companies Act, 1956.", "the appellant was served with the order to attend the Court on March 22, 1960, for the purpose of being examined concerning the affairs of the company, and to bring with him and produce at the said time and place the following books and papers, mentioned in Schedule B to the order", "The appellant was for many years a director of the company, and therefore concerned with guiding the affairs of the company. He was prima facie a person who would be able to give information likely to promote the purpose of the winding up. It appears also that Mr. Justice Mitter was satisfied on the statement filed by the official liquidator that the appellant had the custody of certain important books of the company.", "We must recollect also that it is not necessary to make out a prima facie case-the probability of a case is enough. A fair suspicion may be well worthy of further investigation, and it may well be worth the expense and trouble of examining witnesses to see whether it is well founded. It is not necessary that the applicant should establish his case before he applies to the Judge he may say to the Judge, I have a strong ground for suspecting that a certain transaction was fraudulent if it is proved to be so we shall get a large some of money will you let me lay out a small sum of money in order to examine a witness or two, so as to ascertain the facts? In that case the Court will exercise a discretion.", "Rule 360 of the Companies (Court) Rules provides that every duly authorised officer of a the Central Government, and, save as otherwise provided by these Rules, every persons who has been a director or officer of a company which is being wound up, shall be entitled, free of charge, at all reasonable times to inspect the file of proceedings of the liquidation and to take copies or extracts from any document therein, and, on payment of the prescribed charges to be furnished with such copies or extracts. The right to inspection is given in respect of the file of the proceedings of the liquidation. But the statement made by the official liquidator under Rule 243 does not form part of the file of the proceedings of the liquidation.", "It was urged by counsel for the appellant that the petition for an order under s.477 was inexorably connected with the statement of the official liquidator, and if the party affected by the order was entitled to inspect the petition, he was entitled to inspect the statement which formed part of the petition. There is however, no warrant for the view that the petition and the statement form part of the same document. The petition has, it is true, to be supported by a statement, but the statement is independent of the petition."], "rank4": ["The appellant contended that the order made by Mr. Justice Mitter on January 18, 1960, was obtained by suppression of material facts and that, in any event, the order made without notice to the appellant was vexatious and oppressive and amounted to an abuse of the process of Court. He submitted that he was a Director of the Company between the years 1939 to 1953 and had attended meetings of the Board of Directors of the Company and without reference to the records of the meetings of the Board and particularly without reference to the Minute Books, it was not possible for him to recollect any details as to transactions which might have taken place in the Boards meetings. He stated that he was not concerned with the administration, management or the day to day working of the Company, except to the extent of taking part in the Boards meetings, that he never had in his custody the books referred to in the order and that the official liquidator had never asked for or enquired of him about any documents, that he was not aware of the matters on which information was required by the official liquidator and unless those matters were made known to him, it was not possible for him, to answer questions or to give information required of him, that to enable him to answer questions or supply information, it was necessary for him to know the nature of the enquiry and the charges and to inspect the records and documents of the Company and without the assistance of such records and documents his proposed examination would be highly oppressive and harsh and was likely to prove futile.", "That is an inquisitorial power, which may work with great severity against third persons, and it seems to me to be obvious that such a section ought to be used with the greatest care, so as not unnecessarily put in motion the machinery of justice when it is not wanted or to put it in motion at a stage when it is not clear that it is wanted, and certainly not to put it is motion if unnecessary mischief is going to be done or hardship inflicted upon the third person who is called upon to appear and give information.", "It was never suggested before the High Court that the order was made without considering the material facts and circumstances. The Court has made the order in exercise of the jurisdiction vested in it and in the absence of any material to show that the order was made for a collateral purpose or by the misleading the Court, the appellant is not entitled to have the order vacated."], "label": "REJECTED"}, "expert_3": {"rank1": ["Three questions fall to be determined \n Whether an ex parte order directing the examination of a person under s. 477 of the Indian Companies Act, 1956 is liable to be modified, or vacated on the application of the persons affected thereby \n Whether there is any ground for discharging or modifying the order dated January 18, 1960 and \n Whether the appellant is entitled before his examination to inspect the statement submitted by the official liquidator in support of the application for the order dated January 18, 1960, or to be furnished with a copy thereof", "The primary test for making the order is whether it is just and beneficial to the business of the company, But the power conferred by the section is very wide and the Court must guard itself against being made an instrument of vexation or oppression. The order which is made ex-parte is not final it is always open to a person summoned to apply for vacating or modifying the order on the ground that it has been obtained without placing all the requisite materials before the Court or by mis-statement of facts or on other adequate grounds", "In our view, the High Court was right in holding that in a proper case it would be open to the Company Judge to vacate an ex-parte order obtained under r. 243 of the Companies (Court) Rules. The jurisdiction to vacate or modify an ex- parte order under r. 243 being granted, the question which falls to be determined is whether the order passed by Mr. Justice Mitter was oppressive or vexatious or otherwise liable to be vacated or modified for adequate grounds. In our view, there is no ground for holding that the order is liable to be vacated or modified", "It was never even suggested in the High Court that the order for examination was per se oppressive or vexatious. This is not a case in which the order is sought to facilitate the progress of an action filed by the official liquidator against the appellant, nor is there reason to hold that the order is sought in aid of some collateral purpose-a purpose other than effective progress of the winding up in the interest of the company", "The appellant was for many years a director of the company, and therefore concerned with guiding the affairs of the company. He was prima facie a person who would be able to give information likely to promote the purpose of the winding up", "Justice Mitter was satisfied on the statement filed by the official liquidator that the appellant had the custody of certain important books of the company. The plea of the appellant that compelling him to submit to examination without permitting him to have access to the books before answering questions put to him is oppressive has no substance.", "The affidavit filed on behalf of the liquidator clearly states that the relevant records of the company will be made available to the appellant at the time of the examination. The High Court, in appeal, expressed the view that on the merits there was no ground for interference and it was satisfied that it was desirable and necessary that the appellant as a director should be examined.", "The appellant having been a director of the company during the period when it is alleged the affairs were mismanaged, is likely to be aware of the management and in possession of information conducive to effective prosecution of the winding up and if the learned Judge thought it fit to order that the appellant be examined the order cannot be regarded as either vexatious or oppressive or otherwise liable to be set aside", "The appellant has admitted in his affidavit that he was served with a copy of the order, but he has not chosen to produce it in the Court of First Instance, nor is the order printed in the record prepared for the use of the Court in this appeal. It was never suggested before the High Court that the order was made without considering the material facts and circumstances", "The Court has made the order in exercise of the jurisdiction vested in it and in the absence of any material to show that the order was made for a collateral purpose or by the misleading the Court, the appellant is not entitled to have the order vacated", "Justice Mitter was the company Judge in charge of the liquidation proceedings of the Company. Before him a statement of the official liquidator was produced and in the light of the materials placed before him, he passed the order which is now sought to be modified. This Court cannot proceed upon an assumption that the order for examination of a person who has ceased to be a director prior to the date of the winding up must necessarily be regarded as oppressive or vexatious", "A director of a company, past or present, is ordinarily in a position to give useful information about the affairs of the Company in winding up. In the circumstances, we think that the High Court was right in holding that no case was made out for modification of the ex parte order", "The proceedings are intended to be confidential.", "in these mattersthe object being to keep the proceedings secret from the person sought to be affected, and the practice is, and as far as I know always has been, that the liquidator, instead of making an affidavit, simply makes a written statement which he leaves with the Chief Clerk, who thereupon issues an order, and the written statement cannot, be got at by anybody whereas an affidavit can. This practice in our judgement is consonant with right and justice.", "But the statement made by the official liquidator under Rule 243 does not form part of the file of the proceedings of the liquidation. The statement is not to be made on oath it has to be shown to the Company Judge and the Judge has to apply his mind to the contents thereof, but it does not, as pointed out by Mr. Justice Law, form part of the liquidation proceedings", "In the Company (Court) Rules, there is no rule specifying the documents which are to be included in the file of the liquidation proceedings. The order passed by the Court and the summons issued thereon may be regarded as forming part of the file of the proceeding of liquidation, but having regard to the nature of the statement made by the official liquidator on which this Judges order is passed, it is not part of the file of the proceedings of liquidation", "The person summoned even if he is an officer or director of the company, is therefore not entitled to inspection thereof relying upon Rule 360.", "The petition has, it is true, to be supported by a statement, but the statement is independent of the petition. It appears that the practice of the Calcutta High Court, prior to the promulgation of the Companies (Court) Rules, was different.", "The mere fact that under r. 195 of the Calcutta High Court Rules under Act of 1913 the appellant might have had a right of access to the statement on which the order was founded will not be an adequate ground for holding that the earlier practice must continue to prevail. If the appellant is not entitled to inspection of the statement he would certainly, for the same reason, not be entitled to a copy of that statement"], "rank2": ["The solicitors of the appellant by letters dated February 29, 1960, and March 10, 1960, called upon the Official Liquidator to furnish them with copies of the petition and the report on the basis of which the order was made. The Official Liquidator having informed the solicitors of the appellant that the latter were not entitled to a copy of the report of the official liquidator, the appellant applied by a judges summons for an order recalling vacating, setting aside or modifying the order dated January 18, 1960, and for a direction to the official liquidator requiring him to supply copies of the report of the official liquidator and of the other documents relating to the application and alternatively for an order granting leave to inspect the court records and proceedings of the application and to take copies thereof", "Justice Law rejected the application filed by the appellant, holding that the order dated January 18, 1960, was final and that he had no power to review, modify, alter or vary the same, that the order merely summoning for examination under s. 477 of the Companies Act did not affect a partys rights, there being no charge, no complaint and no allegation against him", "The learned Judge observed that it was not necessary for the Court in the first instance to determine that the person called upon to furnish information actually possessed that information if the Court has reasons to think, or if even an allegation is made that a certain person is in possession of information which would be of use in the course of winding up, the Court can call upon him to appear in Court and examine him, and that rr. 243 (1) and 243 (2) of Companies (Court) Rules laid down the same procedure as was laid down in In re Gold Company (1879 12 Ch.", "and different from the procedure which was laid by r. 195 of the Indian Companies Act, 1913. In the view of the learned Judge the statement of the official liquidator on which the order dated January 18, 1960, was made not being on oath or affirmation was not legal evidence and did not form part of the proceedings of the Court and the appellant could not demand facility for inspection of the statement or copy thereof.", "The High Court held that the order having been initially pass ex parte an application for discharging or modifying the order was in law maintainable at the instance of the appellant but the order in so far as it directed the appellant who was a director of the Company to appear before the Court to be examined touching upon the affairs of the Company was, in the circumstances of the case, desirable and necessary, and that the statement of the official liquidator on which the order dated January 18, 1960, was issued not being an affidavit was not required by the Companies (Court) Rules 1959 to be kept on the file of the liquidation proceedings the statement was a confidential document and was-save by order of the Court-not open to inspection of any person other than the liquidator. The learned judges modified the order in so far as it directed production of the books of account relating to the Ballygunge Estate (Private) Ltd. and the Ballygunge Building Society Private Ltd., because those companies were not parties to the liquidation proceedings", "Against the order of the High Court this appeal with special leave has been preferred to this Court", "Section 477 of the Indian Companies Act, 1956, provides 477 (1) The Court may, at any time after the appointment of a provisional liquidator or the making of a winding up order summon before it any officer of the company or person known or suspected to have in his possession any property or books or papers of the company, or known or suspected to be indebted to the company, or any person whom the Court deems capable of giving information concerning the promotion, formation, trade, dealings, property, books or papers, or affairs of the company. The Court may examine any officer or person so summoned on oath concerning the matters aforesaid, either by word of mouth or on written interrogatories and may, in the former case, reduce his answers to writing and require him to sign them. The Court may require any officer or person so summoned to produce any books and papers in his custody or power relating to the company but, where he claims any lien on books or papers, produced by him, the production shall be without prejudice to that lien, and the Court shall have jurisdiction in the winding up to determine all questions relating to that lien. If any officer or person so summoned, after being paid or tendered a reasonable sum for his expenses, fails to appear before the Court at the time appointed, not having a lawful impediment (made known to the Court at the time of its sitting and allowed by it), the Court may cause him to be apprehended and brought before the Court for examination", "If, on his examination, any officer or person so summoned admits that he is indebted to the company, the Court may order him to pay to the provisional liquidator or, as the case may be, the liquidator at such time and in such manner as to the Court may seem just the amount in which he is indebted, or any part thereof, either in full discharge of the whole amount or not, as the Court thinks fit, with or without costs of the examination", "If, on his examination, any such officer or person admits that he has in his possession any property belonging to the company, the Court may order him to deliver to the provisional liquidator or, as the case may be, the liquidator, that property or any part thereof, at such time, in such manner and on such terms as to the Court may seem just. Orders made under sub-sections (5) and (6) shall be executed in the same manner as decrees for the payment of money or for delivery of property under the Code of Civil Procedure, 1908 respectively. Any person making any payment or delivery in pursuance of an order made under subsection (5) or sub-section (6) shall by such payment or delivery be, unless otherwise directed by such order, discharged from all liability whatsoever in respect of such debt or property.", "Clauses (5), (6), (7) and (8) it may be noted, were inserted by Act 65 of 1960", "Section 463 of the Companies Act authorises this Court to make rules for all matters relating to winding up of companies which by the Act are to be prescribed and for other matters. This court has framed Companies (Court) Rules, 1959, out of which rr. 243, 244 and 249, which are material, are as follows - \n Application for examination under Section 477.-(1) An application for the examination of a person under Section 477 may be made ex parte provided that where the application is made by any person other than the Official Liquidator, notice of the application shall be given to the Official Liquidator. The summons shall be in Form 109 and, where the application is by the Official Liquidator, shall be accompanied by a statement signed by him setting forth the facts on which the application is based. Where the application is made by a person other than the Official Liquidator, the summons shall be supported by an affidavit of the applicant setting forth the matters in respect of which the examination is sought and the grounds relied on in support of the summons", "Upon the hearing of the summons the Judge may, if satisfied that there are grounds for making the orders, make an order directing the issue of summons against the person named in the order for his examination and or for the production of documents. Unless the Judge otherwise directs, the examination of such person shall be held in Chambers. The order shall be in Form No. 110. Order for public examination under section 478.-(1) where an order is made for the examination of any person or persons under Section 478, the examination shall be held before the Judge provided that in the case of High Court, the Judge may direct that the whole or any part of the examination of any such person or persons, be held before any of the officers mentioned in sub-section (10) of the said Section as may be mentioned in the order Where the date of the examination has not been fixed by the order, the Official Liquidator shall take an appointment from the Judge or officer before whom the examination is to be held as to the date of the examination. The order directing a public examination shall be in Form No. 112", "The Judge may, if he things fit, either in the order for examination or by any subsequent order, give directions to the specific matters on which such person is to be examined. By s. 477 the Court is authorised to summon before it (1) any officer of the Company, (2) any person known or suspected to have in his possession any property or books or papers of the Company, and (3) any person known or suspected to be indebted to the company, or any person whom the Court deems capable of giving information concerning the promotion, formation, trade, dealings, property, books or papers or affairs of the company. By r. 243 an application for an order for examination may be made ex parte, and the Company Judge may, if he is satisfied that the interest of the company will be served by the examination of a person-be he an officer of the company or other person make the order", "Rule 9 of the Companies (Court) Rules preserves to the Court its inherent powers to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of Court, and a direction to vacate an order previously made, is in a proper case within the Courts inherent jurisdiction. The relevant provisions of the English Companies Act, 1862 (25 26 Vict. c. 89), the English Companies Act, 1929 (19 20 Geo V c.3) and the English Companies Act, 1948 (11 12 Geo VI c,88) on the question relating to examination of officers of the company or other persons are substantially the same as s. 477 of the Indians Companies Act, 1956, and the principles laid down by the superior Courts in England, which have been assimilated in the practice of Company winding up by the Courts in India are useful in determining the nature of the proceeding. In re North Australian Territory Company (1), Lord Justice Cotton vacated an order in appeal where the order for examination was not made in the interest of the Company in liquidation, but was made with a view to assist the interest of the company in prosecuting an action which has been brought up by the liquidator", "Lord Justice Bowen in that case observed that the power conferred by s. 115 is an extra-ordinary power. It is a power of an inquisitorial kind which enables the Court to direct to be examined-not merely before itself, but before the examiner appointed by the Court-some third person who is no party to a litigation. That is an inquisitorial power, which may work with great severity against third persons, and it seems to me to be obvious that such a section ought to be used with the greatest care, so as not unnecessarily put in motion the machinery of justice when it is not wanted or to put it in motion at a stage when it is not clear that it is wanted, and certainly not to put it is motion if unnecessary mischief is going to be done or hardship inflicted upon the third person who is called upon to appear and give information", "It was held that the liquidator must satisfy the Court that it would be just and beneficial for the purposes of the winding up. The Court in that case held that the action of the liquidator was vexatious", "The Court has therefore jurisdiction in proper cases, i.e. where it is satisfied that the order is vexatious, or oppressive, or where other adequate grounds exist to discharge the same", "It must be remembered that both the Chief Clerk and the Judge know a great deal more of the proceedings in the winding-up than the Court of Appeal can know, and there may be various grounds for exercising the discretion, upon which the Court of Appeal cannot possibly form any opinion. We must recollect also that it is not necessary to make out a prima facie case-the probability of a case is enough. A fair suspicion may be well worthy of further investigation, and it may well be worth the expense and trouble of examining witnesses to see whether it is well founded. It is not necessary that the applicant should establish his case before he applies to the Judge he may say to the Judge, I have a strong ground for suspecting that a certain transaction was fraudulent if it is proved to be so we shall get a large some of money will you let me lay out a small sum of money in order to examine a witness or two, so as to ascertain the facts", "In that case the Court will exercise a discretion.", "Rule 243 expressly contemplates that an application for examination under s. 477 may be made ex parte. An application by an official liquidator is required to be supported by a statement signed by him, but the rule does not contemplate any notice to the parties likely to be affected by the issue of the summons", "That proceedings for examination of officers and other persons are confidential is emphasised by rr. 247 and 248. By cl. (2) of r. 247 no person is entitled to take part in the examination under s. 477 except the official liquidator and his advocate but the court may, if it thinks fit, permit any creditor or contributory to attend the examination subject to such conditions as it may impose. Clause (3) provides that notes of the examination may be permitted to be taken by a witness or any person on his behalf on his giving an undertaking that such notes shall be used only for the purposes of re-examination of the witness", "It is also provided that on the conclusion of the examination, the notes shall, unless otherwise directed, be handed over to the Court for destruction. Rule 248 provides inter alia, that the notes shall not be open to the inspection of any creditor, contributory or other person, except the official liquidator, nor shall a copy thereof or extract there from be supplied to any person other than the official liquidator, save upon orders of the Court", "The proceedings for examination under s. 477 being intended to be commenced only in the interest of the Company and for the purpose of collecting evidence for the effective prosecution of the liquidation are by rules expressly to be commenced by order which may on the application of the official liquidator be made ex parte. The order does not purport to decide any question in dispute between the Company and the persons sought to be examined. It only proceeds upon the satisfaction of the Court that the person should be examined in the interest of the Company, it appearing to the Court just proper that he should be so examined", "There is nothing in the scheme of the Act which indicates that an order passed for the examination of a person under. s. 477 may be made only after serving a notice upon such person the Rules expressly contemplate that the order may be made ex parte. Rules of natural justice are therefore not violated merely by the issue of an order requiring a person or persons to appear before a Court for his examination under s. 477", "Nor do the rules of procedure framed by this Court for examination under s. 477 contemplate and right of inspection of the statement of the official liquidator. As we have already pointed out, r. 243 contemplates an order ex parte and the scheme of the Rule further emphasises the fact that all these enquiries are intended as already discussed to be confidential proceedings. The person whose examination is sought to be held, has therefore no right to inspect the statement made by the liquidator on which the order of the Court proceeds", "Rule 360 of the Companies (Court) Rules provides that every duly authorised officer of a the Central Government, and, save as otherwise provided by these Rules, every persons who has been a director or officer of a company which is being wound up, shall be entitled, free of charge, at all reasonable times to inspect the file of proceedings of the liquidation and to take copies or extracts from any document therein, and, on payment of the prescribed charges to be furnished with such copies or extracts. The right to inspection is given in respect of the file of the proceedings of the liquidation", "Under r. 195 an application for examination of a person under s 195 of the Indian Companies Act 1913, could be made ex parte to the Judge but it had to be by petition verified by the official liquidator stating the facts upon which the application was based. It was also provided that at the hearing, the Judge may, if satisfied that a prima facie case for examination had been made out, direct the issue of a summons or summonses against the person or persons named in the order for examination and or for the production of the documents. Manifestly, the order could be obtained on a petition which was required to be verified by the official liquidator and there had to be a formal hearing and only if a prima facie case for hearing had been made out the order could be made"], "rank3": ["Ballygunge Real Property and Building Society Ltd.-hereinafter called the Company-was on January 8, 1958, ordered by the High Court of Judicature at Calcutta to be wound up. On January 18, 1960, the Official Liquidator submitted an application accompanied by a signed statement for an order that the appellant be examined under s. 477 of the Indian Companies Act, 1956. This application was granted ex-parte by Mr. Justice \n K. Mitter on January 18, 1960, and the appellant was served with the order to attend the Court on March 22, 1960, for the purpose of being examined concerning the affairs of the company, and to bring with him and produce at the said time and place the following books and papers, mentioned in Schedule B to the order, viz., \n Ballygunge Estate (Private) Ltd.-Cash Books, General Ledger, Journal, Minutes Books from 1939 to 1948, Property Register", "Ballygunge Building Society Private Ltd.- Cash Books, General Ledger, Journal, Minute Books, Property Register. Ballygunge Real Property Building Society Ltd. (In liquidation)-General Ledger for 1949, and all such other books, papers, deeds, writings and other documents in his custody or power in any way relating to the affairs of the Company", "Against the order of Mr. Justice Law an appeal was preferred to a Division Bench of the High Court"], "label": "REJECTED"}, "expert_4": {"rank1": ["Rules of natural justice are therefore not violated merely by the issue of an order requiring a person or persons to appear before a Court for his examination under s. 477.", "Nor do the rules of procedure framed by this Court for examination under s. 477 contemplate and right of inspection of the statement of the official liquidator."], "rank2": ["Three questions fall to be determined \n Whether an ex parte order directing the examination of a person under s. 477 of the Indian Companies Act, 1956 is liable to be modified, or vacated on the application of the persons affected thereby \n Whether there is any ground for discharging or modifying the order dated January 18, 1960 and \n Whether the appellant is entitled before his examination to inspect the statement submitted by the official liquidator in support of the application for the order dated January 18, 1960, or to be furnished with a copy thereof.", "The primary test for making the order is whether it is just and beneficial to the business of the company, But the power conferred by the section is very wide and the Court must guard itself against being made an instrument of vexation or oppression.", "The order which is made ex-parte is not final it is always open to a person summoned to apply for vacating or modifying the order on the ground that it has been obtained without placing all the requisite materials before the Court or by mis-statement of facts or on other adequate grounds.", "The Court has therefore jurisdiction in proper cases, i.e. where it is satisfied that the order is vexatious, or oppressive, or where other adequate grounds exist to discharge the same. In our view, the High Court was right in holding that in a proper case it would be open to the Company Judge to vacate an ex-parte order obtained under r. 243 of the Companies (Court) Rules. The jurisdiction to vacate or modify an ex- parte order under r. 243 being granted, the question which falls to be determined is whether the order passed by Mr.", "Justice Mitter was oppressive or vexatious or otherwise liable to be vacated or modified for adequate grounds.", "The plea of the appellant that compelling him to submit to examination without permitting him to have access to the books before answering questions put to him is oppressive has no substance.", "The High Court, in appeal, expressed the view that on the merits there was no ground for interference and it was satisfied that it was desirable and necessary that the appellant as a director should be examined. The appellant having been a director of the company during the period when it is alleged the affairs were mismanaged, is likely to be aware of the management and in possession of information conducive to effective prosecution of the winding up and if the learned Judge thought it fit to order that the appellant be examined the order cannot be regarded as either vexatious or oppressive or otherwise liable to be set aside.", "The Court has made the order in exercise of the jurisdiction vested in it and in the absence of any material to show that the order was made for a collateral purpose or by the misleading the Court, the appellant is not entitled to have the order vacated.", "We must recollect also that it is not necessary to make out a prima facie case-the probability of a case is enough.", "An application by an official liquidator is required to be supported by a statement signed by him, but the rule does not contemplate any notice to the parties likely to be affected by the issue of the summons. The proceedings are intended to be confidential.", "As we have already pointed out, r. 243 contemplates an order ex parte and the scheme of the Rule further emphasises the fact that all these enquiries are intended as already discussed to be confidential proceedings. The person whose examination is sought to be held, has therefore no right to inspect the statement made by the liquidator on which the order of the Court proceeds.", "the statement made by the official liquidator under Rule 243 does not form part of the file of the proceedings of the liquidation. The statement is not to be made on oath it has to be shown to the Company Judge and the Judge has to apply his mind to the contents thereof, but it does not, as pointed out by Mr. Justice Law, form part of the liquidation proceedings.", "The person summoned even if he is an officer or director of the company, is therefore not entitled to inspection thereof relying upon Rule 360.", "There is however, no warrant for the view that the petition and the statement form part of the same document."], "rank3": ["-Ballygunge Real Property and Building Society Ltd.-hereinafter called the Company-was on January 8, 1958, ordered by the High Court of Judicature at Calcutta to be wound up.", "The appellant contended that the order made by Mr. Justice Mitter on January 18, 1960, was obtained by suppression of material facts and that, in any event, the order made without notice to the appellant was vexatious and oppressive and amounted to an abuse of the process of Court.", "Mr. Justice Law rejected the application filed by the appellant, holding that the order dated January 18, 1960, was final and that he had no power to review, modify, alter or vary the same, that the order merely summoning for examination under s. 477 of the Companies Act did not affect a partys rights, there being no charge, no complaint and no allegation against him.", "The learned Judge observed that it was not necessary for the Court in the first instance to determine that the person called upon to furnish information actually possessed that information if the Court has reasons to think, or if even an allegation is made that a certain person is in possession of information which would be of use in the course of winding up, the Court can call upon him to appear in Court and examine him, and that rr. 243 (1) and 243 (2) of Companies (Court) Rules laid down the same procedure as was laid down in In re Gold Company (1879 12 Ch.", "In the view of the learned Judge the statement of the official liquidator on which the order dated January 18, 1960, was made not being on oath or affirmation was not legal evidence and did not form part of the proceedings of the Court and the appellant could not demand facility for inspection of the statement or copy thereof.", "The High Court held that the order having been initially pass ex parte an application for discharging or modifying the order was in law maintainable at the instance of the appellant but the order in so far as it directed the appellant who was a director of the Company to appear before the Court to be examined touching upon the affairs of the Company was, in the circumstances of the case, desirable and necessary, and that the statement of the official liquidator on which the order dated January 18, 1960, was issued not being an affidavit was not required by the Companies (Court) Rules 1959 to be kept on the file of the liquidation proceedings the statement was a confidential document and was-save by order of the Court-not open to inspection of any person other than the liquidator.", "The learned judges modified the order in so far as it directed production of the books of account relating to the Ballygunge Estate (Private) Ltd. and the Ballygunge Building Society Private Ltd., because those companies were not parties to the liquidation proceedings.", "Section 463 of the Companies Act authorises this Court to make rules for all matters relating to winding up of companies which by the Act are to be prescribed and for other matters.", "By s. 477 the Court is authorised to summon before it (1) any officer of the Company, (2) any person known or suspected to have in his possession any property or books or papers of the Company, and (3) any person known or suspected to be indebted to the company, or any person whom the Court deems capable of giving information concerning the promotion, formation, trade, dealings, property, books or papers or affairs of the company.", "By r. 243 an application for an order for examination may be made ex parte, and the Company Judge may, if he is satisfied that the interest of the company will be served by the examination of a person-be he an officer of the company or other person make the order.", "Rule 9 of the Companies (Court) Rules preserves to the Court its inherent powers to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of Court, and a direction to vacate an order previously made, is in a proper case within the Courts inherent jurisdiction.", "In our view, there is no ground for holding that the order is liable to be vacated or modified.", "It was never even suggested in the High Court that the order for examination was per se oppressive or vexatious.", "This is not a case in which the order is sought to facilitate the progress of an action filed by the official liquidator against the appellant, nor is there reason to hold that the order is sought in aid of some collateral purpose-a purpose other than effective progress of the winding up in the interest of the company. The appellant was for many years a director of the company, and therefore concerned with guiding the affairs of the company.", "He was prima facie a person who would be able to give information likely to promote the purpose of the winding up.", "It appears also that Mr. Justice Mitter was satisfied on the statement filed by the official liquidator that the appellant had the custody of certain important books of the company.", "It was never suggested before the High Court that the order was made without considering the material facts and circumstances.", "A fair suspicion may be well worthy of further investigation, and it may well be worth the expense and trouble of examining witnesses to see whether it is well founded. It is not necessary that the applicant should establish his case before he applies to the Judge he may say to the Judge, I have a strong ground for suspecting that a certain transaction was fraudulent if it is proved to be so we shall get a large some of money will you let me lay out a small sum of money in order to examine a witness or two, so as to ascertain the facts? In that case the Court will exercise a discretion.", "This Court cannot proceed upon an assumption that the order for examination of a person who has ceased to be a director prior to the date of the winding up must necessarily be regarded as oppressive or vexatious. A director of a company, past or present, is ordinarily in a position to give useful information about the affairs of the Company in winding up. In the circumstances, we think that the High Court was right in holding that no case was made out for modification of the ex parte order.", "Rule 243 expressly contemplates that an application for examination under s. 477 may be made ex parte.", "This practice in our judgement is consonant with right and justice. That proceedings for examination of officers and other persons are confidential is emphasised by rr. 247 and 248. By cl. (2) of r. 247 no person is entitled to take part in the examination under s. 477 except the official liquidator and his advocate but the court may, if it thinks fit, permit any creditor or contributory to attend the examination subject to such conditions as it may impose.", "The proceedings for examination under s. 477 being intended to be commenced only in the interest of the Company and for the purpose of collecting evidence for the effective prosecution of the liquidation are by rules expressly to be commenced by order which may on the application of the official liquidator be made ex parte. The order does not purport to decide any question in dispute between the Company and the persons sought to be examined. It only proceeds upon the satisfaction of the Court that the person should be examined in the interest of the Company, it appearing to the Court just proper that he should be so examined.", "There is nothing in the scheme of the Act which indicates that an order passed for the examination of a person under. s. 477 may be made only after serving a notice upon such person the Rules expressly contemplate that the order may be made ex parte.", "In the Company (Court) Rules, there is no rule specifying the documents which are to be included in the file of the liquidation proceedings.", "The order passed by the Court and the summons issued thereon may be regarded as forming part of the file of the proceeding of liquidation, but having regard to the nature of the statement made by the official liquidator on which this Judges order is passed, it is not part of the file of the proceedings of liquidation.", "The petition has, it is true, to be supported by a statement, but the statement is independent of the petition.", "The mere fact that under r. 195 of the Calcutta High Court Rules under Act of 1913 the appellant might have had a right of access to the statement on which the order was founded will not be an adequate ground for holding that the earlier practice must continue to prevail. If the appellant is not entitled to inspection of the statement he would certainly, for the same reason, not be entitled to a copy of that statement."], "rank4": ["On January 18, 1960, the Official Liquidator submitted an application accompanied by a signed statement for an order that the appellant be examined under s. 477 of the Indian Companies Act, 1956.", "This application was granted ex-parte by Mr. Justice \n K. Mitter on January 18, 1960, and the appellant was served with the order to attend the Court on March 22, 1960, for the purpose of being examined concerning the affairs of the company, and to bring with him and produce at the said time and place the following books and papers, mentioned in Schedule B to the order, viz., \n Ballygunge Estate (Private) Ltd.", "This order was published in public newspapers.", "The solicitors of the appellant by letters dated February 29, 1960, and March 10, 1960, called upon the Official Liquidator to furnish them with copies of the petition and the report on the basis of which the order was made.", "The Official Liquidator having informed the solicitors of the appellant that the latter were not entitled to a copy of the report of the official liquidator, the appellant applied by a judges summons for an order recalling vacating, setting aside or modifying the order dated January 18, 1960, and for a direction to the official liquidator requiring him to supply copies of the report of the official liquidator and of the other documents relating to the application and alternatively for an order granting leave to inspect the court records and proceedings of the application and to take copies thereof.", "The official liquidator submitted that all the available papers in the books with the liquidator will be made available at the time of the examination of the appellant but he-the official liquidator-was not bound to give information in advance about the nature of the enquiry to do so, he contended, would defeat the purpose of the enquiry.", "He also submitted that the appellant had no right claim inspection or to obtain copies of the statement which accompanied the judges summons dated January 18, 1960.", "Against the order of the High Court this appeal with special leave has been preferred to this Court.", "Section 477 of the Indian Companies Act, 1956, provides 477 (1) The Court may, at any time after the appointment of a provisional liquidator or the making of a winding up order summon before it any officer of the company or person known or suspected to have in his possession any property or books or papers of the company, or known or suspected to be indebted to the company, or any person whom the Court deems capable of giving information concerning the promotion, formation, trade, dealings, property, books or papers, or affairs of the company.", "The Court may examine any officer or person so summoned on oath concerning the matters aforesaid, either by word of mouth or on written interrogatories and may, in the former case, reduce his answers to writing and require him to sign them. The Court may require any officer or person so summoned to produce any books and papers in his custody or power relating to the company but, where he claims any lien on books or papers, produced by him, the production shall be without prejudice to that lien, and the Court shall have jurisdiction in the winding up to determine all questions relating to that lien.", "If any officer or person so summoned, after being paid or tendered a reasonable sum for his expenses, fails to appear before the Court at the time appointed, not having a lawful impediment (made known to the Court at the time of its sitting and allowed by it), the Court may cause him to be apprehended and brought before the Court for examination.", "If, on his examination, any officer or person so summoned admits that he is indebted to the company, the Court may order him to pay to the provisional liquidator or, as the case may be, the liquidator at such time and in such manner as to the Court may seem just the amount in which he is indebted, or any part thereof, either in full discharge of the whole amount or not, as the Court thinks fit, with or without costs of the examination.", "If, on his examination, any such officer or person admits that he has in his possession any property belonging to the company, the Court may order him to deliver to the provisional liquidator or, as the case may be, the liquidator, that property or any part thereof, at such time, in such manner and on such terms as to the Court may seem just. Orders made under sub-sections (5) and (6) shall be executed in the same manner as decrees for the payment of money or for delivery of property under the Code of Civil Procedure, 1908 respectively. Any person making any payment or delivery in pursuance of an order made under subsection (5) or sub-section (6) shall by such payment or delivery be, unless otherwise directed by such order, discharged from all liability whatsoever in respect of such debt or property.", "This court has framed Companies (Court) Rules, 1959, out of which rr. 243, 244 and 249, which are material, are as follows - \n Application for examination under Section 477.-(1) An application for the examination of a person under Section 477 may be made ex parte provided that where the application is made by any person other than the Official Liquidator, notice of the application shall be given to the Official Liquidator. The summons shall be in Form 109 and, where the application is by the Official Liquidator, shall be accompanied by a statement signed by him setting forth the facts on which the application is based. Where the application is made by a person other than the Official Liquidator, the summons shall be supported by an affidavit of the applicant setting forth the matters in respect of which the examination is sought and the grounds relied on in support of the summons.", "-Upon the hearing of the summons the Judge may, if satisfied that there are grounds for making the orders, make an order directing the issue of summons against the person named in the order for his examination and or for the production of documents. Unless the Judge otherwise directs, the examination of such person shall be held in Chambers. The order shall be in Form No. 110.", "Order for public examination under section 478.-(1) where an order is made for the examination of any person or persons under Section 478, the examination shall be held before the Judge provided that in the case of High Court, the Judge may direct that the whole or any part of the examination of any such person or persons, be held before any of the officers mentioned in sub-section (10) of the said Section as may be mentioned in the order Where the date of the examination has not been fixed by the order, the Official Liquidator shall take an appointment from the Judge or officer before whom the examination is to be held as to the date of the examination. The order directing a public examination shall be in Form No. 112. The Judge may, if he things fit, either in the order for examination or by any subsequent order, give directions to the specific matters on which such person is to be examined.", "The relevant provisions of the English Companies Act, 1862 (25 26 Vict. c. 89), the English Companies Act, 1929 (19 20 Geo V c.3) and the English Companies Act, 1948 (11 12 Geo VI c,88) on the question relating to examination of officers of the company or other persons are substantially the same as s. 477 of the Indians Companies Act, 1956, and the principles laid down by the superior Courts in England, which have been assimilated in the practice of Company winding up by the Courts in India are useful in determining the nature of the proceeding.", "In re North Australian Territory Company (1), Lord Justice Cotton vacated an order in appeal where the order for examination was not made in the interest of the Company in liquidation, but was made with a view to assist the interest of the company in prosecuting an action which has been brought up by the liquidator.", "the Court held that the liquidator had shown no reason for seeking discovery except to assist him in the action and so to evade the order of the Judge postponing discovery in the action and therefore the witness was justified in refusing to answer the question.", "Lord Justice Bowen in that case observed that the power conferred by s. 115 is an extra-ordinary power. It is a power of an inquisitorial kind which enables the Court to direct to be examined-not merely before itself, but before the examiner appointed by the Court-some third person who is no party to a litigation.", "That is an inquisitorial power, which may work with great severity against third persons, and it seems to me to be obvious that such a section ought to be used with the greatest care, so as not unnecessarily put in motion the machinery of justice when it is not wanted or to put it in motion at a stage when it is not clear that it is wanted, and certainly not to put it is motion if unnecessary mischief is going to be done or hardship inflicted upon the third person who is called upon to appear and give information.", "In re Metropolitan Bank (Heirons case)(1) a similar situation arose.", "It was held that the liquidator must satisfy the Court that it would be just and beneficial for the purposes of the winding up. The Court in that case held that the action of the liquidator was vexatious.", "In In re Mavile Hose, Limited, (2) an order which was regarded as premature and oppressive in the circumstances of the case was discharged by the Court.", "As pointed out by the Master of the Rolls in In re Gold Company Ltd., (1) It must be remembered that both the Chief Clerk and the Judge know a great deal more of the proceedings in the winding-up than the Court of Appeal can know, and there may be various grounds for exercising the discretion, upon which the Court of Appeal cannot possibly form any opinion.", "As observed in In re Gold Company (1) by Sir George Jessel R in these mattersthe object being to keep the proceedings secret from the person sought to be affected, and the practice is, and as far as I know always has been, that the liquidator, instead of making an affidavit, simply makes a written statement which he leaves with the Chief Clerk, who thereupon issues an order, and the written statement cannot, be got at by anybody whereas an affidavit can."], "rank5": ["Against the order of Mr. Justice Law an appeal was preferred to a Division Bench of the High Court."], "label": "REJECTED"}, "expert_5": {"rank1": ["In our view, there is no ground for holding that the order is liable to be vacated or modified.", "The Court has made the order in exercise of the jurisdiction vested in it and in the absence of any material to show that the order was made for a collateral purpose or by the misleading the Court, the appellant is not entitled to have the order vacated.", "The mere fact that under r. 195 of the Calcutta High Court Rules under Act of 1913 the appellant might have had a right of access to the statement on which the order was founded will not be an adequate ground for holding that the earlier practice must continue to prevail."], "rank2": ["It was never even suggested in the High Court that the order for examination was per se oppressive or vexatious.", "it is not necessary to make out a prima facie case-the probability of a case is enough. A fair suspicion may be well worthy of further investigation, and it may well be worth the expense and trouble of examining witnesses to see whether it is well founded.", "This Court cannot proceed upon an assumption that the order for examination of a person who has ceased to be a director prior to the date of the winding up must necessarily be regarded as oppressive or vexatious.", "This practice in our judgement is consonant with right and justice.", "The person whose examination is sought to be held, has therefore no right to inspect the statement made by the liquidator on which the order of the Court proceeds."], "rank3": ["The appellant has admitted in his affidavit that he was served with a copy of the order, but he has not chosen to produce it in the Court of First Instance, nor is the order printed in the record prepared for the use of the Court in this appeal. It was never suggested before the High Court that the order was made without considering the material facts and circumstances.", "As pointed out by the Master of the Rolls in In re Gold Company Ltd., (1) It must be remembered that both the Chief Clerk and the Judge know a great deal more of the proceedings in the winding-up than the Court of Appeal can know, and there may be various grounds for exercising the discretion, upon which the Court of Appeal cannot possibly form any opinion.", "It is not necessary that the applicant should establish his case before he applies to the Judge he may say to the Judge, I have a strong ground for suspecting that a certain transaction was fraudulent if it is proved to be so we shall get a large some of money will you let me lay out a small sum of money in order to examine a witness or two, so as to ascertain the facts?", "Rule 243 expressly contemplates that an application for examination under s. 477 may be made ex parte.", "There is nothing in the scheme of the Act which indicates that an order passed for the examination of a person under. s. 477 may be made only after serving a notice upon such person the Rules expressly contemplate that the order may be made ex parte. Rules of natural justice are therefore not violated merely by the issue of an order requiring a person or persons to appear before a Court for his examination under s. 477.", "Nor do the rules of procedure framed by this Court for examination under s. 477 contemplate and right of inspection of the statement of the official liquidator.", "As we have already pointed out, r. 243 contemplates an order ex parte and the scheme of the Rule further emphasises the fact that all these enquiries are intended as already discussed to be confidential proceedings.", "Under the Companies (Court) Rules a different practice, which approaches the practice prevailing in the English Courts has been set up."], "rank4": ["This application was granted ex-parte by Mr. Justice \n K. Mitter", "The order which is made ex-parte is not final it is always open to a person summoned to apply for vacating or modifying the order on the ground that it has been obtained without placing all the requisite materials before the Court or by mis-statement of facts or on other adequate grounds. Rule 9 of the Companies (Court) Rules preserves to the Court its inherent powers to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of Court, and a direction to vacate an order previously made, is in a proper case within the Courts inherent jurisdiction.", "The Court has therefore jurisdiction in proper cases, i.e. where it is satisfied that the order is vexatious, or oppressive, or where other adequate grounds exist to discharge the same. In our view, the High Court was right in holding that in a proper case it would be open to the Company Judge to vacate an ex-parte order obtained under r. 243 of the Companies (Court) Rules.", "This is not a case in which the order is sought to facilitate the progress of an action filed by the official liquidator against the appellant, nor is there reason to hold that the order is sought in aid of some collateral purpose-a purpose other than effective progress of the winding up in the interest of the company.", "It appears also that Mr. Justice Mitter was satisfied on the statement filed by the official liquidator that the appellant had the custody of certain important books of the company.", "A director of a company, past or present, is ordinarily in a position to give useful information about the affairs of the Company in winding up.", "As observed in In re Gold Company (1) by Sir George Jessel R in these mattersthe object being to keep the proceedings secret from the person sought to be affected, and the practice is, and as far as I know always has been, that the liquidator, instead of making an affidavit, simply makes a written statement which he leaves with the Chief Clerk, who thereupon issues an order, and the written statement cannot, be got at by anybody whereas an affidavit can.", "By cl. (2) of r. 247 no person is entitled to take part in the examination under s. 477 except the official liquidator and his advocate but the court may, if it thinks fit, permit any creditor or contributory to attend the examination subject to such conditions as it may impose. Clause (3) provides that notes of the examination may be permitted to be taken by a witness or any person on his behalf on his giving an undertaking that such notes shall be used only for the purposes of re-examination of the witness. It is also provided that on the conclusion of the examination, the notes shall, unless otherwise directed, be handed over to the Court for destruction.", "The right to inspection is given in respect of the file of the proceedings of the liquidation. But the statement made by the official liquidator under Rule 243 does not form part of the file of the proceedings of the liquidation.", "In the Company (Court) Rules, there is no rule specifying the documents which are to be included in the file of the liquidation proceedings. The order passed by the Court and the summons issued thereon may be regarded as forming part of the file of the proceeding of liquidation, but having regard to the nature of the statement made by the official liquidator on which this Judges order is passed, it is not part of the file of the proceedings of liquidation. \nThe person summoned even if he is an officer or director of the company, is therefore not entitled to inspection thereof relying upon Rule 360."], "rank5": ["But the power conferred by the section is very wide and the Court must guard itself against being made an instrument of vexation or oppression.", "The appellant was for many years a director of the company, and therefore concerned with guiding the affairs of the company. He was prima facie a person who would be able to give information likely to promote the purpose of the winding up.", "The appellant having been a director of the company during the period when it is alleged the affairs were mismanaged, is likely to be aware of the management and in possession of information conducive to effective prosecution of the winding up and if the learned Judge thought it fit to order that the appellant be examined the order cannot be regarded as either vexatious or oppressive or otherwise liable to be set aside.", "The order does not purport to decide any question in dispute between the Company and the persons sought to be examined. It only proceeds upon the satisfaction of the Court that the person should be examined in the interest of the Company, it appearing to the Court just proper that he should be so examined.", "Rule 360 of the Companies (Court) Rules provides that every duly authorised officer of a the Central Government, and, save as otherwise provided by these Rules, every persons who has been a director or officer of a company which is being wound up, shall be entitled, free of charge, at all reasonable times to inspect the file of proceedings of the liquidation and to take copies or extracts from any document therein, and, on payment of the prescribed charges to be furnished with such copies or extracts."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1961_365", "text": "This is an appeal with special leave under article 136 of the Constitution against the order of the High Court of Judicature at Bombay, refusing to call for a statement of case from the Income-tax Appellate Tribunal under section 66(2) of the Income-tax Act. The appellants are a registered firm carrying on the business of money- lending and speculation in silver and shares. The partners of the appellants firm were also partners of Messrs. Morarka Co., who were the managing agents of the Sholapur Spinning and Weaving Company Ltd. - hereinafter called the Sholapur Mills. The firm commenced business in August, 1942. In Samvat year 2000 (November, 1943, to October, 1944) the appellants purchased seventeen ordinary shares of the Sholapur Mills and thereafter they purchased 82 more ordinary shares between November, 1944, and October, 1948. By November, 1948, the appellants held 99 ordinary shares. The appellants also purchased at diverse times 6,780 preference shares of the Sholapur Mills. All these shares were entered in the books of account of the appellants as stock-in-trade and valued accordingly at the end of each accounting period. During all these years, not a single shares, ordinary or preference, was sold by the appellants. The following table sets out the profit and loss in respect of these shares calculated by the appellants according to the method of valuation of stock adopted by the appellants. Year of Account Assessment year Ordinary shares Preference shares (Maru) Rs. Rs. 2000-01 1945-46 Loss 30,802 Nil. 2001-02 1946-47 Loss 35,468-8-0 Nil. 2002-03 1947-48 Profit 72,545 Nil. 2003-05 1949-50 Loss 3,21,831 Loss 12,020 \nThe appellants submitted their returns for income-tax in respect of the assessment years 1945-46, 1946-47 and 1947-48 with the Income-tax Officer respectively on July 27, 1948, November 11, 1948, and May 23, 1949. In the proceedings for assessment of tax in the assessment years 1945-46 and 1946-47, the Income-tax Officer disallowed the loss claimed holding that the shares formed the appellants capital investment. In the assessment year 1947-48, the Income-tax Officer excluded from the return the amount of profit alleged to have resulted to the Appellate Assistant Commissioner by three orders dated May 4, 1951, the shares of the Sholapur Mills were held to be stock-in-trade and the profits or losses computed according to the method of valuation adopted by the appellants were directed to be taken into account in assessing the taxable income. These orders were not challenged in appeals to the Income-tax Appellate Tribunal. In the assessment year 1948-49, the appellants did not furnish return and they were assessed to tax under section 23(4) of the Income-tax Act. For the assessment year 1949-50, the appellants furnished their return claiming that they incurred a loss of Rs. 3,33,851 in the shares of the Sholapur Mills. This was computed on the alleged difference between the market value of the shares at the close of the previous year of account and the market value at the end of the accounting period, the shares being treated as stock-in-trade. The Income-tax Officer found that the appellants had inflated the loss by Rs. 1,85,000 and that the shares being capital investment and not stock-in-trade, the loss could not be allowed as a revenue deduction. The Appellate Assistant Commissioner disagreed with the view of the Income-tax Officer and held that the shares were the stock-in-trade of the appellants, but agreeing with the Income-tax Officer he held that the loss had been inflated by Rs. 1,85,000. Against this order, the Income-tax Officer appealed to the Income-tax Appellate Tribunal which reversed the order of the Appellate Assistant Commissioner and restored the order of the Income-tax Officer. The Tribunal held that the mere fact that in the previous years the shares were treated as stock-in-trade and the profits and losses in respect thereof were included in the taxable income of the appellants did not preclude the Tribunal from arriving at the conclusion that the shares were capital investment. They substantially confirmed the view of the Income-tax Officer on the facts found. An application submitted by the appellants for a reference under section 66 (1) of the Income-tax Act of the following questions was rejected by the Tribunal.\n Whether the Tribunal misdirected itself in law and or acted without any evidence in finding that the investment of the assessee in the shares of the Sholapur Mills was a capital investment and not its stock-in-trade ? Whether in any event in view of the assessments made for the years 1945-46, 1946-47 and 1947-48 and the Appellate Assistant Commissioners order for these three years, it was open to the department to hold for the assessment years 1949-50 that the said shares do not represent the assessees stock-in-trade ? Whether the Tribunal misdirected itself in law in omitting to consider certain material facts which were taken into account by the Appellate Assistant Commissioner and expressly maintained in the Appellate Assistant Commissioners order, including the fact that the assessee had been holding shares in several other companies as stock- in-trade and this position has been accepted by the department although in those shares there have been preferred with special leave. In our view, the High Court was right in refusing to call for a statement of the case under section 66(2) of the Income-tax Act. The conclusion of the Tribunal was based on inferences of fact raised from materials before the taxing authorities. The conduct of the appellants clearly indicated that even though they were dealing in shares of other companies, the shares of the Sholapur Mills were treated by them as capital investment for the purpose of maintaining their managing agency. The number of shares held by the appellants went on increasing from time to time and not a single share was ever sold. The Tribunal pointed out that the returns for the assessment years 1945-46, 1946-47 and 1947-48 were filed by the appellants after they knew that there were wide fluctuations in the quotation of the shares of that company. They also referred to the circumstance that the appellants were interested in the managing agency of the Sholapur Mills and that every member of the family of the appellants was holding shares \n \n The conclusion of the Tribunal was amply supported by evidence. It can not be said that because in the previous years the shares were held to be stock-in-trade, they must be similarly treated for the assessment year 1949-50. In the matter of assessment of income-tax, each years assessment is complete and the decision arrived at in a previous year on material before the taxing authorities cannot be regarded as binding in the assessment for the subsequent years. The Tribunal is not shown to have omitted to consider the material facts. The decision of the Tribunal was on a question of fact and no question of law arose which could be directed to be referred under section 66(2) of the Income-tax Act.\nDECISION ??", "expert_1": {"rank1": ["In our view, the High Court was right in refusing to call for a statement of the case under section 66(2) of the Income-tax Act. The conclusion of the Tribunal was based on inferences of fact raised from materials before the taxing authorities. The conduct of the appellants clearly indicated that even though they were dealing in shares of other companies, the shares of the Sholapur Mills were treated by them as capital investment for the purpose of maintaining their managing agency. The number of shares held by the appellants went on increasing from time to time and not a single share was ever sold.", "The conclusion of the Tribunal was amply supported by evidence. It can not be said that because in the previous years the shares were held to be stock-in-trade, they must be similarly treated for the assessment year 1949-50. In the matter of assessment of income-tax, each years assessment is complete and the decision arrived at in a previous year on material before the taxing authorities cannot be regarded as binding in the assessment for the subsequent years. The Tribunal is not shown to have omitted to consider the material facts. The decision of the Tribunal was on a question of fact and no question of law arose which could be directed to be referred under section 66(2) of the Income-tax Act."], "rank2": ["An application submitted by the appellants for a reference under section 66 (1) of the Income-tax Act of the following questions was rejected by the Tribunal.\n Whether the Tribunal misdirected itself in law and or acted without any evidence in finding that the investment of the assessee in the shares of the Sholapur Mills was a capital investment and not its stock-in-trade ? Whether in any event in view of the assessments made for the years 1945-46, 1946-47 and 1947-48 and the Appellate Assistant Commissioners order for these three years, it was open to the department to hold for the assessment years 1949-50 that the said shares do not represent the assessees stock-in-trade ? Whether the Tribunal misdirected itself in law in omitting to consider certain material facts which were taken into account by the Appellate Assistant Commissioner and expressly maintained in the Appellate Assistant Commissioners order, including the fact that the assessee had been holding shares in several other companies as stock- in-trade and this position has been accepted by the department although in those shares there have been preferred with special leave.", "The Tribunal pointed out that the returns for the assessment years 1945-46, 1946-47 and 1947-48 were filed by the appellants after they knew that there were wide fluctuations in the quotation of the shares of that company. They also referred to the circumstance that the appellants were interested in the managing agency of the Sholapur Mills and that every member of the family of the appellants was holding shares"], "rank3": ["This is an appeal with special leave under article 136 of the Constitution against the order of the High Court of Judicature at Bombay, refusing to call for a statement of case from the Income-tax Appellate Tribunal under section 66(2) of the Income-tax Act.", "The Income-tax Officer found that the appellants had inflated the loss by Rs. 1,85,000 and that the shares being capital investment and not stock-in-trade, the loss could not be allowed as a revenue deduction. The Appellate Assistant Commissioner disagreed with the view of the Income-tax Officer and held that the shares were the stock-in-trade of the appellants, but agreeing with the Income-tax Officer he held that the loss had been inflated by Rs. 1,85,000. Against this order, the Income-tax Officer appealed to the Income-tax Appellate Tribunal which reversed the order of the Appellate Assistant Commissioner and restored the order of the Income-tax Officer. The Tribunal held that the mere fact that in the previous years the shares were treated as stock-in-trade and the profits and losses in respect thereof were included in the taxable income of the appellants did not preclude the Tribunal from arriving at the conclusion that the shares were capital investment. They substantially confirmed the view of the Income-tax Officer on the facts found."], "label": "REJECTED"}, "expert_2": {"rank1": ["The conduct of the appellants clearly indicated that even though they were dealing in shares of other companies, the shares of the Sholapur Mills were treated by them as capital investment for the purpose of maintaining their managing agency", "The number of shares held by the appellants went on increasing from time to time and not a single share was ever sold. The Tribunal pointed out that the returns for the assessment years 1945-46, 1946-47 and 1947-48 were filed by the appellants after they knew that there were wide fluctuations in the quotation of the shares of that company. They also referred to the circumstance that the appellants were interested in the managing agency of the Sholapur Mills and that every member of the family of the appellants was holding shares \n \n The conclusion of the Tribunal was amply supported by evidence.", "It can not be said that because in the previous years the shares were held to be stock-in-trade, they must be similarly treated for the assessment year 1949-50. In the matter of assessment of income-tax, each years assessment is complete and the decision arrived at in a previous year on material before the taxing authorities cannot be regarded as binding in the assessment for the subsequent years.", "The decision of the Tribunal was on a question of fact and no question of law arose which could be directed to be referred under section 66(2) of the Income-tax Act."], "rank2": ["This is an appeal with special leave under article 136 of the Constitution against the order of the High Court of Judicature at Bombay, refusing to call for a statement of case from the Income-tax Appellate Tribunal under section 66(2) of the Income-tax Act.", "shares were entered in the books of account of the appellants as stock-in-trade and valued accordingly at the end of each accounting period. During all these years, not a single shares, ordinary or preference, was sold by the appellants.", "The Tribunal held that the mere fact that in the previous years the shares were treated as stock-in-trade and the profits and losses in respect thereof were included in the taxable income of the appellants did not preclude the Tribunal from arriving at the conclusion that the shares were capital investment."], "rank3": ["The Income-tax Officer found that the appellants had inflated the loss by Rs. 1,85,000 and that the shares being capital investment and not stock-in-trade, the loss could not be allowed as a revenue deduction."], "label": "REJECTED"}, "expert_3": {"rank1": ["This is an appeal with special leave under article 136 of the Constitution against the order of the High Court of Judicature at Bombay, refusing to call for a statement of case from the Income-tax Appellate Tribunal under section 66(2) of the Income-tax Act", "An application submitted by the appellants for a reference under section 66 (1) of the Income-tax Act of the following questions was rejected by the Tribunal.\n Whether the Tribunal misdirected itself in law and or acted without any evidence in finding that the investment of the assessee in the shares of the Sholapur Mills was a capital investment and not its stock-in-trade ? Whether in any event in view of the assessments made for the years 1945-46, 1946-47 and 1947-48 and the Appellate Assistant Commissioners order for these three years, it was open to the department to hold for the assessment years 1949-50 that the said shares do not represent the assessees stock-in-trade ? Whether the Tribunal misdirected itself in law in omitting to consider certain material facts which were taken into account by the Appellate Assistant Commissioner and expressly maintained in the Appellate Assistant Commissioners order, including the fact that the assessee had been holding shares in several other companies as stock- in-trade and this position has been accepted by the department although in those shares there have been preferred with special leave. In our view, the High Court was right in refusing to call for a statement of the case under section 66(2) of the Income-tax Act", "The conduct of the appellants clearly indicated that even though they were dealing in shares of other companies, the shares of the Sholapur Mills were treated by them as capital investment for the purpose of maintaining their managing agency. The number of shares held by the appellants went on increasing from time to time and not a single share was ever sold", "The Tribunal pointed out that the returns for the assessment years 1945-46, 1946-47 and 1947-48 were filed by the appellants after they knew that there were wide fluctuations in the quotation of the shares of that company. They also referred to the circumstance that the appellants were interested in the managing agency of the Sholapur Mills and that every member of the family of the appellants was holding shares \n \n The conclusion of the Tribunal was amply supported by evidence", "It can not be said that because in the previous years the shares were held to be stock-in-trade, they must be similarly treated for the assessment year 1949-50. In the matter of assessment of income-tax, each years assessment is complete and the decision arrived at in a previous year on material before the taxing authorities cannot be regarded as binding in the assessment for the subsequent years", "The Tribunal is not shown to have omitted to consider the material facts. The decision of the Tribunal was on a question of fact and no question of law arose which could be directed to be referred under section 66(2) of the Income-tax Act"], "rank2": ["In Samvat year 2000 (November, 1943, to October, 1944) the appellants purchased seventeen ordinary shares of the Sholapur Mills and thereafter they purchased 82 more ordinary shares between November, 1944, and October, 1948. By November, 1948, the appellants held 99 ordinary shares", "The appellants also purchased at diverse times 6,780 preference shares of the Sholapur Mills. All these shares were entered in the books of account of the appellants as stock-in-trade and valued accordingly at the end of each accounting period. During all these years, not a single shares, ordinary or preference, was sold by the appellants", "In the proceedings for assessment of tax in the assessment years 1945-46 and 1946-47, the Income-tax Officer disallowed the loss claimed holding that the shares formed the appellants capital investment. In the assessment year 1947-48, the Income-tax Officer excluded from the return the amount of profit alleged to have resulted to the Appellate Assistant Commissioner by three orders dated May 4, 1951, the shares of the Sholapur Mills were held to be stock-in-trade and the profits or losses computed according to the method of valuation adopted by the appellants were directed to be taken into account in assessing the taxable income. These orders were not challenged in appeals to the Income-tax Appellate Tribunal", "In the assessment year 1948-49, the appellants did not furnish return and they were assessed to tax under section 23(4) of the Income-tax Act. For the assessment year 1949-50, the appellants furnished their return claiming that they incurred a loss of Rs. 3,33,851 in the shares of the Sholapur Mills.", "This was computed on the alleged difference between the market value of the shares at the close of the previous year of account and the market value at the end of the accounting period, the shares being treated as stock-in-trade", "The Income-tax Officer found that the appellants had inflated the loss by Rs. 1,85,000 and that the shares being capital investment and not stock-in-trade, the loss could not be allowed as a revenue deduction", "The Tribunal held that the mere fact that in the previous years the shares were treated as stock-in-trade and the profits and losses in respect thereof were included in the taxable income of the appellants did not preclude the Tribunal from arriving at the conclusion that the shares were capital investment"], "rank3": ["The appellants are a registered firm carrying on the business of money- lending and speculation in silver and shares. The partners of the appellants firm were also partners of Messrs. Morarka Co., who were the managing agents of the Sholapur Spinning and Weaving Company Ltd. - hereinafter called the Sholapur Mills. The firm commenced business in August, 1942."], "label": "REJECTED"}, "expert_4": {"rank1": ["This is an appeal with special leave under article 136 of the Constitution against the order of the High Court of Judicature at Bombay, refusing to call for a statement of case from the Income-tax Appellate Tribunal under section 66(2) of the Income-tax Act.", "The decision of the Tribunal was on a question of fact and no question of law arose which could be directed to be referred under section 66(2) of the Income-tax Act."], "rank2": ["In our view, the High Court was right in refusing to call for a statement of the case under section 66(2) of the Income-tax Act.", "The conclusion of the Tribunal was based on inferences of fact raised from materials before the taxing authorities. The conduct of the appellants clearly indicated that even though they were dealing in shares of other companies, the shares of the Sholapur Mills were treated by them as capital investment for the purpose of maintaining their managing agency. The number of shares held by the appellants went on increasing from time to time and not a single share was ever sold.", "It can not be said that because in the previous years the shares were held to be stock-in-trade, they must be similarly treated for the assessment year 1949-50. In the matter of assessment of income-tax, each years assessment is complete and the decision arrived at in a previous year on material before the taxing authorities cannot be regarded as binding in the assessment for the subsequent years.", "The Tribunal is not shown to have omitted to consider the material facts."], "rank3": ["The Appellate Assistant Commissioner disagreed with the view of the Income-tax Officer and held that the shares were the stock-in-trade of the appellants, but agreeing with the Income-tax Officer he held that the loss had been inflated by Rs. 1,85,000.", "Against this order, the Income-tax Officer appealed to the Income-tax Appellate Tribunal which reversed the order of the Appellate Assistant Commissioner and restored the order of the Income-tax Officer.", "The Tribunal held that the mere fact that in the previous years the shares were treated as stock-in-trade and the profits and losses in respect thereof were included in the taxable income of the appellants did not preclude the Tribunal from arriving at the conclusion that the shares were capital investment.", "They substantially confirmed the view of the Income-tax Officer on the facts found.", "An application submitted by the appellants for a reference under section 66 (1) of the Income-tax Act of the following questions was rejected by the Tribunal.\n Whether the Tribunal misdirected itself in law and or acted without any evidence in finding that the investment of the assessee in the shares of the Sholapur Mills was a capital investment and not its stock-in-trade ?", "Whether in any event in view of the assessments made for the years 1945-46, 1946-47 and 1947-48 and the Appellate Assistant Commissioners order for these three years, it was open to the department to hold for the assessment years 1949-50 that the said shares do not represent the assessees stock-in-trade ?", "Whether the Tribunal misdirected itself in law in omitting to consider certain material facts which were taken into account by the Appellate Assistant Commissioner and expressly maintained in the Appellate Assistant Commissioners order, including the fact that the assessee had been holding shares in several other companies as stock- in-trade and this position has been accepted by the department although in those shares there have been preferred with special leave.", "The Tribunal pointed out that the returns for the assessment years 1945-46, 1946-47 and 1947-48 were filed by the appellants after they knew that there were wide fluctuations in the quotation of the shares of that company.", "They also referred to the circumstance that the appellants were interested in the managing agency of the Sholapur Mills and that every member of the family of the appellants was holding shares \n \n The conclusion of the Tribunal was amply supported by evidence."], "rank4": ["The appellants are a registered firm carrying on the business of money- lending and speculation in silver and shares. The partners of the appellants firm were also partners of Messrs. Morarka Co., who were the managing agents of the Sholapur Spinning and Weaving Company Ltd. - hereinafter called the Sholapur Mills.", "For the assessment year 1949-50, the appellants furnished their return claiming that they incurred a loss of Rs. 3,33,851 in the shares of the Sholapur Mills.", "This was computed on the alleged difference between the market value of the shares at the close of the previous year of account and the market value at the end of the accounting period, the shares being treated as stock-in-trade.", "The Income-tax Officer found that the appellants had inflated the loss by Rs. 1,85,000 and that the shares being capital investment and not stock-in-trade, the loss could not be allowed as a revenue deduction."], "label": "REJECTED"}, "expert_5": {"rank1": ["In our view, the High Court was right in refusing to call for a statement of the case under section 66(2) of the Income-tax Act. The conclusion of the Tribunal was based on inferences of fact raised from materials before the taxing authorities.", "The Tribunal is not shown to have omitted to consider the material facts. The decision of the Tribunal was on a question of fact and no question of law arose which could be directed to be referred under section 66(2) of the Income-tax Act."], "rank2": ["even though they were dealing in shares of other companies, the shares of the Sholapur Mills were treated by them as capital investment for the purpose of maintaining their managing agency."], "rank3": ["not a single shares, ordinary or preference, was sold by the appellants.", "The number of shares held by the appellants went on increasing from time to time and not a single share was ever sold."], "rank4": ["The Tribunal held that the mere fact that in the previous years the shares were treated as stock-in-trade and the profits and losses in respect thereof were included in the taxable income of the appellants did not preclude the Tribunal from arriving at the conclusion that the shares were capital investment.", "circumstance that the appellants were interested in the managing agency of the Sholapur Mills and that every member of the family of the appellants was holding shares \n \n The conclusion of the Tribunal was amply supported by evidence.", "It can not be said that because in the previous years the shares were held to be stock-in-trade, they must be similarly treated for the assessment year 1949-50.", "In the matter of assessment of income-tax, each years assessment is complete and the decision arrived at in a previous year on material before the taxing authorities cannot be regarded as binding in the assessment for the subsequent years."], "rank5": ["The appellants are a registered firm carrying on the business of money- lending and speculation in silver and shares."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1961_400", "text": "Appeal from the judgment and order dated March 11, 1957, of the Patna High Court, in Misc. Judicial Case No. 40 of 1957. C. Setalvad, Attorney-General for India,  Ganapathy Iyer R. H. Dhebar and T. M. Sen, for the appellants. P. Verma, for the respondent. 1961. November 21. The Judgment of the Court was delivered by SHAH, J.- This is an appeal against the judgment of the High Court of Judicature at Patna from an order commanding the Accountant General of Bihar, Ranchi, to pay certain passage allowance due under the Superior Civil Services (Revision of Pay and Pension) Rules, 1924, to the wife and the children of the respondent. After passing the competitive examination held in London in August, 1924 the respondent N. bakshi was admitted in November, 1924 to the Indian Civil Service and was, after his arrival in India, posted in the Province of Bihar. He continued to serve in the State of Bihar after independence. On February 3, 1956, the respondent enquired of the Accountant General of Bihar about the number of passages to which he and the members of his family were entitled under the Superior Civil Services (Revision of Pay and Pension) Rules, 1924-hereinafter called the Statutory Rules. The Accountant General, by letter dated March 6, 1956, stated that 284-6 s. stood in the respondents credit 341-3-5d. stood in the account of his wife and 138 stood credited in the separate accounts of each of his four children. The respondent then arranged to travel to the United Kingdom and on June 20, 1956, obtained passage certificates from the Accountant General, Bihar. On July 12,1956, the respondent was informed that the Govt. of India were of the opinion that the passage benefits admissible to officers of Indian domicile under the said Statutory Rules, were inconsistent with the existing circumstances and it was decided, with effect from the date of issue of the order that the benefits shall cease and the passage accounts of Indian Officers of the former Secretary of State Services shall be closed and passage credit left over will lapse to the Government. On February 5, 1957, the Government of India framed, in exercise of the powers conferred by sub-s. (1) of s. 3 of the All India Services Act, 61 of 1951, the All India Services (Overseas Pay, Passage and Leave Salary) Rules, 1957. By cl. 3 of the Rules passage benefits provided by the statutory Rules ceased with retrospective effect from July 12, 1956, to apply to the members of the Indian Civil Service. The appellant protested against the cancellation of the passage benefits for himself and the members of his family. The Government of India waived the original order of July 12, 1956, in favour of the respondent and ordered that he be granted passage benefit for himself but declined to relax the order in favour of the wife and children of the respondent. The respondent accompanied by his wife and children proceeded to the United Kingdom as originally arranged and on his return filed a petition under Art. 226 of the Constitution for a writ in the nature of mandamus against the Accountant General, Bihar, commanding him to pay the prescribed passage money in respect of the respondents wife and children out of the amounts which stood to their credit in the General Passage Fund Account and to issue appropriate direction, order or writ in that behalf. This petition was granted by the High Court and a writ of mandamus as prayed was issued. The Accountant General and the Union of India have appealed to this Court against the order with certificate of fitness granted by the High Court. To appreciate the grounds on which the impugned order was made it is necessary to refer to the Statutory Rules for passage benefit framed in 1924 by the Secretary of State in Council and the amendments thereof in the light of constitutional development since that date. The Statutory Rules were framed by the Secretary of State for India-in-Council under s.96B(2) and (3) of the Government of India Act, 1919, on December 9, 1924. Rule 12 of the Statutory Rules provides \n In addition to the pay prescribed by these Rules passage pay shall be granted at the rates and subject to the conditions set out in Schedule IV, to the members of the services and holders of appointments enumerated in Appendix A to that Schedule. Schedule IV appended to the Regulations set out an elaborate scheme for maintaining accounts of the passage pay and for disbursement thereof. Regulations 3, 5, 6(1),8,9 and 14, which are the material regulations stood as follows- \n There shall be payable to every officer with effect from the 1st day of April, 1924 passage pay at the rate of Rs. 50 per mensem or such different rate as the Governor General in Council may by order declare to be necessary or sufficient for the purpose of the provision of the benefits conferred by these regulations. A sum equal to the amount received by an officer as passage pay shall be deducted monthly from the officers pay or leave salary, as the case may be, and shall be credited to a General Passage Fund to be administered by the Governor-General in Council. 6 (1)The maximum benefits to which officer shall be entitled shall be passages of a total value equal to the cost of the number of passages between Bombay and London by P. O., 1st Class B, shown below- \n A separate account shall be opened in sterling in the case of each officer, and, if such officer is married, for his wife, and, if he has children, for each child. These accounts shall be credited respectively with the cost of the passages to which the officer, his wife and children are entitled under Regulation 6 \n No person whosoever shall have any claim on the General Passage Fund beyond the provision of the benefits, if any, conferred on him by these regulations and any balance remaining at the credit of any person after such person has ceased to be eligible for any such benefits shall lapse to the Fund. Passage benefit provided under Rule 12 was clearly part of the salary to be paid out of a fund called the General Passage Fund which was formed out of the passage pay. Several amendments were made to these Rules from time to time, but we are concerned with the amendments made by Notifications No. F-178/11/1/24 dated October 5, 1925, and No. F-17-15/26 dated June 16, 1926. Rule 12, as amended, reads as follows- \n In addition to the pay prescribed by these Rules, passages shall be granted, subject to the conditions set out in Schedule IV, to the members of the services and holders of appointments enumerated in Appendix A to that Schedule. The Regulations under Sch. IV were, after the amendment, called Revision of Pay, Passage and Pension Regulations. Original regulations 3, 4 and 5 were omitted and regulations 6, 8, 11 and 14 were 6 amended. The effect of these amendments was that instead of allowing as part of salary, passage pay of Rs. 50/- and carrying over that amount to the credit of the officer concerned in the General Passage Fund, by cl. 6 of the Regulations it was directed that a separate passage account be opened for each officer and if he be married for his wife and children, if any. Subject to Regulations, the accounts wire to be credited respectively with the number of passages to which the officer, his wife and children were entitled under the new regulations. Within the limits of these credits, the officer was entitled to draw for himself, his wife and his children respectively the port of a journey between a port in India and a port outside Asia. Whereas by the Rules as originally framed in 1924 an additional salary of Rs. 50/- per mensem was awarded to each officer as passage pay which was to be credited to the General Passage Fund out of which passage benefits to officers were provided, according to the scheme of the Rules as amended in 1926, a separate passage account was to be maintained for each officer for the maximum benefits prescribed by Rule 3 and the disbursement in respect thereof were to be made of the General Revenue of the State. By the amendment made in the Rules in 1926, the passage benefit ceased to be a part of the salary and became an allowance or privilege. The respondent obtained benefit of these passages in 1930, 1950-51 and 1952-53 for himself and the members of his family. In 1957 he has not granted the passage benefit for his wife and his children, and he has filed this petition under Art. 226 for an order that the Union of India and the Accountant General do carry out their Statutory obligations. The conditions of the to which members of the Indian Civil Service were entiled under the Government of India Act, 1919, were guaranteed to them by s.247(1) of the Government of India Act, 1935. That Section provided 247 (1). The conditions of service of all persons appointed to a civil service or civil post by the Secretary of State shall- (a) as respects pay, leave and pension and general rights in regard to medical attendance, be such as may be prescribed by rules to be made by the Secretary of State (b) as respects other matters with respect to which express provision is not made by this chapter, be such as may be prescribed by rules to be made by the Secretary of State in so far as he thinks fit to make such rules, and, in so far and so long as provision is not made by such rules, by rules to be made, as respects persons serving in connection with the affairs of the Federation, by the Governor-General or some person or persons authorised by the Governor- general to make rule for the purpose and, as respects persons serving in connection with the affairs of a Province, by the Governor of the Province or some person or persons authorised by the Governor to make rules for the purpose Provided that no rule made under this sub-Section shall have effect so as to give to any person appointed to a civil service or civil post by the Secretary of State less favorable terms as respect remuneration or pension than were given to him by the rules is force on the date on which he was first appointed to his service or was appointed to his post. The proviso makes it abundantly clear that the power to make rules cannot be exercised by the Secretary of State so as to give to any officer of the class specified terms less favorable as respects remuneration or pension than were given to him by the rules in force on the date on which he was first appointed to his service or to his post. This guarantee was confirmed by s. 10, sub.s. (2) of the Indian Independence Act, 1947, wherein it was provided, in so far as it is material, that Every person who- (a) havining been appointed by the Secretary of State or Secretary of State in Council, to a civil service of the Crown in India continues on and after the appointed day to serve under the Government of either of the new Dominions or of any province or part thereof or (b) shall be entitled to receive from the Governments of the Dominions and Provinces or parts which he is from time to time serving or, as the case may be the same conditions of service as respects remuneration, leave and pension, and the same rights as respects disciplinary matters or as the case may be, as respects the tenure of his office, or rights as similar thereto as changed circumstances may permit, as that person was entitled to immediately before the appointed day. The expression remuneration was defined in s.19(4) of that Act as inclusive of leave pay, allowances and the cost of any privileges or facilities provided in kind. By Art. 314 of the Constitution, persons who were appointed by the Secretary of State or Secretary of State in Council to a civil service of the Crown in India and continue on and after the commencement of the Constitution to serve under the Government of India or of a State were to receive from the Government of India and the Government of the State which they were from time to time serving, the same conditions of service as respects remuneration leave as pension which they were entitled to immediately before such commencement. The Parliament of India enacted the All India Services Act, 61 of 1951, to regulate the recruitment, and the conditions of service of persons appointed, to the all India Services common to the Union and the States, and by s. 3 of that Act the central Government was authorised to make rules for the regulation of recruitment, and the conditions of service of persons appointed, to the All India Service. By s. 4 it was provided that all rules in force immediately before the commencement of the Act and applicable to an All India Service were to continue to by in force and were to be deemed to be rules made under the Act. On September 8, 1954, the Central Government framed rules called the Indian Administrative Services Recruiting Rules and by Rule 2(d) the members of the Indian Civil Service who continued to serve on and after the commencement of the Constitution were to be regarded for the purpose of the rules as members of the Indian Administrative Service. On February 15, 1957, the All India Services Overseas Pay, Passage and Leave Salary Rules, 1957, were promulgated in exercise of the powers conferred by sub-s (1) of s.3 of the All India Services Act, 1951, and thereby passage benefits in favour of the members of the Indian Administrative Service, who were originally members of the Indian Civil Service were cancelled. The only question which falls to be determined in this appeal is whether cl. 3 of the All India Services (overseas Pay, Passage and Leave Salary) Rules, 1957, was competently enacted, having regard to the guarantee contained in Art. 314 of the constitution as to the conditions of service as respects remuneration, leave and pension of the persons appointed by the Secretary of State or Secretary of State for India in Council to a civil service of the Crown in India. Since the All India Services Act was enacted there is manifestly no existing service known as the Indian Civil Service. The members of the Indian Civil Service who were appointed by the Secretary of State for India became members of the Indian Administrative service, but their rights in the matter of condition of service as respects remuneration, leave and pension stood guaranteed by Art.314. In dealing with the status of the members of the former Indian Civil Service since the Indian Independence Act, 1947, this Court in State of Madras v. K. M. Rajagopalan (1) held that (1) the conferral of independence on India brought about an automatic and legal termination of service on the date of Independence (2) all persons previously holding civil posts in India are deemed to have been appointed and hence to continue in service, except those governed by General or special orders arrangements affecting their respective case (3) the guarantee about prior conditions of service and the previous statutory safe guards relating to disciplinary action continues to apply to those who are thus deemed to continue in service but not to others and (4) those previously holding civil posts in India had the right, and were in fact given the option, of declining to continue in service under the new regime and in the event of their exercising that option they ceased to serve on and from the date of the passing of the constitution. Under the Statutory Rules framed in 1924 passage benefits granted to persons employed in the Indian Civil Service, their wives and children were expressly made part of the salary or remuneration. Under the amendment of 1926, these passage benefits acquired the character of allowance, privilege or facility of office. By the Act of 1935 (s. 247) privileges, inter alia as to remuneration under the Government of India Act of 1919 were expressly guaranteed in favour of the members of the India civil Services.\nBy the Indian Independence Act 1947, a similar guarantee in respect of conditions of service as respects remuneration was also conferred and by s. 19(4) of that Act remuneration was defined as inclusive of pay, allowances or privileges or facilities payable in kind. By Art. 314 of the Constitution, the conditions of service, prior to the Constitutions respects remuneration, leave and pension of the members of the Indian Civil Service were protected. There is no definition of remuneration the Constitution, but that is not a ground for holding that the expression is used in any limited sense as merely salary. The expression remuneration, in its ordinary connotation means reward, recompense, pay, wages or salary for service rendered In R. v. Postmaster General (1) Blackbrun, J., observed, I think the word remuneration means a quid pro quo. If a man gives his services whatever consideration he gets for giving his services seems to be a remuneration for them. Consequently, I think if a person was in receipt of a Payment, or in receipt of a percentage, or any kind of payment which would not be actual money payment, the amount he would receive annually in respect of this would be remuneration. The expression remuneration appears to have been used in the Constitution in this wide connotation. As already observed, the right to passage was originally made part of the salary, but under the Rules framed in 1926, the provision for setting apart a fixed sum of money as salary out of the General Passage Fund was altered and passages were credited to the account of members of Civil services and debited and when they were availed of out of the general Revenue of the State. This alteration was made merely for administrative convenience and did not alter the character of the benefit. Under the Rules of 1924, the provision for passage port of the remuneration and it continued to be such even after the amendment of the Rules in 1926 The right to passage benefits was statutory, and was under the Indian Independence Act in the nature of an allowance, or in any event privilege or facility paid in kind. It was expressly made part of the remuneration earned by the numbers of the Indian Civil Service. The Conditions of service as to remuneration having been guaranteed, the right to this benefit remained guaranteed to those members of the Indian Civil Service who were entitled to it before the Constitutions. This guarantee which was continued in force even after the Commencement of the Constitution was for the first time by Rules made in June 1957 by retrospective amendment of the Statutory Rules from July 12, 1956 sought to be cancelled. But the central Government in exercise of Rule making power was incompetent to destroy or cancel a constitutional guarantee.\nDECISION ??", "expert_1": {"rank1": ["As already observed, the right to passage was originally made part of the salary, but under the Rules framed in 1926, the provision for setting apart a fixed sum of money as salary out of the General Passage Fund was altered and passages were credited to the account of members of Civil services and debited and when they were availed of out of the general Revenue of the State. This alteration was made merely for administrative convenience and did not alter the character of the benefit. Under the Rules of 1924, the provision for passage port of the remuneration and it continued to be such even after the amendment of the Rules in 1926 The right to passage benefits was statutory, and was under the Indian Independence Act in the nature of an allowance, or in any event privilege or facility paid in kind. It was expressly made part of the remuneration earned by the numbers of the Indian Civil Service. The Conditions of service as to remuneration having been guaranteed, the right to this benefit remained guaranteed to those members of the Indian Civil Service who were entitled to it before the Constitutions. This guarantee which was continued in force even after the Commencement of the Constitution was for the first time by Rules made in June 1957 by retrospective amendment of the Statutory Rules from July 12, 1956 sought to be cancelled. But the central Government in exercise of Rule making power was incompetent to destroy or cancel a constitutional guarantee."], "rank2": ["There is no definition of remuneration the Constitution, but that is not a ground for holding that the expression is used in any limited sense as merely salary. The expression remuneration, in its ordinary connotation means reward, recompense, pay, wages or salary for service rendered In R. v. Postmaster General (1) Blackbrun, J., observed, I think the word remuneration means a quid pro quo. If a man gives his services whatever consideration he gets for giving his services seems to be a remuneration for them. Consequently, I think if a person was in receipt of a Payment, or in receipt of a percentage, or any kind of payment which would not be actual money payment, the amount he would receive annually in respect of this would be remuneration. The expression remuneration appears to have been used in the Constitution in this wide connotation."], "rank3": ["The respondent obtained benefit of these passages in 1930, 1950-51 and 1952-53 for himself and the members of his family. In 1957 he has not granted the passage benefit for his wife and his children, and he has filed this petition under Art. 226 for an order that the Union of India and the Accountant General do carry out their Statutory obligations. The conditions of the to which members of the Indian Civil Service were entiled under the Government of India Act, 1919, were guaranteed to them by s.247(1) of the Government of India Act, 1935.", "The proviso makes it abundantly clear that the power to make rules cannot be exercised by the Secretary of State so as to give to any officer of the class specified terms less favorable as respects remuneration or pension than were given to him by the rules in force on the date on which he was first appointed to his service or to his post.", "The only question which falls to be determined in this appeal is whether cl. 3 of the All India Services (overseas Pay, Passage and Leave Salary) Rules, 1957, was competently enacted, having regard to the guarantee contained in Art. 314 of the constitution as to the conditions of service as respects remuneration, leave and pension of the persons appointed by the Secretary of State or Secretary of State for India in Council to a civil service of the Crown in India. Since the All India Services Act was enacted there is manifestly no existing service known as the Indian Civil Service. The members of the Indian Civil Service who were appointed by the Secretary of State for India became members of the Indian Administrative service, but their rights in the matter of condition of service as respects remuneration, leave and pension stood guaranteed by Art.314.", "the conferral of independence on India brought about an automatic and legal termination of service on the date of Independence (2) all persons previously holding civil posts in India are deemed to have been appointed and hence to continue in service, except those governed by General or special orders arrangements affecting their respective case (3) the guarantee about prior conditions of service and the previous statutory safe guards relating to disciplinary action continues to apply to those who are thus deemed to continue in service but not to others and (4) those previously holding civil posts in India had the right, and were in fact given the option, of declining to continue in service under the new regime and in the event of their exercising that option they ceased to serve on and from the date of the passing of the constitution. Under the Statutory Rules framed in 1924 passage benefits granted to persons employed in the Indian Civil Service, their wives and children were expressly made part of the salary or remuneration. Under the amendment of 1926, these passage benefits acquired the character of allowance, privilege or facility of office. By the Act of 1935 (s. 247) privileges, inter alia as to remuneration under the Government of India Act of 1919 were expressly guaranteed in favour of the members of the India civil Services.\nBy the Indian Independence Act 1947, a similar guarantee in respect of conditions of service as respects remuneration was also conferred and by s. 19(4) of that Act remuneration was defined as inclusive of pay, allowances or privileges or facilities payable in kind. By Art. 314 of the Constitution, the conditions of service, prior to the Constitutions respects remuneration, leave and pension of the members of the Indian Civil Service were protected."], "rank4": ["This is an appeal against the judgment of the High Court of Judicature at Patna from an order commanding the Accountant General of Bihar, Ranchi, to pay certain passage allowance due under the Superior Civil Services (Revision of Pay and Pension) Rules, 1924, to the wife and the children of the respondent.", "The effect of these amendments was that instead of allowing as part of salary, passage pay of Rs. 50/- and carrying over that amount to the credit of the officer concerned in the General Passage Fund, by cl. 6 of the Regulations it was directed that a separate passage account be opened for each officer and if he be married for his wife and children, if any. Subject to Regulations, the accounts wire to be credited respectively with the number of passages to which the officer, his wife and children were entitled under the new regulations. Within the limits of these credits, the officer was entitled to draw for himself, his wife and his children respectively the port of a journey between a port in India and a port outside Asia. Whereas by the Rules as originally framed in 1924 an additional salary of Rs. 50/- per mensem was awarded to each officer as passage pay which was to be credited to the General Passage Fund out of which passage benefits to officers were provided, according to the scheme of the Rules as amended in 1926, a separate passage account was to be maintained for each officer for the maximum benefits prescribed by Rule 3 and the disbursement in respect thereof were to be made of the General Revenue of the State. By the amendment made in the Rules in 1926, the passage benefit ceased to be a part of the salary and became an allowance or privilege."], "label": "REJECTED"}, "expert_2": {"rank1": ["By Art. 314 of the Constitution, the conditions of service, prior to the Constitutions respects remuneration, leave and pension of the members of the Indian Civil Service were protected. There is no definition of remuneration the Constitution, but that is not a ground for holding that the expression is used in any limited sense as merely salary.", "If a man gives his services whatever consideration he gets for giving his services seems to be a remuneration for them. Consequently, I think if a person was in receipt of a Payment, or in receipt of a percentage, or any kind of payment which would not be actual money payment, the amount he would receive annually in respect of this would be remuneration. The expression remuneration appears to have been used in the Constitution in this wide connotation.", "Under the Rules of 1924, the provision for passage port of the remuneration and it continued to be such even after the amendment of the Rules in 1926 The right to passage benefits was statutory, and was under the Indian Independence Act in the nature of an allowance, or in any event privilege or facility paid in kind.", "The Conditions of service as to remuneration having been guaranteed, the right to this benefit remained guaranteed to those members of the Indian Civil Service who were entitled to it before the Constitutions.", "This guarantee which was continued in force even after the Commencement of the Constitution was for the first time by Rules made in June 1957 by retrospective amendment of the Statutory Rules from July 12, 1956 sought to be cancelled. But the central Government in exercise of Rule making power was incompetent to destroy or cancel a constitutional guarantee."], "rank2": ["The conditions of the to which members of the Indian Civil Service were entiled under the Government of India Act, 1919, were guaranteed to them by s.247(1) of the Government of India Act, 1935.", "The proviso makes it abundantly clear that the power to make rules cannot be exercised by the Secretary of State so as to give to any officer of the class specified terms less favorable as respects remuneration or pension than were given to him by the rules in force on the date on which he was first appointed to his service or to his post.", "By Art. 314 of the Constitution, persons who were appointed by the Secretary of State or Secretary of State in Council to a civil service of the Crown in India and continue on and after the commencement of the Constitution to serve under the Government of India or of a State were to receive from the Government of India and the Government of the State which they were from time to time serving, the same conditions of service as respects remuneration leave as pension which they were entitled to immediately before such commencement.", "The Parliament of India enacted the All India Services Act, 61 of 1951, to regulate the recruitment, and the conditions of service of persons appointed, to the all India Services common to the Union and the States", "By s. 4 it was provided that all rules in force immediately before the commencement of the Act and applicable to an All India Service were to continue to by in force and were to be deemed to be rules made under the Act. On September 8, 1954, the Central Government framed rules called the Indian Administrative Services Recruiting Rules and by Rule 2(d) the members of the Indian Civil Service who continued to serve on and after the commencement of the Constitution were to be regarded for the purpose of the rules as members of the Indian Administrative Service.", "the right to passage was originally made part of the salary, but under the Rules framed in 1926, the provision for setting apart a fixed sum of money as salary out of the General Passage Fund was altered and passages were credited to the account of members of Civil services and debited and when they were availed of out of the general Revenue of the State. This alteration was made merely for administrative convenience and did not alter the character of the benefit."], "rank3": ["The respondent then arranged to travel to the United Kingdom and on June 20, 1956, obtained passage certificates from the Accountant General, Bihar. On July 12,1956, the respondent was informed that the Govt. of India were of the opinion that the passage benefits admissible to officers of Indian domicile under the said Statutory Rules, were inconsistent with the existing circumstances and it was decided, with effect from the date of issue of the order that the benefits shall cease and the passage accounts of Indian Officers of the former Secretary of State Services shall be closed and passage credit left over will lapse to the Government. On February 5, 1957, the Government of India framed, in exercise of the powers conferred by sub-s. (1) of s. 3 of the All India Services Act, 61 of 1951, the All India Services (Overseas Pay, Passage and Leave Salary) Rules, 1957. By cl. 3 of the Rules passage benefits provided by the statutory Rules ceased with retrospective effect from July 12, 1956, to apply to the members of the Indian Civil Service.", "filed a petition under Art. 226 of the Constitution for a writ in the nature of mandamus against the Accountant General, Bihar, commanding him to pay the prescribed passage money in respect of the respondents wife and children out of the amounts which stood to their credit in the General Passage Fund Account and to issue appropriate direction, order or writ in that behalf. This petition was granted by the High Court and a writ of mandamus as prayed was issued.", "By the amendment made in the Rules in 1926, the passage benefit ceased to be a part of the salary and became an allowance or privilege.", "The only question which falls to be determined in this appeal is whether cl. 3 of the All India Services (overseas Pay, Passage and Leave Salary) Rules, 1957, was competently enacted, having regard to the guarantee contained in Art. 314 of the constitution as to the conditions of service as respects remuneration, leave and pension of the persons appointed by the Secretary of State or Secretary of State for India in Council to a civil service of the Crown in India.", "the guarantee about prior conditions of service and the previous statutory safe guards relating to disciplinary action continues to apply to those who are thus deemed to continue in service but not to others", "By the Act of 1935 (s. 247) privileges, inter alia as to remuneration under the Government of India Act of 1919 were expressly guaranteed in favour of the members of the India civil Services.\nBy the Indian Independence Act 1947, a similar guarantee in respect of conditions of service as respects remuneration was also conferred and by s. 19(4) of that Act remuneration was defined as inclusive of pay, allowances or privileges or facilities payable in kind."], "rank4": ["Whereas by the Rules as originally framed in 1924 an additional salary of Rs. 50/- per mensem was awarded to each officer as passage pay which was to be credited to the General Passage Fund out of which passage benefits to officers were provided, according to the scheme of the Rules as amended in 1926, a separate passage account was to be maintained for each officer for the maximum benefits prescribed by Rule 3 and the disbursement in respect thereof were to be made of the General Revenue of the State."], "label": "REJECTED"}, "expert_3": {"rank1": ["The effect of these amendments was that instead of allowing as part of salary, passage pay of Rs. 50/- and carrying over that amount to the credit of the officer concerned in the General Passage Fund, by cl. 6 of the Regulations it was directed that a separate passage account be opened for each officer and if he be married for his wife and children, if any", "By the amendment made in the Rules in 1926, the passage benefit ceased to be a part of the salary and became an allowance or privilege.", "The respondent obtained benefit of these passages in 1930, 1950-51 and 1952-53 for himself and the members of his family. In 1957 he has not granted the passage benefit for his wife and his children, and he has filed this petition under Art. 226 for an order that the Union of India and the Accountant General do carry out their Statutory obligations", "The proviso makes it abundantly clear that the power to make rules cannot be exercised by the Secretary of State so as to give to any officer of the class specified terms less favorable as respects remuneration or pension than were given to him by the rules in force on the date on which he was first appointed to his service or to his post", "The only question which falls to be determined in this appeal is whether cl. 3 of the All India Services (overseas Pay, Passage and Leave Salary) Rules, 1957, was competently enacted, having regard to the guarantee contained in Art. 314 of the constitution as to the conditions of service as respects remuneration, leave and pension of the persons appointed by the Secretary of State or Secretary of State for India in Council to a civil service of the Crown in India.", "Under the Statutory Rules framed in 1924 passage benefits granted to persons employed in the Indian Civil Service, their wives and children were expressly made part of the salary or remuneration. Under the amendment of 1926, these passage benefits acquired the character of allowance, privilege or facility of office", "There is no definition of remuneration the Constitution, but that is not a ground for holding that the expression is used in any limited sense as merely salary. The expression remuneration, in its ordinary connotation means reward, recompense, pay, wages or salary for service rendered", "Blackbrun, J., observed, I think the word remuneration means a quid pro quo. If a man gives his services whatever consideration he gets for giving his services seems to be a remuneration for them. Consequently, I think if a person was in receipt of a Payment, or in receipt of a percentage, or any kind of payment which would not be actual money payment, the amount he would receive annually in respect of this would be remuneration", "The expression remuneration appears to have been used in the Constitution in this wide connotation", "As already observed, the right to passage was originally made part of the salary, but under the Rules framed in 1926, the provision for setting apart a fixed sum of money as salary out of the General Passage Fund was altered and passages were credited to the account of members of Civil services and debited and when they were availed of out of the general Revenue of the State. This alteration was made merely for administrative convenience and did not alter the character of the benefit", "Under the Rules of 1924, the provision for passage port of the remuneration and it continued to be such even after the amendment of the Rules in 1926 The right to passage benefits was statutory, and was under the Indian Independence Act in the nature of an allowance, or in any event privilege or facility paid in kind. It was expressly made part of the remuneration earned by the numbers of the Indian Civil Service. The Conditions of service as to remuneration having been guaranteed, the right to this benefit remained guaranteed to those members of the Indian Civil Service who were entitled to it before the Constitutions", "This guarantee which was continued in force even after the Commencement of the Constitution was for the first time by Rules made in June 1957 by retrospective amendment of the Statutory Rules from July 12, 1956 sought to be cancelled. But the central Government in exercise of Rule making power was incompetent to destroy or cancel a constitutional guarantee."], "rank2": ["By cl. 3 of the Rules passage benefits provided by the statutory Rules ceased with retrospective effect from July 12, 1956, to apply to the members of the Indian Civil Service. The appellant protested against the cancellation of the passage benefits for himself and the members of his family. The Government of India waived the original order of July 12, 1956, in favour of the respondent and ordered that he be granted passage benefit for himself but declined to relax the order in favour of the wife and children of the respondent", "The respondent accompanied by his wife and children proceeded to the United Kingdom as originally arranged and on his return filed a petition under Art. 226 of the Constitution for a writ in the nature of mandamus against the Accountant General, Bihar, commanding him to pay the prescribed passage money in respect of the respondents wife and children out of the amounts which stood to their credit in the General Passage Fund Account and to issue appropriate direction, order or writ in that behalf. This petition was granted by the High Court and a writ of mandamus as prayed was issued", "The Accountant General and the Union of India have appealed to this Court against the order with certificate of fitness granted by the High Court.", "The Statutory Rules were framed by the Secretary of State for India-in-Council under s.96B(2) and (3) of the Government of India Act, 1919, on December 9, 1924. Rule 12 of the Statutory Rules provides \n In addition to the pay prescribed by these Rules passage pay shall be granted at the rates and subject to the conditions set out in Schedule IV, to the members of the services and holders of appointments enumerated in Appendix A to that Schedule. Schedule IV appended to the Regulations set out an elaborate scheme for maintaining accounts of the passage pay and for disbursement thereof", "Regulations 3, 5, 6(1),8,9 and 14, which are the material regulations stood as follows- \n There shall be payable to every officer with effect from the 1st day of April, 1924 passage pay at the rate of Rs. 50 per mensem or such different rate as the Governor General in Council may by order declare to be necessary or sufficient for the purpose of the provision of the benefits conferred by these regulations. A sum equal to the amount received by an officer as passage pay shall be deducted monthly from the officers pay or leave salary, as the case may be, and shall be credited to a General Passage Fund to be administered by the Governor-General in Council. 6 (1)The maximum benefits to which officer shall be entitled shall be passages of a total value equal to the cost of the number of passages between Bombay and London by P", "O., 1st Class B, shown below- \n A separate account shall be opened in sterling in the case of each officer, and, if such officer is married, for his wife, and, if he has children, for each child. These accounts shall be credited respectively with the cost of the passages to which the officer, his wife and children are entitled under Regulation 6 \n No person whosoever shall have any claim on the General Passage Fund beyond the provision of the benefits, if any, conferred on him by these regulations and any balance remaining at the credit of any person after such person has ceased to be eligible for any such benefits shall lapse to the Fund. Passage benefit provided under Rule 12 was clearly part of the salary to be paid out of a fund called the General Passage Fund which was formed out of the passage pay", "Rule 12, as amended, reads as follows- \n In addition to the pay prescribed by these Rules, passages shall be granted, subject to the conditions set out in Schedule IV, to the members of the services and holders of appointments enumerated in Appendix A to that Schedule. The Regulations under Sch. IV were, after the amendment, called Revision of Pay, Passage and Pension Regulations", "Subject to Regulations, the accounts wire to be credited respectively with the number of passages to which the officer, his wife and children were entitled under the new regulations. Within the limits of these credits, the officer was entitled to draw for himself, his wife and his children respectively the port of a journey between a port in India and a port outside Asia.", "The conditions of the to which members of the Indian Civil Service were entiled under the Government of India Act, 1919, were guaranteed to them by s.247(1) of the Government of India Act, 1935. That Section provided 247 (1). The conditions of service of all persons appointed to a civil service or civil post by the Secretary of State shall- (a) as respects pay, leave and pension and general rights in regard to medical attendance, be such as may be prescribed by rules to be made by the Secretary of State (b) as respects other matters with respect to which express provision is not made by this chapter, be such as may be prescribed by rules to be made by the Secretary of State in so far as he thinks fit to make such rules, and, in so far and so long as provision is not made by such rules, by rules to be made, as respects persons serving in connection with the affairs of the Federation, by the Governor-General or some person or persons authorised by the Governor- general to make rule for the purpose and, as respects persons serving in connection with the affairs of a Province, by the Governor of the Province or some person or persons authorised by the Governor to make rules for the purpose Provided that no rule made under this sub-Section shall have effect so as to give to any person appointed to a civil service or civil post by the Secretary of State less favorable terms as respect remuneration or pension than were given to him by the rules is force on the date on which he was first appointed to his service or was appointed to his post.", "On February 15, 1957, the All India Services Overseas Pay, Passage and Leave Salary Rules, 1957, were promulgated in exercise of the powers conferred by sub-s (1) of s.3 of the All India Services Act, 1951, and thereby passage benefits in favour of the members of the Indian Administrative Service, who were originally members of the Indian Civil Service were cancelled", "Since the All India Services Act was enacted there is manifestly no existing service known as the Indian Civil Service. The members of the Indian Civil Service who were appointed by the Secretary of State for India became members of the Indian Administrative service, but their rights in the matter of condition of service as respects remuneration, leave and pension stood guaranteed by Art.314."], "rank3": ["On February 3, 1956, the respondent enquired of the Accountant General of Bihar about the number of passages to which he and the members of his family were entitled under the Superior Civil Services (Revision of Pay and Pension) Rules, 1924-hereinafter called the Statutory Rules. The Accountant General, by letter dated March 6, 1956, stated that 284-6 s. stood in the respondents credit 341-3-5d. stood in the account of his wife and 138 stood credited in the separate accounts of each of his four children. The respondent then arranged to travel to the United Kingdom and on June 20, 1956, obtained passage certificates from the Accountant General, Bihar", "On July 12,1956, the respondent was informed that the Govt. of India were of the opinion that the passage benefits admissible to officers of Indian domicile under the said Statutory Rules, were inconsistent with the existing circumstances and it was decided, with effect from the date of issue of the order that the benefits shall cease and the passage accounts of Indian Officers of the former Secretary of State Services shall be closed and passage credit left over will lapse to the Government. On February 5, 1957, the Government of India framed, in exercise of the powers conferred by sub-s. (1) of s. 3 of the All India Services Act, 61 of 1951, the All India Services (Overseas Pay, Passage and Leave Salary) Rules, 1957."], "rank4": ["After passing the competitive examination held in London in August, 1924 the respondent N. bakshi was admitted in November, 1924 to the Indian Civil Service and was, after his arrival in India, posted in the Province of Bihar. He continued to serve in the State of Bihar after independence", "This guarantee was confirmed by s. 10, sub.s. (2) of the Indian Independence Act, 1947, wherein it was provided, in so far as it is material, that Every person who- (a) havining been appointed by the Secretary of State or Secretary of State in Council, to a civil service of the Crown in India continues on and after the appointed day to serve under the Government of either of the new Dominions or of any province or part thereof or (b) shall be entitled to receive from the Governments of the Dominions and Provinces or parts which he is from time to time serving or, as the case may be the same conditions of service as respects remuneration, leave and pension, and the same rights as respects disciplinary matters or as the case may be, as respects the tenure of his office, or rights as similar thereto as changed circumstances may permit, as that person was entitled to immediately before the appointed day. The expression remuneration was defined in s.19(4) of that Act as inclusive of leave pay, allowances and the cost of any privileges or facilities provided in kind. By Art. 314 of the Constitution, persons who were appointed by the Secretary of State or Secretary of State in Council to a civil service of the Crown in India and continue on and after the commencement of the Constitution to serve under the Government of India or of a State were to receive from the Government of India and the Government of the State which they were from time to time serving, the same conditions of service as respects remuneration leave as pension which they were entitled to immediately before such commencement. The Parliament of India enacted the All India Services Act, 61 of 1951, to regulate the recruitment, and the conditions of service of persons appointed, to the all India Services common to the Union and the States, and by s. 3 of that Act the central Government was authorised to make rules for the regulation of recruitment, and the conditions of service of persons appointed, to the All India Service", "By s. 4 it was provided that all rules in force immediately before the commencement of the Act and applicable to an All India Service were to continue to by in force and were to be deemed to be rules made under the Act", "On September 8, 1954, the Central Government framed rules called the Indian Administrative Services Recruiting Rules and by Rule 2(d) the members of the Indian Civil Service who continued to serve on and after the commencement of the Constitution were to be regarded for the purpose of the rules as members of the Indian Administrative Service"], "label": "REJECTED"}, "expert_4": {"rank2": ["The only question which falls to be determined in this appeal is whether cl. 3 of the All India Services (overseas Pay, Passage and Leave Salary) Rules, 1957, was competently enacted, having regard to the guarantee contained in Art. 314 of the constitution as to the conditions of service as respects remuneration, leave and pension of the persons appointed by the Secretary of State or Secretary of State for India in Council to a civil service of the Crown in India.", "Consequently, I think if a person was in receipt of a Payment, or in receipt of a percentage, or any kind of payment which would not be actual money payment, the amount he would receive annually in respect of this would be remuneration.", "The expression remuneration appears to have been used in the Constitution in this wide connotation.", "As already observed, the right to passage was originally made part of the salary, but under the Rules framed in 1926, the provision for setting apart a fixed sum of money as salary out of the General Passage Fund was altered and passages were credited to the account of members of Civil services and debited and when they were availed of out of the general Revenue of the State. This alteration was made merely for administrative convenience and did not alter the character of the benefit.", "The Conditions of service as to remuneration having been guaranteed, the right to this benefit remained guaranteed to those members of the Indian Civil Service who were entitled to it before the Constitutions.", "This guarantee which was continued in force even after the Commencement of the Constitution was for the first time by Rules made in June 1957 by retrospective amendment of the Statutory Rules from July 12, 1956 sought to be cancelled. But the central Government in exercise of Rule making power was incompetent to destroy or cancel a constitutional guarantee."], "rank3": ["This is an appeal against the judgment of the High Court of Judicature at Patna from an order commanding the Accountant General of Bihar, Ranchi, to pay certain passage allowance due under the Superior Civil Services (Revision of Pay and Pension) Rules, 1924, to the wife and the children of the respondent.", "This petition was granted by the High Court and a writ of mandamus as prayed was issued.", "To appreciate the grounds on which the impugned order was made it is necessary to refer to the Statutory Rules for passage benefit framed in 1924 by the Secretary of State in Council and the amendments thereof in the light of constitutional development since that date.", "Passage benefit provided under Rule 12 was clearly part of the salary to be paid out of a fund called the General Passage Fund which was formed out of the passage pay.", "Several amendments were made to these Rules from time to time, but we are concerned with the amendments made by Notifications No. F-178/11/1/24 dated October 5, 1925, and No. F-17-15/26 dated June 16, 1926.", "The effect of these amendments was that instead of allowing as part of salary, passage pay of Rs. 50/- and carrying over that amount to the credit of the officer concerned in the General Passage Fund, by cl. 6 of the Regulations it was directed that a separate passage account be opened for each officer and if he be married for his wife and children, if any.", "Within the limits of these credits, the officer was entitled to draw for himself, his wife and his children respectively the port of a journey between a port in India and a port outside Asia.", "By the amendment made in the Rules in 1926, the passage benefit ceased to be a part of the salary and became an allowance or privilege.", "In 1957 he has not granted the passage benefit for his wife and his children, and he has filed this petition under Art. 226 for an order that the Union of India and the Accountant General do carry out their Statutory obligations.", "The proviso makes it abundantly clear that the power to make rules cannot be exercised by the Secretary of State so as to give to any officer of the class specified terms less favorable as respects remuneration or pension than were given to him by the rules in force on the date on which he was first appointed to his service or to his post.", "This guarantee was confirmed by s. 10, sub.s. (2) of the Indian Independence Act, 1947, wherein it was provided, in so far as it is material, that Every person who- (a) havining been appointed by the Secretary of State or Secretary of State in Council, to a civil service of the Crown in India continues on and after the appointed day to serve under the Government of either of the new Dominions or of any province or part thereof or (b) shall be entitled to receive from the Governments of the Dominions and Provinces or parts which he is from time to time serving or, as the case may be the same conditions of service as respects remuneration, leave and pension, and the same rights as respects disciplinary matters or as the case may be, as respects the tenure of his office, or rights as similar thereto as changed circumstances may permit, as that person was entitled to immediately before the appointed day.", "The expression remuneration was defined in s.19(4) of that Act as inclusive of leave pay, allowances and the cost of any privileges or facilities provided in kind.", "On February 15, 1957, the All India Services Overseas Pay, Passage and Leave Salary Rules, 1957, were promulgated in exercise of the powers conferred by sub-s (1) of s.3 of the All India Services Act, 1951, and thereby passage benefits in favour of the members of the Indian Administrative Service, who were originally members of the Indian Civil Service were cancelled.", "The members of the Indian Civil Service who were appointed by the Secretary of State for India became members of the Indian Administrative service, but their rights in the matter of condition of service as respects remuneration, leave and pension stood guaranteed by Art.314.", "In dealing with the status of the members of the former Indian Civil Service since the Indian Independence Act, 1947, this Court in State of Madras v. K. M.", "Rajagopalan (1) held that (1) the conferral of independence on India brought about an automatic and legal termination of service on the date of Independence (2) all persons previously holding civil posts in India are deemed to have been appointed and hence to continue in service, except those governed by General or special orders arrangements affecting their respective case (3) the guarantee about prior conditions of service and the previous statutory safe guards relating to disciplinary action continues to apply to those who are thus deemed to continue in service but not to others and (4) those previously holding civil posts in India had the right, and were in fact given the option, of declining to continue in service under the new regime and in the event of their exercising that option they ceased to serve on and from the date of the passing of the constitution.", "Under the Statutory Rules framed in 1924 passage benefits granted to persons employed in the Indian Civil Service, their wives and children were expressly made part of the salary or remuneration.", "Under the amendment of 1926, these passage benefits acquired the character of allowance, privilege or facility of office.", "By the Act of 1935 (s. 247) privileges, inter alia as to remuneration under the Government of India Act of 1919 were expressly guaranteed in favour of the members of the India civil Services.\nBy the Indian Independence Act 1947, a similar guarantee in respect of conditions of service as respects remuneration was also conferred and by s. 19(4) of that Act remuneration was defined as inclusive of pay, allowances or privileges or facilities payable in kind.", "There is no definition of remuneration the Constitution, but that is not a ground for holding that the expression is used in any limited sense as merely salary.", "The expression remuneration, in its ordinary connotation means reward, recompense, pay, wages or salary for service rendered In R. v. Postmaster General (1) Blackbrun, J., observed, I think the word remuneration means a quid pro quo. If a man gives his services whatever consideration he gets for giving his services seems to be a remuneration for them.", "Under the Rules of 1924, the provision for passage port of the remuneration and it continued to be such even after the amendment of the Rules in 1926 The right to passage benefits was statutory, and was under the Indian Independence Act in the nature of an allowance, or in any event privilege or facility paid in kind.", "It was expressly made part of the remuneration earned by the numbers of the Indian Civil Service."], "rank4": ["After passing the competitive examination held in London in August, 1924 the respondent N. bakshi was admitted in November, 1924 to the Indian Civil Service and was, after his arrival in India, posted in the Province of Bihar.", "He continued to serve in the State of Bihar after independence.", "The Accountant General, by letter dated March 6, 1956, stated that 284-6 s. stood in the respondents credit 341-3-5d. stood in the account of his wife and 138 stood credited in the separate accounts of each of his four children. The respondent then arranged to travel to the United Kingdom and on June 20, 1956, obtained passage certificates from the Accountant General, Bihar.", "On July 12,1956, the respondent was informed that the Govt. of India were of the opinion that the passage benefits admissible to officers of Indian domicile under the said Statutory Rules, were inconsistent with the existing circumstances and it was decided, with effect from the date of issue of the order that the benefits shall cease and the passage accounts of Indian Officers of the former Secretary of State Services shall be closed and passage credit left over will lapse to the Government.", "By cl. 3 of the Rules passage benefits provided by the statutory Rules ceased with retrospective effect from July 12, 1956, to apply to the members of the Indian Civil Service.", "The Government of India waived the original order of July 12, 1956, in favour of the respondent and ordered that he be granted passage benefit for himself but declined to relax the order in favour of the wife and children of the respondent. The respondent accompanied by his wife and children proceeded to the United Kingdom as originally arranged and on his return filed a petition under Art. 226 of the Constitution for a writ in the nature of mandamus against the Accountant General, Bihar, commanding him to pay the prescribed passage money in respect of the respondents wife and children out of the amounts which stood to their credit in the General Passage Fund Account and to issue appropriate direction, order or writ in that behalf.", "The Accountant General and the Union of India have appealed to this Court against the order with certificate of fitness granted by the High Court.", "Rule 12 of the Statutory Rules provides \n In addition to the pay prescribed by these Rules passage pay shall be granted at the rates and subject to the conditions set out in Schedule IV, to the members of the services and holders of appointments enumerated in Appendix A to that Schedule. Schedule IV appended to the Regulations set out an elaborate scheme for maintaining accounts of the passage pay and for disbursement thereof.", "Whereas by the Rules as originally framed in 1924 an additional salary of Rs. 50/- per mensem was awarded to each officer as passage pay which was to be credited to the General Passage Fund out of which passage benefits to officers were provided, according to the scheme of the Rules as amended in 1926, a separate passage account was to be maintained for each officer for the maximum benefits prescribed by Rule 3 and the disbursement in respect thereof were to be made of the General Revenue of the State.", "The respondent obtained benefit of these passages in 1930, 1950-51 and 1952-53 for himself and the members of his family.", "The conditions of the to which members of the Indian Civil Service were entiled under the Government of India Act, 1919, were guaranteed to them by s.247(1) of the Government of India Act, 1935.", "That Section provided 247 (1). The conditions of service of all persons appointed to a civil service or civil post by the Secretary of State shall- (a) as respects pay, leave and pension and general rights in regard to medical attendance, be such as may be prescribed by rules to be made by the Secretary of State (b) as respects other matters with respect to which express provision is not made by this chapter, be such as may be prescribed by rules to be made by the Secretary of State in so far as he thinks fit to make such rules, and, in so far and so long as provision is not made by such rules, by rules to be made, as respects persons serving in connection with the affairs of the Federation, by the Governor-General or some person or persons authorised by the Governor- general to make rule for the purpose and, as respects persons serving in connection with the affairs of a Province, by the Governor of the Province or some person or persons authorised by the Governor to make rules for the purpose Provided that no rule made under this sub-Section shall have effect so as to give to any person appointed to a civil service or civil post by the Secretary of State less favorable terms as respect remuneration or pension than were given to him by the rules is force on the date on which he was first appointed to his service or was appointed to his post.", "By Art. 314 of the Constitution, persons who were appointed by the Secretary of State or Secretary of State in Council to a civil service of the Crown in India and continue on and after the commencement of the Constitution to serve under the Government of India or of a State were to receive from the Government of India and the Government of the State which they were from time to time serving, the same conditions of service as respects remuneration leave as pension which they were entitled to immediately before such commencement. The Parliament of India enacted the All India Services Act, 61 of 1951, to regulate the recruitment, and the conditions of service of persons appointed, to the all India Services common to the Union and the States, and by s. 3 of that Act the central Government was authorised to make rules for the regulation of recruitment, and the conditions of service of persons appointed, to the All India Service. By s. 4 it was provided that all rules in force immediately before the commencement of the Act and applicable to an All India Service were to continue to by in force and were to be deemed to be rules made under the Act.", "On September 8, 1954, the Central Government framed rules called the Indian Administrative Services Recruiting Rules and by Rule 2(d) the members of the Indian Civil Service who continued to serve on and after the commencement of the Constitution were to be regarded for the purpose of the rules as members of the Indian Administrative Service."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["The expression remuneration appears to have been used in the Constitution in this wide connotation.", "This alteration was made merely for administrative convenience and did not alter the character of the benefit.", "The Conditions of service as to remuneration having been guaranteed, the right to this benefit remained guaranteed to those members of the Indian Civil Service who were entitled to it before the Constitutions.", "But the central Government in exercise of Rule making power was incompetent to destroy or cancel a constitutional guarantee."], "rank2": ["Passage benefit provided under Rule 12 was clearly part of the salary to be paid out of a fund called the General Passage Fund which was formed out of the passage pay.", "Provided that no rule made under this sub-Section shall have effect so as to give to any person appointed to a civil service or civil post by the Secretary of State less favorable terms as respect remuneration or pension than were given to him by the rules is force on the date on which he was first appointed to his service or was appointed to his post.", "The proviso makes it abundantly clear that the power to make rules cannot be exercised by the Secretary of State so as to give to any officer of the class specified terms less favorable as respects remuneration or pension than were given to him by the rules in force on the date on which he was first appointed to his service or to his post.", "The expression remuneration was defined in s.19(4) of that Act as inclusive of leave pay, allowances and the cost of any privileges or facilities provided in kind.", "Under the Statutory Rules framed in 1924 passage benefits granted to persons employed in the Indian Civil Service, their wives and children were expressly made part of the salary or remuneration.", "by s. 19(4) of that Act remuneration was defined as inclusive of pay, allowances or privileges or facilities payable in kind.", "The expression remuneration, in its ordinary connotation means reward, recompense, pay, wages or salary for service rendered In R. v. Postmaster General (1) Blackbrun, J., observed, I think the word remuneration means a quid pro quo.", "The right to passage benefits was statutory, and was under the Indian Independence Act in the nature of an allowance, or in any event privilege or facility paid in kind.", "It was expressly made part of the remuneration earned by the numbers of the Indian Civil Service."], "rank3": ["Whereas by the Rules as originally framed in 1924 an additional salary of Rs. 50/- per mensem was awarded to each officer as passage pay which was to be credited to the General Passage Fund out of which passage benefits to officers were provided, according to the scheme of the Rules as amended in 1926, a separate passage account was to be maintained for each officer for the maximum benefits prescribed by Rule 3 and the disbursement in respect thereof were to be made of the General Revenue of the State.", "The conditions of the to which members of the Indian Civil Service were entiled under the Government of India Act, 1919, were guaranteed to them by s.247(1) of the Government of India Act, 1935.", "This guarantee was confirmed by s. 10, sub.s. (2) of the Indian Independence Act, 1947", "Every person who- (a) havining been appointed by the Secretary of State or Secretary of State in Council, to a civil service of the Crown in India continues on and after the appointed day to serve under the Government of either of the new Dominions or of any province or part thereof or (b) shall be entitled to receive from the Governments of the Dominions and Provinces or parts which he is from time to time serving or, as the case may be the same conditions of service as respects remuneration, leave and pension, and the same rights as respects disciplinary matters or as the case may be, as respects the tenure of his office, or rights as similar thereto as changed circumstances may permit, as that person was entitled to immediately before the appointed day.", "By Art. 314 of the Constitution, persons who were appointed by the Secretary of State or Secretary of State in Council to a civil service of the Crown in India and continue on and after the commencement of the Constitution to serve under the Government of India or of a State were to receive from the Government of India and the Government of the State which they were from time to time serving, the same conditions of service as respects remuneration leave as pension which they were entitled to immediately before such commencement.", "By s. 4 it was provided that all rules in force immediately before the commencement of the Act and applicable to an All India Service were to continue to by in force and were to be deemed to be rules made under the Act.", "The members of the Indian Civil Service who were appointed by the Secretary of State for India became members of the Indian Administrative service, but their rights in the matter of condition of service as respects remuneration, leave and pension stood guaranteed by Art.314.", "this Court in State of Madras v. K. M. Rajagopalan (1) held that (1) the conferral of independence on India brought about an automatic and legal termination of service on the date of Independence (2) all persons previously holding civil posts in India are deemed to have been appointed and hence to continue in service, except those governed by General or special orders arrangements affecting their respective case (3) the guarantee about prior conditions of service and the previous statutory safe guards relating to disciplinary action continues to apply to those who are thus deemed to continue in service but not to others and (4) those previously holding civil posts in India had the right, and were in fact given the option, of declining to continue in service under the new regime and in the event of their exercising that option they ceased to serve on and from the date of the passing of the constitution.", "By the Act of 1935 (s. 247) privileges, inter alia as to remuneration under the Government of India Act of 1919 were expressly guaranteed in favour of the members of the India civil Services.\nBy the Indian Independence Act 1947, a similar guarantee in respect of conditions of service as respects remuneration was also conferred", "By Art. 314 of the Constitution, the conditions of service, prior to the Constitutions respects remuneration, leave and pension of the members of the Indian Civil Service were protected.", "If a man gives his services whatever consideration he gets for giving his services seems to be a remuneration for them. Consequently, I think if a person was in receipt of a Payment, or in receipt of a percentage, or any kind of payment which would not be actual money payment, the amount he would receive annually in respect of this would be remuneration."], "rank4": ["The effect of these amendments was that instead of allowing as part of salary, passage pay of Rs. 50/- and carrying over that amount to the credit of the officer concerned in the General Passage Fund, by cl. 6 of the Regulations it was directed that a separate passage account be opened for each officer and if he be married for his wife and children, if any.", "The conditions of service of all persons appointed to a civil service or civil post by the Secretary of State shall- (a) as respects pay, leave and pension and general rights in regard to medical attendance, be such as may be prescribed by rules to be made by the Secretary of State (b) as respects other matters with respect to which express provision is not made by this chapter, be such as may be prescribed by rules to be made by the Secretary of State in so far as he thinks fit to make such rules, and, in so far and so long as provision is not made by such rules, by rules to be made, as respects persons serving in connection with the affairs of the Federation, by the Governor-General or some person or persons authorised by the Governor- general to make rule for the purpose and, as respects persons serving in connection with the affairs of a Province, by the Governor of the Province or some person or persons authorised by the Governor to make rules for the purpose", "There is no definition of remuneration the Constitution, but that is not a ground for holding that the expression is used in any limited sense as merely salary."], "rank5": ["There shall be payable to every officer with effect from the 1st day of April, 1924 passage pay at the rate of Rs. 50 per mensem or such different rate as the Governor General in Council may by order declare to be necessary or sufficient for the purpose of the provision of the benefits conferred by these regulations. A sum equal to the amount received by an officer as passage pay shall be deducted monthly from the officers pay or leave salary, as the case may be, and shall be credited to a General Passage Fund to be administered by the Governor-General in Council. 6 (1)The maximum benefits to which officer shall be entitled shall be passages of a total value equal to the cost of the number of passages between Bombay and London by P. O., 1st Class B, shown below- \n A separate account shall be opened in sterling in the case of each officer, and, if such officer is married, for his wife, and, if he has children, for each child. These accounts shall be credited respectively with the cost of the passages to which the officer, his wife and children are entitled under Regulation 6 \n No person whosoever shall have any claim on the General Passage Fund beyond the provision of the benefits, if any, conferred on him by these regulations and any balance remaining at the credit of any person after such person has ceased to be eligible for any such benefits shall lapse to the Fund.", "In addition to the pay prescribed by these Rules, passages shall be granted, subject to the conditions set out in Schedule IV, to the members of the services and holders of appointments enumerated in Appendix A to that Schedule.", "By the amendment made in the Rules in 1926, the passage benefit ceased to be a part of the salary and became an allowance or privilege."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1961_417", "text": "Appeal by special leave from the judgment and decree dated April 18,1952, of the former Nagpur High Court in First Appeal No. 88 of 1942. B. Agarwala and K. P. Gupta, for the appellant No. 1. Har Dayal Hardy and N. N. Keswani, for respondent No. 1. 1961. March 16. The Judgment of the Court was delivered by SUBBA RAO, J.-This appeal by special leave is directed against the judgment and decree of the High of Judicature at Nagpur confirming the judgment of the 2nd Additional District Judge, Jabalpur in Civil Suit No. 9-A of 1942, filed by respondents 2 to 7 herein claiming to be the reversioners of the estate of one Raja Ajitsingh. Ajit Singh was the Raja of Saliya Estate consisting of 73 villages and other property situate in Jabalpur and Saugor Districts. Ajit Singh died on January 2, 1910, leaving behind him two widows named Rani Khuman Kuar and Rani Anant Kuar and an illegitimate son named Ramraghuraj Singh. Rani Anant Kuar died in or about 1914 and Rani Khuman Kuar passed away on February 1, 1922. After the death of Raja Ajit Singh, the Estate was taken over by the Court of Wards on behalf of the widows in the year 1913 and remained in its possession till March 27, 1923. After the death of Rani Khuman Kuar, the local Government issued a notification recognizing Ramraghuraj Singh as the successor to the Estate but, for one reason or other, the Court of Wards continued to manage the Estate on his behalf from September 23, 1923. Ramraghuraj Singh died on April 23, 1932, and on his death the, first respondent, the son of Ramraghuraj Singh, was, declared as the ward of the Court of Wards which continued to manage the Estate on his behalf Respondents 2 to 6, claiming to be the reversioners to the Estate of Raja Ajit Singh, filed a suit on June 15, 1935, for recovery of possession of the Estate. \nAppellants 1 and 2 are alleged to be the assignees pendente lite of the interest of the alleged reversioners. The plaintiffs averred that RamraLhurai Singh was the son of one Jhutti by her husband one Sukhai and that as Raja Ajit Singh had no issue, he and the Ranies treated the boy as their son, that the Lodhi community to which Raja Ajit Singh belonged was not a sudra caste and that, therefore, even if Ramraghuraj Singh was the illegitimate son of Raja Ajit Singh, he was not entitled to a share, and that in any view half of the share of the widows in the Estate would devolve, on their death, on the reversioners to the exclusion of the illegitimate son. They further pleaded that the possession of the Court of Wards of the entire Estate from January 2, 1910 to February 1, 1922, was adverse to the illegitimate son and, therefore, he lost his title, if any, to the said Estate. The case of the first respondent was that Raja Ajit Singh belonged to the sudra caste, that Ramraghuraj Singh was the son of the said Raja by a continuously and exclusively kept concubine named Raj Dulari, that the widows never questioned the right of Ramraghuraj Singh to a share in the property of Raja Ajit Singh, that therefore there was no scope for the plea of adverse possession, and that, after the death of the widows, the succession to the Estate of Raja Ajit Singh in respect of one half share opened out and the illegitimate son, he being the nearest heir, succeeded to that share also. The trial court as well as the High Court concurrently gave the following findings (1) Raja Ajit Singh belonged to the sudra caste (2) Raja Raghuraj Singh was the son of Raja Ajit Singh by a continuously and exclusively kept concubine by name Raj Dulari, who had passed into the coneubinage of Raja Ajit Singh after the death of her husband (3) as the illegitimate son of Raja Ajit Singh, Ramraghuraj Singh succeeded to a moiety of the Estate of his putative father and the two widows of Raja Ajit Singh succeeded to the other moiety of his Estate (4) as there was no daughter or daughters son, after the death of the widows, Ramraghuraj Singh, being the sole surviving heir of his putative father, inherited a moiety of the Estate which was held by the widows during their lifetime.\n Ramraghuraj Singh was all along in joint possession of the Estate with the widows, and, although the Court of Wards had assumed superintendence on behalf of the Ranies, he was not out of possession during their lifetime and as such his title could not be extinguished by adverse possession (6) the plaintiffs suit was barred under s. 26 of the Central Provinces Court of Wards Act and (7) the plaintiffs claim was barred by limitation. While the trial court held that it had not been established that the plaintiffs were the reversioners of Raja Ajit Singh, the High Court held that it had been proved. In the result the trial court dismissed the suit and, on appeal, the High Court confirmed it. The 2nd appellant died and his legal representatives were not brought on record and the appeal so far as the 2nd appellant is concerned has abated. The 1st appellant alone proceeded with the appeal. It is the usual practice of this Court to accept the concurrent findings of the courts below. There are no exceptional circumstances in this case, at any rate none was brought to our notice, to compel us to depart from the usual practice. We, therefore, accept the concurrent findings, namely, that Raja Ajit Singh was a member of the sudra caste and that Ramraghuraj Singh was the son of Raja Ajit Singh by a continuously and exclusively kept concubine named Raj Dulari, who passed into his concubinage after the death of her husband. The main question that arises in this appeal is whether an illegitimate son of a sudra vis-a-vis his-selfacquired property, after having succeeded to a half share of his putative fathers estate, will be entitled to succeed to the other half share got by the widow, after the succession opened out to his putative father on the death of the said widow. The answer to the question depends upon the content of the right of an illegitimate son to succeed to the self-acquired property of his putative father. The source of his right is found in the relevant Hindu Law texts. Mitakshara in explanation of the texts of Manu and Yajnavalkya says in Chapter 1, s. 12, in the following three verses thus \n The author next delivers a special rule concerning the partition of a Sudras goods. Even a son begotten by a Sudra on a female slave may take a share by the fathers choice. But, if the father be dead, the brethren should make him partaker of the moiety of a share and one, who has no brothers, may inherit the whole property, in default of daughters sons. The son, begotten by a Sudra on a female slave, obtains a share by the fathers choice, or at his pleasure. But, after the demise of the father, if there be sons of a wedded wife, let these brothers allow the son of the female slave to participate for half a share that is, let them give him half as much as is the amount of one brothers allotment. However, should there be no sons of a wedded wife, the son of the female slave takes the whole estate, provided there be no daughters of a wife, nor sons of daughters. But, if there be such the son of the female slave participates for half a share only. From the mention of a Sudra in this place it follows that the son begotten by a man of a regenerate tribe on a female slave, does not obtain a share even by the fathers choice, nor the whole estate after his demise. But, if he be docile, he receives a simple maintenance. No mention of a widow is found in the above verses, but in Dattaka Chandrika, the author says in V. 30,31 thus If any, even in the series of heirs down to the daughters son, exist, the son by a female slave does not take the whole estate, but on the contrary shares equally with such heir. The leading decision on the rights of an illegitimate son is that of the Judicial Committee in Raja Jogendra Bhupati Hurri Chundun Mahapatra v. Nityanund Mansingh (1). There, one Raja died leaving behind him a legitimate son and an illegitimate son. On the death of the legitimate son, who had succeeded to the Raja, it was held that the illegitimate son succeeded to him by survivorship. Sir Richard Couch cited two verses from Mitakshara Chapter 1, section 12. We have already extracted the said verses. Commenting upon these verses, the learned Judge observed at P. 132 thus Now it is observable that the first verse shews that during the lifetime of the father the law leaves the son to take a share by his fathers choice, and it cannot be said that at his birth he acquires any right to share in the estate in the same way as a legitimate son would do. But the language there is very distinct, that if the father be dead the bre- thren should make him partaker of the moiety of a share. So in the second verse the words are that the brothers are to allow him to participate for half a share, and later on there is the same expression The son of the female slave participates for half a share only. On that interpretation, he accepted the view of the Bombay High Court and held that an illegitimate son and a legitimate son, being members of an undivided Hindu family governed by Mitakshara, the illegitimate son becomes entitled to the whole of the immoveable property of the family if the legitimate son dies without any male issue. The Judicial Committee again considered the right of an illegitimate son in Kamulammal v. Visvanathaswami Naicker (2). There it was held that in a competition between a widow and an illegitimate son to the property of his putative father, the illegitimate son takes half of the (1) (1890) L.R. 17 I.A. 128. (2) (1922) L.R. 50 I.A. 32. property and the widow the other half. Sir Lawrence Jenkins observed at p. 37 thus Here the contest is between the illegitimate son and the widow, and though the widow is not named in the text it is well settled that as a preferential heir to the daughters son she is included among those who share with the illegitimate son, and it would serve no useful purpose to speculate why she was not mentioned in the text. The status of the illegitimate son was subject of further scrutiny by the Privy Council in Vellaiyappa Chetty v. Natarajan (1). There the question arose in the context of an illegitimate sons right to maintenance from a joint family property after the death of his father who left no separate property. The Judicial Committee held that he was entitled as a member of the family to maintenance out of the joint family property in the hands of the collaterals with whom the father was joint. In dealing with the question of status of an illegitimate son, Sir Dinshah Mulla, speaking for the Court, after considering the relevant Hindu Law texts and decisions, arrived at the following conclusion at p. 15 On a consideration of the texts and the cases on the subject their Lordships are of opinion that the illegitimate son of a Sudra by a continuous concubine has the status of a son, and that he is a member of the family that the share of inheritance given to him is not merely in lieu of maintenance, but in recognition of his status as a son It is not necessary to multiply decisions. The law pertaining to the right of inheritance of an illegitimate son to his putative fathers self-acquired property may be stated, thus An illegitimate son has the status of a son under the Hindu Law and he is a member of the family. But his rights are limited compared to those of a son born in wedlock. He has no right by birth and, therefore, he cannot demand partition during his fathers lifetime. During the lifetime of his father, the law allows the illegitimate son to take (1) (1931) I.L. R. 55 Mad. 1. only such share as his father may give him. But on his fathers death, he takes his fathers self-acquired property along with the legitimate son and in case the legitimate son dies, he takes the entire property by survivorship. Even if there is no legitimate son, the illegitimate son would be entitled to a moiety only of his fathers estate when there is a widow, daughter or daughters son of the last male holder. In the absence of any one of the three heirs, he succeeds to the entire estate of his father. From the premises it follows that an illegitimate son, except to the extent circumscribed by the. Hindu Law texts, has the status of a son and is heir to the self-acquired property of his putative father. If that be his undoubted right under the Hindu Law, on what principle can he be deprived of his right of succession to the other moiety of his fathers property after the death of the widow? Under the Hindu Law, the death of the widow opens inheritance to the reversioners and the nearest heir at the time to the last full owner becomes entitled to possession. When the succession opens, in a competition between an illegitimate son and other reversioners, the illegitimate son is certainly a nearer heir to the last male holder than the other reversioners. If he was the nearest heir only yielding half a share to the widow at the time of the death of his putative father, how does he cease to be one by the intervention of the widows estate? As on the death of the widow the estate reverts back to the last male holder, the succession shall be traced to him, and, if so traced, the illegitimate son has a preferential claim over all other reversioners. In Maynes Hindu Law, 11th edn., this position has been controverted in the following manner at p. 637 The illegitimate Bon, though he inherits on the death of his putative father, along with or in default of male issue, widow or daughter, cannot come in as a reversionary heir on the death of the widow or daughter, as he is undoubtedly neither a sagotra nor a bhinnagotra sapinda of the last, male-holder within the text of Manu. \nWe regret our inability to accept this proposition. for, if accepted, we would be speaking in two voices. Once it is established that for the purpose of succession an illegitimate son of a Sudra has the status of a son and that he is entitled to succeed to his putative fathers entire self-acquired property in the absence of a son, widow, daughter or daughters son and to a share along with them, we cannot see any escape from the consequential and logical position that he shall be entitled to succeed to the other half share when succession opens after the widows death. The intervention of the widow only postpones the opening of succession to the extent of half share but it cannot divert the succession through a different channel, for she cannot constitute herself a new stock of descent. The opinion expressed in Maynes Hindu Law is sought to be supported by the author by reference to a decision of the Madras High Court in Karuppayee Ammal v. Ramaswami (1). But a reference to that judgment shows that no such proposition has been laid down therein. There the facts were that on the death of a sudra, the last male owner of an estate, his widow succeeded to a moiety thereof and his illegitimate son to the other moiety the widow then died leaving behind her a son of the daughter of the last male owner and the illegi- timate son above mentioned. The Madras High Court held that the daughters son was entitled to the moiety that had vested in the widow and the illegitimate son was not entitled to any portion thereof. The reason for that conclusion is found at p. 868 and it is The principle underlying the doctrine of reverter referred to is that the last male- holders estate is inherited by females who have no free right of alienation and who hold a peculiar kind of estate called womans estate and on whose death the then heir of the last male-holder succeeds to the last male-holders estate. From its very nature, the doctrine could not apply legitimately to a case where the last male-holders estate vested on his death not in a female heir but in a male heir also. In such a case, the doctrine as such would not strictly apply, nor has it been, so far as we are aware, applied to such a case. (1) (1932) I.L.R. 55 Mad. 856. The reason of the decision is therefore clear and that is when a daughters son succeeds to an estate, there is no further scope for the application of the doctrine of reverter. The learned Judges expressly left open the present question when they said, We are not now concerned with the question as to what would become of the property if the last of the daughters died without leaving a daughter son, in such circumstances. This decision cannot, therefore, be invoked in support of the contention that in a case where the doctrine of reverter applies the illegitimate son is excluded from succession. On the other hand, the Nagpur High Court in Bhagwantrao v. Punjaram (1) rightly came to the conclusion that where on a partition between a legitimate and an illegitimate son, the widow was allotted a share, on her death the illegitimate son was entitled to a share in the property. We, therefore, hold that on the death of the widow, the illegitimate son, the father of the first respondent herein, succeeded to the other half share of the estate of his putative father Raja Ajit Singh. It is. next contended that the widows acquired an absolute interest in the estate of Raja. Ajit Singh by adverse possession and, therefore, the property would devolve not on Raja Ajit Singhs heirs but on the heirs of the widows. On the question of adverse possession also, both the courts below have held against the appellant. But learned counsel argued that in the circumstances of this case the said find- ing was a mixed question of fact and law. It was said that the courts below missed the point that the Court of Wards, representing the widows, held the Estate adversely to Ramraghuraj Singh in respect of his half share and, therefore, the fact that during its management the widows did not deny the title of Ramraghuraj Singh or the fact that they admitted his title could not affect the question of adverse possession.\nAssuming that learned counsel for the appellant was correct in his contention, we fail to see how the said legal position would advance the appellants case, for the Court of Wards admittedly managed only the I.L.R. 1938 Nag. 255. widows limited estate and it is not the case of the appellant that the Court of Wards acquired on behalf of the widows an absolute interest in respect of the half share of Ramraghuraj Singh in the suit properties. The plaintiffs themselves claimed to hereversioners of Raja Ajit Singh on the ground that the succession to him opened out when the widows died and if their contention be accepted, namely, that the widows acquired an absolute interest in half of the property, they would be non-suited in respect thereof on the simple ground that their suit was not to recover the property as the heirs of the widows. But, as we have pointed out, the widows would have acquired a title by adverse possession in respect of the share of Ramraghuraj Singh only in their capacity as owners of a limited estate i.e., in regard to their half share they held it as widows estate and in respect of the other half-share of Ramraghuraj Singh they acquired a right by adverse possession only a limited estate therein. \nDECISION ??", "expert_1": {"rank1": ["We, therefore, hold that on the death of the widow, the illegitimate son, the father of the first respondent herein, succeeded to the other half share of the estate of his putative father Raja Ajit Singh.", "Assuming that learned counsel for the appellant was correct in his contention, we fail to see how the said legal position would advance the appellants case, for the Court of Wards admittedly managed only the I.L.R. 1938 Nag. 255. widows limited estate and it is not the case of the appellant that the Court of Wards acquired on behalf of the widows an absolute interest in respect of the half share of Ramraghuraj Singh in the suit properties. The plaintiffs themselves claimed to hereversioners of Raja Ajit Singh on the ground that the succession to him opened out when the widows died and if their contention be accepted, namely, that the widows acquired an absolute interest in half of the property, they would be non-suited in respect thereof on the simple ground that their suit was not to recover the property as the heirs of the widows. But, as we have pointed out, the widows would have acquired a title by adverse possession in respect of the share of Ramraghuraj Singh only in their capacity as owners of a limited estate i.e., in regard to their half share they held it as widows estate and in respect of the other half-share of Ramraghuraj Singh they acquired a right by adverse possession only a limited estate therein."], "rank2": ["The illegitimate Bon, though he inherits on the death of his putative father, along with or in default of male issue, widow or daughter, cannot come in as a reversionary heir on the death of the widow or daughter, as he is undoubtedly neither a sagotra nor a bhinnagotra sapinda of the last, male-holder within the text of Manu. \nWe regret our inability to accept this proposition. for, if accepted, we would be speaking in two voices. Once it is established that for the purpose of succession an illegitimate son of a Sudra has the status of a son and that he is entitled to succeed to his putative fathers entire self-acquired property in the absence of a son, widow, daughter or daughters son and to a share along with them, we cannot see any escape from the consequential and logical position that he shall be entitled to succeed to the other half share when succession opens after the widows death. The intervention of the widow only postpones the opening of succession to the extent of half share but it cannot divert the succession through a different channel, for she cannot constitute herself a new stock of descent.", "The principle underlying the doctrine of reverter referred to is that the last male- holders estate is inherited by females who have no free right of alienation and who hold a peculiar kind of estate called womans estate and on whose death the then heir of the last male-holder succeeds to the last male-holders estate. From its very nature, the doctrine could not apply legitimately to a case where the last male-holders estate vested on his death not in a female heir but in a male heir also. In such a case, the doctrine as such would not strictly apply, nor has it been, so far as we are aware, applied to such a case. (1) (1932) I.L.R. 55 Mad. 856. The reason of the decision is therefore clear and that is when a daughters son succeeds to an estate, there is no further scope for the application of the doctrine of reverter. The learned Judges expressly left open the present question when they said, We are not now concerned with the question as to what would become of the property if the last of the daughters died without leaving a daughter son, in such circumstances. This decision cannot, therefore, be invoked in support of the contention that in a case where the doctrine of reverter applies the illegitimate son is excluded from succession. On the other hand, the Nagpur High Court in Bhagwantrao v. Punjaram (1) rightly came to the conclusion that where on a partition between a legitimate and an illegitimate son, the widow was allotted a share, on her death the illegitimate son was entitled to a share in the property.", "It is. next contended that the widows acquired an absolute interest in the estate of Raja. Ajit Singh by adverse possession and, therefore, the property would devolve not on Raja Ajit Singhs heirs but on the heirs of the widows. On the question of adverse possession also, both the courts below have held against the appellant. But learned counsel argued that in the circumstances of this case the said find- ing was a mixed question of fact and law. It was said that the courts below missed the point that the Court of Wards, representing the widows, held the Estate adversely to Ramraghuraj Singh in respect of his half share and, therefore, the fact that during its management the widows did not deny the title of Ramraghuraj Singh or the fact that they admitted his title could not affect the question of adverse possession"], "rank3": ["It is the usual practice of this Court to accept the concurrent findings of the courts below. There are no exceptional circumstances in this case, at any rate none was brought to our notice, to compel us to depart from the usual practice. We, therefore, accept the concurrent findings, namely, that Raja Ajit Singh was a member of the sudra caste and that Ramraghuraj Singh was the son of Raja Ajit Singh by a continuously and exclusively kept concubine named Raj Dulari, who passed into his concubinage after the death of her husband. The main question that arises in this appeal is whether an illegitimate son of a sudra vis-a-vis his-selfacquired property, after having succeeded to a half share of his putative fathers estate, will be entitled to succeed to the other half share got by the widow, after the succession opened out to his putative father on the death of the said widow. The answer to the question depends upon the content of the right of an illegitimate son to succeed to the self-acquired property of his putative father. The source of his right is found in the relevant Hindu Law texts.", "No mention of a widow is found in the above verses, but in Dattaka Chandrika, the author says in V. 30,31 thus If any, even in the series of heirs down to the daughters son, exist, the son by a female slave does not take the whole estate, but on the contrary shares equally with such heir.", "The Judicial Committee again considered the right of an illegitimate son in Kamulammal v. Visvanathaswami Naicker (2). There it was held that in a competition between a widow and an illegitimate son to the property of his putative father, the illegitimate son takes half of the (1) (1890) L.R. 17 I.A. 128. (2) (1922) L.R. 50 I.A. 32. property and the widow the other half.", "From the premises it follows that an illegitimate son, except to the extent circumscribed by the. Hindu Law texts, has the status of a son and is heir to the self-acquired property of his putative father. If that be his undoubted right under the Hindu Law, on what principle can he be deprived of his right of succession to the other moiety of his fathers property after the death of the widow?", "Under the Hindu Law, the death of the widow opens inheritance to the reversioners and the nearest heir at the time to the last full owner becomes entitled to possession. When the succession opens, in a competition between an illegitimate son and other reversioners, the illegitimate son is certainly a nearer heir to the last male holder than the other reversioners. If he was the nearest heir only yielding half a share to the widow at the time of the death of his putative father, how does he cease to be one by the intervention of the widows estate? As on the death of the widow the estate reverts back to the last male holder, the succession shall be traced to him, and, if so traced, the illegitimate son has a preferential claim over all other reversioners."], "rank4": ["This appeal by special leave is directed against the judgment and decree of the High of Judicature at Nagpur confirming the judgment of the 2nd Additional District Judge, Jabalpur in Civil Suit No. 9-A of 1942, filed by respondents 2 to 7 herein claiming to be the reversioners of the estate of one Raja Ajitsingh. Ajit Singh was the Raja of Saliya Estate consisting of 73 villages and other property situate in Jabalpur and Saugor Districts. Ajit Singh died on January 2, 1910, leaving behind him two widows named Rani Khuman Kuar and Rani Anant Kuar and an illegitimate son named Ramraghuraj Singh. Rani Anant Kuar died in or about 1914 and Rani Khuman Kuar passed away on February 1, 1922. After the death of Raja Ajit Singh, the Estate was taken over by the Court of Wards on behalf of the widows in the year 1913 and remained in its possession till March 27, 1923. After the death of Rani Khuman Kuar, the local Government issued a notification recognizing Ramraghuraj Singh as the successor to the Estate but, for one reason or other, the Court of Wards continued to manage the Estate on his behalf from September 23, 1923. Ramraghuraj Singh died on April 23, 1932, and on his death the, first respondent, the son of Ramraghuraj Singh, was, declared as the ward of the Court of Wards which continued to manage the Estate on his behalf Respondents 2 to 6, claiming to be the reversioners to the Estate of Raja Ajit Singh, filed a suit on June 15, 1935, for recovery of possession of the Estate. \nAppellants 1 and 2 are alleged to be the assignees pendente lite of the interest of the alleged reversioners. The plaintiffs averred that RamraLhurai Singh was the son of one Jhutti by her husband one Sukhai and that as Raja Ajit Singh had no issue, he and the Ranies treated the boy as their son, that the Lodhi community to which Raja Ajit Singh belonged was not a sudra caste and that, therefore, even if Ramraghuraj Singh was the illegitimate son of Raja Ajit Singh, he was not entitled to a share, and that in any view half of the share of the widows in the Estate would devolve, on their death, on the reversioners to the exclusion of the illegitimate son. They further pleaded that the possession of the Court of Wards of the entire Estate from January 2, 1910 to February 1, 1922, was adverse to the illegitimate son and, therefore, he lost his title, if any, to the said Estate. The case of the first respondent was that Raja Ajit Singh belonged to the sudra caste, that Ramraghuraj Singh was the son of the said Raja by a continuously and exclusively kept concubine named Raj Dulari, that the widows never questioned the right of Ramraghuraj Singh to a share in the property of Raja Ajit Singh, that therefore there was no scope for the plea of adverse possession, and that, after the death of the widows, the succession to the Estate of Raja Ajit Singh in respect of one half share opened out and the illegitimate son, he being the nearest heir, succeeded to that share also. The trial court as well as the High Court concurrently gave the following findings (1) Raja Ajit Singh belonged to the sudra caste (2) Raja Raghuraj Singh was the son of Raja Ajit Singh by a continuously and exclusively kept concubine by name Raj Dulari, who had passed into the coneubinage of Raja Ajit Singh after the death of her husband (3) as the illegitimate son of Raja Ajit Singh, Ramraghuraj Singh succeeded to a moiety of the Estate of his putative father and the two widows of Raja Ajit Singh succeeded to the other moiety of his Estate (4) as there was no daughter or daughters son, after the death of the widows, Ramraghuraj Singh, being the sole surviving heir of his putative father, inherited a moiety of the Estate which was held by the widows during their lifetime.\n Ramraghuraj Singh was all along in joint possession of the Estate with the widows, and, although the Court of Wards had assumed superintendence on behalf of the Ranies, he was not out of possession during their lifetime and as such his title could not be extinguished by adverse possession (6) the plaintiffs suit was barred under s. 26 of the Central Provinces Court of Wards Act and (7) the plaintiffs claim was barred by limitation. While the trial court held that it had not been established that the plaintiffs were the reversioners of Raja Ajit Singh, the High Court held that it had been proved. In the result the trial court dismissed the suit and, on appeal, the High Court confirmed it. The 2nd appellant died and his legal representatives were not brought on record and the appeal so far as the 2nd appellant is concerned has abated. The 1st appellant alone proceeded with the appeal.", "Now it is observable that the first verse shews that during the lifetime of the father the law leaves the son to take a share by his fathers choice, and it cannot be said that at his birth he acquires any right to share in the estate in the same way as a legitimate son would do. But the language there is very distinct, that if the father be dead the bre- thren should make him partaker of the moiety of a share. So in the second verse the words are that the brothers are to allow him to participate for half a share, and later on there is the same expression The son of the female slave participates for half a share only. On that interpretation, he accepted the view of the Bombay High Court and held that an illegitimate son and a legitimate son, being members of an undivided Hindu family governed by Mitakshara, the illegitimate son becomes entitled to the whole of the immoveable property of the family if the legitimate son dies without any male issue."], "label": "REJECTED"}, "expert_2": {"rank1": ["The law pertaining to the right of inheritance of an illegitimate son to his putative fathers self-acquired property may be stated, thus An illegitimate son has the status of a son under the Hindu Law and he is a member of the family.", "Under the Hindu Law, the death of the widow opens inheritance to the reversioners and the nearest heir at the time to the last full owner becomes entitled to possession. When the succession opens, in a competition between an illegitimate son and other reversioners, the illegitimate son is certainly a nearer heir to the last male holder than the other reversioners.", "As on the death of the widow the estate reverts back to the last male holder, the succession shall be traced to him, and, if so traced, the illegitimate son has a preferential claim over all other reversioners.", "Once it is established that for the purpose of succession an illegitimate son of a Sudra has the status of a son and that he is entitled to succeed to his putative fathers entire self-acquired property in the absence of a son, widow, daughter or daughters son and to a share along with them, we cannot see any escape from the consequential and logical position that he shall be entitled to succeed to the other half share when succession opens after the widows death.", "the Nagpur High Court in Bhagwantrao v. Punjaram (1) rightly came to the conclusion that where on a partition between a legitimate and an illegitimate son, the widow was allotted a share, on her death the illegitimate son was entitled to a share in the property. We, therefore, hold that on the death of the widow, the illegitimate son, the father of the first respondent herein, succeeded to the other half share of the estate of his putative father Raja Ajit Singh."], "rank2": ["The main question that arises in this appeal is whether an illegitimate son of a sudra vis-a-vis his-selfacquired property, after having succeeded to a half share of his putative fathers estate, will be entitled to succeed to the other half share got by the widow, after the succession opened out to his putative father on the death of the said widow.", "Kamulammal v. Visvanathaswami Naicker (2). There it was held that in a competition between a widow and an illegitimate son to the property of his putative father, the illegitimate son takes half of the (1) (1890) L.R. 17 I.A. 128. (2) (1922) L.R. 50 I.A. 32. property and the widow the other half. Sir Lawrence Jenkins observed at p. 37 thus Here the contest is between the illegitimate son and the widow, and though the widow is not named in the text it is well settled that as a preferential heir to the daughters son she is included among those who share with the illegitimate son, and it would serve no useful purpose to speculate why she was not mentioned in the text.", "The intervention of the widow only postpones the opening of succession to the extent of half share but it cannot divert the succession through a different channel, for she cannot constitute herself a new stock of descent.", "the widows would have acquired a title by adverse possession in respect of the share of Ramraghuraj Singh only in their capacity as owners of a limited estate i.e., in regard to their half share they held it as widows estate and in respect of the other half-share of Ramraghuraj Singh they acquired a right by adverse possession only a limited estate therein."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["The 1st appellant alone proceeded with the appeal. It is the usual practice of this Court to accept the concurrent findings of the courts below. There are no exceptional circumstances in this case, at any rate none was brought to our notice, to compel us to depart from the usual practice. We, therefore, accept the concurrent findings, namely, that Raja Ajit Singh was a member of the sudra caste and that Ramraghuraj Singh was the son of Raja Ajit Singh by a continuously and exclusively kept concubine named Raj Dulari, who passed into his concubinage after the death of her husband.", "The main question that arises in this appeal is whether an illegitimate son of a sudra vis-a-vis his-selfacquired property, after having succeeded to a half share of his putative fathers estate, will be entitled to succeed to the other half share got by the widow, after the succession opened out to his putative father on the death of the said widow.", "The answer to the question depends upon the content of the right of an illegitimate son to succeed to the self-acquired property of his putative father", "From the mention of a Sudra in this place it follows that the son begotten by a man of a regenerate tribe on a female slave, does not obtain a share even by the fathers choice, nor the whole estate after his demise. But, if he be docile, he receives a simple maintenance", "No mention of a widow is found in the above verses, but in Dattaka Chandrika, the author says in V. 30,31 thus If any, even in the series of heirs down to the daughters son, exist, the son by a female slave does not take the whole estate, but on the contrary shares equally with such heir", "The leading decision on the rights of an illegitimate son is that of the Judicial Committee in Raja Jogendra Bhupati Hurri Chundun Mahapatra v. Nityanund Mansingh (1). There, one Raja died leaving behind him a legitimate son and an illegitimate son. On the death of the legitimate son, who had succeeded to the Raja, it was held that the illegitimate son succeeded to him by survivorship.", "The law pertaining to the right of inheritance of an illegitimate son to his putative fathers self-acquired property may be stated, thus An illegitimate son has the status of a son under the Hindu Law and he is a member of the family. But his rights are limited compared to those of a son born in wedlock. He has no right by birth and, therefore, he cannot demand partition during his fathers lifetime", "During the lifetime of his father, the law allows the illegitimate son to take (1) (1931) I.L. R. 55 Mad. 1. only such share as his father may give him", "But on his fathers death, he takes his fathers self-acquired property along with the legitimate son and in case the legitimate son dies, he takes the entire property by survivorship. Even if there is no legitimate son, the illegitimate son would be entitled to a moiety only of his fathers estate when there is a widow, daughter or daughters son of the last male holder. In the absence of any one of the three heirs, he succeeds to the entire estate of his father", "From the premises it follows that an illegitimate son, except to the extent circumscribed by the. Hindu Law texts, has the status of a son and is heir to the self-acquired property of his putative father", "Under the Hindu Law, the death of the widow opens inheritance to the reversioners and the nearest heir at the time to the last full owner becomes entitled to possession. When the succession opens, in a competition between an illegitimate son and other reversioners, the illegitimate son is certainly a nearer heir to the last male holder than the other reversioners.", "As on the death of the widow the estate reverts back to the last male holder, the succession shall be traced to him, and, if so traced, the illegitimate son has a preferential claim over all other reversioners", "this position has been controverted in the following manner at p. 637 The illegitimate Bon, though he inherits on the death of his putative father, along with or in default of male issue, widow or daughter, cannot come in as a reversionary heir on the death of the widow or daughter, as he is undoubtedly neither a sagotra nor a bhinnagotra sapinda of the last, male-holder within the text of Manu. \nWe regret our inability to accept this proposition. for, if accepted, we would be speaking in two voices", "Once it is established that for the purpose of succession an illegitimate son of a Sudra has the status of a son and that he is entitled to succeed to his putative fathers entire self-acquired property in the absence of a son, widow, daughter or daughters son and to a share along with them, we cannot see any escape from the consequential and logical position that he shall be entitled to succeed to the other half share when succession opens after the widows death. The intervention of the widow only postpones the opening of succession to the extent of half share but it cannot divert the succession through a different channel, for she cannot constitute herself a new stock of descent", "On the other hand, the Nagpur High Court in Bhagwantrao v. Punjaram (1) rightly came to the conclusion that where on a partition between a legitimate and an illegitimate son, the widow was allotted a share, on her death the illegitimate son was entitled to a share in the property", "We, therefore, hold that on the death of the widow, the illegitimate son, the father of the first respondent herein, succeeded to the other half share of the estate of his putative father Raja Ajit Singh", "It is. next contended that the widows acquired an absolute interest in the estate of Raja. Ajit Singh by adverse possession and, therefore, the property would devolve not on Raja Ajit Singhs heirs but on the heirs of the widows. On the question of adverse possession also, both the courts below have held against the appellant.", "the Court of Wards admittedly managed only the I.L.R. 1938 Nag. 255. widows limited estate and it is not the case of the appellant that the Court of Wards acquired on behalf of the widows an absolute interest in respect of the half share of Ramraghuraj Singh in the suit properties. The plaintiffs themselves claimed to hereversioners of Raja Ajit Singh on the ground that the succession to him opened out when the widows died and if their contention be accepted, namely, that the widows acquired an absolute interest in half of the property, they would be non-suited in respect thereof on the simple ground that their suit was not to recover the property as the heirs of the widows. But, as we have pointed out, the widows would have acquired a title by adverse possession in respect of the share of Ramraghuraj Singh only in their capacity as owners of a limited estate i.e., in regard to their half share they held it as widows estate and in respect of the other half-share of Ramraghuraj Singh they acquired a right by adverse possession only a limited estate therein"], "rank2": ["The plaintiffs averred that RamraLhurai Singh was the son of one Jhutti by her husband one Sukhai and that as Raja Ajit Singh had no issue, he and the Ranies treated the boy as their son, that the Lodhi community to which Raja Ajit Singh belonged was not a sudra caste and that, therefore, even if Ramraghuraj Singh was the illegitimate son of Raja Ajit Singh, he was not entitled to a share, and that in any view half of the share of the widows in the Estate would devolve, on their death, on the reversioners to the exclusion of the illegitimate son. They further pleaded that the possession of the Court of Wards of the entire Estate from January 2, 1910 to February 1, 1922, was adverse to the illegitimate son and, therefore, he lost his title, if any, to the said Estate", "The trial court as well as the High Court concurrently gave the following findings (1) Raja Ajit Singh belonged to the sudra caste (2) Raja Raghuraj Singh was the son of Raja Ajit Singh by a continuously and exclusively kept concubine by name Raj Dulari, who had passed into the coneubinage of Raja Ajit Singh after the death of her husband (3) as the illegitimate son of Raja Ajit Singh, Ramraghuraj Singh succeeded to a moiety of the Estate of his putative father and the two widows of Raja Ajit Singh succeeded to the other moiety of his Estate (4) as there was no daughter or daughters son, after the death of the widows, Ramraghuraj Singh, being the sole surviving heir of his putative father, inherited a moiety of the Estate which was held by the widows during their lifetime.\n Ramraghuraj Singh was all along in joint possession of the Estate with the widows, and, although the Court of Wards had assumed superintendence on behalf of the Ranies, he was not out of possession during their lifetime and as such his title could not be extinguished by adverse possession (6) the plaintiffs suit was barred under s. 26 of the Central Provinces Court of Wards Act and (7) the plaintiffs claim was barred by limitation", "While the trial court held that it had not been established that the plaintiffs were the reversioners of Raja Ajit Singh, the High Court held that it had been proved. In the result the trial court dismissed the suit and, on appeal, the High Court confirmed it", "Mitakshara in explanation of the texts of Manu and Yajnavalkya says in Chapter 1, s. 12, in the following three verses thus \n The author next delivers a special rule concerning the partition of a Sudras goods. Even a son begotten by a Sudra on a female slave may take a share by the fathers choice. But, if the father be dead, the brethren should make him partaker of the moiety of a share and one, who has no brothers, may inherit the whole property, in default of daughters sons.", "The son, begotten by a Sudra on a female slave, obtains a share by the fathers choice, or at his pleasure. But, after the demise of the father, if there be sons of a wedded wife, let these brothers allow the son of the female slave to participate for half a share that is, let them give him half as much as is the amount of one brothers allotment", "However, should there be no sons of a wedded wife, the son of the female slave takes the whole estate, provided there be no daughters of a wife, nor sons of daughters. But, if there be such the son of the female slave participates for half a share only", "Commenting upon these verses, the learned Judge observed at P. 132 thus Now it is observable that the first verse shews that during the lifetime of the father the law leaves the son to take a share by his fathers choice, and it cannot be said that at his birth he acquires any right to share in the estate in the same way as a legitimate son would do. But the language there is very distinct, that if the father be dead the bre- thren should make him partaker of the moiety of a share. So in the second verse the words are that the brothers are to allow him to participate for half a share, and later on there is the same expression The son of the female slave participates for half a share only. On that interpretation, he accepted the view of the Bombay High Court and held that an illegitimate son and a legitimate son, being members of an undivided Hindu family governed by Mitakshara, the illegitimate son becomes entitled to the whole of the immoveable property of the family if the legitimate son dies without any male issue", "The Judicial Committee again considered the right of an illegitimate son in Kamulammal v. Visvanathaswami Naicker (2). There it was held that in a competition between a widow and an illegitimate son to the property of his putative father, the illegitimate son takes half of the (1) (1890) L.R. 17 I.A. 128. (2) (1922) L.R. 50 I.A. 32. property and the widow the other half.", "The status of the illegitimate son was subject of further scrutiny by the Privy Council in Vellaiyappa Chetty v. Natarajan (1). There the question arose in the context of an illegitimate sons right to maintenance from a joint family property after the death of his father who left no separate property. The Judicial Committee held that he was entitled as a member of the family to maintenance out of the joint family property in the hands of the collaterals with whom the father was joint", "On a consideration of the texts and the cases on the subject their Lordships are of opinion that the illegitimate son of a Sudra by a continuous concubine has the status of a son, and that he is a member of the family that the share of inheritance given to him is not merely in lieu of maintenance, but in recognition of his status as a son"], "rank3": ["After the death of Raja Ajit Singh, the Estate was taken over by the Court of Wards on behalf of the widows in the year 1913 and remained in its possession till March 27, 1923. After the death of Rani Khuman Kuar, the local Government issued a notification recognizing Ramraghuraj Singh as the successor to the Estate but, for one reason or other, the Court of Wards continued to manage the Estate on his behalf from September 23, 1923", "Ramraghuraj Singh died on April 23, 1932, and on his death the, first respondent, the son of Ramraghuraj Singh, was, declared as the ward of the Court of Wards which continued to manage the Estate on his behalf Respondents 2 to 6, claiming to be the reversioners to the Estate of Raja Ajit Singh, filed a suit on June 15, 1935, for recovery of possession of the Estate"], "rank4": ["Ajit Singh was the Raja of Saliya Estate consisting of 73 villages and other property situate in Jabalpur and Saugor Districts. Ajit Singh died on January 2, 1910, leaving behind him two widows named Rani Khuman Kuar and Rani Anant Kuar and an illegitimate son named Ramraghuraj Singh. Rani Anant Kuar died in or about 1914 and Rani Khuman Kuar passed away on February 1, 1922"], "label": "REJECTED"}, "expert_4": {"rank1": ["The 2nd appellant died and his legal representatives were not brought on record and the appeal so far as the 2nd appellant is concerned has abated.", "The main question that arises in this appeal is whether an illegitimate son of a sudra vis-a-vis his-selfacquired property, after having succeeded to a half share of his putative fathers estate, will be entitled to succeed to the other half share got by the widow, after the succession opened out to his putative father on the death of the said widow.", "We, therefore, hold that on the death of the widow, the illegitimate son, the father of the first respondent herein, succeeded to the other half share of the estate of his putative father Raja Ajit Singh.", "as we have pointed out, the widows would have acquired a title by adverse possession in respect of the share of Ramraghuraj Singh only in their capacity as owners of a limited estate i.e., in regard to their half share they held it as widows estate and in respect of the other half-share of Ramraghuraj Singh they acquired a right by adverse possession only a limited estate therein."], "rank2": ["We, therefore, accept the concurrent findings, namely, that Raja Ajit Singh was a member of the sudra caste and that Ramraghuraj Singh was the son of Raja Ajit Singh by a continuously and exclusively kept concubine named Raj Dulari, who passed into his concubinage after the death of her husband.", "The law pertaining to the right of inheritance of an illegitimate son to his putative fathers self-acquired property may be stated, thus An illegitimate son has the status of a son under the Hindu Law and he is a member of the family.", "When the succession opens, in a competition between an illegitimate son and other reversioners, the illegitimate son is certainly a nearer heir to the last male holder than the other reversioners.", "As on the death of the widow the estate reverts back to the last male holder, the succession shall be traced to him, and, if so traced, the illegitimate son has a preferential claim over all other reversioners.", "Once it is established that for the purpose of succession an illegitimate son of a Sudra has the status of a son and that he is entitled to succeed to his putative fathers entire self-acquired property in the absence of a son, widow, daughter or daughters son and to a share along with them, we cannot see any escape from the consequential and logical position that he shall be entitled to succeed to the other half share when succession opens after the widows death.", "The intervention of the widow only postpones the opening of succession to the extent of half share but it cannot divert the succession through a different channel, for she cannot constitute herself a new stock of descent."], "rank3": ["This appeal by special leave is directed against the judgment and decree of the High of Judicature at Nagpur confirming the judgment of the 2nd Additional District Judge, Jabalpur in Civil Suit No. 9-A of 1942, filed by respondents 2 to 7 herein claiming to be the reversioners of the estate of one Raja Ajitsingh.", "The trial court as well as the High Court concurrently gave the following findings (1) Raja Ajit Singh belonged to the sudra caste (2) Raja Raghuraj Singh was the son of Raja Ajit Singh by a continuously and exclusively kept concubine by name Raj Dulari, who had passed into the coneubinage of Raja Ajit Singh after the death of her husband (3) as the illegitimate son of Raja Ajit Singh, Ramraghuraj Singh succeeded to a moiety of the Estate of his putative father and the two widows of Raja Ajit Singh succeeded to the other moiety of his Estate (4) as there was no daughter or daughters son, after the death of the widows, Ramraghuraj Singh, being the sole surviving heir of his putative father, inherited a moiety of the Estate which was held by the widows during their lifetime.", "Ramraghuraj Singh was all along in joint possession of the Estate with the widows, and, although the Court of Wards had assumed superintendence on behalf of the Ranies, he was not out of possession during their lifetime and as such his title could not be extinguished by adverse possession (6) the plaintiffs suit was barred under s. 26 of the Central Provinces Court of Wards Act and (7) the plaintiffs claim was barred by limitation.", "While the trial court held that it had not been established that the plaintiffs were the reversioners of Raja Ajit Singh, the High Court held that it had been proved. In the result the trial court dismissed the suit and, on appeal, the High Court confirmed it.", "It is the usual practice of this Court to accept the concurrent findings of the courts below. There are no exceptional circumstances in this case, at any rate none was brought to our notice, to compel us to depart from the usual practice.", "The answer to the question depends upon the content of the right of an illegitimate son to succeed to the self-acquired property of his putative father.", "The leading decision on the rights of an illegitimate son is that of the Judicial Committee in Raja Jogendra Bhupati Hurri Chundun Mahapatra v. Nityanund Mansingh", "On the death of the legitimate son, who had succeeded to the Raja, it was held that the illegitimate son succeeded to him by survivorship.", "he accepted the view of the Bombay High Court and held that an illegitimate son and a legitimate son, being members of an undivided Hindu family governed by Mitakshara, the illegitimate son becomes entitled to the whole of the immoveable property of the family if the legitimate son dies without any male issue.", "The Judicial Committee again considered the right of an illegitimate son in Kamulammal v. Visvanathaswami Naicker (2). There it was held that in a competition between a widow and an illegitimate son to the property of his putative father, the illegitimate son takes half of the (1) (1890) L.R. 17 I.A. 128. (2) (1922) L.R. 50 I.A. 32. property and the widow the other half.", "Sir Lawrence Jenkins observed at p. 37 thus Here the contest is between the illegitimate son and the widow, and though the widow is not named in the text it is well settled that as a preferential heir to the daughters son she is included among those who share with the illegitimate son, and it would serve no useful purpose to speculate why she was not mentioned in the text.", "The status of the illegitimate son was subject of further scrutiny by the Privy Council in Vellaiyappa Chetty v. Natarajan (1).", "The Judicial Committee held that he was entitled as a member of the family to maintenance out of the joint family property in the hands of the collaterals with whom the father was joint.", "On a consideration of the texts and the cases on the subject their Lordships are of opinion that the illegitimate son of a Sudra by a continuous concubine has the status of a son, and that he is a member of the family that the share of inheritance given to him is not merely in lieu of maintenance, but in recognition of his status as a son It is not necessary to multiply decisions.", "He has no right by birth and, therefore, he cannot demand partition during his fathers lifetime. During the lifetime of his father, the law allows the illegitimate son to take (1) (1931) I.L. R. 55 Mad. 1. only such share as his father may give him. But on his fathers death, he takes his fathers self-acquired property along with the legitimate son and in case the legitimate son dies, he takes the entire property by survivorship.", "From the premises it follows that an illegitimate son, except to the extent circumscribed by the. Hindu Law texts, has the status of a son and is heir to the self-acquired property of his putative father. If that be his undoubted right under the Hindu Law, on what principle can he be deprived of his right of succession to the other moiety of his fathers property after the death of the widow?", "Under the Hindu Law, the death of the widow opens inheritance to the reversioners and the nearest heir at the time to the last full owner becomes entitled to possession.", "If he was the nearest heir only yielding half a share to the widow at the time of the death of his putative father, how does he cease to be one by the intervention of the widows estate?", "We regret our inability to accept this proposition. for, if accepted, we would be speaking in two voices.", "This decision cannot, therefore, be invoked in support of the contention that in a case where the doctrine of reverter applies the illegitimate son is excluded from succession.", "On the other hand, the Nagpur High Court in Bhagwantrao v. Punjaram (1) rightly came to the conclusion that where on a partition between a legitimate and an illegitimate son, the widow was allotted a share, on her death the illegitimate son was entitled to a share in the property.", "It is. next contended that the widows acquired an absolute interest in the estate of Raja.", "Ajit Singh by adverse possession and, therefore, the property would devolve not on Raja Ajit Singhs heirs but on the heirs of the widows.", "Assuming that learned counsel for the appellant was correct in his contention, we fail to see how the said legal position would advance the appellants case, for the Court of Wards admittedly managed only the I.L.R. 1938 Nag. 255. widows limited estate and it is not the case of the appellant that the Court of Wards acquired on behalf of the widows an absolute interest in respect of the half share of Ramraghuraj Singh in the suit properties."], "rank4": ["The plaintiffs averred that RamraLhurai Singh was the son of one Jhutti by her husband one Sukhai and that as Raja Ajit Singh had no issue, he and the Ranies treated the boy as their son, that the Lodhi community to which Raja Ajit Singh belonged was not a sudra caste and that, therefore, even if Ramraghuraj Singh was the illegitimate son of Raja Ajit Singh, he was not entitled to a share, and that in any view half of the share of the widows in the Estate would devolve, on their death, on the reversioners to the exclusion of the illegitimate son.", "The case of the first respondent was that Raja Ajit Singh belonged to the sudra caste, that Ramraghuraj Singh was the son of the said Raja by a continuously and exclusively kept concubine named Raj Dulari, that the widows never questioned the right of Ramraghuraj Singh to a share in the property of Raja Ajit Singh, that therefore there was no scope for the plea of adverse possession, and that, after the death of the widows, the succession to the Estate of Raja Ajit Singh in respect of one half share opened out and the illegitimate son, he being the nearest heir, succeeded to that share also.", "In Maynes Hindu Law, 11th edn., this position has been controverted in the following manner at p. 637 The illegitimate Bon, though he inherits on the death of his putative father, along with or in default of male issue, widow or daughter, cannot come in as a reversionary heir on the death of the widow or daughter, as he is undoubtedly neither a sagotra nor a bhinnagotra sapinda of the last, male-holder within the text of Manu.", "On the question of adverse possession also, both the courts below have held against the appellant.", "But learned counsel argued that in the circumstances of this case the said find- ing was a mixed question of fact and law.", "It was said that the courts below missed the point that the Court of Wards, representing the widows, held the Estate adversely to Ramraghuraj Singh in respect of his half share and, therefore, the fact that during its management the widows did not deny the title of Ramraghuraj Singh or the fact that they admitted his title could not affect the question of adverse possession."], "rank5": ["Ajit Singh was the Raja of Saliya Estate consisting of 73 villages and other property situate in Jabalpur and Saugor Districts.", "Ajit Singh died on January 2, 1910, leaving behind him two widows named Rani Khuman Kuar and Rani Anant Kuar and an illegitimate son named Ramraghuraj Singh.", "After the death of Rani Khuman Kuar, the local Government issued a notification recognizing Ramraghuraj Singh as the successor to the Estate but, for one reason or other, the Court of Wards continued to manage the Estate on his behalf from September 23, 1923.", "Ramraghuraj Singh died on April 23, 1932, and on his death the, first respondent, the son of Ramraghuraj Singh, was, declared as the ward of the Court of Wards which continued to manage the Estate on his behalf Respondents 2 to 6, claiming to be the reversioners to the Estate of Raja Ajit Singh, filed a suit on June 15, 1935, for recovery of possession of the Estate. \nAppellants 1 and 2 are alleged to be the assignees pendente lite of the interest of the alleged reversioners."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["Mitakshara in explanation of the texts of Manu and Yajnavalkya says in Chapter 1, s. 12, in the following three verses thus \n The author next delivers a special rule concerning the partition of a Sudras goods. Even a son begotten by a Sudra on a female slave may take a share by the fathers choice. But, if the father be dead, the brethren should make him partaker of the moiety of a share and one, who has no brothers, may inherit the whole property, in default of daughters sons.", "In the absence of any one of the three heirs, he succeeds to the entire estate of his father.", "When the succession opens, in a competition between an illegitimate son and other reversioners, the illegitimate son is certainly a nearer heir to the last male holder than the other reversioners.", "We, therefore, hold that on the death of the widow, the illegitimate son, the father of the first respondent herein, succeeded to the other half share of the estate of his putative father Raja Ajit Singh."], "rank2": ["Raja Ajit Singh was a member of the sudra caste and that Ramraghuraj Singh was the son of Raja Ajit Singh by a continuously and exclusively kept concubine named Raj Dulari, who passed into his concubinage after the death of her husband.", "The leading decision on the rights of an illegitimate son is that of the Judicial Committee in Raja Jogendra Bhupati Hurri Chundun Mahapatra v. Nityanund Mansingh", "he accepted the view of the Bombay High Court and held that an illegitimate son and a legitimate son, being members of an undivided Hindu family governed by Mitakshara, the illegitimate son becomes entitled to the whole of the immoveable property of the family if the legitimate son dies without any male issue.", "The Judicial Committee again considered the right of an illegitimate son in Kamulammal v. Visvanathaswami Naicker (2).", "But on his fathers death, he takes his fathers self-acquired property along with the legitimate son and in case the legitimate son dies, he takes the entire property by survivorship.", "From the premises it follows that an illegitimate son, except to the extent circumscribed by the. Hindu Law texts, has the status of a son and is heir to the self-acquired property of his putative father.", "If he was the nearest heir only yielding half a share to the widow at the time of the death of his putative father, how does he cease to be one by the intervention of the widows estate? As on the death of the widow the estate reverts back to the last male holder, the succession shall be traced to him, and, if so traced, the illegitimate son has a preferential claim over all other reversioners."], "rank3": ["It is the usual practice of this Court to accept the concurrent findings of the courts below. There are no exceptional circumstances in this case, at any rate none was brought to our notice, to compel us to depart from the usual practice.", "as a preferential heir to the daughters son she is included among those who share with the illegitimate son, and it would serve no useful purpose to speculate why she was not mentioned in the text.", "The status of the illegitimate son was subject of further scrutiny by the Privy Council in Vellaiyappa Chetty v. Natarajan (1).", "he was entitled as a member of the family to maintenance out of the joint family property in the hands of the collaterals with whom the father was joint.", "On a consideration of the texts and the cases on the subject their Lordships are of opinion that the illegitimate son of a Sudra by a continuous concubine has the status of a son, and that he is a member of the family that the share of inheritance given to him is not merely in lieu of maintenance, but in recognition of his status as a son It is not necessary to multiply decisions.", "Under the Hindu Law, the death of the widow opens inheritance to the reversioners and the nearest heir at the time to the last full owner becomes entitled to possession.", "Once it is established that for the purpose of succession an illegitimate son of a Sudra has the status of a son and that he is entitled to succeed to his putative fathers entire self-acquired property in the absence of a son, widow, daughter or daughters son and to a share along with them, we cannot see any escape from the consequential and logical position that he shall be entitled to succeed to the other half share when succession opens after the widows death.", "The learned Judges expressly left open the present question when they said, We are not now concerned with the question as to what would become of the property if the last of the daughters died without leaving a daughter son, in such circumstances.", "the Nagpur High Court in Bhagwantrao v. Punjaram (1) rightly came to the conclusion that where on a partition between a legitimate and an illegitimate son, the widow was allotted a share, on her death the illegitimate son was entitled to a share in the property.", "the Court of Wards admittedly managed only the I.L.R. 1938 Nag. 255. widows limited estate and it is not the case of the appellant that the Court of Wards acquired on behalf of the widows an absolute interest in respect of the half share of Ramraghuraj Singh in the suit properties.", "the widows would have acquired a title by adverse possession in respect of the share of Ramraghuraj Singh only in their capacity as owners of a limited estate i.e., in regard to their half share they held it as widows estate and in respect of the other half-share of Ramraghuraj Singh they acquired a right by adverse possession only a limited estate therein."], "rank4": ["But, after the demise of the father, if there be sons of a wedded wife, let these brothers allow the son of the female slave to participate for half a share that is, let them give him half as much as is the amount of one brothers allotment.", "Even if there is no legitimate son, the illegitimate son would be entitled to a moiety only of his fathers estate when there is a widow, daughter or daughters son of the last male holder.", "The intervention of the widow only postpones the opening of succession to the extent of half share but it cannot divert the succession through a different channel, for she cannot constitute herself a new stock of descent.", "From its very nature, the doctrine could not apply legitimately to a case where the last male-holders estate vested on his death not in a female heir but in a male heir also. In such a case, the doctrine as such would not strictly apply, nor has it been, so far as we are aware, applied to such a case. (1) (1932) I.L.R. 55 Mad. 856.", "On the question of adverse possession also, both the courts below have held against the appellant."], "rank5": ["The trial court as well as the High Court concurrently gave the following findings (1) Raja Ajit Singh belonged to the sudra caste (2) Raja Raghuraj Singh was the son of Raja Ajit Singh by a continuously and exclusively kept concubine by name Raj Dulari, who had passed into the coneubinage of Raja Ajit Singh after the death of her husband (3) as the illegitimate son of Raja Ajit Singh, Ramraghuraj Singh succeeded to a moiety of the Estate of his putative father and the two widows of Raja Ajit Singh succeeded to the other moiety of his Estate (4) as there was no daughter or daughters son, after the death of the widows, Ramraghuraj Singh, being the sole surviving heir of his putative father, inherited a moiety of the Estate which was held by the widows during their lifetime.\n Ramraghuraj Singh was all along in joint possession of the Estate with the widows, and, although the Court of Wards had assumed superintendence on behalf of the Ranies, he was not out of possession during their lifetime and as such his title could not be extinguished by adverse possession", "But a reference to that judgment shows that no such proposition has been laid down therein."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1962_105", "text": "Shah, J. The High Court of Judicature at Bombay answered in the affirmative the following two questions which were referred by the Income-tax Appellate Tribunal, Bombay, under sections 66(2) of the Income-tax Act.\n Whether on the facts and in the circumstances of the case the Tribunal was justified in law in adding to the total income of the assessee the sum of Rs. 1,45,706 and or Rs. 48,185 or any part thereof ? Whether there was any material on record to support the finding that Rs. 1,45,706 and or 48,185 or any part thereof represent the income of the assessee ? With special leave the assessees, Messrs. C. Vasantlal Co., have appealed to this court. The assessees carried on business as commission agents and brokers and also in forward transactions in cotton, bullion and other commodities. In the course of proceedings for assessment of income-tax of the assessees, for the assessment year 1947-48, two entries in the assessees books of accounts for Samvat 2002 (which was the previous year for the purpose of assessment) showing payments of Rs. 48,185 and Rs. 1,45,706 to Messrs. Meghaji Kapurchand and Messrs. Bhimaji Motiji respectively were noticed by the Income-tax Officer. A partner of the assessees explained that these two parties were their constituents, and had entered into speculative transactions through them as brokers with Bhawanji Lakhmichand and Joitram Kedarnath and that the latter had suffered losses which aggregated to Rs. 12,303 and Rs. 1,81,587 respectively and that the payments to the assessees by the said two persons were passed on to these two constituents. The Income-tax Officer was not satisfied with the explanation and examined Achaldas, a partner of Messrs. Meghaji Kapurchand, and Poonamchand, a partner of Messrs. Bhimaji Motiji. On a consideration of the material placed before him the Income-tax Officer held that the entries made in the relevant account books maintained by the assessees were fictitious, and in computing their income disallowed the assessees claim in respect of the amounts of Rs. 1,45,706 and Rs. 48,185. The assessee appealed against the order of assessment to the Appellate Assistant Commissioner, Bombay. It was urged before that officer that Achaldas and Poonamchand, partners of Messrs. Meghaji Kapurchand and Messrs. Bhimaji Motiji, were examined by the Income-tax Officer in the absence of the assessees and they had no opportunity of cross-examining them. The Appellate Assistant Commissioner summoned these two persons to appear before him and permitted the assessees to cross examine them. The Appellate Assistant Commissioner held that the transaction in cotton which were entered in the books of accounts of the assessees were not genuine but the assessees had merely acted as brokers or mediators, Joitram Kedarnath and Bhawanji Lakhmichand having directly bought losses from Messrs. Meghaji Kapurchand and Messrs. Bhimaji Motiji. He, therefore, directed that an amount of Rs. 1,94,890 be excluded in computing the assessees total income. The department appealed against the order of the Appellate Assistant Commissioner to the Income-tax Appellate Tribunal, Bombay. \nThe Tribunal reversed the order passed by the Appellate Assistant Commissioner and restored the order passed by the Income-tax Officer. The Tribunal under the direction of the High Court of Bombay submitted a statement of the case and referred the two questions set out hereinbefore. The High Court after an exhaustive review of the evidence held that there was material on the record to support the findings of the Tribunal that the sums of Rs. 1,45,706 and Rs. 48,185 which were the subject-matter of the reference represented the income of the assessees. The Income-tax Appellate Tribunal on a review of the evidence recorded the following findings.\n That the assessees in the years previous to Samvat 2002 had no transactions with Messrs. Meghaji Kapurchand or with Messrs. Bhimaji Motiji and it was not possible to believe that transactions involving large sums of money would be put through by the assessees in respect of new constituents without taking any deposit or security. That the entries made in the books of accounts of the assessees were suspicious and appeared to have been written not in the usual course of business. That the transactions with Messrs. Meghaji Kapurchand and Messrs. Bhimaji Motiji always showed gains in their favour, there being not a single transactions were they had suffered loss. This in the opinion of the Appellate Tribunal was unrealistic. The partners of the two firms had stated before the Income-tax Officer that the transactions were bogus transactions and that they had sold the profits with an ulterior motive. Even in their statements before the Appellate Assistant Commissioner Achaldas and Poonamchand did not pretend that these transactions were genuine transactions. They merely asserted that the transactions were effected by persons who were not available at the time of the enquiry. That Messrs. Meghaji Kapurchand and Messrs. Bhimaji Motiji had encashed the cheques issued by the assessees and admitted that they had paid back the amounts thereof. Before the Income-tax Officer they stated that the amounts of the cheques were returned by them to the assessees but before the Appellate Assistant Commissioner they stated that they had returned those amounts to unknown and unidentifiable parties. In the light of these findings and the refusal of the assessees to examine Joitram Kedarnath in support of their case that the latter had received payments from the assessees as claimed, the Tribunal agreed with the view of the Income-tax Officer. By the two questions referred, the High Court was called upon to advise the Tribunal whether there was any material on the record to support the finding that the amount of Rs. 1,45,706 and Rs. 48,185 represented the income of the assessees. Counsel for the assessees in this appeal has contended that the statements of Achaldas and Poonamchand who were examined by the Income-tax Officer in the absence of the assessees could not be regarded as evidence against the assessees and that the only legal evidence on the record was the statement of these witnesses before the Appellate Assistant Commissioner and therein the witnesses absolved the assessees from any complicity in the transactions. We are unable to hold that the statements made by Achaldas and Poonamchand before the Income-tax Officer were not material on which the Tribunal could act. The case of the assessees was that the transactions in respect of which they had maintained accounts were genuine transactions and that they had received payment from the parties who suffered losses, and had made it over to the parties who had earned profits. The income-tax authorities held that the transactions were not genuine transactions. Again the evidence of Achaldas and Poonamchand clearly showed that these amounts were repaid. In the statements made by these two persons before the Income- tax Officer it was asserted that the repayment of the amounts of the cheques was made to the assessees. \nBefore the Appellate Assistant Commissioner they stated that they handed over the moneys to some other persons whose presence could not be procured. There is nothing on the record to show that the Income-tax Officer had not disclosed to the assessees the material he had collected by examining Achaldas and Poonamchand. In any event, the Appellate Assistant Commissioner in the interest of justice and fair play gave the assessees an opportunity to cross-examine these two persons. The Income-tax Officer is not bound by any technical rules of the law of evidence. It is open to him to collect materials to facilitates assessment even by private enquiry. But if he desires to use the material so collected, the assessee must be informed of the material and must be given an adequate opportunity of explaining it. The statements made by Achaldas and Poonamchand before the Income-tax Officer were material on which the income-tax authorities could act provided that the material was disclosed and the assessees had opportunity to render their explanation in that behalf. It was therefore open to the Tribunal in appreciating the evidence to rely upon the statements made by Achaldas and Poonamchand before the Income-tax Officer and to disbelieve the statements made by them before the Appellate Assistant Commissioner. The jurisdiction of the High Court under section 66 of the Income-tax Act is merely advisory. The High Court does not sit in appeal over the judgment of the income-tax authorities it is not concerned to decide whether the conclusion of the Tribunal on appreciation of evidence is correct. There was apparently a mass of evidence on which the conclusion of the Appellate Tribunal could be founded and the question which fell to be determined by it was purely one of fact. It is true that a finding of fact which is not supported by any evidence or is unreasonable and perverse may be open to challenge on the ground that it is not supported by any material on the record, but, as we have already observed, there was material on which the Income-tax Tribunal could reasonably arrive at the conclusion which it did. The High Court was, therefore, right in recording the answers to the two questions submitted to it.\nDECISION ??", "expert_1": {"rank1": ["It is true that a finding of fact which is not supported by any evidence or is unreasonable and perverse may be open to challenge on the ground that it is not supported by any material on the record, but, as we have already observed, there was material on which the Income-tax Tribunal could reasonably arrive at the conclusion which it did. The High Court was, therefore, right in recording the answers to the two questions submitted to it."], "rank2": ["We are unable to hold that the statements made by Achaldas and Poonamchand before the Income-tax Officer were not material on which the Tribunal could act.", "The income-tax authorities held that the transactions were not genuine transactions. Again the evidence of Achaldas and Poonamchand clearly showed that these amounts were repaid. In the statements made by these two persons before the Income- tax Officer it was asserted that the repayment of the amounts of the cheques was made to the assessees. \nBefore the Appellate Assistant Commissioner they stated that they handed over the moneys to some other persons whose presence could not be procured. There is nothing on the record to show that the Income-tax Officer had not disclosed to the assessees the material he had collected by examining Achaldas and Poonamchand. In any event, the Appellate Assistant Commissioner in the interest of justice and fair play gave the assessees an opportunity to cross-examine these two persons. The Income-tax Officer is not bound by any technical rules of the law of evidence. It is open to him to collect materials to facilitates assessment even by private enquiry. But if he desires to use the material so collected, the assessee must be informed of the material and must be given an adequate opportunity of explaining it. The statements made by Achaldas and Poonamchand before the Income-tax Officer were material on which the income-tax authorities could act provided that the material was disclosed and the assessees had opportunity to render their explanation in that behalf. It was therefore open to the Tribunal in appreciating the evidence to rely upon the statements made by Achaldas and Poonamchand before the Income-tax Officer and to disbelieve the statements made by them before the Appellate Assistant Commissioner. The jurisdiction of the High Court under section 66 of the Income-tax Act is merely advisory. The High Court does not sit in appeal over the judgment of the income-tax authorities it is not concerned to decide whether the conclusion of the Tribunal on appreciation of evidence is correct. There was apparently a mass of evidence on which the conclusion of the Appellate Tribunal could be founded and the question which fell to be determined by it was purely one of fact."], "rank3": ["The High Court of Judicature at Bombay answered in the affirmative the following two questions which were referred by the Income-tax Appellate Tribunal, Bombay, under sections 66(2) of the Income-tax Act.\n Whether on the facts and in the circumstances of the case the Tribunal was justified in law in adding to the total income of the assessee the sum of Rs. 1,45,706 and or Rs. 48,185 or any part thereof ? Whether there was any material on record to support the finding that Rs. 1,45,706 and or 48,185 or any part thereof represent the income of the assessee ? With special leave the assessees, Messrs. C. Vasantlal Co., have appealed to this court.", "The Appellate Assistant Commissioner summoned these two persons to appear before him and permitted the assessees to cross examine them. The Appellate Assistant Commissioner held that the transaction in cotton which were entered in the books of accounts of the assessees were not genuine but the assessees had merely acted as brokers or mediators, Joitram Kedarnath and Bhawanji Lakhmichand having directly bought losses from Messrs. Meghaji Kapurchand and Messrs. Bhimaji Motiji. He, therefore, directed that an amount of Rs. 1,94,890 be excluded in computing the assessees total income. The department appealed against the order of the Appellate Assistant Commissioner to the Income-tax Appellate Tribunal, Bombay. \nThe Tribunal reversed the order passed by the Appellate Assistant Commissioner and restored the order passed by the Income-tax Officer. The Tribunal under the direction of the High Court of Bombay submitted a statement of the case and referred the two questions set out hereinbefore. The High Court after an exhaustive review of the evidence held that there was material on the record to support the findings of the Tribunal that the sums of Rs. 1,45,706 and Rs. 48,185 which were the subject-matter of the reference represented the income of the assessees.", "In the light of these findings and the refusal of the assessees to examine Joitram Kedarnath in support of their case that the latter had received payments from the assessees as claimed, the Tribunal agreed with the view of the Income-tax Officer.", "By the two questions referred, the High Court was called upon to advise the Tribunal whether there was any material on the record to support the finding that the amount of Rs. 1,45,706 and Rs. 48,185 represented the income of the assessees. Counsel for the assessees in this appeal has contended that the statements of Achaldas and Poonamchand who were examined by the Income-tax Officer in the absence of the assessees could not be regarded as evidence against the assessees and that the only legal evidence on the record was the statement of these witnesses before the Appellate Assistant Commissioner and therein the witnesses absolved the assessees from any complicity in the transactions."], "label": "REJECTED"}, "expert_2": {"rank1": ["That the assessees in the years previous to Samvat 2002 had no transactions with Messrs. Meghaji Kapurchand or with Messrs. Bhimaji Motiji and it was not possible to believe that transactions involving large sums of money would be put through by the assessees in respect of new constituents without taking any deposit or security. That the entries made in the books of accounts of the assessees were suspicious and appeared to have been written not in the usual course of business.", "That the transactions with Messrs. Meghaji Kapurchand and Messrs. Bhimaji Motiji always showed gains in their favour, there being not a single transactions were they had suffered loss. This in the opinion of the Appellate Tribunal was unrealistic.", "The case of the assessees was that the transactions in respect of which they had maintained accounts were genuine transactions and that they had received payment from the parties who suffered losses, and had made it over to the parties who had earned profits. The income-tax authorities held that the transactions were not genuine transactions.", "It was therefore open to the Tribunal in appreciating the evidence to rely upon the statements made by Achaldas and Poonamchand before the Income-tax Officer and to disbelieve the statements made by them before the Appellate Assistant Commissioner. The jurisdiction of the High Court under section 66 of the Income-tax Act is merely advisory."], "rank2": ["The High Court of Judicature at Bombay answered in the affirmative the following two questions which were referred by the Income-tax Appellate Tribunal, Bombay, under sections 66(2) of the Income-tax Act.\n Whether on the facts and in the circumstances of the case the Tribunal was justified in law in adding to the total income of the assessee the sum of Rs. 1,45,706 and or Rs. 48,185 or any part thereof ? Whether there was any material on record to support the finding that Rs. 1,45,706 and or 48,185 or any part thereof represent the income of the assessee ?", "That Messrs. Meghaji Kapurchand and Messrs. Bhimaji Motiji had encashed the cheques issued by the assessees and admitted that they had paid back the amounts thereof. Before the Income-tax Officer they stated that the amounts of the cheques were returned by them to the assessees but before the Appellate Assistant Commissioner they stated that they had returned those amounts to unknown and unidentifiable parties.", "The statements made by Achaldas and Poonamchand before the Income-tax Officer were material on which the income-tax authorities could act provided that the material was disclosed and the assessees had opportunity to render their explanation in that behalf."], "rank3": ["In the course of proceedings for assessment of income-tax of the assessees, for the assessment year 1947-48, two entries in the assessees books of accounts for Samvat 2002 (which was the previous year for the purpose of assessment) showing payments of Rs. 48,185 and Rs. 1,45,706", "to Messrs. Meghaji Kapurchand and Messrs. Bhimaji Motiji respectively were noticed by the Income-tax Officer."], "rank4": ["The Appellate Assistant Commissioner held that the transaction in cotton which were entered in the books of accounts of the assessees were not genuine but the assessees had merely acted as brokers or mediators, Joitram Kedarnath and Bhawanji Lakhmichand having directly bought losses from Messrs. Meghaji Kapurchand and Messrs. Bhimaji Motiji. He, therefore, directed that an amount of Rs. 1,94,890 be excluded in computing the assessees total income.", "The Tribunal reversed the order passed by the Appellate Assistant Commissioner and restored the order passed by the Income-tax Officer."], "label": "REJECTED"}, "expert_3": {"rank1": ["The partners of the two firms had stated before the Income-tax Officer that the transactions were bogus transactions and that they had sold the profits with an ulterior motive", "Even in their statements before the Appellate Assistant Commissioner Achaldas and Poonamchand did not pretend that these transactions were genuine transactions. They merely asserted that the transactions were effected by persons who were not available at the time of the enquiry", "That Messrs. Meghaji Kapurchand and Messrs. Bhimaji Motiji had encashed the cheques issued by the assessees and admitted that they had paid back the amounts thereof.", "Before the Income-tax Officer they stated that the amounts of the cheques were returned by them to the assessees but before the Appellate Assistant Commissioner they stated that they had returned those amounts to unknown and unidentifiable parties", "We are unable to hold that the statements made by Achaldas and Poonamchand before the Income-tax Officer were not material on which the Tribunal could act. The case of the assessees was that the transactions in respect of which they had maintained accounts were genuine transactions and that they had received payment from the parties who suffered losses, and had made it over to the parties who had earned profits", "The income-tax authorities held that the transactions were not genuine transactions. Again the evidence of Achaldas and Poonamchand clearly showed that these amounts were repaid. In the statements made by these two persons before the Income- tax Officer it was asserted that the repayment of the amounts of the cheques was made to the assessees", "Before the Appellate Assistant Commissioner they stated that they handed over the moneys to some other persons whose presence could not be procured. There is nothing on the record to show that the Income-tax Officer had not disclosed to the assessees the material he had collected by examining Achaldas and Poonamchand", "In any event, the Appellate Assistant Commissioner in the interest of justice and fair play gave the assessees an opportunity to cross-examine these two persons", "It is open to him to collect materials to facilitates assessment even by private enquiry. But if he desires to use the material so collected, the assessee must be informed of the material and must be given an adequate opportunity of explaining it.", "The statements made by Achaldas and Poonamchand before the Income-tax Officer were material on which the income-tax authorities could act provided that the material was disclosed and the assessees had opportunity to render their explanation in that behalf. It was therefore open to the Tribunal in appreciating the evidence to rely upon the statements made by Achaldas and Poonamchand before the Income-tax Officer and to disbelieve the statements made by them before the Appellate Assistant Commissioner", "The jurisdiction of the High Court under section 66 of the Income-tax Act is merely advisory. The High Court does not sit in appeal over the judgment of the income-tax authorities it is not concerned to decide whether the conclusion of the Tribunal on appreciation of evidence is correct. There was apparently a mass of evidence on which the conclusion of the Appellate Tribunal could be founded and the question which fell to be determined by it was purely one of fact.", "It is true that a finding of fact which is not supported by any evidence or is unreasonable and perverse may be open to challenge on the ground that it is not supported by any material on the record, but, as we have already observed, there was material on which the Income-tax Tribunal could reasonably arrive at the conclusion which it did. The High Court was, therefore, right in recording the answers to the two questions submitted to it"], "rank2": ["The High Court of Judicature at Bombay answered in the affirmative the following two questions which were referred by the Income-tax Appellate Tribunal, Bombay, under sections 66(2) of the Income-tax Act.\n Whether on the facts and in the circumstances of the case the Tribunal was justified in law in adding to the total income of the assessee the sum of Rs. 1,45,706 and or Rs. 48,185 or any part thereof ? Whether there was any material on record to support the finding that Rs. 1,45,706 and or 48,185 or any part thereof represent the income of the assessee ? With special leave the assessees, Messrs. C. Vasantlal Co., have appealed to this court", "On a consideration of the material placed before him the Income-tax Officer held that the entries made in the relevant account books maintained by the assessees were fictitious, and in computing their income disallowed the assessees claim in respect of the amounts of Rs. 1,45,706 and Rs. 48,185. The assessee appealed against the order of assessment to the Appellate Assistant Commissioner, Bombay", "It was urged before that officer that Achaldas and Poonamchand, partners of Messrs. Meghaji Kapurchand and Messrs. Bhimaji Motiji, were examined by the Income-tax Officer in the absence of the assessees and they had no opportunity of cross-examining them", "The Appellate Assistant Commissioner summoned these two persons to appear before him and permitted the assessees to cross examine them. The Appellate Assistant Commissioner held that the transaction in cotton which were entered in the books of accounts of the assessees were not genuine but the assessees had merely acted as brokers or mediators, Joitram Kedarnath and Bhawanji Lakhmichand having directly bought losses from Messrs", "He, therefore, directed that an amount of Rs. 1,94,890 be excluded in computing the assessees total income", "The High Court after an exhaustive review of the evidence held that there was material on the record to support the findings of the Tribunal that the sums of Rs. 1,45,706 and Rs. 48,185 which were the subject-matter of the reference represented the income of the assessees.", "The Income-tax Appellate Tribunal on a review of the evidence recorded the following findings.\n That the assessees in the years previous to Samvat 2002 had no transactions with Messrs. Meghaji Kapurchand or with Messrs. Bhimaji Motiji and it was not possible to believe that transactions involving large sums of money would be put through by the assessees in respect of new constituents without taking any deposit or security", "That the entries made in the books of accounts of the assessees were suspicious and appeared to have been written not in the usual course of business", "That the transactions with Messrs. Meghaji Kapurchand and Messrs. Bhimaji Motiji always showed gains in their favour, there being not a single transactions were they had suffered loss. This in the opinion of the Appellate Tribunal was unrealistic", "In the light of these findings and the refusal of the assessees to examine Joitram Kedarnath in support of their case that the latter had received payments from the assessees as claimed, the Tribunal agreed with the view of the Income-tax Officer. By the two questions referred, the High Court was called upon to advise the Tribunal whether there was any material on the record to support the finding that the amount of Rs. 1,45,706 and Rs. 48,185 represented the income of the assessees"], "rank3": ["In the course of proceedings for assessment of income-tax of the assessees, for the assessment year 1947-48, two entries in the assessees books of accounts for Samvat 2002 (which was the previous year for the purpose of assessment) showing payments of Rs. 48,185 and Rs. 1,45,706 to Messrs. Meghaji Kapurchand and Messrs. Bhimaji Motiji respectively were noticed by the Income-tax Officer", "A partner of the assessees explained that these two parties were their constituents, and had entered into speculative transactions through them as brokers with Bhawanji Lakhmichand and Joitram Kedarnath and that the latter had suffered losses which aggregated to Rs. 12,303 and Rs. 1,81,587 respectively and that the payments to the assessees by the said two persons were passed on to these two constituents.", "The Income-tax Officer was not satisfied with the explanation and examined Achaldas, a partner of Messrs. Meghaji Kapurchand, and Poonamchand, a partner of Messrs. Bhimaji Motiji", "The department appealed against the order of the Appellate Assistant Commissioner to the Income-tax Appellate Tribunal, Bombay. \nThe Tribunal reversed the order passed by the Appellate Assistant Commissioner and restored the order passed by the Income-tax Officer. The Tribunal under the direction of the High Court of Bombay submitted a statement of the case and referred the two questions set out hereinbefore."], "rank4": ["The assessees carried on business as commission agents and brokers and also in forward transactions in cotton, bullion and other commodities."], "label": "REJECTED"}, "expert_4": {"rank1": ["The High Court was, therefore, right in recording the answers to the two questions submitted to it."], "rank2": ["We are unable to hold that the statements made by Achaldas and Poonamchand before the Income-tax Officer were not material on which the Tribunal could act.", "The statements made by Achaldas and Poonamchand before the Income-tax Officer were material on which the income-tax authorities could act provided that the material was disclosed and the assessees had opportunity to render their explanation in that behalf. It was therefore open to the Tribunal in appreciating the evidence to rely upon the statements made by Achaldas and Poonamchand before the Income-tax Officer and to disbelieve the statements made by them before the Appellate Assistant Commissioner.", "The High Court does not sit in appeal over the judgment of the income-tax authorities it is not concerned to decide whether the conclusion of the Tribunal on appreciation of evidence is correct.", "There was apparently a mass of evidence on which the conclusion of the Appellate Tribunal could be founded and the question which fell to be determined by it was purely one of fact. It is true that a finding of fact which is not supported by any evidence or is unreasonable and perverse may be open to challenge on the ground that it is not supported by any material on the record, but, as we have already observed, there was material on which the Income-tax Tribunal could reasonably arrive at the conclusion which it did."], "rank3": ["The High Court of Judicature at Bombay answered in the affirmative the following two questions which were referred by the Income-tax Appellate Tribunal, Bombay, under sections 66(2) of the Income-tax Act.", "Whether on the facts and in the circumstances of the case the Tribunal was justified in law in adding to the total income of the assessee the sum of Rs. 1,45,706 and or Rs. 48,185 or any part thereof ? Whether there was any material on record to support the finding that Rs. 1,45,706 and or 48,185 or any part thereof represent the income of the assessee ?", "He, therefore, directed that an amount of Rs. 1,94,890 be excluded in computing the assessees total income.", "The Tribunal reversed the order passed by the Appellate Assistant Commissioner and restored the order passed by the Income-tax Officer. The Tribunal under the direction of the High Court of Bombay submitted a statement of the case and referred the two questions set out hereinbefore.", "The High Court after an exhaustive review of the evidence held that there was material on the record to support the findings of the Tribunal that the sums of Rs. 1,45,706 and Rs. 48,185 which were the subject-matter of the reference represented the income of the assessees.", "The Income-tax Appellate Tribunal on a review of the evidence recorded the following findings.\n That the assessees in the years previous to Samvat 2002 had no transactions with Messrs. Meghaji Kapurchand or with Messrs.", "Bhimaji Motiji and it was not possible to believe that transactions involving large sums of money would be put through by the assessees in respect of new constituents without taking any deposit or security.", "That the entries made in the books of accounts of the assessees were suspicious and appeared to have been written not in the usual course of business.", "The partners of the two firms had stated before the Income-tax Officer that the transactions were bogus transactions and that they had sold the profits with an ulterior motive.", "They merely asserted that the transactions were effected by persons who were not available at the time of the enquiry.", "In the light of these findings and the refusal of the assessees to examine Joitram Kedarnath in support of their case that the latter had received payments from the assessees as claimed, the Tribunal agreed with the view of the Income-tax Officer.", "In any event, the Appellate Assistant Commissioner in the interest of justice and fair play gave the assessees an opportunity to cross-examine these two persons.", "The Income-tax Officer is not bound by any technical rules of the law of evidence. It is open to him to collect materials to facilitates assessment even by private enquiry. But if he desires to use the material so collected, the assessee must be informed of the material and must be given an adequate opportunity of explaining it.", "The jurisdiction of the High Court under section 66 of the Income-tax Act is merely advisory."], "rank4": ["On a consideration of the material placed before him the Income-tax Officer held that the entries made in the relevant account books maintained by the assessees were fictitious, and in computing their income disallowed the assessees claim in respect of the amounts of Rs. 1,45,706 and Rs. 48,185.", "The assessee appealed against the order of assessment to the Appellate Assistant Commissioner, Bombay.", "The Appellate Assistant Commissioner held that the transaction in cotton which were entered in the books of accounts of the assessees were not genuine but the assessees had merely acted as brokers or mediators, Joitram Kedarnath and Bhawanji Lakhmichand having directly bought losses from Messrs. Meghaji Kapurchand and Messrs. Bhimaji Motiji.", "The department appealed against the order of the Appellate Assistant Commissioner to the Income-tax Appellate Tribunal, Bombay.", "The case of the assessees was that the transactions in respect of which they had maintained accounts were genuine transactions and that they had received payment from the parties who suffered losses, and had made it over to the parties who had earned profits.", "the evidence of Achaldas and Poonamchand clearly showed that these amounts were repaid.", "There is nothing on the record to show that the Income-tax Officer had not disclosed to the assessees the material he had collected by examining Achaldas and Poonamchand."], "rank5": ["The assessees carried on business as commission agents and brokers and also in forward transactions in cotton, bullion and other commodities. In the course of proceedings for assessment of income-tax of the assessees, for the assessment year 1947-48, two entries in the assessees books of accounts for Samvat 2002 (which was the previous year for the purpose of assessment) showing payments of Rs. 48,185 and Rs. 1,45,706 to Messrs.", "Meghaji Kapurchand and Messrs. Bhimaji Motiji respectively were noticed by the Income-tax Officer.", "A partner of the assessees explained that these two parties were their constituents, and had entered into speculative transactions through them as brokers with Bhawanji Lakhmichand and Joitram Kedarnath and that the latter had suffered losses which aggregated to Rs. 12,303 and Rs. 1,81,587 respectively and that the payments to the assessees by the said two persons were passed on to these two constituents."], "label": "REJECTED"}, "expert_5": {"rank1": ["there was material on which the Income-tax Tribunal could reasonably arrive at the conclusion which it did. The High Court was, therefore, right in recording the answers to the two questions submitted to it."], "rank2": ["The partners of the two firms had stated before the Income-tax Officer that the transactions were bogus transactions and that they had sold the profits with an ulterior motive. Even in their statements before the Appellate Assistant Commissioner Achaldas and Poonamchand did not pretend that these transactions were genuine transactions."], "rank3": ["it was not possible to believe that transactions involving large sums of money would be put through by the assessees in respect of new constituents without taking any deposit or security.", "the transactions with Messrs. Meghaji Kapurchand and Messrs. Bhimaji Motiji always showed gains in their favour, there being not a single transactions were they had suffered loss.", "We are unable to hold that the statements made by Achaldas and Poonamchand before the Income-tax Officer were not material on which the Tribunal could act.", "There is nothing on the record to show that the Income-tax Officer had not disclosed to the assessees the material he had collected by examining Achaldas and Poonamchand.", "The statements made by Achaldas and Poonamchand before the Income-tax Officer were material on which the income-tax authorities could act provided that the material was disclosed and the assessees had opportunity to render their explanation in that behalf."], "rank4": ["On a consideration of the material placed before him the Income-tax Officer held that the entries made in the relevant account books maintained by the assessees", "the transaction in cotton which were entered in the books of accounts of the assessees were not genuine", "The High Court after an exhaustive review of the evidence held that there was material on the record to support the findings of the Tribunal", "the entries made in the books of accounts of the assessees were suspicious and appeared to have been written not in the usual course of business.", "Before the Income-tax Officer they stated that the amounts of the cheques were returned by them to the assessees but before the Appellate Assistant Commissioner they stated that they had returned those amounts to unknown and unidentifiable parties."], "rank5": ["On a consideration of the material placed before him the Income-tax Officer held that the entries made in the relevant account books maintained by the assessees were fictitious, and in computing their income disallowed the assessees claim in respect of the amounts of Rs. 1,45,706 and Rs. 48,185.", "The jurisdiction of the High Court under section 66 of the Income-tax Act is merely advisory. The High Court does not sit in appeal over the judgment of the income-tax authorities it is not concerned to decide whether the conclusion of the Tribunal on appreciation of evidence is correct."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1962_113", "text": "Appeal by special leave from the Resolution dated April 21, 1954, of the Board of Revenue, Bihar Patna in Revision Case No. 706 of 1953. K. Kapur and K.K. Jain, for the appellants. P. Singh, R. K. Garg, M.K. Ramamurthi and C. Agarwal, for the respondents. 1962. February, 2.-The Judgment of the Court was delivered by KAPUR, J.-This appeal by Special Leave against the order of the Board of Revenue, Bihar, relates to the assessment for the year 1950-51 of Sale Tax of the appellant under the Bihar Sales Tax Act, 1947 (Act 19 of 1947), hereinafter called the Act. The appellant was a railway caterer, who had Refreshment Rooms and Tea Stalls at various Railway Stations. He sold various kinds of eatables, cigarettes, betels, milk, fruits and tea at railway stations. He was registered as a dealer under the Act and had been carrying on business for a fairly long time. His case was that as it was difficult for him to maintain accounts in regard to eatables, some of which were taxable and others were not, he made representation in 1944 to the Bihar Government for some arrangement so that the difficulty in keeping different sets of account would be the obviated. As a result of his representation the Bihar Government by a letter June 5, 1915, agreed that the appellants taxable turnover in Bihar would be taken to be 66 2/3 of the, gross turnover during the quarter ending December 31, 1944, and that this percentage might be revised after December 31, 1945. As a result of this letter, the appellant did not keep separate accounts for taxable and non-taxable items and for some of the quarters subsequent to those mentioned in the letter above referred to were also taxed according to the arrangements contained in that letter. For the period April 1, 1950, to March 31, 1951, the gross turnover was Rs. 11,16,270-11-0 and the appellant claimed that he be assessed at 66 2/3 of that amount but the Sales Tax officer taxed him on the total gross turnover except for the usual rebate of 4 allowed in such cases. He submitted that in this turnover there were included tax-free articles such as fresh milks, meat, fish, green vegetables etc., which were exempt from Sales tax under s. 6 of the Act. His submission was that the excess amount assessed was Rs. 11,416-15-0. Against this order he took the usual appeals to the Sales Tax Authorities and after the appeals were rejected, he took a revision under s. 24 of the Act before the Board of Revenue, Bihar, where also he was unsuccessful. Under s. 25 of the Act, he applied for referring 6 questions of law to the High court and those questions were as follows- \n Whether upon the true construction of the agreement of 1945 between the State Government and the assessee which had been acted upon and not reviewed, the Department was legally entitled to tax petitioner on his gross turnover instead of 66 2/3 of the same \n Whether Member, Board of Revenue, having held that in the circumstances the petitioner had prima facie bona fide grounds for his belief that the arrangement which the Department had entered into, would continue could legally hold, that the petitioner was not entitled to be assessed in terms of the said arrangement ? Whether in the facts and circumstances of the case, it is open to the Department to challenge the continuance of the arrangement arrived at between the State Government and the petitioner especially so when the State Government by its own acts or omissions misled the petitioner into maintaining his accounts in a manner prejudicial to the petitioners claim for deductions on account of sale of tax free goods during the period ? Whether in the facts and circumstances of the case, the petitioner was entitled to the entire deduction on account of sale of meat and fish in terms of Notification No. 5564 Ft. dated 30-3-49 under section 6 of the Bihar Sales Act. 1947 ? Whether the Member Board of Revenue having held that meat and fish mentioned in Notification No. 5564 Ft. dated 30- 3-49 under section 6 of the Bihar Sales Tax, Act. 1947, included boiled meat and fish and cold meat and fish, could legally hold that meat and fish cooked otherwise were not covered in the terms of said notification ? Whether in terms of the Notification No. 5564 Ft. dated 30-3-49 cold meat and fish and boiled meat and fish could be distinguished from other preparation of meat and fish ? But the Board of Revenue referred the following question to the High Court under s. 6- Whether the following forms of meat and fish are covered by Notification No. 5564 Ft. dated 30-3-49, issued under section 6 of the Bihar Sales Tax Act, 1947 ? Raw (i.e. uncooked in any way) meat or fish. Boiled meat and fish, cooled or uncooled, meant for sale or consumption outside the petitioners premises. Fish or meat, which has been boiled or cooked in some other way served as separate or part of a dish outside the petitioners premises as separate dishes or part of a menu. Fish or meat, which has been boiled or cooked in some other way, served as separate dishes or part of a dish outside the petitioners premises. The High court reframed the question as follows- Whether the petitioner was entitled to exemption under Notification No. 5564 Ft., dated 30th March, 1949, issued under section 6 of the Bihar Sales Act, 1947 with regard to the sales of the preparations of meat and fish e.g., meat curry and fish curry served as separate dishes, or as part of the menu, at lunch or dinner, at the petitioners premises or outside ? and answered it against the appellant. It is against the order of the Board of Revenue that the appellant has come in appeal by special leave but has not appeared against the judgment and order of the High Court.\nThis Court in M s. Chimmonalall Rameshwarlall Commissioner of Income-tax (Central) Calcutta (1) held that in cases where a reference is made to the High Court and the appeal is brought only against the order of the Income Tax Appellate Tribunal then the Supreme Court, if it interfered, would in fact be setting aside the judgment of the High Court without there being an appeal to this Court, and that this Court could not bypass the normal procedure which was to be adopted for the purpose. In a later Judgment in Chandi Prasad Chokhani v. State of Bihar (2)a similar view was taken that as the assessee had not obtained Special Leave in respect of any of the orders passed by the High Court under s. 25 those orders became final and binding and the assessee could not be allowed to bypass or go behind the orders of the High Court and such exercise would be particularly inadvisable in a case where the result may be a conflict of the decision of two courts of competent jurisdiction, which was contrary to the object of ss. 23, 24 and 25 of the Act. \nIn this view of the law the appellant is not entitled to agitate the correctness or otherwise of the decision given by the Tribunal in regard to the questions which we agitated before the High Court and were decided against the appellant and against which no appeal has been brought. But he submits that there are three other questions which also arise, and on which the appellant wanted a reference to the High Court but which were not referred. It was open to the appellant to apply to the High Court for a reference under s. 25. That the appellant did not do, and it has not been shown that there was any such breach of the rules of natural justice or violation of any principal of law which would be a good ground for our interference direct with the orders of the Board of Revenue in an appeal under Art. 136 of the Constitution.\nDECISION ??", "expert_1": {"rank1": ["it has not been shown that there was any such breach of the rules of natural justice or violation of any principal of law which would be a good ground for our interference direct with the orders of the Board of Revenue in an appeal under Art. 136 of the Constitution."], "rank2": ["In this view of the law the appellant is not entitled to agitate the correctness or otherwise of the decision given by the Tribunal in regard to the questions which we agitated before the High Court and were decided against the appellant and against which no appeal has been brought.", "But he submits that there are three other questions which also arise, and on which the appellant wanted a reference to the High Court but which were not referred. It was open to the appellant to apply to the High Court for a reference under s. 25. That the appellant did not do"], "rank3": ["This Court in M s. Chimmonalall Rameshwarlall Commissioner of Income-tax (Central) Calcutta (1) held that in cases where a reference is made to the High Court and the appeal is brought only against the order of the Income Tax Appellate Tribunal then the Supreme Court, if it interfered, would in fact be setting aside the judgment of the High Court without there being an appeal to this Court, and that this Court could not bypass the normal procedure which was to be adopted for the purpose. In a later Judgment in Chandi Prasad Chokhani v. State of Bihar (2)a similar view was taken that as the assessee had not obtained Special Leave in respect of any of the orders passed by the High Court under s. 25 those orders became final and binding and the assessee could not be allowed to bypass or go behind the orders of the High Court and such exercise would be particularly inadvisable in a case where the result may be a conflict of the decision of two courts of competent jurisdiction, which was contrary to the object of ss. 23, 24 and 25 of the Act."], "rank4": ["Appeal by special leave from the Resolution dated April 21, 1954, of the Board of Revenue, Bihar Patna in Revision Case No. 706 of 1953.", "This appeal by Special Leave against the order of the Board of Revenue, Bihar, relates to the assessment for the year 1950-51 of Sale Tax of the appellant under the Bihar Sales Tax Act, 1947 (Act 19 of 1947), hereinafter called the Act.", "Against this order he took the usual appeals to the Sales Tax Authorities and after the appeals were rejected, he took a revision under s. 24 of the Act before the Board of Revenue, Bihar, where also he was unsuccessful. Under s. 25 of the Act, he applied for referring 6 questions of law to the High court and those questions were as follows- \n Whether upon the true construction of the agreement of 1945 between the State Government and the assessee which had been acted upon and not reviewed, the Department was legally entitled to tax petitioner on his gross turnover instead of 66 2/3 of the same \n Whether Member, Board of Revenue, having held that in the circumstances the petitioner had prima facie bona fide grounds for his belief that the arrangement which the Department had entered into, would continue could legally hold, that the petitioner was not entitled to be assessed in terms of the said arrangement ? Whether in the facts and circumstances of the case, it is open to the Department to challenge the continuance of the arrangement arrived at between the State Government and the petitioner especially so when the State Government by its own acts or omissions misled the petitioner into maintaining his accounts in a manner prejudicial to the petitioners claim for deductions on account of sale of tax free goods during the period ? Whether in the facts and circumstances of the case, the petitioner was entitled to the entire deduction on account of sale of meat and fish in terms of Notification No. 5564 Ft. dated 30-3-49 under section 6 of the Bihar Sales Act. 1947 ? Whether the Member Board of Revenue having held that meat and fish mentioned in Notification No. 5564 Ft. dated 30- 3-49 under section 6 of the Bihar Sales Tax, Act. 1947, included boiled meat and fish and cold meat and fish, could legally hold that meat and fish cooked otherwise were not covered in the terms of said notification ? Whether in terms of the Notification No. 5564 Ft. dated 30-3-49 cold meat and fish and boiled meat and fish could be distinguished from other preparation of meat and fish", "But the Board of Revenue referred the following question to the High Court under s. 6- Whether the following forms of meat and fish are covered by Notification No. 5564 Ft. dated 30-3-49, issued under section 6 of the Bihar Sales Tax Act, 1947 ? Raw (i.e. uncooked in any way) meat or fish. Boiled meat and fish, cooled or uncooled, meant for sale or consumption outside the petitioners premises. Fish or meat, which has been boiled or cooked in some other way served as separate or part of a dish outside the petitioners premises as separate dishes or part of a menu. Fish or meat, which has been boiled or cooked in some other way, served as separate dishes or part of a dish outside the petitioners premises. The High court reframed the question as follows- Whether the petitioner was entitled to exemption under Notification No. 5564 Ft., dated 30th March, 1949, issued under section 6 of the Bihar Sales Act, 1947 with regard to the sales of the preparations of meat and fish e.g., meat curry and fish curry served as separate dishes, or as part of the menu, at lunch or dinner, at the petitioners premises or outside ? and answered it against the appellant. It is against the order of the Board of Revenue that the appellant has come in appeal by special leave but has not appeared against the judgment and order of the High Court."], "label": "REJECTED"}, "expert_2": {"rank1": ["It is against the order of the Board of Revenue that the appellant has come in appeal by special leave but has not appeared against the judgment and order of the High Court.", "In this view of the law the appellant is not entitled to agitate the correctness or otherwise of the decision given by the Tribunal in regard to the questions which we agitated before the High Court and were decided against the appellant and against which no appeal has been brought.", "That the appellant did not do, and it has not been shown that there was any such breach of the rules of natural justice or violation of any principal of law which would be a good ground for our interference direct with the orders of the Board of Revenue in an appeal under Art. 136 of the Constitution."], "rank2": ["This Court in M s. Chimmonalall Rameshwarlall Commissioner of Income-tax (Central) Calcutta (1) held that in cases where a reference is made to the High Court and the appeal is brought only against the order of the Income Tax Appellate Tribunal then the Supreme Court, if it interfered, would in fact be setting aside the judgment of the High Court without there being an appeal to this Court, and that this Court could not bypass the normal procedure which was to be adopted for the purpose. In a later Judgment in Chandi Prasad Chokhani v. State of Bihar (2)a similar view was taken that as the assessee had not obtained Special Leave in respect of any of the orders passed by the High Court under s. 25 those orders became final and binding and the assessee could not be allowed to bypass or go behind the orders of the High Court and such exercise would be particularly inadvisable in a case where the result may be a conflict of the decision of two courts of competent jurisdiction, which was contrary to the object of ss. 23, 24 and 25 of the Act."], "label": "REJECTED"}, "expert_3": {"rank1": ["in cases where a reference is made to the High Court and the appeal is brought only against the order of the Income Tax Appellate Tribunal then the Supreme Court, if it interfered, would in fact be setting aside the judgment of the High Court without there being an appeal to this Court, and that this Court could not bypass the normal procedure which was to be adopted for the purpose.", "as the assessee had not obtained Special Leave in respect of any of the orders passed by the High Court under s. 25 those orders became final and binding and the assessee could not be allowed to bypass or go behind the orders of the High Court and such exercise would be particularly inadvisable in a case where the result may be a conflict of the decision of two courts of competent jurisdiction, which was contrary to the object of ss. 23, 24 and 25 of the Act", "In this view of the law the appellant is not entitled to agitate the correctness or otherwise of the decision given by the Tribunal in regard to the questions which we agitated before the High Court and were decided against the appellant and against which no appeal has been brought.", "It was open to the appellant to apply to the High Court for a reference under s. 25. That the appellant did not do, and it has not been shown that there was any such breach of the rules of natural justice or violation of any principal of law which would be a good ground for our interference direct with the orders of the Board of Revenue in an appeal under Art. 136 of the Constitution."], "rank2": ["As a result of this letter, the appellant did not keep separate accounts for taxable and non-taxable items and for some of the quarters subsequent to those mentioned in the letter above referred to were also taxed according to the arrangements contained in that letter", "For the period April 1, 1950, to March 31, 1951, the gross turnover was Rs. 11,16,270-11-0 and the appellant claimed that he be assessed at 66 2/3 of that amount but the Sales Tax officer taxed him on the total gross turnover except for the usual rebate of 4 allowed in such cases. He submitted that in this turnover there were included tax-free articles such as fresh milks, meat, fish, green vegetables etc., which were exempt from Sales tax under s. 6 of the Act. His submission was that the excess amount assessed was Rs. 11,416-15-0.", "Against this order he took the usual appeals to the Sales Tax Authorities and after the appeals were rejected, he took a revision under s. 24 of the Act before the Board of Revenue, Bihar, where also he was unsuccessful. Under s. 25 of the Act, he applied for referring 6 questions of law to the High court and those questions were as follows- \n Whether upon the true construction of the agreement of 1945 between the State Government and the assessee which had been acted upon and not reviewed, the Department was legally entitled to tax petitioner on his gross turnover instead of 66 2/3 of the same \n Whether Member, Board of Revenue, having held that in the circumstances the petitioner had prima facie bona fide grounds for his belief that the arrangement which the Department had entered into, would continue could legally hold, that the petitioner was not entitled to be assessed in terms of the said arrangement ?", "Whether in the facts and circumstances of the case, it is open to the Department to challenge the continuance of the arrangement arrived at between the State Government and the petitioner especially so when the State Government by its own acts or omissions misled the petitioner into maintaining his accounts in a manner prejudicial to the petitioners claim for deductions on account of sale of tax free goods during the period ? Whether in the facts and circumstances of the case, the petitioner was entitled to the entire deduction on account of sale of meat and fish in terms of Notification No. 5564 Ft. dated 30-3-49 under section 6 of the Bihar Sales Act. 1947 ? Whether the Member Board of Revenue having held that meat and fish mentioned in Notification No. 5564 Ft. dated 30- 3-49 under section 6 of the Bihar Sales Tax, Act. 1947, included boiled meat and fish and cold meat and fish, could legally hold that meat and fish cooked otherwise were not covered in the terms of said notification", "Whether in terms of the Notification No. 5564 Ft. dated 30-3-49 cold meat and fish and boiled meat and fish could be distinguished from other preparation of meat and fish", "But the Board of Revenue referred the following question to the High Court under s. 6- Whether the following forms of meat and fish are covered by Notification No. 5564 Ft. dated 30-3-49, issued under section 6 of the Bihar Sales Tax Act, 1947 ? Raw (i.e. uncooked in any way) meat or fish. Boiled meat and fish, cooled or uncooled, meant for sale or consumption outside the petitioners premises. Fish or meat, which has been boiled or cooked in some other way served as separate or part of a dish outside the petitioners premises as separate dishes or part of a menu", "Fish or meat, which has been boiled or cooked in some other way, served as separate dishes or part of a dish outside the petitioners premises", "The High court reframed the question as follows- Whether the petitioner was entitled to exemption under Notification No. 5564 Ft., dated 30th March, 1949, issued under section 6 of the Bihar Sales Act, 1947 with regard to the sales of the preparations of meat and fish e.g., meat curry and fish curry served as separate dishes, or as part of the menu, at lunch or dinner, at the petitioners premises or outside ? and answered it against the appellant. It is against the order of the Board of Revenue that the appellant has come in appeal by special leave but has not appeared against the judgment and order of the High Court"], "rank3": ["This appeal by Special Leave against the order of the Board of Revenue, Bihar, relates to the assessment for the year 1950-51 of Sale Tax of the appellant under the Bihar Sales Tax Act, 1947", "His case was that as it was difficult for him to maintain accounts in regard to eatables, some of which were taxable and others were not, he made representation in 1944 to the Bihar Government for some arrangement so that the difficulty in keeping different sets of account would be the obviated. As a result of his representation the Bihar Government by a letter June 5, 1915, agreed that the appellants taxable turnover in Bihar would be taken to be 66 2/3 of the, gross turnover during the quarter ending December 31, 1944, and that this percentage might be revised after December 31, 1945"], "rank4": ["The appellant was a railway caterer, who had Refreshment Rooms and Tea Stalls at various Railway Stations. He sold various kinds of eatables, cigarettes, betels, milk, fruits and tea at railway stations. He was registered as a dealer under the Act and had been carrying on business for a fairly long time"], "label": "REJECTED"}, "expert_4": {"rank1": ["This appeal by Special Leave against the order of the Board of Revenue, Bihar, relates to the assessment for the year 1950-51 of Sale Tax of the appellant under the Bihar Sales Tax Act, 1947 (Act 19 of 1947), hereinafter called the Act."], "rank2": ["In this view of the law the appellant is not entitled to agitate the correctness or otherwise of the decision given by the Tribunal in regard to the questions which we agitated before the High Court and were decided against the appellant and against which no appeal has been brought.", "It was open to the appellant to apply to the High Court for a reference under s. 25. That the appellant did not do, and it has not been shown that there was any such breach of the rules of natural justice or violation of any principal of law which would be a good ground for our interference direct with the orders of the Board of Revenue in an appeal under Art. 136 of the Constitution."], "rank3": ["Against this order he took the usual appeals to the Sales Tax Authorities and after the appeals were rejected, he took a revision under s. 24 of the Act before the Board of Revenue, Bihar, where also he was unsuccessful.", "The High court reframed the question as follows- Whether the petitioner was entitled to exemption under Notification No. 5564 Ft., dated 30th March, 1949, issued under section 6 of the Bihar Sales Act, 1947 with regard to the sales of the preparations of meat and fish e.g., meat curry and fish curry served as separate dishes, or as part of the menu, at lunch or dinner, at the petitioners premises or outside ? and answered it against the appellant.", "This Court in M s. Chimmonalall Rameshwarlall Commissioner of Income-tax (Central) Calcutta (1) held that in cases where a reference is made to the High Court and the appeal is brought only against the order of the Income Tax Appellate Tribunal then the Supreme Court, if it interfered, would in fact be setting aside the judgment of the High Court without there being an appeal to this Court, and that this Court could not bypass the normal procedure which was to be adopted for the purpose.", "In a later Judgment in Chandi Prasad Chokhani v. State of Bihar (2)a similar view was taken that as the assessee had not obtained Special Leave in respect of any of the orders passed by the High Court under s. 25 those orders became final and binding and the assessee could not be allowed to bypass or go behind the orders of the High Court and such exercise would be particularly inadvisable in a case where the result may be a conflict of the decision of two courts of competent jurisdiction, which was contrary to the object of ss. 23, 24 and 25 of the Act."], "rank4": ["His case was that as it was difficult for him to maintain accounts in regard to eatables, some of which were taxable and others were not, he made representation in 1944 to the Bihar Government for some arrangement so that the difficulty in keeping different sets of account would be the obviated.", "As a result of his representation the Bihar Government by a letter June 5, 1915, agreed that the appellants taxable turnover in Bihar would be taken to be 66 2/3 of the, gross turnover during the quarter ending December 31, 1944, and that this percentage might be revised after December 31, 1945.", "As a result of this letter, the appellant did not keep separate accounts for taxable and non-taxable items and for some of the quarters subsequent to those mentioned in the letter above referred to were also taxed according to the arrangements contained in that letter.", "For the period April 1, 1950, to March 31, 1951, the gross turnover was Rs. 11,16,270-11-0 and the appellant claimed that he be assessed at 66 2/3 of that amount but the Sales Tax officer taxed him on the total gross turnover except for the usual rebate of 4 allowed in such cases.", "Under s. 25 of the Act, he applied for referring 6 questions of law to the High court and those questions were as follows- \n Whether upon the true construction of the agreement of 1945 between the State Government and the assessee which had been acted upon and not reviewed, the Department was legally entitled to tax petitioner on his gross turnover instead of 66 2/3 of the same \n Whether Member, Board of Revenue, having held that in the circumstances the petitioner had prima facie bona fide grounds for his belief that the arrangement which the Department had entered into, would continue could legally hold, that the petitioner was not entitled to be assessed in terms of the said arrangement ? Whether in the facts and circumstances of the case, it is open to the Department to challenge the continuance of the arrangement arrived at between the State Government and the petitioner especially so when the State Government by its own acts or omissions misled the petitioner into maintaining his accounts in a manner prejudicial to the petitioners claim for deductions on account of sale of tax free goods during the period ?", "Whether in the facts and circumstances of the case, the petitioner was entitled to the entire deduction on account of sale of meat and fish in terms of Notification No. 5564 Ft. dated 30-3-49 under section 6 of the Bihar Sales Act. 1947 ? Whether the Member Board of Revenue having held that meat and fish mentioned in Notification No. 5564 Ft. dated 30- 3-49 under section 6 of the Bihar Sales Tax, Act. 1947, included boiled meat and fish and cold meat and fish, could legally hold that meat and fish cooked otherwise were not covered in the terms of said notification ?", "Whether in terms of the Notification No. 5564 Ft. dated 30-3-49 cold meat and fish and boiled meat and fish could be distinguished from other preparation of meat and fish ?", "But the Board of Revenue referred the following question to the High Court under s. 6- Whether the following forms of meat and fish are covered by Notification No. 5564 Ft. dated 30-3-49, issued under section 6 of the Bihar Sales Tax Act, 1947 ?", "But he submits that there are three other questions which also arise, and on which the appellant wanted a reference to the High Court but which were not referred."], "rank5": ["The appellant was a railway caterer, who had Refreshment Rooms and Tea Stalls at various Railway Stations.", "He sold various kinds of eatables, cigarettes, betels, milk, fruits and tea at railway stations.", "He was registered as a dealer under the Act and had been carrying on business for a fairly long time."], "label": "REJECTED"}, "expert_5": {"rank1": ["This Court in M s. Chimmonalall Rameshwarlall Commissioner of Income-tax (Central) Calcutta (1) held that in cases where a reference is made to the High Court and the appeal is brought only against the order of the Income Tax Appellate Tribunal then the Supreme Court, if it interfered, would in fact be setting aside the judgment of the High Court without there being an appeal to this Court, and that this Court could not bypass the normal procedure which was to be adopted for the purpose.", "It was open to the appellant to apply to the High Court for a reference under s. 25. That the appellant did not do, and it has not been shown that there was any such breach of the rules of natural justice or violation of any principal of law which would be a good ground for our interference direct with the orders of the Board of Revenue in an appeal under Art. 136 of the Constitution."], "rank2": ["in Chandi Prasad Chokhani v. State of Bihar (2)a similar view was taken that as the assessee had not obtained Special Leave in respect of any of the orders passed by the High Court under s. 25 those orders became final and binding and the assessee could not be allowed to bypass or go behind the orders of the High Court and such exercise would be particularly inadvisable in a case where the result may be a conflict of the decision of two courts of competent jurisdiction, which was contrary to the object of ss. 23, 24 and 25 of the Act."], "rank3": ["In this view of the law the appellant is not entitled to agitate the correctness or otherwise of the decision given by the Tribunal in regard to the questions which we agitated before the High Court and were decided against the appellant and against which no appeal has been brought"], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1962_118", "text": "Appeal from the judgment and order dated March 20, 1959, of the Bombay High Court at Nagpur in Special Civil Application No. 322 of 1958. S. Bobde, and Ganpat Rai, for the appellant. C. Mathur and P. D. Menon, for the respondents. 1962. March 15. The Judgment of the Court was delivered by GAJENDRAGADKAR, J.-On the 26th July, 1958, the Collector of Central Excise, Nagpur, passed an order directing absolute confiscation of five bars of gold weighing 290.6 Tolas found in the possession of the appellant Pukhraj and imposing upon him a personal penalty of Rs. 25,000/- under s. 167 (8) of the Sea Customs Act, 1878 read with a. 19 of the said Act and s. 23-A of the Foreign Exchange Regulation Act, 1947. Aggrieved by the said order, the appellant filed a writ petition in the High Court of Bombay at Nagpur under Arts. 226 and 227 of the Constitution on September 15, 1958. By this petition, the appellant claimed a writ of Certiorari or other appropriate writ or order quashing the impugned order. It was urged by him in support of his petit-ion, inter alia, that s. 178A of the Sea Customs Act was unconstitutional in that it infringed the appellants fundamental right under Art. 19 (1) (1) and (g) of the Constitution. It was also. urged that on the merits, the said impugned order was not justified by the relevant statutory provisions of the Sea Customs Act read with the Foreign Exchange, Regulation Act. The High Court rejected the appellants challenge to the validity of s. 178A and held that the order directing the confiscation of five bars of gold was valid. The High Court, however, took the view that the direction issued by the Collector of Central Excise imposing a personal penalty of Rs. 25,000/- On the appellant was invalid and so, the said direction was sot aside and a writ issued in that behalf. The appellant then applied for and obtained a certificate from the said High Court and it is with the said certificate that he has come to this Court for challenging the correctness of the order passed by the High Court by which the confiscation of gold in question has been held to be valid. The main point on which the certificate was granted by the High Court to the appellant was in regard to the constitutional validity of a. 178A. That question has, in the meanwhile, been decided by this Court on September 25, 1961, in Civil Appeals Nos. 408 to 410 of 1960 and other companion appeals. The judgment of the constitutional Bench dealingwith those appeals has upheld the validity of s.178A and so, the principal point which the appellant wanted to raise before this Court is now concluded against him. For the appellant, Mr. Bobde has, however, urged three other contentions before us in support of his case that the confiscation of gold is not justified. \nBefore dealing with these contentions, it is necessary to mention very briefly the relevant facts which led to the confiscation of gold. The appellant is a goldsmith by profession and owns a gold and silver shop at Rajnandgaon in Madhya Pradesh. On October 25, 1956, whilst he was travelling by the passenger train from Calcutta on the CalcuttaNagpur route, he was searched at Raigarh railway station and found to be in possession of five pieces of gold bullion weighing 290.6 tolas valued at Rs. 29,835/- approximately. The said gold was then seized by the Officer concerned acting on a reasonable belief that it was smuggled gold, and notice was issued against the appellant on May 20, 1957, calling upon him to show cause why action should not be taken against him for having contravened the notification issued by the Government of India No. 12 (11)-F.1/48 dated August 26, 1948 under the foreign Exchange Regulation Act, 1947 read with s.23A of the said Act and s.19 of the Sea Customs Act and punishable under item (8) of s.167 of the Sea Customs Act. The appellant sent a reply and thereupon, the Collector of Central Excise held an enquiry. At the enquiry the appellant appeared by counsel and examined four witnesses in support of his plea that he was in possession of gold Which belonged to him and which was not smuggled gold at all. Documentary evidence in the form of account books was also produced by the appellant in sup. port of his plea. The Collector of Central Excise disbelieved the evidence adduced by the appellant and came to the conclusion that the presumption arising under s.178 of the Sea Customs Act had not .been rebutted by the appellant and so, he proceeded to pass the impugned order confiscating gold and imposing on the appellant a personal penalty of Rs.25,000/-. It is in the light of these facts that the three contentions raised by Mr. Bobde fall to be, considered in the present appeal. The first argument raised in support of the appeal is that the confiscation of gold is not justified under s.167(8) because it has been found by the High Court that the appellant is not a person concerned in the offence of importation of the said gold. It appears that in dealing with the question as to whether the personal penalty imposed upon the appellant is valid or not, the High Court has relied on two considerations. It has held that the jurisdiction of the officer to impose a personal penalty was confined to the imposition of a penalty only up to Rs.1000/-and no more, and in support of this conclusion, the High Court relied on certain observations made by this Court in F.N.Roy v. Collector of Customs, Calcutta(1). This question has been recently considered by this Court in M s. Ranchhoddas Atmaram v. The Union of India(2) and it has been held that the language in item (8) of s.167 is clear and it permits the imposition of a penalty in excess of Rs.1000/- and that must be given effect to whatever may have been the intention in other provisions. So, it is clear that the High Court was in error in taking the view that under section 167(8), it was not within the jurisdiction of the Collector of Central Excise to impose a penalty exceeding Rs. 1000/-. The High Court has also held that the appellant was not shown to have been concerned with the importation of the smuggled gold, though he was found in possession of it and this finding, according to the High Court, justified the conclusion that a personal penalty could not be imposed on him. We are not called upon to consider in the present appeal the correctness or propriety of this conclusion because there is no appeal by the respondent Collector of Central Excise challenging this part of the High Courts order. Basing himself on the finding of the High Court that the appellant was not concerned in the importation of ,smuggled gold, Mr. Bobde argues that even the goods cannot be confiscated under s.167(8). In our opinion, this argument is clearly misconceived. Section 167(8) clearly provides, inter alia, that if (1) 1957 S.C.R.1 151 at p.1158, (2) 1961 3 S.C.R. 718. any goods, the importation of which is for the time being prohibited or restricted by or under Chapter IV of the Act, be imported into India contrary to such prohibition or restriction, such goods shall be liable to confiscation. If s.167(8) applies, then there can be no doubt that as soon as it is shown that certain goods have been imported contrary to the statutory prohibition or restriction, they are liable to confiscation and the confiscation of the said goods is not based on the fact that they are necessarily found with a person who was concerned with their importation. Therefore, once s.167(8) is hold to be applicable, the validity of the order directing the confiscation of the smuggled goods is beyond any challenge. The next question to consider is whether s.167(8) applies to the facts of this case, and that takes us to the relevant notification issued by the Government of India in 1948. This notification imposed restrictions on import of gold and silver and it has been issued under s.8(1) of the Foreign Exchange Regulation Act, 1947. The effect of this notification, inter alia, is that except with the general or special permission of the Reserve Bank, no person shall bring or send into India from any place outside India any gold, coin gold bullion. gold sheets or gold ingot, whether refined or not. Thus, bringing into India gold from outside is prohibited by this notification unless the said gold is brought with the general or special permission of the Reserve Bank. Section 23 of the said Act provides for penalty and procedure in respect of contravention of its provisions and of rules, orders or directions issued thereunder. Section 23-A provides that without prejudice to the provisions of s. 23 or to any other provision contained in the said Act, the restrictions imposed by sub-s.(1) and (2) of s. 8 shall be deemed to have been imposed under s. 19 of the Sea Customs Act, and all the provisions or that Act shall have effect accordingly, except that s. 183 thereof shall have effect as if for the word shall therein the word ,may was substituted. It would, thus be noticed that the combined effect of the aforesaid provisions of the two Acts and the relevant notification is that the notification of 1948 has the force of a notification issued under s. 19 of the Sea Customs Act, and in consequence, gold imported in contravention of the said notification is liable to be seized under . 1.78 of the said Act and renders the person in possession of the said gold liable for proceedings under s.167(8) of the said Act and since the matter falls to be considered under the, relevant provisions of the Sea Customs Act, s. 178A is also applicable. This position is not disputed. Now s. 178A places the burden of proving that the goods are not smuggled goods on the person from whose possession the said goods are seized where it appears that the said goods are seized under the provisions of the Sea Customs Act in the reasonable belief that they are smuggled goods. Once it is shown that the goods were seized in the manner contemplated by the first part of s. 178A, it would be for the appellant to prove that the goods were not smuggled goods and since it has been held by the Collector of Central Excise that the appellant had not discharged the onus imposed on him by s. 178A, the statutory presumption remained unrebutted and so, the goods must be dealt with on the basis that they are smuggled goods. As soon as we reach this conclusion, it follows that under s. 167(8) of the Sea Customs Act, the said goods are liable to confiscation. That is the view taken by the High Court when it rejected the appellants prayer for a writ quashing the order of confiscation passed by the Collector of Central Excise in respect of the gold in question, and we see no reason to interfere with it. The next argument urged by Mr. Bobde is that certain witnesses whose evidence was recorded by the Collector of Central Excise in the enquiry before him, were not produced for cross-examination by the appellant. In our opinion, there is no substance in this argument. This complaint relates to the evidence of Anwar, Marotrao and his brother Rambhau. These three persons, it is alleged made their statements in the absence of the appellant. It was, however, stated before the High Court by Mr. Abhyankar for the department that Anwar was, in fact, examined in the presence of the appellants counsel and the appellants counsel did not cross-examine him. This statement was accepted by Mr. Sorabji who appeared for the appellant and so, no valid complaint can be made that Anwar gave evidence in the absence of the appellant and the appellant bad no opportunity to cross-examine him. Then, as regards Marotrao and Rambhau, their statements were intended to show that the appellants case that he had got the gold melted through them was not true. At the enquiry, the appellant gave up this stand and did not adhere to his earlier version that the gold in question had been melted with the assistance of the said two witnesses. Since it became unnecessary to consider that plea because of the change of attitude adopted by the appellant, it was hardly necessary to allow the appellant to cross-examine the said two witnesses. Their version on the point was no longer inconsistent with the subsequent case set up by the appellant. \nTherefore there is no substance in the argument that the enquiry held by the Collector of Central Excise was conducted unfairly and the procedure adopted at the said enquiry was inconsistent with the requirements of natural justice. The last contention raised by Mr. Bobde was that there is nothing on record to show that the seizure of gold from the appellant had been affected by the officer concerned acting on a reasonable belief that the said gold was smuggled. It would be recalled that S. 178A of the Sea Customs Act requires that before the burden can be imposed on the appellant to show that the goods in question were not smuggled, it has to be shown that the goods had been seized under the said Act and in the reasonable belief that they are smuggled goods. The argument is that the question as to whether there was a reasonable belief or not is justiceable, and since there is no material on the record to show that the belief could have been reasonable, the statutory presumption cannot be raised. In our opinion, this argument is not well-founded. There are two broad features of this seizure which cannot be igno- red. The first feature on which the officer relied is supplied by the quantity of gold in question. It was found that the appellant was carrying on his person five pieces of gold bullion weighing as much as 290.6 tolas. \nThis large quantity of gold valued at nearly Rs. 30,000/- itself justified a reasonable belief in the mind of the officer that the gold may be smuggled. In that connection, it may not be irrelevant to remember that the said officer had received positive information in the month of September, 1956, regarding the smuggling of gold by the appellant. That is why he was intercepted by the officer on the 25th October, 1956, at the Raigarb railway station at 16.30 hours. Then the other fact on which the reasonable belief can be founded is the suspicious circumstances of the appellants journey. The appellant was found travelling without a Railway ticket and his explanation as to how he came to be. in the said passenger train is obviously untrue. A person carrying a, large quantity of gold and found travelling without a ticket may well have raised a reasonable belief in the mind of the officer that the gold was smuggled. The object of travelling without a ticket must have been to conceal the fact that the appellant had travelled all the way from Calcutta at which place the gold must have been smuggled. The story subsequently mentioned by the appellant about his journey to Tatanagar which has been disbelieved brings into bold belief the purpose which the appellant had in mind in travelling without a ticket. After-all-, when we are dealing with a question as to whether the belief in the mind of the Officer who effected the seizure was reasonable or not, we are not sitting in appeal over the decision of the said officer. All that we can consider is whether there is ground which prima facie justifies the said reasonable belief. That being so, we do not think there is any substance in the argument that the seizure was effected without a reasonable belief and so is outside section 178A.\nDECISION ??", "expert_1": {"rank1": ["Once it is shown that the goods were seized in the manner contemplated by the first part of s. 178A, it would be for the appellant to prove that the goods were not smuggled goods and since it has been held by the Collector of Central Excise that the appellant had not discharged the onus imposed on him by s. 178A, the statutory presumption remained unrebutted and so, the goods must be dealt with on the basis that they are smuggled goods. As soon as we reach this conclusion, it follows that under s. 167(8) of the Sea Customs Act, the said goods are liable to confiscation. That is the view taken by the High Court when it rejected the appellants prayer for a writ quashing the order of confiscation passed by the Collector of Central Excise in respect of the gold in question, and we see no reason to interfere with it.", "The next argument urged by Mr. Bobde is that certain witnesses whose evidence was recorded by the Collector of Central Excise in the enquiry before him, were not produced for cross-examination by the appellant. In our opinion, there is no substance in this argument.", "Since it became unnecessary to consider that plea because of the change of attitude adopted by the appellant, it was hardly necessary to allow the appellant to cross-examine the said two witnesses. Their version on the point was no longer inconsistent with the subsequent case set up by the appellant. \nTherefore there is no substance in the argument that the enquiry held by the Collector of Central Excise was conducted unfairly and the procedure adopted at the said enquiry was inconsistent with the requirements of natural justice.", "The argument is that the question as to whether there was a reasonable belief or not is justiceable, and since there is no material on the record to show that the belief could have been reasonable, the statutory presumption cannot be raised. In our opinion, this argument is not well-founded.", "After-all-, when we are dealing with a question as to whether the belief in the mind of the Officer who effected the seizure was reasonable or not, we are not sitting in appeal over the decision of the said officer. All that we can consider is whether there is ground which prima facie justifies the said reasonable belief. That being so, we do not think there is any substance in the argument that the seizure was effected without a reasonable belief and so is outside section 178A."], "rank2": ["The last contention raised by Mr. Bobde was that there is nothing on record to show that the seizure of gold from the appellant had been affected by the officer concerned acting on a reasonable belief that the said gold was smuggled. It would be recalled that S. 178A of the Sea Customs Act requires that before the burden can be imposed on the appellant to show that the goods in question were not smuggled, it has to be shown that the goods had been seized under the said Act and in the reasonable belief that they are smuggled goods.", "There are two broad features of this seizure which cannot be igno- red. The first feature on which the officer relied is supplied by the quantity of gold in question. It was found that the appellant was carrying on his person five pieces of gold bullion weighing as much as 290.6 tolas. \nThis large quantity of gold valued at nearly Rs. 30,000/- itself justified a reasonable belief in the mind of the officer that the gold may be smuggled. In that connection, it may not be irrelevant to remember that the said officer had received positive information in the month of September, 1956, regarding the smuggling of gold by the appellant. That is why he was intercepted by the officer on the 25th October, 1956, at the Raigarb railway station at 16.30 hours. Then the other fact on which the reasonable belief can be founded is the suspicious circumstances of the appellants journey. The appellant was found travelling without a Railway ticket and his explanation as to how he came to be. in the said passenger train is obviously untrue. A person carrying a, large quantity of gold and found travelling without a ticket may well have raised a reasonable belief in the mind of the officer that the gold was smuggled. The object of travelling without a ticket must have been to conceal the fact that the appellant had travelled all the way from Calcutta at which place the gold must have been smuggled. The story subsequently mentioned by the appellant about his journey to Tatanagar which has been disbelieved brings into bold belief the purpose which the appellant had in mind in travelling without a ticket."], "rank3": ["We are not called upon to consider in the present appeal the correctness or propriety of this conclusion because there is no appeal by the respondent Collector of Central Excise challenging this part of the High Courts order.", "Basing himself on the finding of the High Court that the appellant was not concerned in the importation of ,smuggled gold, Mr. Bobde argues that even the goods cannot be confiscated under s.167(8). In our opinion, this argument is clearly misconceived.", "Therefore, once s.167(8) is hold to be applicable, the validity of the order directing the confiscation of the smuggled goods is beyond any challenge.", "It would, thus be noticed that the combined effect of the aforesaid provisions of the two Acts and the relevant notification is that the notification of 1948 has the force of a notification issued under s. 19 of the Sea Customs Act, and in consequence, gold imported in contravention of the said notification is liable to be seized under . 1.78 of the said Act and renders the person in possession of the said gold liable for proceedings under s.167(8) of the said Act and since the matter falls to be considered under the, relevant provisions of the Sea Customs Act, s. 178A is also applicable. This position is not disputed. Now s. 178A places the burden of proving that the goods are not smuggled goods on the person from whose possession the said goods are seized where it appears that the said goods are seized under the provisions of the Sea Customs Act in the reasonable belief that they are smuggled goods.", "This complaint relates to the evidence of Anwar, Marotrao and his brother Rambhau. These three persons, it is alleged made their statements in the absence of the appellant. It was, however, stated before the High Court by Mr. Abhyankar for the department that Anwar was, in fact, examined in the presence of the appellants counsel and the appellants counsel did not cross-examine him. This statement was accepted by Mr. Sorabji who appeared for the appellant and so, no valid complaint can be made that Anwar gave evidence in the absence of the appellant and the appellant bad no opportunity to cross-examine him. Then, as regards Marotrao and Rambhau, their statements were intended to show that the appellants case that he had got the gold melted through them was not true. At the enquiry, the appellant gave up this stand and did not adhere to his earlier version that the gold in question had been melted with the assistance of the said two witnesses."], "rank4": ["The main point on which the certificate was granted by the High Court to the appellant was in regard to the constitutional validity of a. 178A.", "It is in the light of these facts that the three contentions raised by Mr. Bobde fall to be, considered in the present appeal. The first argument raised in support of the appeal is that the confiscation of gold is not justified under s.167(8) because it has been found by the High Court that the appellant is not a person concerned in the offence of importation of the said gold. It appears that in dealing with the question as to whether the personal penalty imposed upon the appellant is valid or not, the High Court has relied on two considerations. It has held that the jurisdiction of the officer to impose a personal penalty was confined to the imposition of a penalty only up to Rs.1000/-and no more, and in support of this conclusion, the High Court relied on certain observations made by this Court in F.N.Roy v. Collector of Customs, Calcutta(1). This question has been recently considered by this Court in M s. Ranchhoddas Atmaram v. The Union of India(2) and it has been held that the language in item (8) of s.167 is clear and it permits the imposition of a penalty in excess of Rs.1000/- and that must be given effect to whatever may have been the intention in other provisions. So, it is clear that the High Court was in error in taking the view that under section 167(8), it was not within the jurisdiction of the Collector of Central Excise to impose a penalty exceeding Rs. 1000/-. The High Court has also held that the appellant was not shown to have been concerned with the importation of the smuggled gold, though he was found in possession of it and this finding, according to the High Court, justified the conclusion that a personal penalty could not be imposed on him."], "rank5": ["On the 26th July, 1958, the Collector of Central Excise, Nagpur, passed an order directing absolute confiscation of five bars of gold weighing 290.6 Tolas found in the possession of the appellant Pukhraj and imposing upon him a personal penalty of Rs. 25,000/- under s. 167 (8) of the Sea Customs Act, 1878 read with a. 19 of the said Act and s. 23-A of the Foreign Exchange Regulation Act, 1947. Aggrieved by the said order, the appellant filed a writ petition in the High Court of Bombay at Nagpur under Arts. 226 and 227 of the Constitution on September 15, 1958. By this petition, the appellant claimed a writ of Certiorari or other appropriate writ or order quashing the impugned order. It was urged by him in support of his petit-ion, inter alia, that s. 178A of the Sea Customs Act was unconstitutional in that it infringed the appellants fundamental right under Art. 19 (1) (1) and (g) of the Constitution. It was also. urged that on the merits, the said impugned order was not justified by the relevant statutory provisions of the Sea Customs Act read with the Foreign Exchange, Regulation Act. The High Court rejected the appellants challenge to the validity of s. 178A and held that the order directing the confiscation of five bars of gold was valid. The High Court, however, took the view that the direction issued by the Collector of Central Excise imposing a personal penalty of Rs. 25,000/- On the appellant was invalid and so, the said direction was sot aside and a writ issued in that behalf. The appellant then applied for and obtained a certificate from the said High Court and it is with the said certificate that he has come to this Court for challenging the correctness of the order passed by the High Court by which the confiscation of gold in question has been held to be valid.", "That question has, in the meanwhile, been decided by this Court on September 25, 1961, in Civil Appeals Nos. 408 to 410 of 1960 and other companion appeals. The judgment of the constitutional Bench dealingwith those appeals has upheld the validity of s.178A and so, the principal point which the appellant wanted to raise before this Court is now concluded against him. For the appellant, Mr. Bobde has, however, urged three other contentions before us in support of his case that the confiscation of gold is not justified. \nBefore dealing with these contentions, it is necessary to mention very briefly the relevant facts which led to the confiscation of gold. The appellant is a goldsmith by profession and owns a gold and silver shop at Rajnandgaon in Madhya Pradesh. On October 25, 1956, whilst he was travelling by the passenger train from Calcutta on the CalcuttaNagpur route, he was searched at Raigarh railway station and found to be in possession of five pieces of gold bullion weighing 290.6 tolas valued at Rs. 29,835/- approximately. The said gold was then seized by the Officer concerned acting on a reasonable belief that it was smuggled gold, and notice was issued against the appellant on May 20, 1957, calling upon him to show cause why action should not be taken against him for having contravened the notification issued by the Government of India No. 12 (11)-F.1/48 dated August 26, 1948 under the foreign Exchange Regulation Act, 1947 read with s.23A of the said Act and s.19 of the Sea Customs Act and punishable under item (8) of s.167 of the Sea Customs Act. The appellant sent a reply and thereupon, the Collector of Central Excise held an enquiry. At the enquiry the appellant appeared by counsel and examined four witnesses in support of his plea that he was in possession of gold Which belonged to him and which was not smuggled gold at all. Documentary evidence in the form of account books was also produced by the appellant in sup. port of his plea. The Collector of Central Excise disbelieved the evidence adduced by the appellant and came to the conclusion that the presumption arising under s.178 of the Sea Customs Act had not .been rebutted by the appellant and so, he proceeded to pass the impugned order confiscating gold and imposing on the appellant a personal penalty of Rs.25,000/-"], "label": "REJECTED"}, "expert_2": {"rank1": ["This question has been recently considered by this Court in M s. Ranchhoddas Atmaram v. The Union of India(2) and it has been held that the language in item (8) of s.167 is clear and it permits the imposition of a penalty in excess of Rs.1000/- and that must be given effect to whatever may have been the intention in other provisions.", "Section 167(8) clearly provides, inter alia, that if (1) 1957 S.C.R.1 151 at p.1158, (2) 1961 3 S.C.R. 718. any goods, the importation of which is for the time being prohibited or restricted by or under Chapter IV of the Act, be imported into India contrary to such prohibition or restriction, such goods shall be liable to confiscation. If s.167(8) applies, then there can be no doubt that as soon as it is shown that certain goods have been imported contrary to the statutory prohibition or restriction, they are liable to confiscation and the confiscation of the said goods is not based on the fact that they are necessarily found with a person who was concerned with their importation. Therefore, once s.167(8) is hold to be applicable, the validity of the order directing the confiscation of the smuggled goods is beyond any challenge.", "Now s. 178A places the burden of proving that the goods are not smuggled goods on the person from whose possession the said goods are seized where it appears that the said goods are seized under the provisions of the Sea Customs Act in the reasonable belief that they are smuggled goods.", "There are two broad features of this seizure which cannot be igno- red. The first feature on which the officer relied is supplied by the quantity of gold in question. It was found that the appellant was carrying on his person five pieces of gold bullion weighing as much as 290.6 tolas. \nThis large quantity of gold valued at nearly Rs. 30,000/- itself justified a reasonable belief in the mind of the officer that the gold may be smuggled. In that connection, it may not be irrelevant to remember that the said officer had received positive information in the month of September, 1956, regarding the smuggling of gold by the appellant. That is why he was intercepted by the officer on the 25th October, 1956, at the Raigarb railway station at 16.30 hours.", "The appellant was found travelling without a Railway ticket and his explanation as to how he came to be. in the said passenger train is obviously untrue. A person carrying a, large quantity of gold and found travelling without a ticket may well have raised a reasonable belief in the mind of the officer that the gold was smuggled. The object of travelling without a ticket must have been to conceal the fact that the appellant had travelled all the way from Calcutta at which place the gold must have been smuggled.", "All that we can consider is whether there is ground which prima facie justifies the said reasonable belief."], "rank2": ["three other contentions before us in support of his case that the confiscation of gold is not justified.", "The first argument raised in support of the appeal is that the confiscation of gold is not justified under s.167(8) because it has been found by the High Court that the appellant is not a person concerned in the offence of importation of the said gold.", "the jurisdiction of the officer to impose a personal penalty was confined to the imposition of a penalty only up to Rs.1000/-and no more", "It would, thus be noticed that the combined effect of the aforesaid provisions of the two Acts and the relevant notification is that the notification of 1948 has the force of a notification issued under s. 19 of the Sea Customs Act, and in consequence, gold imported in contravention of the said notification is liable to be seized under . 1.78 of the said Act and renders the person in possession of the said gold liable for proceedings under s.167(8) of the said Act and since the matter falls to be considered under the, relevant provisions of the Sea Customs Act, s. 178A is also applicable.", "Once it is shown that the goods were seized in the manner contemplated by the first part of s. 178A, it would be for the appellant to prove that the goods were not smuggled goods and since it has been held by the Collector of Central Excise that the appellant had not discharged the onus imposed on him by s. 178A, the statutory presumption remained unrebutted and so, the goods must be dealt with on the basis that they are smuggled goods. As soon as we reach this conclusion, it follows that under s. 167(8) of the Sea Customs Act, the said goods are liable to confiscation.", "Bobde is that certain witnesses whose evidence was recorded by the Collector of Central Excise in the enquiry before him, were not produced for cross-examination by the appellant. In our opinion, there is no substance in this argument.", "Therefore there is no substance in the argument that the enquiry held by the Collector of Central Excise was conducted unfairly and the procedure adopted at the said enquiry was inconsistent with the requirements of natural justice.", "The argument is that the question as to whether there was a reasonable belief or not is justiceable, and since there is no material on the record to show that the belief could have been reasonable, the statutory presumption cannot be raised."], "rank3": ["gold was then seized by the Officer concerned acting on a reasonable belief that it was smuggled gold, and notice was issued against the appellant on May 20, 1957, calling upon him to show cause why action should not be taken against him for having contravened the notification issued by the Government of India No. 12 (11)-F.1/48 dated August 26, 1948 under the foreign Exchange Regulation Act, 1947 read with s.23A of the said Act and s.19 of the Sea Customs Act and punishable under item (8) of s.167 of the Sea Customs Act.", "The Collector of Central Excise disbelieved the evidence adduced by the appellant and came to the conclusion that the presumption arising under s.178 of the Sea Customs Act had not .been rebutted by the appellant and so, he proceeded to pass the impugned order confiscating gold and imposing on the appellant a personal penalty of Rs.25,000/-.", "This notification imposed restrictions on import of gold and silver and it has been issued under s.8(1) of the Foreign Exchange Regulation Act, 1947. The effect of this notification, inter alia, is that except with the general or special permission of the Reserve Bank, no person shall bring or send into India from any place outside India any gold, coin gold bullion. gold sheets or gold ingot, whether refined or not. Thus, bringing into India gold from outside is prohibited by this notification unless the said gold is brought with the general or special permission of the Reserve Bank. Section 23 of the said Act provides for penalty and procedure in respect of contravention of its provisions and of rules, orders or directions issued thereunder."], "label": "REJECTED"}, "expert_3": {"rank1": ["This question has been recently considered by this Court in M s. Ranchhoddas Atmaram v. The Union of India(2) and it has been held that the language in item (8) of s.167 is clear and it permits the imposition of a penalty in excess of Rs.1000/- and that must be given effect to whatever may have been the intention in other provisions. So, it is clear that the High Court was in error in taking the view that under section 167(8), it was not within the jurisdiction of the Collector of Central Excise to impose a penalty exceeding Rs. 1000", "Section 167(8) clearly provides, inter alia, that if (1) 1957 S.C.R.1 151 at p.1158, (2) 1961 3 S.C.R. 718. any goods, the importation of which is for the time being prohibited or restricted by or under Chapter IV of the Act, be imported into India contrary to such prohibition or restriction, such goods shall be liable to confiscation", "If s.167(8) applies, then there can be no doubt that as soon as it is shown that certain goods have been imported contrary to the statutory prohibition or restriction, they are liable to confiscation and the confiscation of the said goods is not based on the fact that they are necessarily found with a person who was concerned with their importation. Therefore, once s.167(8) is hold to be applicable, the validity of the order directing the confiscation of the smuggled goods is beyond any challenge", "The next question to consider is whether s.167(8) applies to the facts of this case, and that takes us to the relevant notification issued by the Government of India in 1948", "It would, thus be noticed that the combined effect of the aforesaid provisions of the two Acts and the relevant notification is that the notification of 1948 has the force of a notification issued under s. 19 of the Sea Customs Act, and in consequence, gold imported in contravention of the said notification is liable to be seized under . 1.78 of the said Act and renders the person in possession of the said gold liable for proceedings under s.167(8) of the said Act and since the matter falls to be considered under the, relevant provisions of the Sea Customs Act, s. 178A is also applicable. This position is not disputed", "Now s. 178A places the burden of proving that the goods are not smuggled goods on the person from whose possession the said goods are seized where it appears that the said goods are seized under the provisions of the Sea Customs Act in the reasonable belief that they are smuggled goods. Once it is shown that the goods were seized in the manner contemplated by the first part of s. 178A, it would be for the appellant to prove that the goods were not smuggled goods and since it has been held by the Collector of Central Excise that the appellant had not discharged the onus imposed on him by s. 178A, the statutory presumption remained unrebutted and so, the goods must be dealt with on the basis that they are smuggled goods. As soon as we reach this conclusion, it follows that under s. 167(8) of the Sea Customs Act, the said goods are liable to confiscation", "That is the view taken by the High Court when it rejected the appellants prayer for a writ quashing the order of confiscation passed by the Collector of Central Excise in respect of the gold in question, and we see no reason to interfere with it", "This complaint relates to the evidence of Anwar, Marotrao and his brother Rambhau. These three persons, it is alleged made their statements in the absence of the appellant. It was, however, stated before the High Court by Mr. Abhyankar for the department that Anwar was, in fact, examined in the presence of the appellants counsel and the appellants counsel did not cross-examine him. This statement was accepted by Mr. Sorabji who appeared for the appellant and so, no valid complaint can be made that Anwar gave evidence in the absence of the appellant and the appellant bad no opportunity to cross-examine him", "Then, as regards Marotrao and Rambhau, their statements were intended to show that the appellants case that he had got the gold melted through them was not true. At the enquiry, the appellant gave up this stand and did not adhere to his earlier version that the gold in question had been melted with the assistance of the said two witnesses. Since it became unnecessary to consider that plea because of the change of attitude adopted by the appellant, it was hardly necessary to allow the appellant to cross-examine the said two witnesses. Their version on the point was no longer inconsistent with the subsequent case set up by the appellant", "Therefore there is no substance in the argument that the enquiry held by the Collector of Central Excise was conducted unfairly and the procedure adopted at the said enquiry was inconsistent with the requirements of natural justice", "It would be recalled that S. 178A of the Sea Customs Act requires that before the burden can be imposed on the appellant to show that the goods in question were not smuggled, it has to be shown that the goods had been seized under the said Act and in the reasonable belief that they are smuggled goods", "There are two broad features of this seizure which cannot be igno- red. The first feature on which the officer relied is supplied by the quantity of gold in question. It was found that the appellant was carrying on his person five pieces of gold bullion weighing as much as 290.6 tolas", "This large quantity of gold valued at nearly Rs. 30,000/- itself justified a reasonable belief in the mind of the officer that the gold may be smuggled. In that connection, it may not be irrelevant to remember that the said officer had received positive information in the month of September, 1956, regarding the smuggling of gold by the appellant", "That is why he was intercepted by the officer on the 25th October, 1956, at the Raigarb railway station at 16.30 hours. Then the other fact on which the reasonable belief can be founded is the suspicious circumstances of the appellants journey. The appellant was found travelling without a Railway ticket and his explanation as to how he came to be. in the said passenger train is obviously untrue", "A person carrying a, large quantity of gold and found travelling without a ticket may well have raised a reasonable belief in the mind of the officer that the gold was smuggled. The object of travelling without a ticket must have been to conceal the fact that the appellant had travelled all the way from Calcutta at which place the gold must have been smuggled", "The story subsequently mentioned by the appellant about his journey to Tatanagar which has been disbelieved brings into bold belief the purpose which the appellant had in mind in travelling without a ticket.", "After-all-, when we are dealing with a question as to whether the belief in the mind of the Officer who effected the seizure was reasonable or not, we are not sitting in appeal over the decision of the said officer. All that we can consider is whether there is ground which prima facie justifies the said reasonable belief. That being so, we do not think there is any substance in the argument that the seizure was effected without a reasonable belief and so is outside section 178A"], "rank2": ["Aggrieved by the said order, the appellant filed a writ petition in the High Court of Bombay at Nagpur under Arts. 226 and 227 of the Constitution on September 15, 1958. By this petition, the appellant claimed a writ of Certiorari or other appropriate writ or order quashing the impugned order. It was urged by him in support of his petit-ion, inter alia, that s. 178A of the Sea Customs Act was unconstitutional in that it infringed the appellants fundamental right under Art. 19 (1) (1) and (g) of the Constitution. It was also. urged that on the merits, the said impugned order was not justified by the relevant statutory provisions of the Sea Customs Act read with the Foreign Exchange, Regulation Act", "The High Court rejected the appellants challenge to the validity of s. 178A and held that the order directing the confiscation of five bars of gold was valid", "The appellant then applied for and obtained a certificate from the said High Court and it is with the said certificate that he has come to this Court for challenging the correctness of the order passed by the High Court by which the confiscation of gold in question has been held to be valid.", "The main point on which the certificate was granted by the High Court to the appellant was in regard to the constitutional validity of a. 178A. That question has, in the meanwhile, been decided by this Court on September 25, 1961, in Civil Appeals Nos. 408 to 410 of 1960 and other companion appeals. The judgment of the constitutional Bench dealingwith those appeals has upheld the validity of s.178A and so, the principal point which the appellant wanted to raise before this Court is now concluded against him.", "At the enquiry the appellant appeared by counsel and examined four witnesses in support of his plea that he was in possession of gold Which belonged to him and which was not smuggled gold at all. Documentary evidence in the form of account books was also produced by the appellant in sup. port of his plea. The Collector of Central Excise disbelieved the evidence adduced by the appellant and came to the conclusion that the presumption arising under s.178 of the Sea Customs Act had not .been rebutted by the appellant and so, he proceeded to pass the impugned order confiscating gold and imposing on the appellant a personal penalty of Rs.25,000/-", "It appears that in dealing with the question as to whether the personal penalty imposed upon the appellant is valid or not, the High Court has relied on two considerations. It has held that the jurisdiction of the officer to impose a personal penalty was confined to the imposition of a penalty only up to Rs.1000/-and no more", "This notification imposed restrictions on import of gold and silver and it has been issued under s.8(1) of the Foreign Exchange Regulation Act, 1947. The effect of this notification, inter alia, is that except with the general or special permission of the Reserve Bank, no person shall bring or send into India from any place outside India any gold, coin gold bullion. gold sheets or gold ingot, whether refined or not. Thus, bringing into India gold from outside is prohibited by this notification unless the said gold is brought with the general or special permission of the Reserve Bank. Section 23 of the said Act provides for penalty and procedure in respect of contravention of its provisions and of rules, orders or directions issued thereunder.", "Section 23-A provides that without prejudice to the provisions of s. 23 or to any other provision contained in the said Act, the restrictions imposed by sub-s.(1) and (2) of s. 8 shall be deemed to have been imposed under s. 19 of the Sea Customs Act, and all the provisions or that Act shall have effect accordingly, except that s. 183 thereof shall have effect as if for the word shall therein the word ,may was substituted", "The argument is that the question as to whether there was a reasonable belief or not is justiceable, and since there is no material on the record to show that the belief could have been reasonable, the statutory presumption cannot be raised. In our opinion, this argument is not well-founded"], "rank3": ["On the 26th July, 1958, the Collector of Central Excise, Nagpur, passed an order directing absolute confiscation of five bars of gold weighing 290.6 Tolas found in the possession of the appellant Pukhraj and imposing upon him a personal penalty of Rs. 25,000/- under s. 167 (8) of the Sea Customs Act, 1878 read with a. 19 of the said Act and s. 23-A of the Foreign Exchange Regulation Act, 1947", "The appellant is a goldsmith by profession and owns a gold and silver shop at Rajnandgaon in Madhya Pradesh. On October 25, 1956, whilst he was travelling by the passenger train from Calcutta on the CalcuttaNagpur route, he was searched at Raigarh railway station and found to be in possession of five pieces of gold bullion weighing 290.6 tolas valued at Rs. 29,835/- approximately. The said gold was then seized by the Officer concerned acting on a reasonable belief that it was smuggled gold, and notice was issued against the appellant on May 20, 1957, calling upon him to show cause why action should not be taken against him for having contravened the notification issued by the Government of India No. 12 (11)-F.1/48 dated August 26, 1948 under the foreign Exchange Regulation Act, 1947 read with s.23A of the said Act and s.19 of the Sea Customs Act and punishable under item (8) of s.167 of the Sea Customs Act. The appellant sent a reply and thereupon, the Collector of Central Excise held an enquiry"], "label": "REJECTED"}, "expert_4": {"rank1": ["That question has, in the meanwhile, been decided by this Court on September 25, 1961, in Civil Appeals Nos. 408 to 410 of 1960 and other companion appeals. The judgment of the constitutional Bench dealingwith those appeals has upheld the validity of s.178A and so, the principal point which the appellant wanted to raise before this Court is now concluded against him.", "Therefore, once s.167(8) is hold to be applicable, the validity of the order directing the confiscation of the smuggled goods is beyond any challenge.", "Therefore there is no substance in the argument that the enquiry held by the Collector of Central Excise was conducted unfairly and the procedure adopted at the said enquiry was inconsistent with the requirements of natural justice."], "rank2": ["The main point on which the certificate was granted by the High Court to the appellant was in regard to the constitutional validity of a. 178A.", "So, it is clear that the High Court was in error in taking the view that under section 167(8), it was not within the jurisdiction of the Collector of Central Excise to impose a penalty exceeding Rs. 1000/-.", "As soon as we reach this conclusion, it follows that under s. 167(8) of the Sea Customs Act, the said goods are liable to confiscation. That is the view taken by the High Court when it rejected the appellants prayer for a writ quashing the order of confiscation passed by the Collector of Central Excise in respect of the gold in question, and we see no reason to interfere with it.", "Since it became unnecessary to consider that plea because of the change of attitude adopted by the appellant, it was hardly necessary to allow the appellant to cross-examine the said two witnesses.", "After-all-, when we are dealing with a question as to whether the belief in the mind of the Officer who effected the seizure was reasonable or not, we are not sitting in appeal over the decision of the said officer.", "All that we can consider is whether there is ground which prima facie justifies the said reasonable belief. That being so, we do not think there is any substance in the argument that the seizure was effected without a reasonable belief and so is outside section 178A."], "rank3": ["The High Court rejected the appellants challenge to the validity of s. 178A and held that the order directing the confiscation of five bars of gold was valid.", "The High Court, however, took the view that the direction issued by the Collector of Central Excise imposing a personal penalty of Rs. 25,000/- On the appellant was invalid and so, the said direction was sot aside and a writ issued in that behalf.", "This question has been recently considered by this Court in M s. Ranchhoddas Atmaram v. The Union of India(2) and it has been held that the language in item (8) of s.167 is clear and it permits the imposition of a penalty in excess of Rs.1000/- and that must be given effect to whatever may have been the intention in other provisions.", "In our opinion, this argument is clearly misconceived. Section 167(8) clearly provides, inter alia, that if (1) 1957 S.C.R.1 151 at p.1158, (2) 1961 3 S.C.R. 718. any goods, the importation of which is for the time being prohibited or restricted by or under Chapter IV of the Act, be imported into India contrary to such prohibition or restriction, such goods shall be liable to confiscation.", "If s.167(8) applies, then there can be no doubt that as soon as it is shown that certain goods have been imported contrary to the statutory prohibition or restriction, they are liable to confiscation and the confiscation of the said goods is not based on the fact that they are necessarily found with a person who was concerned with their importation.", "Section 23 of the said Act provides for penalty and procedure in respect of contravention of its provisions and of rules, orders or directions issued thereunder. Section 23-A provides that without prejudice to the provisions of s. 23 or to any other provision contained in the said Act, the restrictions imposed by sub-s.(1) and (2) of s. 8 shall be deemed to have been imposed under s. 19 of the Sea Customs Act, and all the provisions or that Act shall have effect accordingly, except that s. 183 thereof shall have effect as if for the word shall therein the word ,may was substituted.", "It would, thus be noticed that the combined effect of the aforesaid provisions of the two Acts and the relevant notification is that the notification of 1948 has the force of a notification issued under s. 19 of the Sea Customs Act, and in consequence, gold imported in contravention of the said notification is liable to be seized under . 1.78 of the said Act and renders the person in possession of the said gold liable for proceedings under s.167(8) of the said Act and since the matter falls to be considered under the, relevant provisions of the Sea Customs Act, s. 178A is also applicable.", "This position is not disputed.", "Now s. 178A places the burden of proving that the goods are not smuggled goods on the person from whose possession the said goods are seized where it appears that the said goods are seized under the provisions of the Sea Customs Act in the reasonable belief that they are smuggled goods. Once it is shown that the goods were seized in the manner contemplated by the first part of s. 178A, it would be for the appellant to prove that the goods were not smuggled goods and since it has been held by the Collector of Central Excise that the appellant had not discharged the onus imposed on him by s. 178A, the statutory presumption remained unrebutted and so, the goods must be dealt with on the basis that they are smuggled goods.", "The next argument urged by Mr. Bobde is that certain witnesses whose evidence was recorded by the Collector of Central Excise in the enquiry before him, were not produced for cross-examination by the appellant. In our opinion, there is no substance in this argument.", "This complaint relates to the evidence of Anwar, Marotrao and his brother Rambhau. These three persons, it is alleged made their statements in the absence of the appellant. It was, however, stated before the High Court by Mr. Abhyankar for the department that Anwar was, in fact, examined in the presence of the appellants counsel and the appellants counsel did not cross-examine him. This statement was accepted by Mr. Sorabji who appeared for the appellant and so, no valid complaint can be made that Anwar gave evidence in the absence of the appellant and the appellant bad no opportunity to cross-examine him. Then, as regards Marotrao and Rambhau, their statements were intended to show that the appellants case that he had got the gold melted through them was not true.", "At the enquiry, the appellant gave up this stand and did not adhere to his earlier version that the gold in question had been melted with the assistance of the said two witnesses.", "It would be recalled that S. 178A of the Sea Customs Act requires that before the burden can be imposed on the appellant to show that the goods in question were not smuggled, it has to be shown that the goods had been seized under the said Act and in the reasonable belief that they are smuggled goods.", "The argument is that the question as to whether there was a reasonable belief or not is justiceable, and since there is no material on the record to show that the belief could have been reasonable, the statutory presumption cannot be raised. In our opinion, this argument is not well-founded.", "There are two broad features of this seizure which cannot be igno- red. The first feature on which the officer relied is supplied by the quantity of gold in question.", "It was found that the appellant was carrying on his person five pieces of gold bullion weighing as much as 290.6 tolas. \nThis large quantity of gold valued at nearly Rs. 30,000/- itself justified a reasonable belief in the mind of the officer that the gold may be smuggled.", "In that connection, it may not be irrelevant to remember that the said officer had received positive information in the month of September, 1956, regarding the smuggling of gold by the appellant. That is why he was intercepted by the officer on the 25th October, 1956, at the Raigarb railway station at 16.30 hours.", "Then the other fact on which the reasonable belief can be founded is the suspicious circumstances of the appellants journey. The appellant was found travelling without a Railway ticket and his explanation as to how he came to be. in the said passenger train is obviously untrue.", "A person carrying a, large quantity of gold and found travelling without a ticket may well have raised a reasonable belief in the mind of the officer that the gold was smuggled.", "The story subsequently mentioned by the appellant about his journey to Tatanagar which has been disbelieved brings into bold belief the purpose which the appellant had in mind in travelling without a ticket."], "rank4": ["For the appellant, Mr. Bobde has, however, urged three other contentions before us in support of his case that the confiscation of gold is not justified.", "It is in the light of these facts that the three contentions raised by Mr. Bobde fall to be, considered in the present appeal. The first argument raised in support of the appeal is that the confiscation of gold is not justified under s.167(8) because it has been found by the High Court that the appellant is not a person concerned in the offence of importation of the said gold.", "Basing himself on the finding of the High Court that the appellant was not concerned in the importation of ,smuggled gold, Mr. Bobde argues that even the goods cannot be confiscated under s.167(8).", "The next question to consider is whether s.167(8) applies to the facts of this case, and that takes us to the relevant notification issued by the Government of India in 1948.", "This notification imposed restrictions on import of gold and silver and it has been issued under s.8(1) of the Foreign Exchange Regulation Act, 1947.", "The effect of this notification, inter alia, is that except with the general or special permission of the Reserve Bank, no person shall bring or send into India from any place outside India any gold, coin gold bullion. gold sheets or gold ingot, whether refined or not.", "Thus, bringing into India gold from outside is prohibited by this notification unless the said gold is brought with the general or special permission of the Reserve Bank.", "The last contention raised by Mr. Bobde was that there is nothing on record to show that the seizure of gold from the appellant had been affected by the officer concerned acting on a reasonable belief that the said gold was smuggled."], "rank5": ["On the 26th July, 1958, the Collector of Central Excise, Nagpur, passed an order directing absolute confiscation of five bars of gold weighing 290.6 Tolas found in the possession of the appellant Pukhraj and imposing upon him a personal penalty of Rs. 25,000/- under s. 167 (8) of the Sea Customs Act, 1878 read with a. 19 of the said Act and s. 23-A of the Foreign Exchange Regulation Act, 1947.", "Aggrieved by the said order, the appellant filed a writ petition in the High Court of Bombay at Nagpur under Arts. 226 and 227 of the Constitution on September 15, 1958.", "By this petition, the appellant claimed a writ of Certiorari or other appropriate writ or order quashing the impugned order. It was urged by him in support of his petit-ion, inter alia, that s. 178A of the Sea Customs Act was unconstitutional in that it infringed the appellants fundamental right under Art. 19 (1) (1) and (g) of the Constitution. It was also. urged that on the merits, the said impugned order was not justified by the relevant statutory provisions of the Sea Customs Act read with the Foreign Exchange, Regulation Act.", "The appellant is a goldsmith by profession and owns a gold and silver shop at Rajnandgaon in Madhya Pradesh. On October 25, 1956, whilst he was travelling by the passenger train from Calcutta on the CalcuttaNagpur route, he was searched at Raigarh railway station and found to be in possession of five pieces of gold bullion weighing 290.6 tolas valued at Rs. 29,835/- approximately.", "The said gold was then seized by the Officer concerned acting on a reasonable belief that it was smuggled gold, and notice was issued against the appellant on May 20, 1957, calling upon him to show cause why action should not be taken against him for having contravened the notification issued by the Government of India No. 12 (11)-F.1/48 dated August 26, 1948 under the foreign Exchange Regulation Act, 1947 read with s.23A of the said Act and s.19 of the Sea Customs Act and punishable under item (8) of s.167 of the Sea Customs Act.", "The Collector of Central Excise disbelieved the evidence adduced by the appellant and came to the conclusion that the presumption arising under s.178 of the Sea Customs Act had not .been rebutted by the appellant and so, he proceeded to pass the impugned order confiscating gold and imposing on the appellant a personal penalty of Rs.25,000/-."], "label": "REJECTED"}, "expert_5": {"rank1": ["That is the view taken by the High Court when it rejected the appellants prayer for a writ quashing the order of confiscation passed by the Collector of Central Excise in respect of the gold in question, and we see no reason to interfere with it.", "when we are dealing with a question as to whether the belief in the mind of the Officer who effected the seizure was reasonable or not, we are not sitting in appeal over the decision of the said officer. All that we can consider is whether there is ground which prima facie justifies the said reasonable belief."], "rank2": ["Now s. 178A places the burden of proving that the goods are not smuggled goods on the person from whose possession the said goods are seized where it appears that the said goods are seized under the provisions of the Sea Customs Act in the reasonable belief that they are smuggled goods.", "it would be for the appellant to prove that the goods were not smuggled goods and since it has been held by the Collector of Central Excise that the appellant had not discharged the onus imposed on him by s. 178A, the statutory presumption remained unrebutted and so, the goods must be dealt with on the basis that they are smuggled goods.", "The first feature on which the officer relied is supplied by the quantity of gold in question.", "This large quantity of gold valued at nearly Rs. 30,000/- itself justified a reasonable belief in the mind of the officer that the gold may be smuggled.", "The appellant was found travelling without a Railway ticket and his explanation as to how he came to be. in the said passenger train is obviously untrue. A person carrying a, large quantity of gold and found travelling without a ticket may well have raised a reasonable belief in the mind of the officer that the gold was smuggled. The object of travelling without a ticket must have been to conceal the fact that the appellant had travelled all the way from Calcutta at which place the gold must have been smuggled."], "rank3": ["five bars of gold weighing 290.6 Tolas", "five pieces of gold bullion weighing 290.6 tolas valued at Rs. 29,835/- approximately.", "except with the general or special permission of the Reserve Bank, no person shall bring or send into India from any place outside India any gold, coin gold bullion. gold sheets or gold ingot, whether refined or not.", "the notification of 1948 has the force of a notification issued under s. 19 of the Sea Customs Act, and in consequence, gold imported in contravention of the said notification is liable to be seized under . 1.78 of the said Act and renders the person in possession of the said gold liable for proceedings under s.167(8) of the said Act and since the matter falls to be considered under the, relevant provisions of the Sea Customs Act, s. 178A is also applicable.", "Their version on the point was no longer inconsistent with the subsequent case set up by the appellant.", "it may not be irrelevant to remember that the said officer had received positive information in the month of September, 1956, regarding the smuggling of gold by the appellant."], "rank4": ["Section 167(8) clearly provides, inter alia, that if (1) 1957 S.C.R.1 151 at p.1158, (2) 1961 3 S.C.R. 718. any goods, the importation of which is for the time being prohibited or restricted by or under Chapter IV of the Act, be imported into India contrary to such prohibition or restriction, such goods shall be liable to confiscation.", "If s.167(8) applies, then there can be no doubt that as soon as it is shown that certain goods have been imported contrary to the statutory prohibition or restriction, they are liable to confiscation and the confiscation of the said goods is not based on the fact that they are necessarily found with a person who was concerned with their importation. Therefore, once s.167(8) is hold to be applicable, the validity of the order directing the confiscation of the smuggled goods is beyond any challenge.", "This position is not disputed.", "It was, however, stated before the High Court by Mr. Abhyankar for the department that Anwar was, in fact, examined in the presence of the appellants counsel and the appellants counsel did not cross-examine him. This statement was accepted by Mr. Sorabji who appeared for the appellant and so, no valid complaint can be made that Anwar gave evidence in the absence of the appellant and the appellant bad no opportunity to cross-examine him. Then, as regards Marotrao and Rambhau, their statements were intended to show that the appellants case that he had got the gold melted through them was not true. At the enquiry, the appellant gave up this stand and did not adhere to his earlier version that the gold in question had been melted with the assistance of the said two witnesses. Since it became unnecessary to consider that plea because of the change of attitude adopted by the appellant, it was hardly necessary to allow the appellant to cross-examine the said two witnesses."], "rank5": ["We are not called upon to consider in the present appeal the correctness or propriety of this conclusion because there is no appeal by the respondent Collector of Central Excise challenging this part of the High Courts order.", "Section 23-A provides that without prejudice to the provisions of s. 23 or to any other provision contained in the said Act, the restrictions imposed by sub-s.(1) and (2) of s. 8 shall be deemed to have been imposed under s. 19 of the Sea Customs Act, and all the provisions or that Act shall have effect accordingly, except that s. 183 thereof shall have effect as if for the word shall therein the word ,may was substituted."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1962_128", "text": "Appeal by special leave from the judgment and order dated February 3, 1961, of the Madhya Pradesh High Court in M. P. No. 139 of 1960. C. Chatterjee and D. N. Mukherjee, for appellants. Sen and 1. N. Shroff, for respondent No. 1. P. Maheshwari, for respondent No. 2. 1962. April 16. The Judgment of the Court was delivered by AYYANGAR, J.-By a communication dated April 5, 1930, from the Secretary to the Government of the Central Provinces addressed to the Commissioner Jabalpur Division, certain Nazul land was made available to the Municipal Committee of Jabalpur. In this letter the Secretary Stated I am directed by the Governor in Council with the previous sanction of the Government of India to communicate the following orders of the Government of the Central Provinces - Under Section 38(1)(f) of the Central Provinces Municipalities Act, 1922, Government is pleased to transfer to the Municipal Committee, Jubbiilpore, free of premium and ground rent nazul land measuring of the Jabbulpore town. The land shall vest in the Municipal Committee subject to the following conditions \nThe land shall be used only for the purpose of a garden and no part of it shall be used for any other purpose without the previous sanction of the Local Government. If condition 1 is broken the land shall be liable to be divested under section 38(2) and resumed by Government .and no compensation whatsoever shall be payable to the Municipal Committee upon such resumption. If the land. is resumed by Government for any Government purpose the provisions of Section 38(3) will apply. Sub-sections (2) (3) of s. 38 referred to ran 38. (2) The State Government may, by notification, direct that any property which has vested in the committee shall cease to be so vested, and thereupon the property speci- fied in the notification shall cease to be so vested and the State Government may pass such orders as it thinks fit regarding the disposal and management of such property. Where any immovable property is transferred, otherwise than by sales, by the State Government to a committee, for public purpose, it shall be deemed to be a condition of such transfer, unless specially provided to the contrary, that, should the property be at any time resumed by the Government, the compensation payable therefor shall notwith- standing any thing to the contrary in the Land Acquisition Act, 1894 (1 of 1894), in no case exceed the amount, if any, paid to the Govern- ment for the transfer, together with the cost or the present value, whichever shall be less, of any buildings created or other works executed on the land by the committee. The land thus obtained was being used by the Municipal Committee in accordance with the condition of the transfer as a public garden. The Central Provinces Berar Municipalities Act, 1922 was repealed by the City of Jabalpur Corporation Act, 1948 (M.III of 1950). Under this later enactment the Municipal Committee was substituted by the Jabalpur Corporation, the appellant before us and all properties-movable and immovable-which were previously vested in the Municipal Committee were transferred to and vested in the Corporation (vide s. 71 of the Jabalpur Corporation Act), and by reason of the vesting, the appellant was in enjoyment of the transferred property. A hostel or boarding house of a public institution-the Hitkarni Mahavidyalaya had been located in a building constructed to the north of the Public Garden maintained by the Corporation. A public road ran to the south of the Public Garden and as there was not a proper and convenient access from the Boarding-house to the public road, the authorities of the Mahavidyalaya approached the State Government to obtain for them a narrow strip of land about 20 ft. wide at the eastern extremity of the Public Garden for the purpose of laying a public road which would provide this access. The Government considered this request reasonable and forwarded this request of the Mahavidyalaya, with a covering letter of their own dated April 28, 1959, to the Corporation for being complied with.- The request however was not acceded to and thereafter on February 11, 1960, the Government of Madhya Pradesh issued a notification under s. 81 of the Jabalpur Corporation Act notifying that the strip of land needed for making a road measuring 3, 940 sq. ft. stood divested from the Corporation., .Section 81 runs in these terms \n The Provincial Government may resume any immovable property, transferred to the Corporation by itself or by any local authority, where such property is required for a public purpose, without payment of any compensation other than the amount paid by the Corporation for such transfer and the market value at the date of resumption of any buildings or works subsequently reacted or executed thereon by the Corporation with the intention that such buildings or works should be permanent Provided that compensation need not be paid for buildings or works constructed or erected in contravention of the terms of the transfer. (The expression Provincial Government was amended so as to read State Government by the Adaptation of Laws Order). Complaining that this notification was illegal and beyond the jurisdiction of the State Government the Jabalpur Corporation moved the High Court of Madhya Pradesh for relief under Art-. 826 of the Constitution praying for the issue of the writ of mandamus quashing the notification of the government as without jurisdiction and forbidding the enforcement of that order. This was opposed both by the State of Madhya Pradesh as well as the Hitkarini Sabha and the learned Judges dismissed this petition. An application for a certificate of fitness for appeal to this Court filed by the Corporation was also dismissed and therefore the present appeal has been filed by special leave obtained under Art. 136 of the Constitution. The submission of Mr. Chatterji-learned Counsel for the appellant-was naturally directed to showing that the reasoning adopted by the learned judges of the High Court was erroneous. The reasoning was briefly as follows The learned Judges assumed, accepting a submission made on behalf of the appellant-Corporation during the arguments on the writ petition, that the authority which effected the transfer of the property to the Municipal Committee of Jabalpur by the order which we have set out as the opening of this judgment was not the Government of Central Provinces Berar but the Central Government. Starting from this premise, they concluded that the notification could not be sustained under the terms of s. 81. Section 81, it will be seen, empowers the State Government to resume immovable property transferred to the Corporation by itself when such property is required for a public purpose. If the property in question had been transferred by the Central Government, the argument ran that s. 81 was inapplicable. It should be added that both in the basic assumption that it was the Central and not the Local Government the predecessor of the State Government that had effected the transfer, as well as in the further consequence that the exercise of the power under s. 81 of the Corporation Act was ineffective, the learned Judges were aided by concessions accepting the correctness of this position which appear to have been made by the Deputy Advocate General who represented the State before them., We shall have occasion to refer to this aspect later. Meanwhile to proceed with the reasoning of the learned Judges, s. 81 being assumed not to be available to sustain the impugned notification, the learned Counsel for the State appears to have relied on the provisions of s. 38 of the Act of 1922 as enabling the State Government to resume the land, and this notwithstanding that by the Jabalpur Corporation Act III of 1950 the entirety of the C. \n Berar Municipalities Act of 1922 including s. 38 bad been expressly repealed. The learned Judges considered that this was possible by reason of a saving contained in s. 3 (1) of the Jabalpur Corporation Act which reads- 3. (1) All debts and obligations incurred, all contracts entered into with and all matters and things engaged to be done by or for, the Municipality of Jubbulpore, before this Act comes into force shall be deemed to have been incurred, entered into with or engaged to be done by, or for, the Corporation as constituted under this Act. Mr. Chatterji-learned Counsel for the appellant Corporation submitted to us that the learned Judges of the High Court bad wrongly applied the saving in s. 3 (1) of Act III of 1940 to sustain the resumption of land under the impugned notification. He consider, however, that in view of our conclusion that the impugned notification fell clearly within the power vested in State Government under s. 81 of the Jabalpur Corporation Act, it is not necessary to pronounce upon the correctness of the submissions made to us on the construction of s. I (1) of that Act, There could not be any dispute that if the authority that had transferred the property covered by the impugned notification, to the Municipal Committee of Jabalpur was the Government of Central Provinces Berar, the right of the suceessor-Government viz. the State Government of Madhya Pradesh to take over the land from the Corporation for the purpose of forming a public road would manifestly be within their power under a. 81. That the Corporation of Jabalpur was the successor-in-title to the Municipal Committee of Jabalpur and. that the property which- was vested in the Municipal Committee of Jabalpur was transferred to and became vested in the appellant Corporation under s. 71 of the Jabalpur Corporation Act, were never in dispute and indeed formed the very basis of the appellants petition to the High Court. If any particular property had vested in the Municipal Committee subject to its being divested in particular contingencies, that the property in the hands of the Corporation would be held subject to the same obligations or disabilities could also not be in controversy. Nor could it be contested that the making of a public road is a public purpose for which land may be resumed by the State under s. \n What we desire to point out is that if the State of Madhya Pradesh was or must be deemed to have been the transferee of the property under the communication dated April 5, 1930, the validity of the notification under s. 81 could not be challenged. As we have pointed out earlier, the learned Judges proceeded, however on the assumption that it was not the Government of C. P. Berar but the Central Government that was the transferrer of the land in question. There was, however, no basis upon which the learned Judges could have rested this assumption. In the first place, in the writ petition by which the appellant-Corporation challenged the validity of the notification it did not deny the fact that it was the Government of C. P. Berar that had effected the transfer, and, in fact, the allegations in the petition proceeded on the basis that it was the State Government that had done so but the contention raised was that on a proper construction of is. 81 it applied only to transfers made after the Jubbulpore Corporation Act, 1948 came into force- an untenable contention which has not been persisted in. The question as to who a transferor is obviously a question of fact or at best a mixed question of law and fact and when a party in a writ petition does not allege any such fact, it stands to reason that he ought not to be permitted to travel beyond the facts stated, at the stage of the arguments, To confine a party to his pleadings, particularly to his allegations as regards facts is dictated not merely by the need for orderliness in these proceedings but for avoiding surprise to the other party and consequent injustice resulting therefrom. Save in exceptional cases, parties should be held strictly to their pleadings and if owing to discovery of new matter or grounds, there is need to add to or to modify the allegations either in the petition or in the counter- affidavit, the Court should insist on formal amendments being effected, for this would enable each party to state its case with precision and definiteness and the other side would have a proper opportunity to know this case and meet it with appropriate defences. This salutary rule was not adhered to in this case, and the departure from the pleadings which the appellant was permitted to adopt during the course of its arguments before the High Court has led to injustice because thereby the Counsel for the State who was apparently not prepared, to meet an argument not raised in the petition, made submissions at the spur of the moment which were not justified by the true state of affairs. In our opinion, on the allegations made in the petition by the appellant Corporation it ought not to have been permitted to put forward a case that the State Government was not the transferor of the property and the learned Judges of the High Court should have proceeded on the basis of the pleadings in the case. Apart from this question of pleading, we consider that there is no merit in the contention even otherwise. \nWe have already set out the terms by which the transfer of the land was communicated to the Municipal Committee. The preamble recites that is what being communicated is the order of the Government of the Central Provinces. The words of conveyance are in the second paragraph and they read Under section 38(1)(f) of the Central Provinces Municipalities Act, 1922 Government is pleased to transfer to the Municipal Committee . The expression Government here obviously, in the context, means the Government of the Central Provinces. Paragraph 2 which specifies what should happen if the condition on which the land has been granted should be broken, states The land shall be liable to be. divested under s. 38 (2) and resumed by Government . Government here again obviously is the Government of the Central Provinces a construction reinforced if one looked at the sub-section referred to. Further, in Condition 3 which speaks of what was to happen if the land was resumed by Government for any Government purpose the reference to Government again is to the State Government. On the terms of the document therefore it was the Government of the Central Provinces that made the grant-the predecessor of the State Government. We find therefore that there is no factual foundation for the submission which was apparently made before the High Court that the transfer in the present case was by the Central Government. No doubt, the communication refers to the fact that previous to making the grant the Government of C. P. Berar had obtained the approval of the Central Government, but that was merely a matter of administrative arrangement between the Central and Local Governments which is totally irrelevant for determining the identity of the Government which made the grant. Besides, the corporation having accepted the grant from the State Government was obviously estopped from contending that the land of which it continued in possession under that grant was not one by the State Government or that the State Government had not the authority to make the grant. If such contention is both not open to the Corporation and not tenable on the merits., it would follow that the impugned notification was fully justified by the, provisions under s. 81 of the Jabalpur Corporation Act. \nDECISION ??", "expert_1": {"rank1": ["In our opinion, on the allegations made in the petition by the appellant Corporation it ought not to have been permitted to put forward a case that the State Government was not the transferor of the property and the learned Judges of the High Court should have proceeded on the basis of the pleadings in the case.", "Apart from this question of pleading, we consider that there is no merit in the contention even otherwise.", "We find therefore that there is no factual foundation for the submission which was apparently made before the High Court that the transfer in the present case was by the Central Government. No doubt, the communication refers to the fact that previous to making the grant the Government of C. P. Berar had obtained the approval of the Central Government, but that was merely a matter of administrative arrangement between the Central and Local Governments which is totally irrelevant for determining the identity of the Government which made the grant. Besides, the corporation having accepted the grant from the State Government was obviously estopped from contending that the land of which it continued in possession under that grant was not one by the State Government or that the State Government had not the authority to make the grant. If such contention is both not open to the Corporation and not tenable on the merits., it would follow that the impugned notification was fully justified by the, provisions under s. 81 of the Jabalpur Corporation Act."], "rank2": ["He consider, however, that in view of our conclusion that the impugned notification fell clearly within the power vested in State Government under s. 81 of the Jabalpur Corporation Act, it is not necessary to pronounce upon the correctness of the submissions made to us on the construction of s. I (1) of that Act, There could not be any dispute that if the authority that had transferred the property covered by the impugned notification, to the Municipal Committee of Jabalpur was the Government of Central Provinces Berar, the right of the suceessor-Government viz. the State Government of Madhya Pradesh to take over the land from the Corporation for the purpose of forming a public road would manifestly be within their power under a. 81. That the Corporation of Jabalpur was the successor-in-title to the Municipal Committee of Jabalpur and. that the property which- was vested in the Municipal Committee of Jabalpur was transferred to and became vested in the appellant Corporation under s. 71 of the Jabalpur Corporation Act, were never in dispute and indeed formed the very basis of the appellants petition to the High Court. If any particular property had vested in the Municipal Committee subject to its being divested in particular contingencies, that the property in the hands of the Corporation would be held subject to the same obligations or disabilities could also not be in controversy. Nor could it be contested that the making of a public road is a public purpose for which land may be resumed by the State under s. \n What we desire to point out is that if the State of Madhya Pradesh was or must be deemed to have been the transferee of the property under the communication dated April 5, 1930, the validity of the notification under s. 81 could not be challenged.", "As we have pointed out earlier, the learned Judges proceeded, however on the assumption that it was not the Government of C. P. Berar but the Central Government that was the transferrer of the land in question. There was, however, no basis upon which the learned Judges could have rested this assumption. In the first place, in the writ petition by which the appellant-Corporation challenged the validity of the notification it did not deny the fact that it was the Government of C. P. Berar that had effected the transfer, and, in fact, the allegations in the petition proceeded on the basis that it was the State Government that had done so but the contention raised was that on a proper construction of is. 81 it applied only to transfers made after the Jubbulpore Corporation Act, 1948 came into force- an untenable contention which has not been persisted in. The question as to who a transferor is obviously a question of fact or at best a mixed question of law and fact and when a party in a writ petition does not allege any such fact, it stands to reason that he ought not to be permitted to travel beyond the facts stated, at the stage of the arguments, To confine a party to his pleadings, particularly to his allegations as regards facts is dictated not merely by the need for orderliness in these proceedings but for avoiding surprise to the other party and consequent injustice resulting therefrom. Save in exceptional cases, parties should be held strictly to their pleadings and if owing to discovery of new matter or grounds, there is need to add to or to modify the allegations either in the petition or in the counter- affidavit, the Court should insist on formal amendments being effected, for this would enable each party to state its case with precision and definiteness and the other side would have a proper opportunity to know this case and meet it with appropriate defences. This salutary rule was not adhered to in this case, and the departure from the pleadings which the appellant was permitted to adopt during the course of its arguments before the High Court has led to injustice because thereby the Counsel for the State who was apparently not prepared, to meet an argument not raised in the petition, made submissions at the spur of the moment which were not justified by the true state of affairs.", "We have already set out the terms by which the transfer of the land was communicated to the Municipal Committee. The preamble recites that is what being communicated is the order of the Government of the Central Provinces. The words of conveyance are in the second paragraph and they read Under section 38(1)(f) of the Central Provinces Municipalities Act, 1922 Government is pleased to transfer to the Municipal Committee . The expression Government here obviously, in the context, means the Government of the Central Provinces. Paragraph 2 which specifies what should happen if the condition on which the land has been granted should be broken, states The land shall be liable to be. divested under s. 38 (2) and resumed by Government . Government here again obviously is the Government of the Central Provinces a construction reinforced if one looked at the sub-section referred to. Further, in Condition 3 which speaks of what was to happen if the land was resumed by Government for any Government purpose the reference to Government again is to the State Government. On the terms of the document therefore it was the Government of the Central Provinces that made the grant-the predecessor of the State Government."], "rank3": ["The reasoning was briefly as follows The learned Judges assumed, accepting a submission made on behalf of the appellant-Corporation during the arguments on the writ petition, that the authority which effected the transfer of the property to the Municipal Committee of Jabalpur by the order which we have set out as the opening of this judgment was not the Government of Central Provinces Berar but the Central Government. Starting from this premise, they concluded that the notification could not be sustained under the terms of s. 81. Section 81, it will be seen, empowers the State Government to resume immovable property transferred to the Corporation by itself when such property is required for a public purpose. If the property in question had been transferred by the Central Government, the argument ran that s. 81 was inapplicable. It should be added that both in the basic assumption that it was the Central and not the Local Government the predecessor of the State Government that had effected the transfer, as well as in the further consequence that the exercise of the power under s. 81 of the Corporation Act was ineffective, the learned Judges were aided by concessions accepting the correctness of this position which appear to have been made by the Deputy Advocate General who represented the State before them., We shall have occasion to refer to this aspect later. Meanwhile to proceed with the reasoning of the learned Judges, s. 81 being assumed not to be available to sustain the impugned notification, the learned Counsel for the State appears to have relied on the provisions of s. 38 of the Act of 1922 as enabling the State Government to resume the land, and this notwithstanding that by the Jabalpur Corporation Act III of 1950 the entirety of the C. \n Berar Municipalities Act of 1922 including s. 38 bad been expressly repealed. The learned Judges considered that this was possible by reason of a saving contained in s. 3 (1) of the Jabalpur Corporation Act which reads- 3. (1) All debts and obligations incurred, all contracts entered into with and all matters and things engaged to be done by or for, the Municipality of Jubbulpore, before this Act comes into force shall be deemed to have been incurred, entered into with or engaged to be done by, or for, the Corporation as constituted under this Act. Mr. Chatterji-learned Counsel for the appellant Corporation submitted to us that the learned Judges of the High Court bad wrongly applied the saving in s. 3 (1) of Act III of 1940 to sustain the resumption of land under the impugned notification."], "rank4": ["By a communication dated April 5, 1930, from the Secretary to the Government of the Central Provinces addressed to the Commissioner Jabalpur Division, certain Nazul land was made available to the Municipal Committee of Jabalpur. In this letter the Secretary Stated I am directed by the Governor in Council with the previous sanction of the Government of India to communicate the following orders of the Government of the Central Provinces - Under Section 38(1)(f) of the Central Provinces Municipalities Act, 1922, Government is pleased to transfer to the Municipal Committee, Jubbiilpore, free of premium and ground rent nazul land measuring of the Jabbulpore town. The land shall vest in the Municipal Committee subject to the following conditions \nThe land shall be used only for the purpose of a garden and no part of it shall be used for any other purpose without the previous sanction of the Local Government. If condition 1 is broken the land shall be liable to be divested under section 38(2) and resumed by Government .and no compensation whatsoever shall be payable to the Municipal Committee upon such resumption. If the land. is resumed by Government for any Government purpose the provisions of Section 38(3) will apply. Sub-sections (2) (3) of s. 38 referred to ran 38. (2) The State Government may, by notification, direct that any property which has vested in the committee shall cease to be so vested, and thereupon the property speci- fied in the notification shall cease to be so vested and the State Government may pass such orders as it thinks fit regarding the disposal and management of such property. Where any immovable property is transferred, otherwise than by sales, by the State Government to a committee, for public purpose, it shall be deemed to be a condition of such transfer, unless specially provided to the contrary, that, should the property be at any time resumed by the Government, the compensation payable therefor shall notwith- standing any thing to the contrary in the Land Acquisition Act, 1894 (1 of 1894), in no case exceed the amount, if any, paid to the Govern- ment for the transfer, together with the cost or the present value, whichever shall be less, of any buildings created or other works executed on the land by the committee. The land thus obtained was being used by the Municipal Committee in accordance with the condition of the transfer as a public garden. The Central Provinces Berar Municipalities Act, 1922 was repealed by the City of Jabalpur Corporation Act, 1948 (M.III of 1950). Under this later enactment the Municipal Committee was substituted by the Jabalpur Corporation, the appellant before us and all properties-movable and immovable-which were previously vested in the Municipal Committee were transferred to and vested in the Corporation (vide s. 71 of the Jabalpur Corporation Act), and by reason of the vesting, the appellant was in enjoyment of the transferred property. A hostel or boarding house of a public institution-the Hitkarni Mahavidyalaya had been located in a building constructed to the north of the Public Garden maintained by the Corporation. A public road ran to the south of the Public Garden and as there was not a proper and convenient access from the Boarding-house to the public road, the authorities of the Mahavidyalaya approached the State Government to obtain for them a narrow strip of land about 20 ft. wide at the eastern extremity of the Public Garden for the purpose of laying a public road which would provide this access. The Government considered this request reasonable and forwarded this request of the Mahavidyalaya, with a covering letter of their own dated April 28, 1959, to the Corporation for being complied with.- The request however was not acceded to and thereafter on February 11, 1960, the Government of Madhya Pradesh issued a notification under s. 81 of the Jabalpur Corporation Act notifying that the strip of land needed for making a road measuring 3, 940 sq. ft. stood divested from the Corporation., .Section 81 runs in these terms \n The Provincial Government may resume any immovable property, transferred to the Corporation by itself or by any local authority, where such property is required for a public purpose, without payment of any compensation other than the amount paid by the Corporation for such transfer and the market value at the date of resumption of any buildings or works subsequently reacted or executed thereon by the Corporation with the intention that such buildings or works should be permanent Provided that compensation need not be paid for buildings or works constructed or erected in contravention of the terms of the transfer. (The expression Provincial Government was amended so as to read State Government by the Adaptation of Laws Order). Complaining that this notification was illegal and beyond the jurisdiction of the State Government the Jabalpur Corporation moved the High Court of Madhya Pradesh for relief under Art-. 826 of the Constitution praying for the issue of the writ of mandamus quashing the notification of the government as without jurisdiction and forbidding the enforcement of that order. This was opposed both by the State of Madhya Pradesh as well as the Hitkarini Sabha and the learned Judges dismissed this petition. An application for a certificate of fitness for appeal to this Court filed by the Corporation was also dismissed and therefore the present appeal has been filed by special leave obtained under Art. 136 of the Constitution."], "label": "REJECTED"}, "expert_2": {"rank1": ["The preamble recites that is what being communicated is the order of the Government of the Central Provinces. The words of conveyance are in the second paragraph and they read Under section 38(1)(f) of the Central Provinces Municipalities Act, 1922 Government is pleased to transfer to the Municipal Committee . The expression Government here obviously, in the context, means the Government of the Central Provinces. Paragraph 2 which specifies what should happen if the condition on which the land has been granted should be broken, states The land shall be liable to be. divested under s. 38 (2) and resumed by Government . Government here again obviously is the Government of the Central Provinces a construction reinforced if one looked at the sub-section referred to. Further, in Condition 3 which speaks of what was to happen if the land was resumed by Government for any Government purpose the reference to Government again is to the State Government. On the terms of the document therefore it was the Government of the Central Provinces that made the grant-the predecessor of the State Government. We find therefore that there is no factual foundation for the submission which was apparently made before the High Court that the transfer in the present case was by the Central Government."], "rank2": ["The land shall vest in the Municipal Committee subject to the following conditions \nThe land shall be used only for the purpose of a garden and no part of it shall be used for any other purpose without the previous sanction of the Local Government. If condition 1 is broken the land shall be liable to be divested under section 38(2) and resumed by Government .and no compensation whatsoever shall be payable to the Municipal Committee upon such resumption. If the land. is resumed by Government for any Government purpose the provisions of Section 38(3) will apply.", "Sub-sections (2) (3) of s. 38 referred to ran 38. (2) The State Government may, by notification, direct that any property which has vested in the committee shall cease to be so vested, and thereupon the property speci- fied in the notification shall cease to be so vested and the State Government may pass such orders as it thinks fit regarding the disposal and management of such property."], "rank3": ["The Central Provinces Berar Municipalities Act, 1922 was repealed by the City of Jabalpur Corporation Act, 1948 (M.III of 1950). Under this later enactment the Municipal Committee was substituted by the Jabalpur Corporation, the appellant before us and all properties-movable and immovable-which were previously vested in the Municipal Committee were transferred to and vested in the Corporation (vide s. 71 of the Jabalpur Corporation Act), and by reason of the vesting, the appellant was in enjoyment of the transferred property.", "The request however was not acceded to and thereafter on February 11, 1960, the Government of Madhya Pradesh issued a notification under s. 81 of the Jabalpur Corporation Act notifying that the strip of land needed for making a road measuring 3, 940 sq. ft. stood divested from the Corporation., .Section 81 runs in these terms \n The Provincial Government may resume any immovable property, transferred to the Corporation by itself or by any local authority, where such property is required for a public purpose, without payment of any compensation other than the amount paid by the Corporation for such transfer and the market value at the date of resumption of any buildings or works subsequently reacted or executed thereon by the Corporation with the intention that such buildings or works should be permanent Provided that compensation need not be paid for buildings or works constructed or erected in contravention of the terms of the transfer.", "the authority which effected the transfer of the property to the Municipal Committee of Jabalpur by the order which we have set out as the opening of this judgment was not the Government of Central Provinces Berar but the Central Government. Starting from this premise, they concluded that the notification could not be sustained under the terms of s. 81. Section 81, it will be seen, empowers the State Government to resume immovable property transferred to the Corporation by itself when such property is required for a public purpose. If the property in question had been transferred by the Central Government, the argument ran that s. 81 was inapplicable."], "label": "REJECTED"}, "expert_3": {"rank1": ["Section 81, it will be seen, empowers the State Government to resume immovable property transferred to the Corporation by itself when such property is required for a public purpose. If the property in question had been transferred by the Central Government, the argument ran that s. 81 was inapplicable. It should be added that both in the basic assumption that it was the Central and not the Local Government the predecessor of the State Government that had effected the transfer, as well as in the further consequence that the exercise of the power under s. 81 of the Corporation Act was ineffective, the learned Judges were aided by concessions accepting the correctness of this position which appear to have been made by the Deputy Advocate General who represented the State before them., We shall have occasion to refer to this aspect later", "What we desire to point out is that if the State of Madhya Pradesh was or must be deemed to have been the transferee of the property under the communication dated April 5, 1930, the validity of the notification under s. 81 could not be challenged", "In the first place, in the writ petition by which the appellant-Corporation challenged the validity of the notification it did not deny the fact that it was the Government of C. P. Berar that had effected the transfer, and, in fact, the allegations in the petition proceeded on the basis that it was the State Government that had done so but the contention raised was that on a proper construction of is. 81 it applied only to transfers made after the Jubbulpore Corporation Act, 1948 came into force- an untenable contention which has not been persisted in", "The question as to who a transferor is obviously a question of fact or at best a mixed question of law and fact and when a party in a writ petition does not allege any such fact, it stands to reason that he ought not to be permitted to travel beyond the facts stated, at the stage of the arguments, To confine a party to his pleadings, particularly to his allegations as regards facts is dictated not merely by the need for orderliness in these proceedings but for avoiding surprise to the other party and consequent injustice resulting therefrom", "This salutary rule was not adhered to in this case, and the departure from the pleadings which the appellant was permitted to adopt during the course of its arguments before the High Court has led to injustice because thereby the Counsel for the State who was apparently not prepared, to meet an argument not raised in the petition, made submissions at the spur of the moment which were not justified by the true state of affairs. In our opinion, on the allegations made in the petition by the appellant Corporation it ought not to have been permitted to put forward a case that the State Government was not the transferor of the property and the learned Judges of the High Court should have proceeded on the basis of the pleadings in the case.", "We have already set out the terms by which the transfer of the land was communicated to the Municipal Committee. The preamble recites that is what being communicated is the order of the Government of the Central Provinces", "The words of conveyance are in the second paragraph and they read Under section 38(1)(f) of the Central Provinces Municipalities Act, 1922 Government is pleased to transfer to the Municipal Committee . The expression Government here obviously, in the context, means the Government of the Central Provinces. Paragraph 2 which specifies what should happen if the condition on which the land has been granted should be broken, states The land shall be liable to be. divested under s. 38 (2) and resumed by Government", "Government here again obviously is the Government of the Central Provinces a construction reinforced if one looked at the sub-section referred to. Further, in Condition 3 which speaks of what was to happen if the land was resumed by Government for any Government purpose the reference to Government again is to the State Government", "On the terms of the document therefore it was the Government of the Central Provinces that made the grant-the predecessor of the State Government. We find therefore that there is no factual foundation for the submission which was apparently made before the High Court that the transfer in the present case was by the Central Government", "No doubt, the communication refers to the fact that previous to making the grant the Government of C. P. Berar had obtained the approval of the Central Government, but that was merely a matter of administrative arrangement between the Central and Local Governments which is totally irrelevant for determining the identity of the Government which made the grant.", "Besides, the corporation having accepted the grant from the State Government was obviously estopped from contending that the land of which it continued in possession under that grant was not one by the State Government or that the State Government had not the authority to make the grant. If such contention is both not open to the Corporation and not tenable on the merits., it would follow that the impugned notification was fully justified by the, provisions under s. 81 of the Jabalpur Corporation Act"], "rank2": ["Sub-sections (2) (3) of s. 38 referred to ran 38. (2) The State Government may, by notification, direct that any property which has vested in the committee shall cease to be so vested, and thereupon the property speci- fied in the notification shall cease to be so vested and the State Government may pass such orders as it thinks fit regarding the disposal and management of such property. Where any immovable property is transferred, otherwise than by sales, by the State Government to a committee, for public purpose, it shall be deemed to be a condition of such transfer, unless specially provided to the contrary, that, should the property be at any time resumed by the Government, the compensation payable therefor shall notwith- standing any thing to the contrary in the Land Acquisition Act, 1894 (1 of 1894), in no case exceed the amount, if any, paid to the Govern- ment for the transfer, together with the cost or the present value, whichever shall be less, of any buildings created or other works executed on the land by the committee", "The land thus obtained was being used by the Municipal Committee in accordance with the condition of the transfer as a public garden. The Central Provinces Berar Municipalities Act, 1922 was repealed by the City of Jabalpur Corporation Act, 1948 (M.III of 1950). Under this later enactment the Municipal Committee was substituted by the Jabalpur Corporation, the appellant before us and all properties-movable and immovable-which were previously vested in the Municipal Committee were transferred to and vested in the Corporation (vide s. 71 of the Jabalpur Corporation Act), and by reason of the vesting, the appellant was in enjoyment of the transferred property.", "Complaining that this notification was illegal and beyond the jurisdiction of the State Government the Jabalpur Corporation moved the High Court of Madhya Pradesh for relief under Art-. 826 of the Constitution praying for the issue of the writ of mandamus quashing the notification of the government as without jurisdiction and forbidding the enforcement of that order. This was opposed both by the State of Madhya Pradesh as well as the Hitkarini Sabha and the learned Judges dismissed this petition. An application for a certificate of fitness for appeal to this Court filed by the Corporation was also dismissed and therefore the present appeal has been filed by special leave obtained under Art. 136 of the Constitution", "Meanwhile to proceed with the reasoning of the learned Judges, s. 81 being assumed not to be available to sustain the impugned notification, the learned Counsel for the State appears to have relied on the provisions of s. 38 of the Act of 1922 as enabling the State Government to resume the land, and this notwithstanding that by the Jabalpur Corporation Act III of 1950 the entirety of the C. \n Berar Municipalities Act of 1922 including s. 38 bad been expressly repealed. The learned Judges considered that this was possible by reason of a saving contained in s. 3 (1) of the Jabalpur Corporation Act which reads- 3. (1) All debts and obligations incurred, all contracts entered into with and all matters and things engaged to be done by or for, the Municipality of Jubbulpore, before this Act comes into force shall be deemed to have been incurred, entered into with or engaged to be done by, or for, the Corporation as constituted under this Act"], "rank3": ["By a communication dated April 5, 1930, from the Secretary to the Government of the Central Provinces addressed to the Commissioner Jabalpur Division, certain Nazul land was made available to the Municipal Committee of Jabalpur. In this letter the Secretary Stated I am directed by the Governor in Council with the previous sanction of the Government of India to communicate the following orders of the Government of the Central Provinces - Under Section 38(1)(f) of the Central Provinces Municipalities Act, 1922, Government is pleased to transfer to the Municipal Committee, Jubbiilpore, free of premium and ground rent nazul land measuring of the Jabbulpore town. The land shall vest in the Municipal Committee subject to the following conditions \nThe land shall be used only for the purpose of a garden and no part of it shall be used for any other purpose without the previous sanction of the Local Government. If condition 1 is broken the land shall be liable to be divested under section 38(2) and resumed by Government .and no compensation whatsoever shall be payable to the Municipal Committee upon such resumption. If the land. is resumed by Government for any Government purpose the provisions of Section 38(3) will apply", "A hostel or boarding house of a public institution-the Hitkarni Mahavidyalaya had been located in a building constructed to the north of the Public Garden maintained by the Corporation. A public road ran to the south of the Public Garden and as there was not a proper and convenient access from the Boarding-house to the public road, the authorities of the Mahavidyalaya approached the State Government to obtain for them a narrow strip of land about 20 ft. wide at the eastern extremity of the Public Garden for the purpose of laying a public road which would provide this access", "The Government considered this request reasonable and forwarded this request of the Mahavidyalaya, with a covering letter of their own dated April 28, 1959, to the Corporation for being complied with.- The request however was not acceded to and thereafter on February 11, 1960, the Government of Madhya Pradesh issued a notification under s. 81 of the Jabalpur Corporation Act notifying that the strip of land needed for making a road measuring 3, 940 sq. ft. stood divested from the Corporation", "Save in exceptional cases, parties should be held strictly to their pleadings and if owing to discovery of new matter or grounds, there is need to add to or to modify the allegations either in the petition or in the counter- affidavit, the Court should insist on formal amendments being effected, for this would enable each party to state its case with precision and definiteness and the other side would have a proper opportunity to know this case and meet it with appropriate defences"], "label": "REJECTED"}, "expert_4": {"rank1": ["What we desire to point out is that if the State of Madhya Pradesh was or must be deemed to have been the transferee of the property under the communication dated April 5, 1930, the validity of the notification under s. 81 could not be challenged.", "This salutary rule was not adhered to in this case, and the departure from the pleadings which the appellant was permitted to adopt during the course of its arguments before the High Court has led to injustice because thereby the Counsel for the State who was apparently not prepared, to meet an argument not raised in the petition, made submissions at the spur of the moment which were not justified by the true state of affairs.", "In our opinion, on the allegations made in the petition by the appellant Corporation it ought not to have been permitted to put forward a case that the State Government was not the transferor of the property and the learned Judges of the High Court should have proceeded on the basis of the pleadings in the case.", "Apart from this question of pleading, we consider that there is no merit in the contention even otherwise.", "On the terms of the document therefore it was the Government of the Central Provinces that made the grant-the predecessor of the State Government. We find therefore that there is no factual foundation for the submission which was apparently made before the High Court that the transfer in the present case was by the Central Government.", "No doubt, the communication refers to the fact that previous to making the grant the Government of C. P", "Berar had obtained the approval of the Central Government, but that was merely a matter of administrative arrangement between the Central and Local Governments which is totally irrelevant for determining the identity of the Government which made the grant. Besides, the corporation having accepted the grant from the State Government was obviously estopped from contending that the land of which it continued in possession under that grant was not one by the State Government or that the State Government had not the authority to make the grant.", "If such contention is both not open to the Corporation and not tenable on the merits., it would follow that the impugned notification was fully justified by the, provisions under s. 81 of the Jabalpur Corporation Act."], "rank2": ["He consider, however, that in view of our conclusion that the impugned notification fell clearly within the power vested in State Government under s. 81 of the Jabalpur Corporation Act, it is not necessary to pronounce upon the correctness of the submissions made to us on the construction of s.", "I (1) of that Act, There could not be any dispute that if the authority that had transferred the property covered by the impugned notification, to the Municipal Committee of Jabalpur was the Government of Central Provinces Berar, the right of the suceessor-Government viz. the State Government of Madhya Pradesh to take over the land from the Corporation for the purpose of forming a public road would manifestly be within their power under a. 81.", "That the Corporation of Jabalpur was the successor-in-title to the Municipal Committee of Jabalpur and. that the property which- was vested in the Municipal Committee of Jabalpur was transferred to and became vested in the appellant Corporation under s. 71 of the Jabalpur Corporation Act, were never in dispute and indeed formed the very basis of the appellants petition to the High Court.", "If any particular property had vested in the Municipal Committee subject to its being divested in particular contingencies, that the property in the hands of the Corporation would be held subject to the same obligations or disabilities could also not be in controversy. Nor could it be contested that the making of a public road is a public purpose for which land may be resumed by the State under s.", "The question as to who a transferor is obviously a question of fact or at best a mixed question of law and fact and when a party in a writ petition does not allege any such fact, it stands to reason that he ought not to be permitted to travel beyond the facts stated, at the stage of the arguments, To confine a party to his pleadings, particularly to his allegations as regards facts is dictated not merely by the need for orderliness in these proceedings but for avoiding surprise to the other party and consequent injustice resulting therefrom.", "Save in exceptional cases, parties should be held strictly to their pleadings and if owing to discovery of new matter or grounds, there is need to add to or to modify the allegations either in the petition or in the counter- affidavit, the Court should insist on formal amendments being effected, for this would enable each party to state its case with precision and definiteness and the other side would have a proper opportunity to know this case and meet it with appropriate defences."], "rank3": ["As we have pointed out earlier, the learned Judges proceeded, however on the assumption that it was not the Government of C. P. Berar but the Central Government that was the transferrer of the land in question. There was, however, no basis upon which the learned Judges could have rested this assumption.", "In the first place, in the writ petition by which the appellant-Corporation challenged the validity of the notification it did not deny the fact that it was the Government of C. P. Berar that had effected the transfer, and, in fact, the allegations in the petition proceeded on the basis that it was the State Government that had done so but the contention raised was that on a proper construction of is. 81 it applied only to transfers made after the Jubbulpore Corporation Act, 1948 came into force- an untenable contention which has not been persisted in.", "We have already set out the terms by which the transfer of the land was communicated to the Municipal Committee. The preamble recites that is what being communicated is the order of the Government of the Central Provinces. The words of conveyance are in the second paragraph and they read Under section 38(1)(f) of the Central Provinces Municipalities Act, 1922 Government is pleased to transfer to the Municipal Committee .", "The expression Government here obviously, in the context, means the Government of the Central Provinces. Paragraph 2 which specifies what should happen if the condition on which the land has been granted should be broken, states The land shall be liable to be. divested under s. 38 (2) and resumed by Government . Government here again obviously is the Government of the Central Provinces a construction reinforced if one looked at the sub-section referred to.", "Further, in Condition 3 which speaks of what was to happen if the land was resumed by Government for any Government purpose the reference to Government again is to the State Government."], "rank4": ["If condition 1 is broken the land shall be liable to be divested under section 38(2) and resumed by Government .and no compensation whatsoever shall be payable to the Municipal Committee upon such resumption.", "If the land. is resumed by Government for any Government purpose the provisions of Section 38(3) will apply.", "Where any immovable property is transferred, otherwise than by sales, by the State Government to a committee, for public purpose, it shall be deemed to be a condition of such transfer, unless specially provided to the contrary, that, should the property be at any time resumed by the Government, the compensation payable therefor shall notwith- standing any thing to the contrary in the Land Acquisition Act, 1894 (1 of 1894), in no case exceed the amount, if any, paid to the Govern- ment for the transfer, together with the cost or the present value, whichever shall be less, of any buildings created or other works executed on the land by the committee.", "The land thus obtained was being used by the Municipal Committee in accordance with the condition of the transfer as a public garden.", "Complaining that this notification was illegal and beyond the jurisdiction of the State Government the Jabalpur Corporation moved the High Court of Madhya Pradesh for relief under Art-. 826 of the Constitution praying for the issue of the writ of mandamus quashing the notification of the government as without jurisdiction and forbidding the enforcement of that order.", "This was opposed both by the State of Madhya Pradesh as well as the Hitkarini Sabha and the learned Judges dismissed this petition.", "An application for a certificate of fitness for appeal to this Court filed by the Corporation was also dismissed and therefore the present appeal has been filed by special leave obtained under Art. 136 of the Constitution.", "The learned Judges assumed, accepting a submission made on behalf of the appellant-Corporation during the arguments on the writ petition, that the authority which effected the transfer of the property to the Municipal Committee of Jabalpur by the order which we have set out as the opening of this judgment was not the Government of Central Provinces Berar but the Central Government.", "Starting from this premise, they concluded that the notification could not be sustained under the terms of s. 81.", "Section 81, it will be seen, empowers the State Government to resume immovable property transferred to the Corporation by itself when such property is required for a public purpose. If the property in question had been transferred by the Central Government, the argument ran that s. 81 was inapplicable.", "It should be added that both in the basic assumption that it was the Central and not the Local Government the predecessor of the State Government that had effected the transfer, as well as in the further consequence that the exercise of the power under s. 81 of the Corporation Act was ineffective, the learned Judges were aided by concessions accepting the correctness of this position which appear to have been made by the Deputy Advocate General who represented the State before them., We shall have occasion to refer to this aspect later.", "Meanwhile to proceed with the reasoning of the learned Judges, s. 81 being assumed not to be available to sustain the impugned notification, the learned Counsel for the State appears to have relied on the provisions of s. 38 of the Act of 1922 as enabling the State Government to resume the land, and this notwithstanding that by the Jabalpur Corporation Act III of 1950 the entirety of the C. \n Berar Municipalities Act of 1922 including s. 38 bad been expressly repealed.", "The learned Judges considered that this was possible by reason of a saving contained in s. 3 (1) of the Jabalpur Corporation Act which reads- 3. (1) All debts and obligations incurred, all contracts entered into with and all matters and things engaged to be done by or for, the Municipality of Jubbulpore, before this Act comes into force shall be deemed to have been incurred, entered into with or engaged to be done by, or for, the Corporation as constituted under this Act."], "rank5": ["-By a communication dated April 5, 1930, from the Secretary to the Government of the Central Provinces addressed to the Commissioner Jabalpur Division, certain Nazul land was made available to the Municipal Committee of Jabalpur.", "In this letter the Secretary Stated I am directed by the Governor in Council with the previous sanction of the Government of India to communicate the following orders of the Government of the Central Provinces - Under Section 38(1)(f) of the Central Provinces Municipalities Act, 1922, Government is pleased to transfer to the Municipal Committee, Jubbiilpore, free of premium and ground rent nazul land measuring of the Jabbulpore town.", "The land shall vest in the Municipal Committee subject to the following conditions \nThe land shall be used only for the purpose of a garden and no part of it shall be used for any other purpose without the previous sanction of the Local Government.", "Sub-sections (2) (3) of s. 38 referred to ran 38. (2) The State Government may, by notification, direct that any property which has vested in the committee shall cease to be so vested, and thereupon the property speci- fied in the notification shall cease to be so vested and the State Government may pass such orders as it thinks fit regarding the disposal and management of such property.", "The Central Provinces Berar Municipalities Act, 1922 was repealed by the City of Jabalpur Corporation Act, 1948 (M.III of 1950). Under this later enactment the Municipal Committee was substituted by the Jabalpur Corporation, the appellant before us and all properties-movable and immovable-which were previously vested in the Municipal Committee were transferred to and vested in the Corporation (vide s. 71 of the Jabalpur Corporation Act), and by reason of the vesting, the appellant was in enjoyment of the transferred property.", "A hostel or boarding house of a public institution-the Hitkarni Mahavidyalaya had been located in a building constructed to the north of the Public Garden maintained by the Corporation.", "A public road ran to the south of the Public Garden and as there was not a proper and convenient access from the Boarding-house to the public road, the authorities of the Mahavidyalaya approached the State Government to obtain for them a narrow strip of land about 20 ft. wide at the eastern extremity of the Public Garden for the purpose of laying a public road which would provide this access.", "The Government considered this request reasonable and forwarded this request of the Mahavidyalaya, with a covering letter of their own dated April 28, 1959, to the Corporation for being complied with.- The request however was not acceded to and thereafter on February 11, 1960, the Government of Madhya Pradesh issued a notification under s. 81 of the Jabalpur Corporation Act notifying that the strip of land needed for making a road measuring 3, 940 sq. ft. stood divested from the Corporation., .Section 81 runs in these terms \n The Provincial Government may resume any immovable property, transferred to the Corporation by itself or by any local authority, where such property is required for a public purpose, without payment of any compensation other than the amount paid by the Corporation for such transfer and the market value at the date of resumption of any buildings or works subsequently reacted or executed thereon by the Corporation with the intention that such buildings or works should be permanent Provided that compensation need not be paid for buildings or works constructed or erected in contravention of the terms of the transfer.", "(The expression Provincial Government was amended so as to read State Government by the Adaptation of Laws Order).", "Mr. Chatterji-learned Counsel for the appellant Corporation submitted to us that the learned Judges of the High Court bad wrongly applied the saving in s. 3 (1) of Act III of 1940 to sustain the resumption of land under the impugned notification."], "label": "REJECTED"}, "expert_5": {"rank1": ["Secretary to the Government of the Central Provinces", "In the first place, in the writ petition by which the appellant-Corporation challenged the validity of the notification it did not deny the fact that it was the Government of C. P. Berar that had effected the transfer, and, in fact, the allegations in the petition proceeded on the basis that it was the State Government that had done so but the contention raised was that on a proper construction of is. 81 it applied only to transfers made after the Jubbulpore Corporation Act, 1948 came into force- an untenable contention which has not been persisted in.", "Save in exceptional cases, parties should be held strictly to their pleadings", "The preamble recites that is what being communicated is the order of the Government of the Central Provinces."], "rank2": ["By a communication dated April 5, 1930, from the Secretary to the Government of the Central Provinces addressed to the Commissioner Jabalpur Division, certain Nazul land was made available to the Municipal Committee of Jabalpur.", "To confine a party to his pleadings, particularly to his allegations as regards facts is dictated not merely by the need for orderliness in these proceedings but for avoiding surprise to the other party and consequent injustice resulting therefrom.", "Further, in Condition 3 which speaks of what was to happen if the land was resumed by Government for any Government purpose the reference to Government again is to the State Government. On the terms of the document therefore it was the Government of the Central Provinces that made the grant-the predecessor of the State Government."], "rank3": ["There could not be any dispute that if the authority that had transferred the property covered by the impugned notification, to the Municipal Committee of Jabalpur was the Government of Central Provinces Berar, the right of the suceessor-Government viz. the State Government of Madhya Pradesh to take over the land from the Corporation for the purpose of forming a public road would manifestly be within their power under a. 81.", "if the State of Madhya Pradesh was or must be deemed to have been the transferee of the property under the communication dated April 5, 1930, the validity of the notification under s. 81 could not be challenged.", "for this would enable each party to state its case with precision and definiteness and the other side would have a proper opportunity to know this case and meet it with appropriate defences", "the departure from the pleadings which the appellant was permitted to adopt during the course of its arguments before the High Court has led to injustice because thereby the Counsel for the State who was apparently not prepared, to meet an argument not raised in the petition, made submissions at the spur of the moment which were not justified by the true state of affairs.", "The words of conveyance are in the second paragraph and they read Under section 38(1)(f) of the Central Provinces Municipalities Act, 1922 Government is pleased to transfer to the Municipal Committee . The expression Government here obviously, in the context, means the Government of the Central Provinces. Paragraph 2 which specifies what should happen if the condition on which the land has been granted should be broken, states The land shall be liable to be. divested under s. 38 (2) and resumed by Government . Government here again obviously is the Government of the Central Provinces a construction reinforced if one looked at the sub-section referred to."], "rank4": ["if owing to discovery of new matter or grounds, there is need to add to or to modify the allegations either in the petition or in the counter- affidavit, the Court should insist on formal amendments being effected, for this would enable each party to state its case with precision and definiteness and the other side would have a proper opportunity to know this case and meet it with appropriate defences.", "Besides, the corporation having accepted the grant from the State Government was obviously estopped from contending that the land of which it continued in possession under that grant was not one by the State Government or that the State Government had not the authority to make the grant"], "rank5": ["No doubt, the communication refers to the fact that previous to making the grant the Government of C. P. Berar had obtained the approval of the Central Government, but that was merely a matter of administrative arrangement between the Central and Local Governments which is totally irrelevant for determining the identity of the Government which made the grant."], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "1962_207", "text": "Das Gupta, J. This appeal by special leave is against the order of the High Court at Allahabad under s. 133 of the Code of Criminal Procedure. The three appellants carry on the trade of auctioning vegetables. These vegetables, it appears, are brought in carts which are parked on the public road outside the building where the auctioning takes place. There was some dispute between these appellants and the Municipal Board which it is suggested by the appellants was really behind the move to get this order under s. 133 passed against them. It is unnecessary, however, for us to consider that matter. What appears to be clear is that the trade is carried on in a private house in the subzimandi quarter and it does happen that some amount of inconvenience is caused to people who pass by the public road because of the carts which necessarily come near this house. The real question is, whether because this trade of auctioning vegetables which the appellants carry on in their private house produce the consequence that people passing by the road are put to inconvenience, action can be taken under s. 133 of the Code of Criminal Procedure. \nThe High Court seems to be of the opinion - when it is clear that the business of auctioning vegetables cannot be carried on without causing obstruction to the passers by, the conduct of the business can be prohibited, even though it is carried on in a private place. It seems to us that this proposition has been put too widely. Section 133 of the Code of Criminal Procedure empowers action by the District Magistrate, Sub-Divisional Magistrate of Magistrate 1st class to remove public nuisances in certain circumstances. Two out of the several cls. of s. 133(1) in which these circumstances are set out, with which we are concerned, are the first and second clauses. The first clause provides for action by Magistrate where he considers, on receiving a police-report or other information and on taking such evidence as he thinks fit, that any unlawful obstruction or nuisance should be removed from any way, river or channel which is or may be lawfully used by the public or from any public place. The second clause deals with the position where the conduct of any trade or occupation or the keeping of any goods or merchandise, is injurious to the health or physical comfort of the community and that in consequence such trade or occupation should be prohibited or regulated or such goods or merchandise should be removed or the keeping thereof regulated. It is difficult to see how the first clause can have any application.\nUnlawful obstruction, if any, is certainly not caused by the people who carry on the trade of auctioning. If the obstruction caused by keeping the carts on the road can be considered to be unlawful obstruction within the meaning of this clause - about which we express no opinion action can be taken against the persons causing such obstruction. The obvious difficulty in the way of that might be that the persons who bring the carts are not the same from day do day. But whether or not any action is possible under s. 133 against the persons bringing the carts, we are unable to agree that merely because the appellants carry on auctioning in connection with which the carts are brought, they can be considered to have caused the obstruction. In our opinion, the appellants cannot be considered to be the persons causing obstruction. Turning now to the next clause, the question arises how the conduct of this auctioning trade is injurious to the health or physical comfort of the community. Undoubtedly, some amount of noise the auction is going on. That however is a necessary concomitant of buying and selling large quantities and it will be unreasonable to think that merely because some amount of noise is caused which people preferring perfect peace may not like, this is injurious to the physical comfort, or health of the community. It appears to us that the conduct of trades of this nature and indeed of other trades in localities of a city where such trades are usually carried on, is bound to produce some discomfort, though at the same time resulting perhaps in the good of the community in other respects. If a trade like auctioning which has to be carried on as necessary for the well being of the community, some amount of noise has to be borne in at least that part of the town where such trade is ordinarily carried on. \nIn making the provisions of s. 133 of the Code of Criminal Procedure, the legislature cannot have intended the stoppage of such trades in such part of the town, merely because of the discomfort caused by the noise in carrying on the trade. In our opinion therefore, the slight discomfort that may be caused to some people passing by the road or living in the neighbourhood cannot ordinarily be considered to be such as to justify action under s. 133 of the Code of Criminal Procedure. We do not think that the orders are justified under s. 133.\nDECISION ??", "expert_1": {"rank1": ["What appears to be clear is that the trade is carried on in a private house in the subzimandi quarter and it does happen that some amount of inconvenience is caused to people who pass by the public road because of the carts which necessarily come near this house.", "It seems to us that this proposition has been put too widely.", "It is difficult to see how the first clause can have any application.\nUnlawful obstruction, if any, is certainly not caused by the people who carry on the trade of auctioning. If the obstruction caused by keeping the carts on the road can be considered to be unlawful obstruction within the meaning of this clause - about which we express no opinion action can be taken against the persons causing such obstruction. The obvious difficulty in the way of that might be that the persons who bring the carts are not the same from day do day.", "But whether or not any action is possible under s. 133 against the persons bringing the carts, we are unable to agree that merely because the appellants carry on auctioning in connection with which the carts are brought, they can be considered to have caused the obstruction.", "In our opinion, the appellants cannot be considered to be the persons causing obstruction.", "It appears to us that the conduct of trades of this nature and indeed of other trades in localities of a city where such trades are usually carried on, is bound to produce some discomfort, though at the same time resulting perhaps in the good of the community in other respects. If a trade like auctioning which has to be carried on as necessary for the well being of the community, some amount of noise has to be borne in at least that part of the town where such trade is ordinarily carried on. \nIn making the provisions of s. 133 of the Code of Criminal Procedure, the legislature cannot have intended the stoppage of such trades in such part of the town, merely because of the discomfort caused by the noise in carrying on the trade. In our opinion therefore, the slight discomfort that may be caused to some people passing by the road or living in the neighbourhood cannot ordinarily be considered to be such as to justify action under s. 133 of the Code of Criminal Procedure. We do not think that the orders are justified under s. 133."], "rank2": ["There was some dispute between these appellants and the Municipal Board which it is suggested by the appellants was really behind the move to get this order under s. 133 passed against them. It is unnecessary, however, for us to consider that matter.", "The real question is, whether because this trade of auctioning vegetables which the appellants carry on in their private house produce the consequence that people passing by the road are put to inconvenience, action can be taken under s. 133 of the Code of Criminal Procedure. \nThe High Court seems to be of the opinion - when it is clear that the business of auctioning vegetables cannot be carried on without causing obstruction to the passers by, the conduct of the business can be prohibited, even though it is carried on in a private place.", "Section 133 of the Code of Criminal Procedure empowers action by the District Magistrate, Sub-Divisional Magistrate of Magistrate 1st class to remove public nuisances in certain circumstances. Two out of the several cls. of s. 133(1) in which these circumstances are set out, with which we are concerned, are the first and second clauses. The first clause provides for action by Magistrate where he considers, on receiving a police-report or other information and on taking such evidence as he thinks fit, that any unlawful obstruction or nuisance should be removed from any way, river or channel which is or may be lawfully used by the public or from any public place. The second clause deals with the position where the conduct of any trade or occupation or the keeping of any goods or merchandise, is injurious to the health or physical comfort of the community and that in consequence such trade or occupation should be prohibited or regulated or such goods or merchandise should be removed or the keeping thereof regulated.", "Turning now to the next clause, the question arises how the conduct of this auctioning trade is injurious to the health or physical comfort of the community. Undoubtedly, some amount of noise the auction is going on. That however is a necessary concomitant of buying and selling large quantities and it will be unreasonable to think that merely because some amount of noise is caused which people preferring perfect peace may not like, this is injurious to the physical comfort, or health of the community."], "rank3": ["This appeal by special leave is against the order of the High Court at Allahabad under s. 133 of the Code of Criminal Procedure."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["the appellants cannot be considered to be the persons causing obstruction.", "some amount of noise the auction is going on. That however is a necessary concomitant of buying and selling large quantities and it will be unreasonable to think that merely because some amount of noise is caused which people preferring perfect peace may not like, this is injurious to the physical comfort, or health of the community.", "In making the provisions of s. 133 of the Code of Criminal Procedure, the legislature cannot have intended the stoppage of such trades in such part of the town, merely because of the discomfort caused by the noise in carrying on the trade. In our opinion therefore, the slight discomfort that may be caused to some people passing by the road or living in the neighbourhood cannot ordinarily be considered to be such as to justify action under s. 133 of the Code of Criminal Procedure."], "rank2": ["What appears to be clear is that the trade is carried on in a private house in the subzimandi quarter and it does happen that some amount of inconvenience is caused to people who pass by the public road because of the carts which necessarily come near this house.", "whether because this trade of auctioning vegetables which the appellants carry on in their private house produce the consequence that people passing by the road are put to inconvenience, action can be taken under s. 133 of the Code of Criminal Procedure.", "Two out of the several cls. of s. 133(1) in which these circumstances are set out, with which we are concerned, are the first and second clauses."], "rank3": ["Section 133 of the Code of Criminal Procedure empowers action by the District Magistrate, Sub-Divisional Magistrate of Magistrate 1st class to remove public nuisances in certain circumstances.", "Unlawful obstruction, if any, is certainly not caused by the people who carry on the trade of auctioning. If the obstruction caused by keeping the carts on the road can be considered to be unlawful obstruction within the meaning of this clause - about which we express no opinion action can be taken against the persons causing such obstruction. The obvious difficulty in the way of that might be that the persons who bring the carts are not the same from day do day."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["The real question is, whether because this trade of auctioning vegetables which the appellants carry on in their private house produce the consequence that people passing by the road are put to inconvenience, action can be taken under s. 133 of the Code of Criminal Procedure.", "It seems to us that this proposition has been put too widely. Section 133 of the Code of Criminal Procedure empowers action by the District Magistrate, Sub-Divisional Magistrate of Magistrate 1st class to remove public nuisances in certain circumstances. Two out of the several cls. of s. 133(1) in which these circumstances are set out, with which we are concerned, are the first and second clauses.", "It is difficult to see how the first clause can have any application.\nUnlawful obstruction, if any, is certainly not caused by the people who carry on the trade of auctioning. If the obstruction caused by keeping the carts on the road can be considered to be unlawful obstruction within the meaning of this clause - about which we express no opinion action can be taken against the persons causing such obstruction", "The obvious difficulty in the way of that might be that the persons who bring the carts are not the same from day do day. But whether or not any action is possible under s. 133 against the persons bringing the carts, we are unable to agree that merely because the appellants carry on auctioning in connection with which the carts are brought, they can be considered to have caused the obstruction.", "In our opinion, the appellants cannot be considered to be the persons causing obstruction", "the question arises how the conduct of this auctioning trade is injurious to the health or physical comfort of the community. Undoubtedly, some amount of noise the auction is going on. That however is a necessary concomitant of buying and selling large quantities and it will be unreasonable to think that merely because some amount of noise is caused which people preferring perfect peace may not like, this is injurious to the physical comfort, or health of the community. It appears to us that the conduct of trades of this nature and indeed of other trades in localities of a city where such trades are usually carried on, is bound to produce some discomfort, though at the same time resulting perhaps in the good of the community in other respects.", "If a trade like auctioning which has to be carried on as necessary for the well being of the community, some amount of noise has to be borne in at least that part of the town where such trade is ordinarily carried on", "In making the provisions of s. 133 of the Code of Criminal Procedure, the legislature cannot have intended the stoppage of such trades in such part of the town, merely because of the discomfort caused by the noise in carrying on the trade. In our opinion therefore, the slight discomfort that may be caused to some people passing by the road or living in the neighbourhood cannot ordinarily be considered to be such as to justify action under s. 133 of the Code of Criminal Procedure. We do not think that the orders are justified under s. 133"], "rank2": ["What appears to be clear is that the trade is carried on in a private house in the subzimandi quarter and it does happen that some amount of inconvenience is caused to people who pass by the public road because of the carts which necessarily come near this house", "The High Court seems to be of the opinion - when it is clear that the business of auctioning vegetables cannot be carried on without causing obstruction to the passers by, the conduct of the business can be prohibited, even though it is carried on in a private place.", "The first clause provides for action by Magistrate where he considers, on receiving a police-report or other information and on taking such evidence as he thinks fit, that any unlawful obstruction or nuisance should be removed from any way, river or channel which is or may be lawfully used by the public or from any public place. The second clause deals with the position where the conduct of any trade or occupation or the keeping of any goods or merchandise, is injurious to the health or physical comfort of the community and that in consequence such trade or occupation should be prohibited or regulated or such goods or merchandise should be removed or the keeping thereof regulated"], "rank3": ["The three appellants carry on the trade of auctioning vegetables. These vegetables, it appears, are brought in carts which are parked on the public road outside the building where the auctioning takes place."], "label": "ACCEPTED"}, "expert_4": {"rank1": ["In our opinion, the appellants cannot be considered to be the persons causing obstruction.", "In our opinion therefore, the slight discomfort that may be caused to some people passing by the road or living in the neighbourhood cannot ordinarily be considered to be such as to justify action under s. 133 of the Code of Criminal Procedure.", "We do not think that the orders are justified under s. 133."], "rank2": ["It seems to us that this proposition has been put too widely.", "Section 133 of the Code of Criminal Procedure empowers action by the District Magistrate, Sub-Divisional Magistrate of Magistrate 1st class to remove public nuisances in certain circumstances.", "Two out of the several cls. of s. 133(1) in which these circumstances are set out, with which we are concerned, are the first and second clauses.", "But whether or not any action is possible under s. 133 against the persons bringing the carts, we are unable to agree that merely because the appellants carry on auctioning in connection with which the carts are brought, they can be considered to have caused the obstruction.", "If a trade like auctioning which has to be carried on as necessary for the well being of the community, some amount of noise has to be borne in at least that part of the town where such trade is ordinarily carried on. \nIn making the provisions of s. 133 of the Code of Criminal Procedure, the legislature cannot have intended the stoppage of such trades in such part of the town, merely because of the discomfort caused by the noise in carrying on the trade."], "rank3": ["What appears to be clear is that the trade is carried on in a private house in the subzimandi quarter and it does happen that some amount of inconvenience is caused to people who pass by the public road because of the carts which necessarily come near this house.", "The real question is, whether because this trade of auctioning vegetables which the appellants carry on in their private house produce the consequence that people passing by the road are put to inconvenience, action can be taken under s. 133 of the Code of Criminal Procedure.", "The High Court seems to be of the opinion - when it is clear that the business of auctioning vegetables cannot be carried on without causing obstruction to the passers by, the conduct of the business can be prohibited, even though it is carried on in a private place.", "The first clause provides for action by Magistrate where he considers, on receiving a police-report or other information and on taking such evidence as he thinks fit, that any unlawful obstruction or nuisance should be removed from any way, river or channel which is or may be lawfully used by the public or from any public place.", "The second clause deals with the position where the conduct of any trade or occupation or the keeping of any goods or merchandise, is injurious to the health or physical comfort of the community and that in consequence such trade or occupation should be prohibited or regulated or such goods or merchandise should be removed or the keeping thereof regulated.", "It is difficult to see how the first clause can have any application.\nUnlawful obstruction, if any, is certainly not caused by the people who carry on the trade of auctioning.", "If the obstruction caused by keeping the carts on the road can be considered to be unlawful obstruction within the meaning of this clause - about which we express no opinion action can be taken against the persons causing such obstruction. The obvious difficulty in the way of that might be that the persons who bring the carts are not the same from day do day.", "Turning now to the next clause, the question arises how the conduct of this auctioning trade is injurious to the health or physical comfort of the community. Undoubtedly, some amount of noise the auction is going on.", "That however is a necessary concomitant of buying and selling large quantities and it will be unreasonable to think that merely because some amount of noise is caused which people preferring perfect peace may not like, this is injurious to the physical comfort, or health of the community.", "It appears to us that the conduct of trades of this nature and indeed of other trades in localities of a city where such trades are usually carried on, is bound to produce some discomfort, though at the same time resulting perhaps in the good of the community in other respects."], "rank5": ["There was some dispute between these appellants and the Municipal Board which it is suggested by the appellants was really behind the move to get this order under s. 133 passed against them. It is unnecessary, however, for us to consider that matter."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["Unlawful obstruction, if any, is certainly not caused by the people who carry on the trade of auctioning.", "the appellants cannot be considered to be the persons causing obstruction.", "In our opinion therefore, the slight discomfort that may be caused to some people passing by the road or living in the neighbourhood cannot ordinarily be considered to be such as to justify action under s. 133 of the Code of Criminal Procedure. We do not think that the orders are justified under s. 133."], "rank2": ["If the obstruction caused by keeping the carts on the road can be considered to be unlawful obstruction within the meaning of this clause - about which we express no opinion action can be taken against the persons causing such obstruction.", "That however is a necessary concomitant of buying and selling large quantities and it will be unreasonable to think that merely because some amount of noise is caused which people preferring perfect peace may not like, this is injurious to the physical comfort, or health of the community.", "the legislature cannot have intended the stoppage of such trades in such part of the town, merely because of the discomfort caused by the noise in carrying on the trade."], "rank3": ["unlawful obstruction", "injurious to the health or physical comfort", "It appears to us that the conduct of trades of this nature and indeed of other trades in localities of a city where such trades are usually carried on, is bound to produce some discomfort, though at the same time resulting perhaps in the good of the community in other respects.", "If a trade like auctioning which has to be carried on as necessary for the well being of the community, some amount of noise has to be borne in at least that part of the town where such trade is ordinarily carried on."], "rank4": ["it does happen that some amount of inconvenience is caused to people who pass by the public road because of the carts which necessarily come near this house.", "The obvious difficulty in the way of that might be that the persons who bring the carts are not the same from day do day.", "But whether or not any action is possible under s. 133 against the persons bringing the carts, we are unable to agree that merely because the appellants carry on auctioning in connection with which the carts are brought, they can be considered to have caused the obstruction."], "rank5": ["What appears to be clear is that the trade is carried on in a private house in the subzimandi quarter and it does happen that some amount of inconvenience is caused to people who pass by the public road because of the carts which necessarily come near this house.", "The first clause provides for action by Magistrate where he considers, on receiving a police-report or other information and on taking such evidence as he thinks fit, that any unlawful obstruction or nuisance should be removed from any way, river or channel which is or may be lawfully used by the public or from any public place.", "The second clause deals with the position where the conduct of any trade or occupation or the keeping of any goods or merchandise, is injurious to the health or physical comfort of the community and that in consequence such trade or occupation should be prohibited or regulated or such goods or merchandise should be removed or the keeping thereof regulated."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1962_213", "text": "Appeal from the judgment and order dated December 21, 1961, of the Calcutta High Court in Cr. A. No. 423 of 1958. K. Chakravarty, for the appellant. C. Mazumdar, for respondent No. 1. N. Mukherjee, P. K. Mukherjee for P. K. Bose, for the respondent No. 2. 1962. August 3. The Judgment of the Court was delivered by SINHA, C.J.-This appeal on a certificate of fitness granted by the High Court under Act 134(1), (c). of the Constitution, is directed against the order of a Division Bench of the Calcutta High Court dated December 21, 1960, setting aside the order of acquittal passed by the trial Magistrate, dated July 2, 1958. We heard this appeal on the eve of the long vacation and pronounced our order to the effect that the appeal was allowed and the order of acquittal was to stand, and that reasons would be given later. It appears that the appellant, who it a practising lawyer, had been employed by the respondent to work for him to investigate the title to some property which the latter was about to purchase, sometime in October 1952. The prosecution case was that the respondent had entrusted the. sum of Rs. 5000/- to the appellant for depositing in Court in connection with an application in respect of the proposed transaction, under the Bengal Money Lenders Act, and that the appellant having been so entrusted with the money, in breach of trust, misappropriated the amount, thus causing loss to his client. The appellant was, therefore, charged under s. 409 of the Indian Penal Code, with having committed criminal breach of trust in respect of the sum of Rs. 5000/- , which had been entrusted to him as a lawyer on behalf of the respondent. \nThe appellant defense was that the case, against him was false and that he had been falsely implicated for reasons which need not be stated. In order to substantiate the charge against him, the complainant (now respondents examined himself and a number of witnesses. He also adduced in evidence a certain document, marketed Ex. 1, purporting to be a letter in the handwriting of the appellant, to show that Rs. 4200/- being a portion of the amount of Rs. 5000/- required for the deposit, had been asked for by the appellant. It also con- tained writings in the hand of the complainant owing that there was correspondence in the matter of the deposit. That was a very important piece of evidence, which if genuine could go a long way to prove the case against the appellant. But the appellant challenged the document as a forgery in material parts, and cross- examined the complainant who had produced the document. In spite of the fact that the complainant was very pointedly cross-examined with a view to showing that the document placed before the Court was a forgery in material parts, the complainant did not take any steps to get an expert on handwriting examined. The trial Court, on an examination of-the evidence, oral and documentary, came to the conclusion that the case against the accused had not been proved and acquitted him. The complainant preferred an appeal to the High Court against the order of acquittal, which was heard by a Division Bench, The High Court took the view that, in the circumstances of the case, there should be retrial by another magistrate, who should give an opportunity to the complainant to adduce the evidence of a handwriting expert in order to establish the genuineness of the questioned document. Apparently, the High court, sitting in appeal on the judgment of the acquittal, passed by the learned Magistrate, was not satisfied as to the genuineness of the questioned document. Otherwise it could have pronounced its judgment one way or the other, on the merits of the controversy, whether or not the prosecution had succeeded in bringing the charge home to the accused. If it were not a case between a lawyer as an accused and his client as the complainant, perhaps the High Court may not have taken the unusual course of giving a fresh opportunity to the complainant to have second round of litigation, to the great prejudice of the accused. \nIn this connection, the following observations of the High Court may be extracted in order to show the reasons.for the unusual course it took in this case Thus there can be no doubt that this was a document of considerable importance. According to the prosecution it clearly showed the respondents connection with the sum of Rs. 4200/- which was a part of the sum of Rs. 5000/-, the subject matter of the charge. According to the respondent, the figures 4200 and the Bengali word sankranta were for- geries just as at the bottom of the document the word yes and the signature of the res- pondent with date were also forgeries. This case was clearly put by the respondent to Bimla, Krishna Ben and it was suggested to him that the- impugned portions of the document were clear forgeries made by the appellant in order to falsely implicate the respondent. It must be said that inspite of this challenge, the appellant took no steps what. ever to produce expert evidence to aid the court in coming to a conclusion as to the authorship of the impugned portion of the document. It is true that expert evidence cannot always be a final settler still in a call of this kind, it is eminently desirable that the court should be assisted by a qualified expert since almost the whole case depends upon proof of the fact whether the impugned portions of that document were in the hand of the respondent Comment was also made by the Magistrate on the appellants failure to call expert evidence. In one sense that comment was justified but in a case of this kind between lawyer and client we think the matter cannot be left, where it is. In view of the fiduciary relation. ship between the parties it is as much necessary in the interest of, the prosecution as in. the interest of the accused that the whole matter should be cleared up, and no steps should be spared which might ensure complete justice between the parties. If it were an ordinary case between one litigant and another, we might have hesitated at this dis- tance of time to send the case back even though the prosecution did not avail of the opportunity of proving its own case. In all civilised countries, criminal jurisprudence has firmly established the rule that an accused person should not be placed on trial for the same offence more than once, except in very exceptional circumstances. In this case, the complainant had the fullest opportunity of adducing all the evidence that he was advised would be necessary to prove the charge against the accused person. It was not that he proved for the examination of an expert and that opportunity had been denied to him. The prosecution took its chance of having a decision in its favour on the evidence adduced by it before the trial Court.\nThat Court was not satisfied that evidence was adequately reliable to bring the charge home to the accused. The accused was thus acquitted. On appeal, it was open to the High Court to take a different view of the evidence, if the facts and circumstances placed before it could lead to the conclusion that the appreciation of the evidence by the trial Court was so thoroughly erroneous as to be wholly unacceptable to the Appellate Court. If the High Court could come to the conclusion, it could have reversed the judgment and converted the order of acquittal into an order of conviction. But it should not have put the accused to the botheration and expense of a second trial simply because the prosecution did not adduce all the evidence that should, and could, have been brought before the Court of first instance. It is not a case where it in open to the Court of Appeal, against an order of acquittal, to order a retrial for the reasons that the trial Court has not given the prosecution full opportunity to adduce all available evidence in support of the prosecution case. It has no where been suggested that the trial Magistrate had unreasonably refused any opportunity to the prosecution to adduce all the evidence that it was ready and willing to produce. That being so, the High Court, in our judgment, entirely misdirected itself in setting aside the order of acquittal and making an order for a fresh trial by another Magistrate, simply on the ground that the case was between a lawyer and his client. Simply because the accused happened to be a lawyer would not be a ground for subjecting him to harassment a second time, there being no reason for holding that his prosecutor had not a fair chance of bringing the charge home to him. In our opinion, the High Court gave way to considerations which were not relevant to a criminal trial. The High Court was not sitting on a disciplinary proceeding for professional misconduct. It had to apply the same rules of criminal jurisprudence as. apply to all criminal trials, and, in our opinion, the only. reason given by the High Court for ordering retrial is against all well-established rules of criminal jurisprudence. The fact that the appellant is a practising lawyer does not entitle him to any preferential treatment when he is hauled up on a criminal charge, even as he is not subject to any additional disability because the cam was between a lawyer and his client. There was no relationship of lawyer and client so far as the criminal case was concerned.\nDECISION ??", "expert_1": {"rank1": ["That being so, the High Court, in our judgment, entirely misdirected itself in setting aside the order of acquittal and making an order for a fresh trial by another Magistrate, simply on the ground that the case was between a lawyer and his client. Simply because the accused happened to be a lawyer would not be a ground for subjecting him to harassment a second time, there being no reason for holding that his prosecutor had not a fair chance of bringing the charge home to him. In our opinion, the High Court gave way to considerations which were not relevant to a criminal trial. The High Court was not sitting on a disciplinary proceeding for professional misconduct. It had to apply the same rules of criminal jurisprudence as. apply to all criminal trials, and, in our opinion, the only. reason given by the High Court for ordering retrial is against all well-established rules of criminal jurisprudence. The fact that the appellant is a practising lawyer does not entitle him to any preferential treatment when he is hauled up on a criminal charge, even as he is not subject to any additional disability because the cam was between a lawyer and his client. There was no relationship of lawyer and client so far as the criminal case was concerned."], "rank2": ["On appeal, it was open to the High Court to take a different view of the evidence, if the facts and circumstances placed before it could lead to the conclusion that the appreciation of the evidence by the trial Court was so thoroughly erroneous as to be wholly unacceptable to the Appellate Court. If the High Court could come to the conclusion, it could have reversed the judgment and converted the order of acquittal into an order of conviction. But it should not have put the accused to the botheration and expense of a second trial simply because the prosecution did not adduce all the evidence that should, and could, have been brought before the Court of first instance. It is not a case where it in open to the Court of Appeal, against an order of acquittal, to order a retrial for the reasons that the trial Court has not given the prosecution full opportunity to adduce all available evidence in support of the prosecution case. It has no where been suggested that the trial Magistrate had unreasonably refused any opportunity to the prosecution to adduce all the evidence that it was ready and willing to produce."], "rank3": ["This case was clearly put by the respondent to Bimla, Krishna Ben and it was suggested to him that the- impugned portions of the document were clear forgeries made by the appellant in order to falsely implicate the respondent. It must be said that inspite of this challenge, the appellant took no steps what. ever to produce expert evidence to aid the court in coming to a conclusion as to the authorship of the impugned portion of the document. It is true that expert evidence cannot always be a final settler still in a call of this kind, it is eminently desirable that the court should be assisted by a qualified expert since almost the whole case depends upon proof of the fact whether the impugned portions of that document were in the hand of the respondent Comment was also made by the Magistrate on the appellants failure to call expert evidence. In one sense that comment was justified but in a case of this kind between lawyer and client we think the matter cannot be left, where it is. In view of the fiduciary relation. ship between the parties it is as much necessary in the interest of, the prosecution as in. the interest of the accused that the whole matter should be cleared up, and no steps should be spared which might ensure complete justice between the parties. If it were an ordinary case between one litigant and another, we might have hesitated at this dis- tance of time to send the case back even though the prosecution did not avail of the opportunity of proving its own case. In all civilised countries, criminal jurisprudence has firmly established the rule that an accused person should not be placed on trial for the same offence more than once, except in very exceptional circumstances. In this case, the complainant had the fullest opportunity of adducing all the evidence that he was advised would be necessary to prove the charge against the accused person. It was not that he proved for the examination of an expert and that opportunity had been denied to him. The prosecution took its chance of having a decision in its favour on the evidence adduced by it before the trial Court.\nThat Court was not satisfied that evidence was adequately reliable to bring the charge home to the accused. The accused was thus acquitted."], "rank4": ["This appeal on a certificate of fitness granted by the High Court under Act 134(1), (c). of the Constitution, is directed against the order of a Division Bench of the Calcutta High Court dated December 21, 1960, setting aside the order of acquittal passed by the trial Magistrate, dated July 2, 1958. We heard this appeal on the eve of the long vacation and pronounced our order to the effect that the appeal was allowed and the order of acquittal was to stand, and that reasons would be given later. It appears that the appellant, who it a practising lawyer, had been employed by the respondent to work for him to investigate the title to some property which the latter was about to purchase, sometime in October 1952. The prosecution case was that the respondent had entrusted the. sum of Rs. 5000/- to the appellant for depositing in Court in connection with an application in respect of the proposed transaction, under the Bengal Money Lenders Act, and that the appellant having been so entrusted with the money, in breach of trust, misappropriated the amount, thus causing loss to his client. The appellant was, therefore, charged under s. 409 of the Indian Penal Code, with having committed criminal breach of trust in respect of the sum of Rs. 5000/- , which had been entrusted to him as a lawyer on behalf of the respondent. \nThe appellant defense was that the case, against him was false and that he had been falsely implicated for reasons which need not be stated. In order to substantiate the charge against him, the complainant (now respondents examined himself and a number of witnesses. He also adduced in evidence a certain document, marketed Ex. 1, purporting to be a letter in the handwriting of the appellant, to show that Rs. 4200/- being a portion of the amount of Rs. 5000/- required for the deposit, had been asked for by the appellant. It also con- tained writings in the hand of the complainant owing that there was correspondence in the matter of the deposit. That was a very important piece of evidence, which if genuine could go a long way to prove the case against the appellant. But the appellant challenged the document as a forgery in material parts, and cross- examined the complainant who had produced the document. In spite of the fact that the complainant was very pointedly cross-examined with a view to showing that the document placed before the Court was a forgery in material parts, the complainant did not take any steps to get an expert on handwriting examined. The trial Court, on an examination of-the evidence, oral and documentary, came to the conclusion that the case against the accused had not been proved and acquitted him. The complainant preferred an appeal to the High Court against the order of acquittal, which was heard by a Division Bench, The High Court took the view that, in the circumstances of the case, there should be retrial by another magistrate, who should give an opportunity to the complainant to adduce the evidence of a handwriting expert in order to establish the genuineness of the questioned document. Apparently, the High court, sitting in appeal on the judgment of the acquittal, passed by the learned Magistrate, was not satisfied as to the genuineness of the questioned document. Otherwise it could have pronounced its judgment one way or the other, on the merits of the controversy, whether or not the prosecution had succeeded in bringing the charge home to the accused. If it were not a case between a lawyer as an accused and his client as the complainant, perhaps the High Court may not have taken the unusual course of giving a fresh opportunity to the complainant to have second round of litigation, to the great prejudice of the accused. \nIn this connection, the following observations of the High Court may be extracted in order to show the reasons.for the unusual course it took in this case Thus there can be no doubt that this was a document of considerable importance. According to the prosecution it clearly showed the respondents connection with the sum of Rs. 4200/- which was a part of the sum of Rs. 5000/-, the subject matter of the charge. According to the respondent, the figures 4200 and the Bengali word sankranta were for- geries just as at the bottom of the document the word yes and the signature of the res- pondent with date were also forgeries."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["the complainant did not take any steps to get an expert on handwriting examined.", "the complainant had the fullest opportunity of adducing all the evidence that he was advised would be necessary to prove the charge against the accused person. It was not that he proved for the examination of an expert and that opportunity had been denied to him.", "It has no where been suggested that the trial Magistrate had unreasonably refused any opportunity to the prosecution to adduce all the evidence that it was ready and willing to produce. That being so, the High Court, in our judgment, entirely misdirected itself in setting aside the order of acquittal and making an order for a fresh trial by another Magistrate, simply on the ground that the case was between a lawyer and his client."], "rank2": ["This appeal on a certificate of fitness granted by the High Court under Act 134(1), (c). of the Constitution, is directed against the order of a Division Bench of the Calcutta High Court dated December 21, 1960, setting aside the order of acquittal passed by the trial Magistrate, dated July 2, 1958.", "The prosecution case was that the respondent had entrusted the. sum of Rs. 5000/- to the appellant for depositing in Court in connection with an application in respect of the proposed transaction, under the Bengal Money Lenders Act, and that the appellant having been so entrusted with the money, in breach of trust, misappropriated the amount, thus causing loss to his client. The appellant was, therefore, charged under s. 409 of the Indian Penal Code, with having committed criminal breach of trust in respect of the sum of Rs. 5000/- , which had been entrusted to him as a lawyer on behalf of the respondent. \nThe appellant defense was that the case, against him was false and that he had been falsely implicated for reasons which need not be stated.", "a certain document, marketed Ex. 1, purporting to be a letter in the handwriting of the appellant, to show that Rs. 4200/- being a portion of the amount of Rs. 5000/- required for the deposit, had been asked for by the appellant. It also con- tained writings in the hand of the complainant owing that there was correspondence in the matter of the deposit. That was a very important piece of evidence, which if genuine could go a long way to prove the case against the appellant. But the appellant challenged the document as a forgery in material parts, and cross- examined the complainant who had produced the document.", "It is true that expert evidence cannot always be a final settler still in a call of this kind, it is eminently desirable that the court should be assisted by a qualified expert since almost the whole case depends upon proof of the fact whether the impugned portions of that document were in the hand of the respondent Comment was also made by the Magistrate on the appellants failure to call expert evidence.", "it was open to the High Court to take a different view of the evidence, if the facts and circumstances placed before it could lead to the conclusion that the appreciation of the evidence by the trial Court was so thoroughly erroneous as to be wholly unacceptable to the Appellate Court.", "because the accused happened to be a lawyer would not be a ground for subjecting him to harassment a second time, there being no reason for holding that his prosecutor had not a fair chance of bringing the charge home to him. In our opinion, the High Court gave way to considerations which were not relevant to a criminal trial."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["It must be said that inspite of this challenge, the appellant took no steps what. ever to produce expert evidence to aid the court in coming to a conclusion as to the authorship of the impugned portion of the document. It is true that expert evidence cannot always be a final settler still in a call of this kind, it is eminently desirable that the court should be assisted by a qualified expert since almost the whole case depends upon proof of the fact whether the impugned portions of that document were in the hand of the respondent Comment was also made by the Magistrate on the appellants failure to call expert evidence", "In one sense that comment was justified but in a case of this kind between lawyer and client we think the matter cannot be left, where it is. In view of the fiduciary relation. ship between the parties it is as much necessary in the interest of, the prosecution as in. the interest of the accused that the whole matter should be cleared up, and no steps should be spared which might ensure complete justice between the parties. If it were an ordinary case between one litigant and another, we might have hesitated at this dis- tance of time to send the case back even though the prosecution did not avail of the opportunity of proving its own case.", "In this case, the complainant had the fullest opportunity of adducing all the evidence that he was advised would be necessary to prove the charge against the accused person. It was not that he proved for the examination of an expert and that opportunity had been denied to him. The prosecution took its chance of having a decision in its favour on the evidence adduced by it before the trial Court.\nThat Court was not satisfied that evidence was adequately reliable to bring the charge home to the accused.", "The accused was thus acquitted", "On appeal, it was open to the High Court to take a different view of the evidence, if the facts and circumstances placed before it could lead to the conclusion that the appreciation of the evidence by the trial Court was so thoroughly erroneous as to be wholly unacceptable to the Appellate Court. If the High Court could come to the conclusion, it could have reversed the judgment and converted the order of acquittal into an order of conviction. But it should not have put the accused to the botheration and expense of a second trial simply because the prosecution did not adduce all the evidence that should, and could, have been brought before the Court of first instance. It is not a case where it in open to the Court of Appeal, against an order of acquittal, to order a retrial for the reasons that the trial Court has not given the prosecution full opportunity to adduce all available evidence in support of the prosecution case", "It has no where been suggested that the trial Magistrate had unreasonably refused any opportunity to the prosecution to adduce all the evidence that it was ready and willing to produce", "That being so, the High Court, in our judgment, entirely misdirected itself in setting aside the order of acquittal and making an order for a fresh trial by another Magistrate, simply on the ground that the case was between a lawyer and his client. Simply because the accused happened to be a lawyer would not be a ground for subjecting him to harassment a second time, there being no reason for holding that his prosecutor had not a fair chance of bringing the charge home to him. In our opinion, the High Court gave way to considerations which were not relevant to a criminal trial.", "The High Court was not sitting on a disciplinary proceeding for professional misconduct. It had to apply the same rules of criminal jurisprudence as. apply to all criminal trials, and, in our opinion, the only. reason given by the High Court for ordering retrial is against all well-established rules of criminal jurisprudence", "The fact that the appellant is a practising lawyer does not entitle him to any preferential treatment when he is hauled up on a criminal charge, even as he is not subject to any additional disability because the cam was between a lawyer and his client. There was no relationship of lawyer and client so far as the criminal case was concerned."], "rank2": ["This appeal on a certificate of fitness granted by the High Court under Act 134(1), (c). of the Constitution, is directed against the order of a Division Bench of the Calcutta High Court dated December 21, 1960, setting aside the order of acquittal passed by the trial Magistrate, dated July 2, 1958. We heard this appeal on the eve of the long vacation and pronounced our order to the effect that the appeal was allowed and the order of acquittal was to stand, and that reasons would be given later", "He also adduced in evidence a certain document, marketed Ex. 1, purporting to be a letter in the handwriting of the appellant, to show that Rs. 4200/- being a portion of the amount of Rs. 5000/- required for the deposit, had been asked for by the appellant. It also con- tained writings in the hand of the complainant owing that there was correspondence in the matter of the deposit. That was a very important piece of evidence, which if genuine could go a long way to prove the case against the appellant", "But the appellant challenged the document as a forgery in material parts, and cross- examined the complainant who had produced the document. In spite of the fact that the complainant was very pointedly cross-examined with a view to showing that the document placed before the Court was a forgery in material parts, the complainant did not take any steps to get an expert on handwriting examined", "The trial Court, on an examination of-the evidence, oral and documentary, came to the conclusion that the case against the accused had not been proved and acquitted him. The complainant preferred an appeal to the High Court against the order of acquittal, which was heard by a Division Bench, The High Court took the view that, in the circumstances of the case, there should be retrial by another magistrate, who should give an opportunity to the complainant to adduce the evidence of a handwriting expert in order to establish the genuineness of the questioned document. Apparently, the High court, sitting in appeal on the judgment of the acquittal, passed by the learned Magistrate, was not satisfied as to the genuineness of the questioned document", "Otherwise it could have pronounced its judgment one way or the other, on the merits of the controversy, whether or not the prosecution had succeeded in bringing the charge home to the accused. If it were not a case between a lawyer as an accused and his client as the complainant, perhaps the High Court may not have taken the unusual course of giving a fresh opportunity to the complainant to have second round of litigation, to the great prejudice of the accused.", "the following observations of the High Court may be extracted in order to show the reasons.for the unusual course it took in this case Thus there can be no doubt that this was a document of considerable importance. According to the prosecution it clearly showed the respondents connection with the sum of Rs. 4200/- which was a part of the sum of Rs. 5000/-, the subject matter of the charge. According to the respondent, the figures 4200 and the Bengali word sankranta were for- geries just as at the bottom of the document the word yes and the signature of the res- pondent with date were also forgeries", "This case was clearly put by the respondent to Bimla, Krishna Ben and it was suggested to him that the- impugned portions of the document were clear forgeries made by the appellant in order to falsely implicate the respondent", "In all civilised countries, criminal jurisprudence has firmly established the rule that an accused person should not be placed on trial for the same offence more than once, except in very exceptional circumstances"], "rank3": ["It appears that the appellant, who it a practising lawyer, had been employed by the respondent to work for him to investigate the title to some property which the latter was about to purchase, sometime in October 1952. The prosecution case was that the respondent had entrusted the. sum of Rs. 5000/- to the appellant for depositing in Court in connection with an application in respect of the proposed transaction, under the Bengal Money Lenders Act, and that the appellant having been so entrusted with the money, in breach of trust, misappropriated the amount, thus causing loss to his client. The appellant was, therefore, charged under s. 409 of the Indian Penal Code, with having committed criminal breach of trust in respect of the sum of Rs. 5000/- , which had been entrusted to him as a lawyer on behalf of the respondent", "The appellant defense was that the case, against him was false and that he had been falsely implicated for reasons which need not be stated. In order to substantiate the charge against him, the complainant (now respondents examined himself and a number of witnesses"], "label": "ACCEPTED"}, "expert_4": {"rank1": ["We heard this appeal on the eve of the long vacation and pronounced our order to the effect that the appeal was allowed and the order of acquittal was to stand, and that reasons would be given later.", "In all civilised countries, criminal jurisprudence has firmly established the rule that an accused person should not be placed on trial for the same offence more than once, except in very exceptional circumstances. In this case, the complainant had the fullest opportunity of adducing all the evidence that he was advised would be necessary to prove the charge against the accused person. It was not that he proved for the examination of an expert and that opportunity had been denied to him.", "That being so, the High Court, in our judgment, entirely misdirected itself in setting aside the order of acquittal and making an order for a fresh trial by another Magistrate, simply on the ground that the case was between a lawyer and his client.", "Simply because the accused happened to be a lawyer would not be a ground for subjecting him to harassment a second time, there being no reason for holding that his prosecutor had not a fair chance of bringing the charge home to him. In our opinion, the High Court gave way to considerations which were not relevant to a criminal trial."], "rank2": ["This appeal on a certificate of fitness granted by the High Court under Act 134(1), (c). of the Constitution, is directed against the order of a Division Bench of the Calcutta High Court dated December 21, 1960, setting aside the order of acquittal passed by the trial Magistrate, dated July 2, 1958.", "In view of the fiduciary relation. ship between the parties it is as much necessary in the interest of, the prosecution as in. the interest of the accused that the whole matter should be cleared up, and no steps should be spared which might ensure complete justice between the parties.", "If it were an ordinary case between one litigant and another, we might have hesitated at this dis- tance of time to send the case back even though the prosecution did not avail of the opportunity of proving its own case.", "That Court was not satisfied that evidence was adequately reliable to bring the charge home to the accused. The accused was thus acquitted.", "The High Court was not sitting on a disciplinary proceeding for professional misconduct. It had to apply the same rules of criminal jurisprudence as. apply to all criminal trials, and, in our opinion, the only. reason given by the High Court for ordering retrial is against all well-established rules of criminal jurisprudence.", "The fact that the appellant is a practising lawyer does not entitle him to any preferential treatment when he is hauled up on a criminal charge, even as he is not subject to any additional disability because the cam was between a lawyer and his client. There was no relationship of lawyer and client so far as the criminal case was concerned."], "rank3": ["The appellant was, therefore, charged under s. 409 of the Indian Penal Code, with having committed criminal breach of trust in respect of the sum of Rs. 5000/- , which had been entrusted to him as a lawyer on behalf of the respondent.", "The appellant defense was that the case, against him was false and that he had been falsely implicated for reasons which need not be stated.", "That was a very important piece of evidence, which if genuine could go a long way to prove the case against the appellant.", "But the appellant challenged the document as a forgery in material parts, and cross- examined the complainant who had produced the document. In spite of the fact that the complainant was very pointedly cross-examined with a view to showing that the document placed before the Court was a forgery in material parts, the complainant did not take any steps to get an expert on handwriting examined.", "The trial Court, on an examination of-the evidence, oral and documentary, came to the conclusion that the case against the accused had not been proved and acquitted him.", "The complainant preferred an appeal to the High Court against the order of acquittal, which was heard by a Division Bench, The High Court took the view that, in the circumstances of the case, there should be retrial by another magistrate, who should give an opportunity to the complainant to adduce the evidence of a handwriting expert in order to establish the genuineness of the questioned document.", "Apparently, the High court, sitting in appeal on the judgment of the acquittal, passed by the learned Magistrate, was not satisfied as to the genuineness of the questioned document.", "In this connection, the following observations of the High Court may be extracted in order to show the reasons.for the unusual course it took in this case Thus there can be no doubt that this was a document of considerable importance. According to the prosecution it clearly showed the respondents connection with the sum of Rs. 4200/- which was a part of the sum of Rs. 5000/-, the subject matter of the charge. According to the respondent, the figures 4200 and the Bengali word sankranta were for- geries just as at the bottom of the document the word yes and the signature of the res- pondent with date were also forgeries.", "It must be said that inspite of this challenge, the appellant took no steps what. ever to produce expert evidence to aid the court in coming to a conclusion as to the authorship of the impugned portion of the document.", "It is true that expert evidence cannot always be a final settler still in a call of this kind, it is eminently desirable that the court should be assisted by a qualified expert since almost the whole case depends upon proof of the fact whether the impugned portions of that document were in the hand of the respondent Comment was also made by the Magistrate on the appellants failure to call expert evidence.", "In one sense that comment was justified but in a case of this kind between lawyer and client we think the matter cannot be left, where it is.", "On appeal, it was open to the High Court to take a different view of the evidence, if the facts and circumstances placed before it could lead to the conclusion that the appreciation of the evidence by the trial Court was so thoroughly erroneous as to be wholly unacceptable to the Appellate Court. If the High Court could come to the conclusion, it could have reversed the judgment and converted the order of acquittal into an order of conviction.", "But it should not have put the accused to the botheration and expense of a second trial simply because the prosecution did not adduce all the evidence that should, and could, have been brought before the Court of first instance. It is not a case where it in open to the Court of Appeal, against an order of acquittal, to order a retrial for the reasons that the trial Court has not given the prosecution full opportunity to adduce all available evidence in support of the prosecution case.", "It has no where been suggested that the trial Magistrate had unreasonably refused any opportunity to the prosecution to adduce all the evidence that it was ready and willing to produce."], "rank4": ["The prosecution case was that the respondent had entrusted the. sum of Rs. 5000/- to the appellant for depositing in Court in connection with an application in respect of the proposed transaction, under the Bengal Money Lenders Act, and that the appellant having been so entrusted with the money, in breach of trust, misappropriated the amount, thus causing loss to his client.", "In order to substantiate the charge against him, the complainant (now respondents examined himself and a number of witnesses. He also adduced in evidence a certain document, marketed Ex. 1, purporting to be a letter in the handwriting of the appellant, to show that Rs. 4200/- being a portion of the amount of Rs. 5000/- required for the deposit, had been asked for by the appellant. It also con- tained writings in the hand of the complainant owing that there was correspondence in the matter of the deposit."], "rank5": ["It appears that the appellant, who it a practising lawyer, had been employed by the respondent to work for him to investigate the title to some property which the latter was about to purchase, sometime in October 1952."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["The High Court was not sitting on a disciplinary proceeding for professional misconduct. It had to apply the same rules of criminal jurisprudence as. apply to all criminal trials, and, in our opinion, the only. reason given by the High Court for ordering retrial is against all well-established rules of criminal jurisprudence."], "rank2": ["In spite of the fact that the complainant was very pointedly cross-examined with a view to showing that the document placed before the Court was a forgery in material parts, the complainant did not take any steps to get an expert on handwriting examined.", "In all civilised countries, criminal jurisprudence has firmly established the rule that an accused person should not be placed on trial for the same offence more than once, except in very exceptional circumstances.", "But it should not have put the accused to the botheration and expense of a second trial simply because the prosecution did not adduce all the evidence that should, and could, have been brought before the Court of first instance.", "The fact that the appellant is a practising lawyer does not entitle him to any preferential treatment when he is hauled up on a criminal charge, even as he is not subject to any additional disability because the cam was between a lawyer and his client."], "rank3": ["If it were not a case between a lawyer as an accused and his client as the complainant, perhaps the High Court may not have taken the unusual course of giving a fresh opportunity to the complainant to have second round of litigation, to the great prejudice of the accused.", "If it were an ordinary case between one litigant and another, we might have hesitated at this dis- tance of time to send the case back even though the prosecution did not avail of the opportunity of proving its own case.", "On appeal, it was open to the High Court to take a different view of the evidence, if the facts and circumstances placed before it could lead to the conclusion that the appreciation of the evidence by the trial Court was so thoroughly erroneous as to be wholly unacceptable to the Appellate Court. If the High Court could come to the conclusion, it could have reversed the judgment and converted the order of acquittal into an order of conviction.", "It has no where been suggested that the trial Magistrate had unreasonably refused any opportunity to the prosecution to adduce all the evidence that it was ready and willing to produce.", "Simply because the accused happened to be a lawyer would not be a ground for subjecting him to harassment a second time, there being no reason for holding that his prosecutor had not a fair chance of bringing the charge home to him."], "rank4": ["That was a very important piece of evidence, which if genuine could go a long way to prove the case against the appellant.", "In this case, the complainant had the fullest opportunity of adducing all the evidence that he was advised would be necessary to prove the charge against the accused person. It was not that he proved for the examination of an expert and that opportunity had been denied to him.", "The prosecution took its chance of having a decision in its favour on the evidence adduced by it before the trial Court."], "rank5": ["That Court was not satisfied that evidence was adequately reliable to bring the charge home to the accused. The accused was thus acquitted."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1962_339", "text": "Appeal by special leave from the judgment and decree dated December 1, 1955, of the Madras High Court in second Appeal No. 736 of 1953. Ganapathy Iyer, R. Thiagarajan and G. Gopalakrishnan, for the appellants. S. Prashar, A. S. Chaturvedi and K. R. Chaudhari, for the respondent. 1962. November 30. The judgment of the Court was delivered by MUDHOLKAR, J. -Only one question arises for consideration in this appeal by special leave and that is the meaning to be given to the expression final decision occurring in the first proviso to s. 28 A of the Provincial Insolvency Act, 1920 (Act No. 5 of 1920), introduced by Act No. 25 of 1948. For appreciating the argument advanced before us a few facts have to be stated. Venkata Reddy, the father of the appellants, was adjudicated an insolvent by the Sub-Court, Salem in I. P. No. 73 of 1935. At that time only the appellants 1 and 2 were born while the third appellant was born later. The fathers one-third share was put up for auction by the Official Receiver and was purchased by one Karuppan Pillai for Rs. 80/-. The Official Receiver then put up for auction the two-thirds share belonging to appellants 1 and 2 on July 27, 1936, which was purchased by the same person for Rs. 341/-. He sold the entire property to the respondent Pethi Reddy on May 25, 1939, for Rs. 300/-. The appellants instituted a suit on February 1, 1.943, for the partition of the joint family property to which suit they made Pethi Reddy a party and claimed thereunder two- thirds share in the property puchased by him. In that suit it was contended on behalf of the respondent that on their fathers insolvency the share of the appellants in the joint family property also vested in the Official Receiver and that he had the power to sell it. The contention was negatived by the trial court which passed a preliminary decree for partition in favour of the appellants. \nThe decree was affirmed in appeal by the District judge and eventually by the High Court in second appeal, except with a slight variation regarding the amount of mesne profits. The decision of the High Court is dated November 18, 1946. On January 18, 1946 the appellants made an application for a final decree which was granted ex parte on August 17, 1946. At the instance of the present respondent this decree was set aside. By that time the new provision, that is, s. 28 A of the Provincial, Insolvency Act, had come into force. On the basis of this provision it was contended by the respondent that the appellants were not entitled to the allotment of their two-thirds share in the property purchased by him inasmuch as that share had also vested in the Official Receiver. The District Munsif held that Act 25 of 1948 which introduced s. 28 A did not affect the preliminary decree for partition since it had been passed on August 20, 1943. He, therefore, restored the ex parte final decree which had been set aside on December 17, 1950. The appeal preferred by the respondent against the decision of the District Munsif was dismissed by the Principal Subordinate judge, Salem, whereupon he preferred a second appeal before the High Court. \nThe High Court allowed the appeal and dismissed the application of the appellant for passing the final decree, Section 28A of the Provincial Insolvency Act runs as follows The property of the insolvent shall comprise and shall always be deemed to have comprised also the capacity to exercise and to take proceedings for exercising all such powers in or over or in respect of property as might have been exercised by the insolvent for his own benefit at the commencement of his insolvency or before his discharge Provided that nothing in this section shall affect any sale, mortgage or other transfer of the property of the insolvent by a Court or Receiver or the Collector acting tinder s. 60 made before the commencement of the Provincial Insolvency (Amendment) Act, 1948, which has been the subject of a final decision by a competent Court Provided further that the property of the insolvent shall not be deemed by reason of anything contained in this section to comprise his capacity referred to in this section in respect of any such sale, mortgage or other transfer of property made in the State of Madras after the 28th day of July, 1942. and before the commencement of the Provincial Insolvency (Amendment) Act, 1948. The objects and reasons set out in the bill which sought to introduce this provision were to bring the provisions of the provincial insolvency Act in line with those of the Presidency Towns Insolvency Act in so far as the vesting of the joint family property in the Official Receiver upon the fathers insolvency was concerned. While under the Presidency Towns Insolvency Act, in a case of this kind, the disposing power of the father over the interest of his undivided sons also vests in the Official Receiver and not merely the fathers own interest in the joint family property there was divergence of opinion amongst the High Courts in India as to whether under the Provincial Insolvency Act the fathers disposing power over his undivided sons interest also vests in the Official Receiver. A Full Bench of the Madras High Court held in Ramasastrulu v. Balakrishna Rao (1) that it does not. It was in the light of this decision that in the appellants suit for partition, a preliminary decree was passed with respect to their two- thirds interest in the joint family property which had been sold by the Official Receiver. In the course of the decision of the Full Bench a suggestion was made that the legislature should step in and bring the provisions of the Provincial Insolvency Act in the relevant respect in line with those of the Presidency Towns Insolvency Act. The new provision makes it clear that the law is and has always been that upon the fathers insolvency his disposing power over the interest of his undivided sons in the joint family property vests in the Official Receiver and that consequently the latter has a right to sell that interest. The-provision is thus declaratory of the law and was intended to apply to all cases except those covered by the two provisos. We are concerned here only with the first proviso. This proviso excepts from the operation of the Act a transaction such as a sale by an Official Receiver which has been the subject of a final decision by a competent Court. The short question, therefore. is whether the preliminary decree for partition passed in this case which was affirmed finally in second \n I.L.R. 1943 Mad. 83. appeal by the High Court of Madras can be regard as a final decision. The competence of the court is not in question here. What is, however, contended is that in a partition suit the only decision which can be said to be a final decision is the final decree passed in the case and that since final decree proceedings were still going on when the Amending Act came into force the first proviso was not available to the appellants. It is contended on behalf of the appellants that since the rights of the parties are adjudicated upon by the court before a preliminary decree is passed that decree must, in so far as rights adjudicated upon arc concerned, be deemed to be a final decision The word decision even in its popular sense means a concluded opinion (see Strouds Judicial Dictionary--3rd ed. Vol. 1, p. 743). Where, therefore, the decision is embodied in the judgment which is followed by a decree finality must naturally attach itself to it in the sense that it is no longer open to question by either party except in an appeal, review or revision petition as provided for by law. The High Court has, however, observed The mere declaration of the rights of the plaintiff by the preliminary decree, would, in our opinion not amount to a final decision for it is well known that even if a preliminary decree is passed either in a mortgage suit or in a partition suit, there are certain contingencies in which such a preliminary decree can be modified or amended and therefore would not become final. It is not clear from the judgment what the contingencies referred to by the High Court are in which a preliminary decree can be modified or amended unless what the learned judges meant was modified or amended in appeal or in review or in revision or in exceptional circumstances by resorting to the powers conferred by ss. 151 and 152 of the Code of Civil Procedure. If that is what the High Court meant then every decree passed by a Court including decrees passed in cases which do not contemplate making of a preliminary decree are liable to be modified and amended. Therefore, if the reason given by the High Court is accepted it would mean that no finality attaches to decree at all. That is not the law. A decision is said to be final when so far as, ,the Court rendering it is concerned, it is unalterable except by resort to such provisions of the Code of Civil Procedure as permit its reversal, modification or amendment. Similarly, a final decision would mean a decision which would operate as res judicate between the parties if it is not sought to be modified or reversed by preferring an appeal or a revision or a review application as is permitted by the Code. A preliminary decree passed, whether it is in a mort- gage suit or a partition suit, is not a tentative decree but must, in so far as the matters dealt with by it are concerned, be regarded as conclusive. No doubt, in suits which contemplate the making of two decrees--a preliminary decree and a final decree-the decree which would be executable would be the final decree But the finality of a decree or a decision does not necessarily depend upon its being executable. The legislature in its wisdom has thought that suits of certain types should be decided in stages and though the suit in such cases can be regarded as fully and completely decided only after a final decree is made the decision of the court arrived at the earlier stage also has a finality attached to it. It would be relevant to refer to s. 97 of the Code of Civil Procedure which provides that where a party aggrieved by a preliminary decree does not appeal from it, he is precluded from disputing its. correctness in any appeal which may be preferred from the final decree. This provision thus clearly indicates that as to the matters covered by it, a preliminary decree is regarded as embodying the final decision of the court pass- ing that decree. The High Court, however, thinks that a decision cannot be regarded as final if further proceedings are required to be taken for procuring the relief to which a party is held entitled by that decision. In support of its view the High Court has referred to the following observations in in re A Debtor(1) It is clear., therefore, that further proceedings will be necessary to get the money out of court and I think it is also clear that the order of October 24, in its own terms, did not finally determine. the right of the petitioner, or any one else, in respect of the sum to be paid. In my opinion, therefore, the order is not a final order In that case the Divorce Court made an order that the co- respondent do within seven days from the service of this order pay into Court the sum of pound 67 Is. 9d. being the amount of the petitioners costs, as taxed and certified by one of the registrars of this Division. The order was made in that form because at that time the ultimate fate of the petition was undecided. No doubt, the decree nisi had been passed but it had yet to be made absolute land the right of the petitioner to receive the costs might never have been brought to fruition. The money had therefore to be paid into the court. A little latter a further order was made by the President of the Divorce Court in these terms Upon hearing the solicitors for the petitioner I do order that the order herein dated the 11th day of July 1928 be varied and that (the debtor) the co-respondent do within seven days from the service of this order pay to Messrs H. L. Lumley Co., of 35 Picadilly W. 1, the solicitors of the petitioner, the sum of pound 67 Is. 9d. being the amount of the petitioners taxed costs as taxed and certified by one of the (1)1929 2 Ch, 146. registrars of this Division, the said solicitors undertaking to lodge in Court any sums recovered under this order. Pursuant to this order the solicitors gave an undertaking required by the Court to the registrar on October 26. On November 5, the decree nisi was made absolute. On January 2, 1929, a bankruptcy notice was issued by the solicitors against the debtor, for payment to them of the amount of pound 67 1 s. 9d. The co-respondent did not comply with the bankruptcy notice and accordingly on January 27, the solicitors presented a bankruptcy petition against him. Over-ruling the objection by the co-respondent, that is, the debtor that the bankruptcy notice was bad on, amongst other things, the ground that the second order made by the President of the Divorce Division was not a final order within sub-s. 1 (g) of s. 1 of the Bankruptcy Act, 1914, the registrar made a receiving order. In appeal it was contended that the receiving order was wrong because the solicitors were not the creditors of the debtor and also because the order for payment of the costs to them was not a final order. While upholding the latter contention Lord Hanworth, M. R., said what has been quoted above and relied upon by the High Court. Upon the particular facts of the case the order was clearly not a final order and in making the observations quoted above the Master of Rolls did not formulate a test for determining what could be regarded as a final order in every kind of case. The observations of the Master of Rolls must be read in the context of the facts of the case decided by him. Read that way those observations do not help the respondents. Apart from this, the short answer to the reason given by the High Court is that even a money decree passed in a suit would cease to be a final decision because if the judgment- debtor against whom the decree is pawed does not pay the amount voluntarily execution proceedings will have to be taken for re- covering the amount from him. It would thus lead to an absurdity if the test adopted by the High Court is accepted. In support of the High Courts view a few decisions were cited at the bar but as they are of no assistance we have not thought it fit to refer to them. We may, however, refer to a decision of this court upon which reliance was placed by the respondents. That is the decision in Vakalapudi Sri Ranga Rao and others V. Mutyala Ammanna (1) in which it was held that a particular order was not a final decision within the meaning of the first proviso to S. 28-A. There, in a suit for partition and another suit for possession of the suit property and arrears of rent, it was contended that upon the fathers insolvency the Official Receiver was in- competent to sell the sons interest in the joint family property. The contention was negatived by the trial court but upheld in appeals by the Subordinate judge who remanded the suits to the trial court with certain directions. Appeals preferred against his decision were dismissed by the High Court. Before the decision of the suits after remand, the Amending Act, XXV of 1948 came into force and it was contended before the trial court that in view of the new provision the sale by the Official Receiver must be held to be good even so far as the sons interest was concerned. This contention was negatived by the trial court on the ground that the decision of the High Court on the point was a final order within the meaning of the proviso. \nThe District judge, before whom appeals were preferred, however, negatived the contention and held that there was no final order with regard to the sale by the Official Receiver. The High Court reversed the decision of the District judge but this Court held that the orders of remand made by the Subordinate Judge and upheld by the High Court were interlocutory orders as also were the orders of C.A. No. 634 of 1957, decided on March 29, 1961. the High Court in the appeals prefer-red before it and as such could be challenged in the appeal preferred before this Court against the decision of the High Court in the appeal against the final decree in the suit. In the case before us the preliminary decree was never challenged at all by preferring any appeal and therefore, the matters conclude by it are not open to challenge in an appeal against the final decree. Further, a preliminary decree cannot be equated with an interlocutory order within the meaning of s. 105, Code of Civil Procedure. It will thus be seen that the decision relied upon has no application to the facts of this case. Our conclusion, therefore, is that in this case the sale made by the Official Receiver during the insolvency of the appellants father was the subject of a final decision by a competent court inasmuch as that court decided that the sale was of no avail to the purchaser at the Official Receiver had no power to effect that sale. Nothing more was required to be established by the appellants before being entitled to the protection of the first proviso to s.28A. \nSince they have established what was required to be established by them, they are entitled to a final decree and the High Court was in error in dismissing their application in that behalf. In the result we allow the appeal, set aside the judgment and decree of the High Court and restore that of the trial court as affirmed in appeal by the learned Subordinate judge. Costs in this court and in the High Court will be borne by the present respondent.\nDECISION ??", "expert_1": {"rank1": ["Our conclusion, therefore, is that in this case the sale made by the Official Receiver during the insolvency of the appellants father was the subject of a final decision by a competent court inasmuch as that court decided that the sale was of no avail to the purchaser at the Official Receiver had no power to effect that sale. Nothing more was required to be established by the appellants before being entitled to the protection of the first proviso to s.28A. \nSince they have established what was required to be established by them, they are entitled to a final decree and the High Court was in error in dismissing their application in that behalf. In the result we allow the appeal, set aside the judgment and decree of the High Court and restore that of the trial court as affirmed in appeal by the learned Subordinate judge."], "rank2": ["Upon the particular facts of the case the order was clearly not a final order and in making the observations quoted above the Master of Rolls did not formulate a test for determining what could be regarded as a final order in every kind of case. The observations of the Master of Rolls must be read in the context of the facts of the case decided by him. Read that way those observations do not help the respondents. Apart from this, the short answer to the reason given by the High Court is that even a money decree passed in a suit would cease to be a final decision because if the judgment- debtor against whom the decree is pawed does not pay the amount voluntarily execution proceedings will have to be taken for re- covering the amount from him. It would thus lead to an absurdity if the test adopted by the High Court is accepted.", "In the case before us the preliminary decree was never challenged at all by preferring any appeal and therefore, the matters conclude by it are not open to challenge in an appeal against the final decree. Further, a preliminary decree cannot be equated with an interlocutory order within the meaning of s. 105, Code of Civil Procedure. It will thus be seen that the decision relied upon has no application to the facts of this case."], "rank3": ["It would be relevant to refer to s. 97 of the Code of Civil Procedure which provides that where a party aggrieved by a preliminary decree does not appeal from it, he is precluded from disputing its. correctness in any appeal which may be preferred from the final decree. This provision thus clearly indicates that as to the matters covered by it, a preliminary decree is regarded as embodying the final decision of the court pass- ing that decree.", "The High Court, however, thinks that a decision cannot be regarded as final if further proceedings are required to be taken for procuring the relief to which a party is held entitled by that decision. In support of its view the High Court has referred to the following observations in in re A Debtor(1) It is clear., therefore, that further proceedings will be necessary to get the money out of court and I think it is also clear that the order of October 24, in its own terms, did not finally determine. the right of the petitioner, or any one else, in respect of the sum to be paid. In my opinion, therefore, the order is not a final order In that case the Divorce Court made an order that the co- respondent do within seven days from the service of this order pay into Court the sum of pound 67 Is. 9d. being the amount of the petitioners costs, as taxed and certified by one of the registrars of this Division."], "rank4": ["Only one question arises for consideration in this appeal by special leave and that is the meaning to be given to the expression final decision occurring in the first proviso to s. 28 A of the Provincial Insolvency Act, 1920 (Act No. 5 of 1920), introduced by Act No. 25 of 1948.", "The appellants instituted a suit on February 1, 1.943, for the partition of the joint family property to which suit they made Pethi Reddy a party and claimed thereunder two- thirds share in the property puchased by him. In that suit it was contended on behalf of the respondent that on their fathers insolvency the share of the appellants in the joint family property also vested in the Official Receiver and that he had the power to sell it. The contention was negatived by the trial court which passed a preliminary decree for partition in favour of the appellants. \nThe decree was affirmed in appeal by the District judge and eventually by the High Court in second appeal, except with a slight variation regarding the amount of mesne profits. The decision of the High Court is dated November 18, 1946. On January 18, 1946 the appellants made an application for a final decree which was granted ex parte on August 17, 1946. At the instance of the present respondent this decree was set aside.", "By that time the new provision, that is, s. 28 A of the Provincial, Insolvency Act, had come into force. On the basis of this provision it was contended by the respondent that the appellants were not entitled to the allotment of their two-thirds share in the property purchased by him inasmuch as that share had also vested in the Official Receiver. The District Munsif held that Act 25 of 1948 which introduced s. 28 A did not affect the preliminary decree for partition since it had been passed on August 20, 1943. He, therefore, restored the ex parte final decree which had been set aside on December 17, 1950. The appeal preferred by the respondent against the decision of the District Munsif was dismissed by the Principal Subordinate judge, Salem, whereupon he preferred a second appeal before the High Court. \nThe High Court allowed the appeal and dismissed the application of the appellant for passing the final decree,", "The new provision makes it clear that the law is and has always been that upon the fathers insolvency his disposing power over the interest of his undivided sons in the joint family property vests in the Official Receiver and that consequently the latter has a right to sell that interest. The-provision is thus declaratory of the law and was intended to apply to all cases except those covered by the two provisos. We are concerned here only with the first proviso. This proviso excepts from the operation of the Act a transaction such as a sale by an Official Receiver which has been the subject of a final decision by a competent Court. The short question, therefore. is whether the preliminary decree for partition passed in this case which was affirmed finally in second \n I.L.R. 1943 Mad. 83. appeal by the High Court of Madras can be regard as a final decision. The competence of the court is not in question here.", "What is, however, contended is that in a partition suit the only decision which can be said to be a final decision is the final decree passed in the case and that since final decree proceedings were still going on when the Amending Act came into force the first proviso was not available to the appellants. It is contended on behalf of the appellants that since the rights of the parties are adjudicated upon by the court before a preliminary decree is passed that decree must, in so far as rights adjudicated upon arc concerned, be deemed to be a final decision The word decision even in its popular sense means a concluded opinion (see Strouds Judicial Dictionary--3rd ed. Vol. 1, p. 743). Where, therefore, the decision is embodied in the judgment which is followed by a decree finality must naturally attach itself to it in the sense that it is no longer open to question by either party except in an appeal, review or revision petition as provided for by law. The High Court has, however, observed The mere declaration of the rights of the plaintiff by the preliminary decree, would, in our opinion not amount to a final decision for it is well known that even if a preliminary decree is passed either in a mortgage suit or in a partition suit, there are certain contingencies in which such a preliminary decree can be modified or amended and therefore would not become final. It is not clear from the judgment what the contingencies referred to by the High Court are in which a preliminary decree can be modified or amended unless what the learned judges meant was modified or amended in appeal or in review or in revision or in exceptional circumstances by resorting to the powers conferred by ss. 151 and 152 of the Code of Civil Procedure. If that is what the High Court meant then every decree passed by a Court including decrees passed in cases which do not contemplate making of a preliminary decree are liable to be modified and amended. Therefore, if the reason given by the High Court is accepted it would mean that no finality attaches to decree at all. That is not the law. A decision is said to be final when so far as, ,the Court rendering it is concerned, it is unalterable except by resort to such provisions of the Code of Civil Procedure as permit its reversal, modification or amendment. Similarly, a final decision would mean a decision which would operate as res judicate between the parties if it is not sought to be modified or reversed by preferring an appeal or a revision or a review application as is permitted by the Code. A preliminary decree passed, whether it is in a mort- gage suit or a partition suit, is not a tentative decree but must, in so far as the matters dealt with by it are concerned, be regarded as conclusive. No doubt, in suits which contemplate the making of two decrees--a preliminary decree and a final decree-the decree which would be executable would be the final decree But the finality of a decree or a decision does not necessarily depend upon its being executable. The legislature in its wisdom has thought that suits of certain types should be decided in stages and though the suit in such cases can be regarded as fully and completely decided only after a final decree is made the decision of the court arrived at the earlier stage also has a finality attached to it."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["A decision is said to be final when so far as, ,the Court rendering it is concerned, it is unalterable except by resort to such provisions of the Code of Civil Procedure as permit its reversal, modification or amendment. Similarly, a final decision would mean a decision which would operate as res judicate between the parties if it is not sought to be modified or reversed by preferring an appeal or a revision or a review application as is permitted by the Code.", "A preliminary decree passed, whether it is in a mort- gage suit or a partition suit, is not a tentative decree but must, in so far as the matters dealt with by it are concerned, be regarded as conclusive.", "the short answer to the reason given by the High Court is that even a money decree passed in a suit would cease to be a final decision because if the judgment- debtor against whom the decree is pawed does not pay the amount voluntarily execution proceedings will have to be taken for re- covering the amount from him. It would thus lead to an absurdity if the test adopted by the High Court is accepted.", "is that in this case the sale made by the Official Receiver during the insolvency of the appellants father was the subject of a final decision by a competent court inasmuch as that court decided that the sale was of no avail to the purchaser at the Official Receiver had no power to effect that sale. Nothing more was required to be established by the appellants before being entitled to the protection of the first proviso to s.28A."], "rank2": ["is the meaning to be given to the expression final decision occurring in the first proviso to s. 28 A of the Provincial Insolvency Act, 1920 (Act No. 5 of 1920), introduced by Act No. 25 of 1948.", "Venkata Reddy, the father of the appellants, was adjudicated an insolvent", "At that time only the appellants 1 and 2 were born while the third appellant was born later. The fathers one-third share was put up for auction by the Official Receiver and was purchased by one Karuppan Pillai for Rs. 80/-. The Official Receiver then put up for auction the two-thirds share belonging to appellants 1 and 2 on July 27, 1936, which was purchased by the same person for Rs. 341/-.", "The new provision makes it clear that the law is and has always been that upon the fathers insolvency his disposing power over the interest of his undivided sons in the joint family property vests in the Official Receiver and that consequently the latter has a right to sell that interest. The-provision is thus declaratory of the law and was intended to apply to all cases except those covered by the two provisos.", "This proviso excepts from the operation of the Act a transaction such as a sale by an Official Receiver which has been the subject of a final decision by a competent Court. The short question, therefore. is whether the preliminary decree for partition passed in this case which was affirmed finally in second \n I.L.R. 1943 Mad. 83. appeal by the High Court of Madras can be regard as a final decision.", "It would be relevant to refer to s. 97 of the Code of Civil Procedure which provides that where a party aggrieved by a preliminary decree does not appeal from it, he is precluded from disputing its. correctness in any appeal which may be preferred from the final decree. This provision thus clearly indicates that as to the matters covered by it, a preliminary decree is regarded as embodying the final decision of the court pass- ing that decree."], "rank3": ["In that suit it was contended on behalf of the respondent that on their fathers insolvency the share of the appellants in the joint family property also vested in the Official Receiver and that he had the power to sell it. The contention was negatived by the trial court which passed a preliminary decree for partition in favour of the appellants.", "On January 18, 1946 the appellants made an application for a final decree which was granted ex parte on August 17, 1946. At the instance of the present respondent this decree was set aside. By that time the new provision, that is, s. 28 A of the Provincial, Insolvency Act, had come into force. On the basis of this provision it was contended by the respondent that the appellants were not entitled to the allotment of their two-thirds share in the property purchased by him inasmuch as that share had also vested in the Official Receiver.", "Act 25 of 1948 which introduced s. 28 A did not affect the preliminary decree for partition since it had been passed on August 20, 1943. He, therefore, restored the ex parte final decree which had been set aside on December 17, 1950."], "rank4": ["The objects and reasons set out in the bill which sought to introduce this provision were to bring the provisions of the provincial insolvency Act in line with those of the Presidency Towns Insolvency Act in so far as the vesting of the joint family property in the Official Receiver upon the fathers insolvency was concerned.", "in a partition suit the only decision which can be said to be a final decision is the final decree passed in the case and that since final decree proceedings were still going on when the Amending Act came into force the first proviso was not available to the appellants."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["Only one question arises for consideration in this appeal by special leave and that is the meaning to be given to the expression final decision occurring in the first proviso to s. 28 A of the Provincial Insolvency Act, 1920 (Act No. 5 of 1920), introduced by Act No. 25 of 1948.", "The new provision makes it clear that the law is and has always been that upon the fathers insolvency his disposing power over the interest of his undivided sons in the joint family property vests in the Official Receiver and that consequently the latter has a right to sell that interest. The-provision is thus declaratory of the law and was intended to apply to all cases except those covered by the two provisos", "the first proviso. This proviso excepts from the operation of the Act a transaction such as a sale by an Official Receiver which has been the subject of a final decision by a competent Court.", "The short question, therefore. is whether the preliminary decree for partition passed in this case which was affirmed finally in second \n I.L.R. 1943 Mad. 83. appeal by the High Court of Madras can be regard as a final decision", "Where, therefore, the decision is embodied in the judgment which is followed by a decree finality must naturally attach itself to it in the sense that it is no longer open to question by either party except in an appeal, review or revision petition as provided for by law. The High Court has, however, observed The mere declaration of the rights of the plaintiff by the preliminary decree, would, in our opinion not amount to a final decision for it is well known that even if a preliminary decree is passed either in a mortgage suit or in a partition suit, there are certain contingencies in which such a preliminary decree can be modified or amended and therefore would not become final. It is not clear from the judgment what the contingencies referred to by the High Court are in which a preliminary decree can be modified or amended unless what the learned judges meant was modified or amended in appeal or in review or in revision or in exceptional circumstances by resorting to the powers conferred by ss. 151 and 152 of the Code of Civil Procedure. If that is what the High Court meant then every decree passed by a Court including decrees passed in cases which do not contemplate making of a preliminary decree are liable to be modified and amended. Therefore, if the reason given by the High Court is accepted it would mean that no finality attaches to decree at all", "That is not the law. A decision is said to be final when so far as, ,the Court rendering it is concerned, it is unalterable except by resort to such provisions of the Code of Civil Procedure as permit its reversal, modification or amendment. Similarly, a final decision would mean a decision which would operate as res judicate between the parties if it is not sought to be modified or reversed by preferring an appeal or a revision or a review application as is permitted by the Code. A preliminary decree passed, whether it is in a mort- gage suit or a partition suit, is not a tentative decree but must, in so far as the matters dealt with by it are concerned, be regarded as conclusive. No doubt, in suits which contemplate the making of two decrees--a preliminary decree and a final decree-the decree which would be executable would be the final decree But the finality of a decree or a decision does not necessarily depend upon its being executable.", "The legislature in its wisdom has thought that suits of certain types should be decided in stages and though the suit in such cases can be regarded as fully and completely decided only after a final decree is made the decision of the court arrived at the earlier stage also has a finality attached to it", "This provision thus clearly indicates that as to the matters covered by it, a preliminary decree is regarded as embodying the final decision of the court pass- ing that decree", "my opinion, therefore, the order is not a final order In that case the Divorce Court made an order that the co- respondent do within seven days from the service of this order pay into Court the sum of pound 67 Is. 9d. being the amount of the petitioners costs, as taxed and certified by one of the registrars of this Division. The order was made in that form because at that time the ultimate fate of the petition was undecided. No doubt, the decree nisi had been passed but it had yet to be made absolute land the right of the petitioner to receive the costs might never have been brought to fruition.", "The money had therefore to be paid into the court", "The observations of the Master of Rolls must be read in the context of the facts of the case decided by him. Read that way those observations do not help the respondents", "Apart from this, the short answer to the reason given by the High Court is that even a money decree passed in a suit would cease to be a final decision because if the judgment- debtor against whom the decree is pawed does not pay the amount voluntarily execution proceedings will have to be taken for re- covering the amount from him. It would thus lead to an absurdity if the test adopted by the High Court is accepted.", "In the case before us the preliminary decree was never challenged at all by preferring any appeal and therefore, the matters conclude by it are not open to challenge in an appeal against the final decree. Further, a preliminary decree cannot be equated with an interlocutory order within the meaning of s. 105, Code of Civil Procedure. It will thus be seen that the decision relied upon has no application to the facts of this case. Our conclusion, therefore, is that in this case the sale made by the Official Receiver during the insolvency of the appellants father was the subject of a final decision by a competent court inasmuch as that court decided that the sale was of no avail to the purchaser at the Official Receiver had no power to effect that sale", "Nothing more was required to be established by the appellants before being entitled to the protection of the first proviso to s.28A", "Since they have established what was required to be established by them, they are entitled to a final decree and the High Court was in error in dismissing their application in that behalf"], "rank2": ["The appellants instituted a suit on February 1, 1.943, for the partition of the joint family property to which suit they made Pethi Reddy a party and claimed thereunder two- thirds share in the property puchased by him. In that suit it was contended on behalf of the respondent that on their fathers insolvency the share of the appellants in the joint family property also vested in the Official Receiver and that he had the power to sell it. The contention was negatived by the trial court which passed a preliminary decree for partition in favour of the appellants", "The decree was affirmed in appeal by the District judge and eventually by the High Court in second appeal, except with a slight variation regarding the amount of mesne profits. The decision of the High Court is dated November 18, 1946.", "On January 18, 1946 the appellants made an application for a final decree which was granted ex parte on August 17, 1946. At the instance of the present respondent this decree was set aside", "By that time the new provision, that is, s. 28 A of the Provincial, Insolvency Act, had come into force. On the basis of this provision it was contended by the respondent that the appellants were not entitled to the allotment of their two-thirds share in the property purchased by him inasmuch as that share had also vested in the Official Receiver. The District Munsif held that Act 25 of 1948 which introduced s. 28 A did not affect the preliminary decree for partition since it had been passed on August 20, 1943.", "He, therefore, restored the ex parte final decree which had been set aside on December 17, 1950. The appeal preferred by the respondent against the decision of the District Munsif was dismissed by the Principal Subordinate judge, Salem, whereupon he preferred a second appeal before the High Court", "The High Court allowed the appeal and dismissed the application of the appellant for passing the final decree, Section 28A of the Provincial Insolvency Act runs as follows The property of the insolvent shall comprise and shall always be deemed to have comprised also the capacity to exercise and to take proceedings for exercising all such powers in or over or in respect of property as might have been exercised by the insolvent for his own benefit at the commencement of his insolvency or before his discharge Provided that nothing in this section shall affect any sale, mortgage or other transfer of the property of the insolvent by a Court or Receiver or the Collector acting tinder s. 60 made before the commencement of the Provincial Insolvency (Amendment) Act, 1948, which has been the subject of a final decision by a competent Court Provided further that the property of the insolvent shall not be deemed by reason of anything contained in this section to comprise his capacity referred to in this section in respect of any such sale, mortgage or other transfer of property made in the State of Madras after the 28th day of July, 1942. and before the commencement of the Provincial Insolvency (Amendment) Act, 1948.", "The objects and reasons set out in the bill which sought to introduce this provision were to bring the provisions of the provincial insolvency Act in line with those of the Presidency Towns Insolvency Act in so far as the vesting of the joint family property in the Official Receiver upon the fathers insolvency was concerned. While under the Presidency Towns Insolvency Act, in a case of this kind, the disposing power of the father over the interest of his undivided sons also vests in the Official Receiver and not merely the fathers own interest in the joint family property there was divergence of opinion amongst the High Courts in India as to whether under the Provincial Insolvency Act the fathers disposing power over his undivided sons interest also vests in the Official Receiver", "A Full Bench of the Madras High Court held in Ramasastrulu v. Balakrishna Rao (1) that it does not. It was in the light of this decision that in the appellants suit for partition, a preliminary decree was passed with respect to their two- thirds interest in the joint family property which had been sold by the Official Receiver", "In the course of the decision of the Full Bench a suggestion was made that the legislature should step in and bring the provisions of the Provincial Insolvency Act in the relevant respect in line with those of the Presidency Towns Insolvency Act.", "It would be relevant to refer to s. 97 of the Code of Civil Procedure which provides that where a party aggrieved by a preliminary decree does not appeal from it, he is precluded from disputing its. correctness in any appeal which may be preferred from the final decree.", "The High Court, however, thinks that a decision cannot be regarded as final if further proceedings are required to be taken for procuring the relief to which a party is held entitled by that decision. In support of its view the High Court has referred to the following observations in in re A Debtor(1) It is clear., therefore, that further proceedings will be necessary to get the money out of court and I think it is also clear that the order of October 24, in its own terms, did not finally determine. the right of the petitioner, or any one else, in respect of the sum to be paid.", "Over-ruling the objection by the co-respondent, that is, the debtor that the bankruptcy notice was bad on, amongst other things, the ground that the second order made by the President of the Divorce Division was not a final order within sub-s. 1 (g) of s. 1 of the Bankruptcy Act, 1914, the registrar made a receiving order. In appeal it was contended that the receiving order was wrong because the solicitors were not the creditors of the debtor and also because the order for payment of the costs to them was not a final order", "While upholding the latter contention Lord Hanworth, M. R., said what has been quoted above and relied upon by the High Court. Upon the particular facts of the case the order was clearly not a final order and in making the observations quoted above the Master of Rolls did not formulate a test for determining what could be regarded as a final order in every kind of case", "We may, however, refer to a decision of this court upon which reliance was placed by the respondents. That is the decision in Vakalapudi Sri Ranga Rao and others V. Mutyala Ammanna", "There, in a suit for partition and another suit for possession of the suit property and arrears of rent, it was contended that upon the fathers insolvency the Official Receiver was in- competent to sell the sons interest in the joint family property. The contention was negatived by the trial court but upheld in appeals by the Subordinate judge who remanded the suits to the trial court with certain directions. Appeals preferred against his decision were dismissed by the High Court. Before the decision of the suits after remand, the Amending Act, XXV of 1948 came into force and it was contended before the trial court that in view of the new provision the sale by the Official Receiver must be held to be good even so far as the sons interest was concerned. This contention was negatived by the trial court on the ground that the decision of the High Court on the point was a final order within the meaning of the proviso. \nThe District judge, before whom appeals were preferred, however, negatived the contention and held that there was no final order with regard to the sale by the Official Receiver. The High Court reversed the decision of the District judge but this Court held that the orders of remand made by the Subordinate Judge and upheld by the High Court were interlocutory orders as also were the orders of C.A.", "No. 634 of 1957, decided on March 29, 1961. the High Court in the appeals prefer-red before it and as such could be challenged in the appeal preferred before this Court against the decision of the High Court in the appeal against the final decree in the suit."], "rank3": ["Venkata Reddy, the father of the appellants, was adjudicated an insolvent by the Sub-Court, Salem in I. P. No. 73 of 1935", "The fathers one-third share was put up for auction by the Official Receiver and was purchased by one Karuppan Pillai for Rs. 80/-.", "The Official Receiver then put up for auction the two-thirds share belonging to appellants 1 and 2 on July 27, 1936, which was purchased by the same person for Rs. 341/-. He sold the entire property to the respondent Pethi Reddy on May 25, 1939, for Rs. 300", "A little latter a further order was made by the President of the Divorce Court in these terms Upon hearing the solicitors for the petitioner I do order that the order herein dated the 11th day of July 1928 be varied and that (the debtor) the co-respondent do within seven days from the service of this order pay to Messrs H. L. Lumley Co., of 35 Picadilly W. 1, the solicitors of the petitioner, the sum of pound 67 Is. 9d. being the amount of the petitioners taxed costs as taxed and certified by one of the (1)1929 2 Ch, 146. registrars of this Division, the said solicitors undertaking to lodge in Court any sums recovered under this order. Pursuant to this order the solicitors gave an undertaking required by the Court to the registrar on October 26", "On November 5, the decree nisi was made absolute. On January 2, 1929, a bankruptcy notice was issued by the solicitors against the debtor, for payment to them of the amount of pound 67 1 s. 9d. The co-respondent did not comply with the bankruptcy notice and accordingly on January 27, the solicitors presented a bankruptcy petition against him"], "label": "ACCEPTED"}, "expert_4": {"rank1": ["A decision is said to be final when so far as, ,the Court rendering it is concerned, it is unalterable except by resort to such provisions of the Code of Civil Procedure as permit its reversal, modification or amendment. Similarly, a final decision would mean a decision which would operate as res judicate between the parties if it is not sought to be modified or reversed by preferring an appeal or a revision or a review application as is permitted by the Code. A preliminary decree passed, whether it is in a mort- gage suit or a partition suit, is not a tentative decree but must, in so far as the matters dealt with by it are concerned, be regarded as conclusive.", "No doubt, in suits which contemplate the making of two decrees--a preliminary decree and a final decree-the decree which would be executable would be the final decree But the finality of a decree or a decision does not necessarily depend upon its being executable.", "Our conclusion, therefore, is that in this case the sale made by the Official Receiver during the insolvency of the appellants father was the subject of a final decision by a competent court inasmuch as that court decided that the sale was of no avail to the purchaser at the Official Receiver had no power to effect that sale.", "Nothing more was required to be established by the appellants before being entitled to the protection of the first proviso to s.28A. \nSince they have established what was required to be established by them, they are entitled to a final decree and the High Court was in error in dismissing their application in that behalf. In the result we allow the appeal, set aside the judgment and decree of the High Court and restore that of the trial court as affirmed in appeal by the learned Subordinate judge."], "rank2": ["The short question, therefore. is whether the preliminary decree for partition passed in this case which was affirmed finally in second \n I.L.R. 1943 Mad. 83. appeal by the High Court of Madras can be regard as a final decision.", "It is not clear from the judgment what the contingencies referred to by the High Court are in which a preliminary decree can be modified or amended unless what the learned judges meant was modified or amended in appeal or in review or in revision or in exceptional circumstances by resorting to the powers conferred by ss. 151 and 152 of the Code of Civil Procedure. If that is what the High Court meant then every decree passed by a Court including decrees passed in cases which do not contemplate making of a preliminary decree are liable to be modified and amended. Therefore, if the reason given by the High Court is accepted it would mean that no finality attaches to decree at all.", "That is not the law.", "This provision thus clearly indicates that as to the matters covered by it, a preliminary decree is regarded as embodying the final decision of the court pass- ing that decree.", "Apart from this, the short answer to the reason given by the High Court is that even a money decree passed in a suit would cease to be a final decision because if the judgment- debtor against whom the decree is pawed does not pay the amount voluntarily execution proceedings will have to be taken for re- covering the amount from him. It would thus lead to an absurdity if the test adopted by the High Court is accepted.", "In the case before us the preliminary decree was never challenged at all by preferring any appeal and therefore, the matters conclude by it are not open to challenge in an appeal against the final decree.", "Further, a preliminary decree cannot be equated with an interlocutory order within the meaning of s. 105, Code of Civil Procedure.", "It will thus be seen that the decision relied upon has no application to the facts of this case."], "rank3": ["Only one question arises for consideration in this appeal by special leave and that is the meaning to be given to the expression final decision occurring in the first proviso to s. 28 A of the Provincial Insolvency Act, 1920 (Act No. 5 of 1920), introduced by Act No. 25 of 1948.", "He, therefore, restored the ex parte final decree which had been set aside on December 17, 1950.", "The appeal preferred by the respondent against the decision of the District Munsif was dismissed by the Principal Subordinate judge, Salem, whereupon he preferred a second appeal before the High Court. \nThe High Court allowed the appeal and dismissed the application of the appellant for passing the final decree", "In the course of the decision of the Full Bench a suggestion was made that the legislature should step in and bring the provisions of the Provincial Insolvency Act in the relevant respect in line with those of the Presidency Towns Insolvency Act. The new provision makes it clear that the law is and has always been that upon the fathers insolvency his disposing power over the interest of his undivided sons in the joint family property vests in the Official Receiver and that consequently the latter has a right to sell that interest. The-provision is thus declaratory of the law and was intended to apply to all cases except those covered by the two provisos.", "We are concerned here only with the first proviso.", "This proviso excepts from the operation of the Act a transaction such as a sale by an Official Receiver which has been the subject of a final decision by a competent Court.", "The competence of the court is not in question here. What is, however, contended is that in a partition suit the only decision which can be said to be a final decision is the final decree passed in the case and that since final decree proceedings were still going on when the Amending Act came into force the first proviso was not available to the appellants.", "It is contended on behalf of the appellants that since the rights of the parties are adjudicated upon by the court before a preliminary decree is passed that decree must, in so far as rights adjudicated upon arc concerned, be deemed to be a final decision The word decision even in its popular sense means a concluded opinion (see Strouds Judicial Dictionary--3rd ed. Vol. 1, p. 743).", "Where, therefore, the decision is embodied in the judgment which is followed by a decree finality must naturally attach itself to it in the sense that it is no longer open to question by either party except in an appeal, review or revision petition as provided for by law. The High Court has, however, observed The mere declaration of the rights of the plaintiff by the preliminary decree, would, in our opinion not amount to a final decision for it is well known that even if a preliminary decree is passed either in a mortgage suit or in a partition suit, there are certain contingencies in which such a preliminary decree can be modified or amended and therefore would not become final.", "The legislature in its wisdom has thought that suits of certain types should be decided in stages and though the suit in such cases can be regarded as fully and completely decided only after a final decree is made the decision of the court arrived at the earlier stage also has a finality attached to it.", "It would be relevant to refer to s. 97 of the Code of Civil Procedure which provides that where a party aggrieved by a preliminary decree does not appeal from it, he is precluded from disputing its. correctness in any appeal which may be preferred from the final decree.", "The High Court, however, thinks that a decision cannot be regarded as final if further proceedings are required to be taken for procuring the relief to which a party is held entitled by that decision. In support of its view the High Court has referred to the following observations in in re A Debtor(1) It is clear., therefore, that further proceedings will be necessary to get the money out of court and I think it is also clear that the order of October 24, in its own terms, did not finally determine. the right of the petitioner, or any one else, in respect of the sum to be paid. In my opinion, therefore, the order is not a final order In that case the Divorce Court made an order that the co- respondent do within seven days from the service of this order pay into Court the sum of pound 67 Is. 9d. being the amount of the petitioners costs, as taxed and certified by one of the registrars of this Division.", "The order was made in that form because at that time the ultimate fate of the petition was undecided.", "in Vakalapudi Sri Ranga Rao and others V. Mutyala Ammanna (1) in which it was held that a particular order was not a final decision within the meaning of the first proviso to S. 28-A.", "Before the decision of the suits after remand, the Amending Act, XXV of 1948 came into force and it was contended before the trial court that in view of the new provision the sale by the Official Receiver must be held to be good even so far as the sons interest was concerned. This contention was negatived by the trial court on the ground that the decision of the High Court on the point was a final order within the meaning of the proviso. \nThe District judge, before whom appeals were preferred, however, negatived the contention and held that there was no final order with regard to the sale by the Official Receiver.", "The High Court reversed the decision of the District judge but this Court held that the orders of remand made by the Subordinate Judge and upheld by the High Court were interlocutory orders as also were the orders of C.A. No. 634 of 1957, decided on March 29, 1961. the High Court in the appeals prefer-red before it and as such could be challenged in the appeal preferred before this Court against the decision of the High Court in the appeal against the final decree in the suit."], "rank4": ["At the instance of the present respondent this decree was set aside.", "By that time the new provision, that is, s. 28 A of the Provincial, Insolvency Act, had come into force. On the basis of this provision it was contended by the respondent that the appellants were not entitled to the allotment of their two-thirds share in the property purchased by him inasmuch as that share had also vested in the Official Receiver. The District Munsif held that Act 25 of 1948 which introduced s. 28 A did not affect the preliminary decree for partition since it had been passed on August 20, 1943.", "Section 28A of the Provincial Insolvency Act runs as follows The property of the insolvent shall comprise and shall always be deemed to have comprised also the capacity to exercise and to take proceedings for exercising all such powers in or over or in respect of property as might have been exercised by the insolvent for his own benefit at the commencement of his insolvency or before his discharge Provided that nothing in this section shall affect any sale, mortgage or other transfer of the property of the insolvent by a Court or Receiver or the Collector acting tinder s. 60 made before the commencement of the Provincial Insolvency (Amendment) Act, 1948, which has been the subject of a final decision by a competent Court Provided further that the property of the insolvent shall not be deemed by reason of anything contained in this section to comprise his capacity referred to in this section in respect of any such sale, mortgage or other transfer of property made in the State of Madras after the 28th day of July, 1942. and before the commencement of the Provincial Insolvency (Amendment) Act, 1948.", "The objects and reasons set out in the bill which sought to introduce this provision were to bring the provisions of the provincial insolvency Act in line with those of the Presidency Towns Insolvency Act in so far as the vesting of the joint family property in the Official Receiver upon the fathers insolvency was concerned.", "While under the Presidency Towns Insolvency Act, in a case of this kind, the disposing power of the father over the interest of his undivided sons also vests in the Official Receiver and not merely the fathers own interest in the joint family property there was divergence of opinion amongst the High Courts in India as to whether under the Provincial Insolvency Act the fathers disposing power over his undivided sons interest also vests in the Official Receiver.", "A Full Bench of the Madras High Court held in Ramasastrulu v. Balakrishna Rao (1) that it does not. It was in the light of this decision that in the appellants suit for partition, a preliminary decree was passed with respect to their two- thirds interest in the joint family property which had been sold by the Official Receiver.", "No doubt, the decree nisi had been passed but it had yet to be made absolute land the right of the petitioner to receive the costs might never have been brought to fruition. The money had therefore to be paid into the court. A little latter a further order was made by the President of the Divorce Court in these terms Upon hearing the solicitors for the petitioner I do order that the order herein dated the 11th day of July 1928 be varied and that (the debtor) the co-respondent do within seven days from the service of this order pay to Messrs H.", "L.", "Lumley Co., of 35 Picadilly W. 1, the solicitors of the petitioner, the sum of pound 67 Is. 9d. being the amount of the petitioners taxed costs as taxed and certified by one of the (1)1929 2 Ch, 146. registrars of this Division, the said solicitors undertaking to lodge in Court any sums recovered under this order. Pursuant to this order the solicitors gave an undertaking required by the Court to the registrar on October 26. On November 5, the decree nisi was made absolute.", "On January 2, 1929, a bankruptcy notice was issued by the solicitors against the debtor, for payment to them of the amount of pound 67 1 s. 9d.", "The co-respondent did not comply with the bankruptcy notice and accordingly on January 27, the solicitors presented a bankruptcy petition against him. Over-ruling the objection by the co-respondent, that is, the debtor that the bankruptcy notice was bad on, amongst other things, the ground that the second order made by the President of the Divorce Division was not a final order within sub-s. 1 (g) of s. 1 of the Bankruptcy Act, 1914, the registrar made a receiving order. In appeal it was contended that the receiving order was wrong because the solicitors were not the creditors of the debtor and also because the order for payment of the costs to them was not a final order.", "Upon the particular facts of the case the order was clearly not a final order and in making the observations quoted above the Master of Rolls did not formulate a test for determining what could be regarded as a final order in every kind of case. The observations of the Master of Rolls must be read in the context of the facts of the case decided by him.", "Read that way those observations do not help the respondents."], "rank5": ["Venkata Reddy, the father of the appellants, was adjudicated an insolvent by the Sub-Court, Salem in I. P. No. 73 of 1935.", "At that time only the appellants 1 and 2 were born while the third appellant was born later.", "The fathers one-third share was put up for auction by the Official Receiver and was purchased by one Karuppan Pillai for Rs. 80/-. The Official Receiver then put up for auction the two-thirds share belonging to appellants 1 and 2 on July 27, 1936, which was purchased by the same person for Rs. 341/-. He sold the entire property to the respondent Pethi Reddy on May 25, 1939, for Rs. 300/-.", "The appellants instituted a suit on February 1, 1.943, for the partition of the joint family property to which suit they made Pethi Reddy a party and claimed thereunder two- thirds share in the property puchased by him.", "In that suit it was contended on behalf of the respondent that on their fathers insolvency the share of the appellants in the joint family property also vested in the Official Receiver and that he had the power to sell it. The contention was negatived by the trial court which passed a preliminary decree for partition in favour of the appellants. \nThe decree was affirmed in appeal by the District judge and eventually by the High Court in second appeal, except with a slight variation regarding the amount of mesne profits.", "On January 18, 1946 the appellants made an application for a final decree which was granted ex parte on August 17, 1946."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["A preliminary decree passed, whether it is in a mort- gage suit or a partition suit, is not a tentative decree but must, in so far as the matters dealt with by it are concerned, be regarded as conclusive.", "in this case the sale made by the Official Receiver during the insolvency of the appellants father was the subject of a final decision by a competent court inasmuch as that court decided that the sale was of no avail to the purchaser at the Official Receiver had no power to effect that sale.", "Since they have established what was required to be established by them, they are entitled to a final decree and the High Court was in error in dismissing their application in that behalf."], "rank2": ["A decision is said to be final when so far as, ,the Court rendering it is concerned, it is unalterable except by resort to such provisions of the Code of Civil Procedure as permit its reversal, modification or amendment.", "the finality of a decree or a decision does not necessarily depend upon its being executable."], "rank3": ["Provided that nothing in this section shall affect any sale, mortgage or other transfer of the property of the insolvent by a Court or Receiver or the Collector acting tinder s. 60 made before the commencement of the Provincial Insolvency (Amendment) Act, 1948, which has been the subject of a final decision by a competent Court Provided further that the property of the insolvent shall not be deemed by reason of anything contained in this section to comprise his capacity referred to in this section in respect of any such sale, mortgage or other transfer of property made in the State of Madras after the 28th day of July, 1942. and before the commencement of the Provincial Insolvency (Amendment) Act, 1948.", "Where, therefore, the decision is embodied in the judgment which is followed by a decree finality must naturally attach itself to it in the sense that it is no longer open to question by either party except in an appeal, review or revision petition as provided for by law.", "Similarly, a final decision would mean a decision which would operate as res judicate between the parties if it is not sought to be modified or reversed by preferring an appeal or a revision or a review application as is permitted by the Code.", "Apart from this, the short answer to the reason given by the High Court is that even a money decree passed in a suit would cease to be a final decision because if the judgment- debtor against whom the decree is pawed does not pay the amount voluntarily execution proceedings will have to be taken for re- covering the amount from him. It would thus lead to an absurdity if the test adopted by the High Court is accepted.", "Further, a preliminary decree cannot be equated with an interlocutory order within the meaning of s. 105, Code of Civil Procedure."], "rank4": ["The word decision even in its popular sense means a concluded opinion (see Strouds Judicial Dictionary--3rd ed. Vol. 1, p. 743).", "It would be relevant to refer to s. 97 of the Code of Civil Procedure which provides that where a party aggrieved by a preliminary decree does not appeal from it, he is precluded from disputing its. correctness in any appeal which may be preferred from the final decree. This provision thus clearly indicates that as to the matters covered by it, a preliminary decree is regarded as embodying the final decision of the court pass- ing that decree.", "In the case before us the preliminary decree was never challenged at all by preferring any appeal and therefore, the matters conclude by it are not open to challenge in an appeal against the final decree."], "rank5": ["The property of the insolvent shall comprise and shall always be deemed to have comprised also the capacity to exercise and to take proceedings for exercising all such powers in or over or in respect of property as might have been exercised by the insolvent for his own benefit at the commencement of his insolvency or before his discharge", "It is not clear from the judgment what the contingencies referred to by the High Court are in which a preliminary decree can be modified or amended unless what the learned judges meant was modified or amended in appeal or in review or in revision or in exceptional circumstances by resorting to the powers conferred by ss. 151 and 152 of the Code of Civil Procedure.", "The legislature in its wisdom has thought that suits of certain types should be decided in stages and though the suit in such cases can be regarded as fully and completely decided only after a final decree is made the decision of the court arrived at the earlier stage also has a finality attached to it.", "Upon the particular facts of the case the order was clearly not a final order and in making the observations quoted above the Master of Rolls did not formulate a test for determining what could be regarded as a final order in every kind of case.", "The observations of the Master of Rolls must be read in the context of the facts of the case decided by him. Read that way those observations do not help the respondents."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1962_384", "text": "Appeal by special leave from the award dated December 29, 1960, of the Industrial Trinal Bihar it Patna in Reference No. 4 of 1960. K. Daphtary, Solicitor General of India. and Sardar Bhadur, for the appellants. P. Maheshwari, for the respondents. 1962. March 9. The Judgment of the Court was delivered by GAJENDRAGADKAR,J.-This appeal by special leave, is directed against the order passed by the Industrial Tribunal,Patna, directing the appellant, the Tatanagar Foundry Co., to pay to the respondents, its workmen, 75 of the consolidated wages as compensation for having laid them off for a period of 45 days commencing from December 1.5, 1959. it is common around that the appellant laid off the respondents for the said period. The appellants case was that it had paid the respondents the statutory compensation for the said lay-off as prescribed by s.25C of the Industrial Disputes Act (No. 14 of 1947) (hereinafter called the Act). \nThe respondents, however, contended that the lay-off was not justified and so the statutory compensation paid by the appellant did not satisfy the ends of justice. It was this dispute between the parties which was referred for adjudication by the Government of Bihar to the Industrial Tribunal on February 9, 1960. On this reference, the Tribunal has held that the lay-off could not be held to be altogether justified. That is why it has awarded compensation to the respondents in excess of the amount statutorily fixed in that behalf. The appellant contends that the award thus made by the Tribunal is contrary to law Before dealing with the merits of the contentions raised by the appellant, it would be necessary to state some relevant facts which led to the lay-off. The appellant is a Public Limited Company and has its factory in Jamshedpur. \nIt manufactures cast iron sleepers, pipes, general engineering casting and non-ferrous castings in the said factory. The raw materials mainly required for the manufacture of sleepers are pig-iron, coke, limestone and moulding sand. The Railway Board is the only buyer of sleepers and the sleepers are, therefore, manufactured only on receipt of orders upon tenders from the said Board, and not otherwise. The normal procedure for procuring raw material was that after an order was received from the Railway Board, the appellant submitted its requirement of pig iron to ,the Iron Steel Controller of the Government of India who allocates the quantity for the said commodity to the various manufactures, such as Tata Iron Steel Co. Ltd. and Indian Iron Steel Co. Ltd. Formerly, supply of pig iron used to come from the said two concerns to the appellant and the appellant used to pay cash to Tata Iron Steel Co. Ltd. for the pig iron supplied by it and by a Letter of credit to the Indian Iron Steel Co. Ltd. on which the said Company used to supply the raw material made by it. In 1959, both the companies stopped supply of pig iron in spite of the order issued in that behalf by the Controller, and they wrote to the appellant suggesting that the appellant should request the Controller to cancel his order and place the same with some other suppliers. Correspondence followed between the said companies and the appellant and finally in November, 1959, the appellant was informed by the said companies that they could not supply its requirements of raw material. In June, 1959, the Bhilai Steel Works made their first shipment of pig iron addressed to, the appellant. In August, 1959, the said Works despatched some wagons of pig iron to the appellant, but out of 20 wagons of the consignment, 14 were lost completely, and the rest misdelivered and were subsequently found somewhere in Gomoh and some in Tatanagar and they never reached the appellant in time. In May, 1959, the appellant arranged for Letter of Credit for a sum of Rs. 1,00,000/- for the Bhilai Steel Works. In August, there was a supply of 440 tons and in September, followed a supply of 36 wagons Containing pig iron to the extent of 20 to 21 tons each roughly. In all, this latter supply came to about 760 tons. \nIn the two subsequent months, no supply was received from Bhilai. The Letter of Credit which the appellant had opened for Bhilai Steel Works was revolving, with the result that as soon as one transaction was completed, the said letter was ready for the subsequent transaction. The effect of this revolving letter was that the value of credit of Rs.1,00,000/- continued to be outstanding all the time. In spite of this revolving letter, the Bhilai Steel Works failed to supply pig iron in the two months October and November. The appellant reminded the Works that no supply of pig iron was received from them and yet no advice of any despatch of pig iron was received from the Works after July 27, 1959. Even the 20 wagons which had been sent in August and September did not arrive at the factory. These wagons, it was later learnt, had been delivered to K. P. Docks and some other destinations. In regard to the supply of pig iron from Rourkela, the appellant arranged for finance on cash basis. In fact, between August and December a total advance of Rs. 1,75,000/- was made to the Rourkela Steel Works. A supply of pig iron worth about Rs. 1,64,000/- was received by the appellant, but the balance of Rs. 11,000/- was still outstanding.,In addition to the cash advances, the appellant also opened a Letter of Credit for Rs. 1,00,000/- in November, 1959, for financing the purchase of steel from the said Works. As early as 1959, TISCO informed the appellant that it regretted that it would not be possible for it to supply the requirements of the company regularly, while in regard to the supply from IISCO, the position was still worse. The appellant kept its employees and the Assistant Labour Commissioner fully informed of these unfortunate developments from time to time. Both the Assistant Labour Commissioner and Mr. John, President of the respondents Union, did what they could by moving the Government to assist the appellant in securing the raw material. Even so, when the situation did not show any signs of improvement and the appellant found that no raw material was available with which its foundry could carry on the manufacture of sleepers, it issued a notice on December 15,- 1959, and laid off the workers of the Sleeper Factory. This lay-off con- tinued until September, 11, 1960 and from September 12, 1960, the appellant closed the Sleeper Foundry department and issued notice of retrenchment. Subsequently, retrenchment compensation was duly paid to the workmen who had been retrenched. That, in short, is the background of the lay-off, the validity of which formed the subject-matter of the present reference. It appears that before the Tribunal it was urged by the respondents that the appellant had deliberately brought about a situation which led to the lay-off in order to divert the relevant orders for sleepers to its Belur factory. The argument was that at Belur, the appellant gets its work done at cheaper cost with the help of contract labour. Now, if this contention had been established then it would clearly have been a case of malafides on the part of the appellant and a claim for additional compensation may have been justified. But the Tribunal has rejected this contention and has hold that no evidence had been adduced to prove such a malafide intention on the part of the appellant. It was also urged by the respondents that even in the absence of pig iron, the manufacture of sleepers could have been carried on by utilising a substitute, and in support of this case, four witnesses were examined by the respondents. The Tribunal has rejected this case also. It has found that the evidence given by the four witnesses was unreliable and unsatisfactory and the statement made by the General Manager in cross-examination on this point was sufficient to show that in the absence of pig iron, castings with scrap iron and tin could not have been made. In fact, the General Manager categorically stated that the appellant had not casted any sleeper without pig iron at any time. Thus, the alternative plea raised by the respondents to suggest that if the appellant had so desired, it could have avoided to lay-off its workmen, has also been rejected by the Tribunal. The Tribunal, however, was inclined to take the view that if the management had been more foresighted, it could have avoided the unfortunate position which it had to face at the relevant time and because the Tribunal thought that the situation which faced the appellant at the relevant time was partly due to its negligence, it reached the final conclusion that the lay-off was not altogether justified. The Tribunals view appears to be that if reasonable care had been exercised by the appellant, the situation could have been avoided. It is this part, of its finding that is seriously disputed before us by the appellant. Under a. 2 (kkk), lay-off means, inter alia, the failure, or inability of an employer on account of shortage of raw materials to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched. As we have already seen, there is no doubt that raw materials wore not available to the appellant at the relevant time and so, the lay-off which is the subject-matter of the present dispute satisfies the test prescribed by the definition. Section 25C provides for the right of workmen laid-off for compensation, and it is common ground that compensation, equal to 50 of the total of the basic wages and dearness allowance, as therein prescribed has been paid by the appellant to the respondents. The issue referred to the Tribunal was whether the action of the management in laying off the workmen was justified. If not, to what relief were, the respondents entitled ? In other words, the reference shows that it was only if the Tribunal came to the conclusion that the lay-off wag not justified that the question of considering what additional compensation should be paid to the respondents could arise. If the lay-off is justified and it satisfies the requirements of the definition under s. 2(kkk), the only relief to which the workmen laid off are entitled is the statutory relief prescribed by a. 25C. There is no doubt or dispute about this position. It is also not in dispute that if the lay-off is malafide in the sense that the employer has deliberately and maliciously brought about a situation where lay off became necessary, then it would not be a lay-off which is justified under s. 2(kkk) and the relief provided to the laid-off workmen under a. 25C would not be the only relief to which they are entitled. Malafides of the employer in declaring a lay-off really mean that no lay-off, as contemplated by the definition, has in law taken place and so, a finding as to malafides of the employer in declaring a lay-off naturally takes the lay-off out of the definition of s. 2(kkk) and as such a. 25C cannot be held to be applicable to it so as to confine the workmens right to the compensation therein prescribed. If the lay-off has been declared in order to victimise the workmen or for some other ulterior purpose, the position would be the same. It would Dot be a lay-off as contemplated by a. 2(kkk). But when dealing with a lay-off like the one with which we are concerned in the present appeal it would not be open to the Tribunal to enquire whether the appellant could have avoided the lay off if he had been more diligent, more careful or more far-sighted. That is a matter relating to the management of the undertaking and unless malafides are alleged or proved, it would be difficult to assume that the Industrial Tribunal has jurisdiction to sit in judgment over the acts of management of the employer and investigate whether a more prudent management could have avoided the situation which led to lay- off. The danger involved in permitting such jurisdiction to the Tribunal is illustrated by the present award itself. The Tribunal has found that the appellant was in financial difficulties at the relevant time it has found that the appellant was not actuated by any malafide intention, it has come to the conclusion that the lay-off was not the result of any uleriort motive, and yet it has finally come to the conclusion that if the affairs of the appellant it had been better managed and more foresight had been shown by the appellant prior to the time when the crisis was reached, pig iron could have been secured and lay-off could have been avoided. Apart from, the fact that this conclusion does not appear to be borne out by any evidence on record, it seems to us that the Tribunal exceeded its jurisdiction in trying to decide whether better. management could have avoided the crisis. The appellant is, no doubt, expected to manage its affairs prudently, but it would, we think, not be reasonable or fair to hold that if the employer is faced with a situation under which for lack of raw materials he has to lay-off his workmen, it is necessary that he must submit to an enquiry by the Industrial Tribunal about the prudence of the management and the forethought displayed by it in anticipating and avoiding the difficulties. \nThat is why we think in embarking upon an enquiry as to whether the appellant had shown sufficient foresight in managing its affairs, the Tribunal has exceeded its jurisdiction. Besides, as we have just indicated, its finding on the question of negligence is not supported by any evidence on record nor by probabilities in the case. In that connection, it is significant that subsequently the section in question has been closed and the retrenched workmen have been paid retrenchment compensation due to them. \nDECISION ??", "expert_1": {"rank1": ["The Tribunal has found that the appellant was in financial difficulties at the relevant time it has found that the appellant was not actuated by any malafide intention, it has come to the conclusion that the lay-off was not the result of any uleriort motive, and yet it has finally come to the conclusion that if the affairs of the appellant it had been better managed and more foresight had been shown by the appellant prior to the time when the crisis was reached, pig iron could have been secured and lay-off could have been avoided. Apart from, the fact that this conclusion does not appear to be borne out by any evidence on record, it seems to us that the Tribunal exceeded its jurisdiction in trying to decide whether better. management could have avoided the crisis. The appellant is, no doubt, expected to manage its affairs prudently, but it would, we think, not be reasonable or fair to hold that if the employer is faced with a situation under which for lack of raw materials he has to lay-off his workmen, it is necessary that he must submit to an enquiry by the Industrial Tribunal about the prudence of the management and the forethought displayed by it in anticipating and avoiding the difficulties. \nThat is why we think in embarking upon an enquiry as to whether the appellant had shown sufficient foresight in managing its affairs, the Tribunal has exceeded its jurisdiction. Besides, as we have just indicated, its finding on the question of negligence is not supported by any evidence on record nor by probabilities in the case. In that connection, it is significant that subsequently the section in question has been closed and the retrenched workmen have been paid retrenchment compensation due to them."], "rank2": ["As we have already seen, there is no doubt that raw materials wore not available to the appellant at the relevant time and so, the lay-off which is the subject-matter of the present dispute satisfies the test prescribed by the definition.", "In other words, the reference shows that it was only if the Tribunal came to the conclusion that the lay-off wag not justified that the question of considering what additional compensation should be paid to the respondents could arise. If the lay-off is justified and it satisfies the requirements of the definition under s. 2(kkk), the only relief to which the workmen laid off are entitled is the statutory relief prescribed by a. 25C. There is no doubt or dispute about this position. It is also not in dispute that if the lay-off is malafide in the sense that the employer has deliberately and maliciously brought about a situation where lay off became necessary, then it would not be a lay-off which is justified under s. 2(kkk) and the relief provided to the laid-off workmen under a. 25C would not be the only relief to which they are entitled. Malafides of the employer in declaring a lay-off really mean that no lay-off, as contemplated by the definition, has in law taken place and so, a finding as to malafides of the employer in declaring a lay-off naturally takes the lay-off out of the definition of s. 2(kkk) and as such a. 25C cannot be held to be applicable to it so as to confine the workmens right to the compensation therein prescribed. If the lay-off has been declared in order to victimise the workmen or for some other ulterior purpose, the position would be the same. It would Dot be a lay-off as contemplated by a. 2(kkk). But when dealing with a lay-off like the one with which we are concerned in the present appeal it would not be open to the Tribunal to enquire whether the appellant could have avoided the lay off if he had been more diligent, more careful or more far-sighted. That is a matter relating to the management of the undertaking and unless malafides are alleged or proved, it would be difficult to assume that the Industrial Tribunal has jurisdiction to sit in judgment over the acts of management of the employer and investigate whether a more prudent management could have avoided the situation which led to lay- off. The danger involved in permitting such jurisdiction to the Tribunal is illustrated by the present award itself."], "rank3": ["It appears that before the Tribunal it was urged by the respondents that the appellant had deliberately brought about a situation which led to the lay-off in order to divert the relevant orders for sleepers to its Belur factory. The argument was that at Belur, the appellant gets its work done at cheaper cost with the help of contract labour. Now, if this contention had been established then it would clearly have been a case of malafides on the part of the appellant and a claim for additional compensation may have been justified. But the Tribunal has rejected this contention and has hold that no evidence had been adduced to prove such a malafide intention on the part of the appellant. It was also urged by the respondents that even in the absence of pig iron, the manufacture of sleepers could have been carried on by utilising a substitute, and in support of this case, four witnesses were examined by the respondents. The Tribunal has rejected this case also. It has found that the evidence given by the four witnesses was unreliable and unsatisfactory and the statement made by the General Manager in cross-examination on this point was sufficient to show that in the absence of pig iron, castings with scrap iron and tin could not have been made.", "In fact, the General Manager categorically stated that the appellant had not casted any sleeper without pig iron at any time. Thus, the alternative plea raised by the respondents to suggest that if the appellant had so desired, it could have avoided to lay-off its workmen, has also been rejected by the Tribunal. The Tribunal, however, was inclined to take the view that if the management had been more foresighted, it could have avoided the unfortunate position which it had to face at the relevant time and because the Tribunal thought that the situation which faced the appellant at the relevant time was partly due to its negligence, it reached the final conclusion that the lay-off was not altogether justified. The Tribunals view appears to be that if reasonable care had been exercised by the appellant, the situation could have been avoided. It is this part, of its finding that is seriously disputed before us by the appellant."], "rank4": ["This appeal by special leave, is directed against the order passed by the Industrial Tribunal,Patna, directing the appellant, the Tatanagar Foundry Co., to pay to the respondents, its workmen, 75 of the consolidated wages as compensation for having laid them off for a period of 45 days commencing from December 1.5, 1959. it is common around that the appellant laid off the respondents for the said period. The appellants case was that it had paid the respondents the statutory compensation for the said lay-off as prescribed by s.25C of the Industrial Disputes Act (No. 14 of 1947) (hereinafter called the Act). \nThe respondents, however, contended that the lay-off was not justified and so the statutory compensation paid by the appellant did not satisfy the ends of justice. It was this dispute between the parties which was referred for adjudication by the Government of Bihar to the Industrial Tribunal on February 9, 1960. On this reference, the Tribunal has held that the lay-off could not be held to be altogether justified. That is why it has awarded compensation to the respondents in excess of the amount statutorily fixed in that behalf. The appellant contends that the award thus made by the Tribunal is contrary to law Before dealing with the merits of the contentions raised by the appellant, it would be necessary to state some relevant facts which led to the lay-off.", "It appears that before the Tribunal it was urged by the respondents that the appellant had deliberately brought about a situation which led to the lay-off in order to divert the relevant orders for sleepers to its Belur factory. The argument was that at Belur, the appellant gets its work done at cheaper cost with the help of contract labour. Now, if this contention had been established then it would clearly have been a case of malafides on the part of the appellant and a claim for additional compensation may have been justified. But the Tribunal has rejected this contention and has hold that no evidence had been adduced to prove such a malafide intention on the part of the appellant. It was also urged by the respondents that even in the absence of pig iron, the manufacture of sleepers could have been carried on by utilising a substitute, and in support of this case, four witnesses were examined by the respondents."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["If the lay-off is justified and it satisfies the requirements of the definition under s. 2(kkk), the only relief to which the workmen laid off are entitled is the statutory relief prescribed by a. 25C.", "if the lay-off is malafide in the sense that the employer has deliberately and maliciously brought about a situation where lay off became necessary, then it would not be a lay-off which is justified under s. 2(kkk) and the relief provided to the laid-off workmen under a. 25C would not be the only relief to which they are entitled.", "when dealing with a lay-off like the one with which we are concerned in the present appeal it would not be open to the Tribunal to enquire whether the appellant could have avoided the lay off if he had been more diligent, more careful or more far-sighted."], "rank2": ["The appellants case was that it had paid the respondents the statutory compensation for the said lay-off as prescribed by s.25C of the Industrial Disputes Act (No. 14 of 1947) (hereinafter called the Act). \nThe respondents, however, contended that the lay-off was not justified and so the statutory compensation paid by the appellant did not satisfy the ends of justice.", "the fact that this conclusion does not appear to be borne out by any evidence on record, it seems to us that the Tribunal exceeded its jurisdiction in trying to decide whether better. management could have avoided the crisis."], "rank3": ["the alternative plea raised by the respondents to suggest that if the appellant had so desired, it could have avoided to lay-off its workmen, has also been rejected by the Tribunal.", "The Tribunal, however, was inclined to take the view that if the management had been more foresighted, it could have avoided the unfortunate position which it had to face at the relevant time and because the Tribunal thought that the situation which faced the appellant at the relevant time was partly due to its negligence, it reached the final conclusion that the lay-off was not altogether justified."], "rank4": ["the situation did not show any signs of improvement and the appellant found that no raw material was available with which its foundry could carry on the manufacture of sleepers, it issued a notice on December 15,- 1959, and laid off the workers of the Sleeper Factory.", "retrenchment compensation was duly paid to the workmen who had been retrenched."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["Now, if this contention had been established then it would clearly have been a case of malafides on the part of the appellant and a claim for additional compensation may have been justified. But the Tribunal has rejected this contention and has hold that no evidence had been adduced to prove such a malafide intention on the part of the appellant", "In fact, the General Manager categorically stated that the appellant had not casted any sleeper without pig iron at any time. Thus, the alternative plea raised by the respondents to suggest that if the appellant had so desired, it could have avoided to lay-off its workmen, has also been rejected by the Tribunal", "As we have already seen, there is no doubt that raw materials wore not available to the appellant at the relevant time and so, the lay-off which is the subject-matter of the present dispute satisfies the test prescribed by the definition. Section 25C provides for the right of workmen laid-off for compensation, and it is common ground that compensation, equal to 50 of the total of the basic wages and dearness allowance, as therein prescribed has been paid by the appellant to the respondents", "The issue referred to the Tribunal was whether the action of the management in laying off the workmen was justified. If not, to what relief were, the respondents entitled ? In other words, the reference shows that it was only if the Tribunal came to the conclusion that the lay-off wag not justified that the question of considering what additional compensation should be paid to the respondents could arise", "If the lay-off is justified and it satisfies the requirements of the definition under s. 2(kkk), the only relief to which the workmen laid off are entitled is the statutory relief prescribed by a. 25C. There is no doubt or dispute about this position", "It is also not in dispute that if the lay-off is malafide in the sense that the employer has deliberately and maliciously brought about a situation where lay off became necessary, then it would not be a lay-off which is justified under s. 2(kkk) and the relief provided to the laid-off workmen under a. 25C would not be the only relief to which they are entitled. Malafides of the employer in declaring a lay-off really mean that no lay-off, as contemplated by the definition, has in law taken place and so, a finding as to malafides of the employer in declaring a lay-off naturally takes the lay-off out of the definition of s. 2(kkk) and as such a. 25C cannot be held to be applicable to it so as to confine the workmens right to the compensation therein prescribed. If the lay-off has been declared in order to victimise the workmen or for some other ulterior purpose, the position would be the same", "It would Dot be a lay-off as contemplated by a. 2(kkk).", "But when dealing with a lay-off like the one with which we are concerned in the present appeal it would not be open to the Tribunal to enquire whether the appellant could have avoided the lay off if he had been more diligent, more careful or more far-sighted. That is a matter relating to the management of the undertaking and unless malafides are alleged or proved, it would be difficult to assume that the Industrial Tribunal has jurisdiction to sit in judgment over the acts of management of the employer and investigate whether a more prudent management could have avoided the situation which led to lay- off. The danger involved in permitting such jurisdiction to the Tribunal is illustrated by the present award itself", "Apart from, the fact that this conclusion does not appear to be borne out by any evidence on record, it seems to us that the Tribunal exceeded its jurisdiction in trying to decide whether better. management could have avoided the crisis. The appellant is, no doubt, expected to manage its affairs prudently, but it would, we think, not be reasonable or fair to hold that if the employer is faced with a situation under which for lack of raw materials he has to lay-off his workmen, it is necessary that he must submit to an enquiry by the Industrial Tribunal about the prudence of the management and the forethought displayed by it in anticipating and avoiding the difficulties. \nThat is why we think in embarking upon an enquiry as to whether the appellant had shown sufficient foresight in managing its affairs, the Tribunal has exceeded its jurisdiction. Besides, as we have just indicated, its finding on the question of negligence is not supported by any evidence on record nor by probabilities in the case.", "In that connection, it is significant that subsequently the section in question has been closed and the retrenched workmen have been paid retrenchment compensation due to them."], "rank2": ["It was this dispute between the parties which was referred for adjudication by the Government of Bihar to the Industrial Tribunal on February 9, 1960. On this reference, the Tribunal has held that the lay-off could not be held to be altogether justified. That is why it has awarded compensation to the respondents in excess of the amount statutorily fixed in that behalf", "The appellant contends that the award thus made by the Tribunal is contrary to law Before dealing with the merits of the contentions raised by the appellant, it would be necessary to state some relevant facts which led to the lay-off.", "The Letter of Credit which the appellant had opened for Bhilai Steel Works was revolving, with the result that as soon as one transaction was completed, the said letter was ready for the subsequent transaction. The effect of this revolving letter was that the value of credit of Rs.1,00,000/- continued to be outstanding all the time", "As early as 1959, TISCO informed the appellant that it regretted that it would not be possible for it to supply the requirements of the company regularly, while in regard to the supply from IISCO, the position was still worse", "The appellant kept its employees and the Assistant Labour Commissioner fully informed of these unfortunate developments from time to time. Both the Assistant Labour Commissioner and Mr. John, President of the respondents Union, did what they could by moving the Government to assist the appellant in securing the raw material. Even so, when the situation did not show any signs of improvement and the appellant found that no raw material was available with which its foundry could carry on the manufacture of sleepers, it issued a notice on December 15,- 1959, and laid off the workers of the Sleeper Factory.", "This lay-off con- tinued until September, 11, 1960 and from September 12, 1960, the appellant closed the Sleeper Foundry department and issued notice of retrenchment", "Subsequently, retrenchment compensation was duly paid to the workmen who had been retrenched", "It appears that before the Tribunal it was urged by the respondents that the appellant had deliberately brought about a situation which led to the lay-off in order to divert the relevant orders for sleepers to its Belur factory. The argument was that at Belur, the appellant gets its work done at cheaper cost with the help of contract labour.", "It was also urged by the respondents that even in the absence of pig iron, the manufacture of sleepers could have been carried on by utilising a substitute, and in support of this case, four witnesses were examined by the respondents. The Tribunal has rejected this case also. It has found that the evidence given by the four witnesses was unreliable and unsatisfactory and the statement made by the General Manager in cross-examination on this point was sufficient to show that in the absence of pig iron, castings with scrap iron and tin could not have been made.", "The Tribunal, however, was inclined to take the view that if the management had been more foresighted, it could have avoided the unfortunate position which it had to face at the relevant time and because the Tribunal thought that the situation which faced the appellant at the relevant time was partly due to its negligence, it reached the final conclusion that the lay-off was not altogether justified. The Tribunals view appears to be that if reasonable care had been exercised by the appellant, the situation could have been avoided. It is this part, of its finding that is seriously disputed before us by the appellant", "Under a. 2 (kkk), lay-off means, inter alia, the failure, or inability of an employer on account of shortage of raw materials to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched", "The Tribunal has found that the appellant was in financial difficulties at the relevant time it has found that the appellant was not actuated by any malafide intention, it has come to the conclusion that the lay-off was not the result of any uleriort motive, and yet it has finally come to the conclusion that if the affairs of the appellant it had been better managed and more foresight had been shown by the appellant prior to the time when the crisis was reached, pig iron could have been secured and lay-off could have been avoided."], "rank3": ["This appeal by special leave, is directed against the order passed by the Industrial Tribunal,Patna, directing the appellant, the Tatanagar Foundry Co., to pay to the respondents, its workmen, 75 of the consolidated wages as compensation for having laid them off for a period of 45 days commencing from December 1.5, 1959. it is common around that the appellant laid off the respondents for the said period.", "The appellants case was that it had paid the respondents the statutory compensation for the said lay-off as prescribed by s.25C of the Industrial Disputes Act (No. 14 of 1947) (hereinafter called the Act). \nThe respondents, however, contended that the lay-off was not justified and so the statutory compensation paid by the appellant did not satisfy the ends of justice", "The normal procedure for procuring raw material was that after an order was received from the Railway Board, the appellant submitted its requirement of pig iron to ,the Iron Steel Controller of the Government of India who allocates the quantity for the said commodity to the various manufactures, such as Tata Iron Steel Co", "Ltd. and Indian Iron Steel Co. Ltd. Formerly, supply of pig iron used to come from the said two concerns to the appellant and the appellant used to pay cash to Tata Iron Steel Co. Ltd. for the pig iron supplied by it and by a Letter of credit to the Indian Iron Steel Co", "Ltd. on which the said Company used to supply the raw material made by it", "In 1959, both the companies stopped supply of pig iron in spite of the order issued in that behalf by the Controller, and they wrote to the appellant suggesting that the appellant should request the Controller to cancel his order and place the same with some other suppliers. Correspondence followed between the said companies and the appellant and finally in November, 1959, the appellant was informed by the said companies that they could not supply its requirements of raw material. In June, 1959, the Bhilai Steel Works made their first shipment of pig iron addressed to, the appellant. In August, 1959, the said Works despatched some wagons of pig iron to the appellant, but out of 20 wagons of the consignment, 14 were lost completely, and the rest misdelivered and were subsequently found somewhere in Gomoh and some in Tatanagar and they never reached the appellant in time", "In May, 1959, the appellant arranged for Letter of Credit for a sum of Rs. 1,00,000/- for the Bhilai Steel Works", "In August, there was a supply of 440 tons and in September, followed a supply of 36 wagons Containing pig iron to the extent of 20 to 21 tons each roughly. In all, this latter supply came to about 760 tons. \nIn the two subsequent months, no supply was received from Bhilai.", "In spite of this revolving letter, the Bhilai Steel Works failed to supply pig iron in the two months October and November. The appellant reminded the Works that no supply of pig iron was received from them and yet no advice of any despatch of pig iron was received from the Works after July 27, 1959. Even the 20 wagons which had been sent in August and September did not arrive at the factory", "These wagons, it was later learnt, had been delivered to K. P. Docks and some other destinations.", "In regard to the supply of pig iron from Rourkela, the appellant arranged for finance on cash basis. In fact, between August and December a total advance of Rs. 1,75,000/- was made to the Rourkela Steel Works. A supply of pig iron worth about Rs. 1,64,000/- was received by the appellant, but the balance of Rs. 11,000/- was still outstanding.,In addition to the cash advances, the appellant also opened a Letter of Credit for Rs. 1,00,000/- in November, 1959, for financing the purchase of steel from the said Works"], "rank4": ["The appellant is a Public Limited Company and has its factory in Jamshedpur. \nIt manufactures cast iron sleepers, pipes, general engineering casting and non-ferrous castings in the said factory. The raw materials mainly required for the manufacture of sleepers are pig-iron, coke, limestone and moulding sand. The Railway Board is the only buyer of sleepers and the sleepers are, therefore, manufactured only on receipt of orders upon tenders from the said Board, and not otherwise"], "label": "ACCEPTED"}, "expert_4": {"rank2": ["This appeal by special leave, is directed against the order passed by the Industrial Tribunal,Patna, directing the appellant, the Tatanagar Foundry Co., to pay to the respondents, its workmen, 75 of the consolidated wages as compensation for having laid them off for a period of 45 days commencing from December 1.5, 1959. it is common around that the appellant laid off the respondents for the said period. The appellants case was that it had paid the respondents the statutory compensation for the said lay-off as prescribed by s.25C of the Industrial Disputes Act (No. 14 of 1947) (hereinafter called the Act). \nThe respondents, however, contended that the lay-off was not justified and so the statutory compensation paid by the appellant did not satisfy the ends of justice. It was this dispute between the parties which was referred for adjudication by the Government of Bihar to the Industrial Tribunal on February 9, 1960. On this reference, the Tribunal has held that the lay-off could not be held to be altogether justified. That is why it has awarded compensation to the respondents in excess of the amount statutorily fixed in that behalf. The appellant contends that the award thus made by the Tribunal is contrary to law Before dealing with the merits of the contentions raised by the appellant, it would be necessary to state some relevant facts which led to the lay-off.", "The appellant is a Public Limited Company and has its factory in Jamshedpur. \nIt manufactures cast iron sleepers, pipes, general engineering casting and non-ferrous castings in the said factory. The raw materials mainly required for the manufacture of sleepers are pig-iron, coke, limestone and moulding sand. The Railway Board is the only buyer of sleepers and the sleepers are, therefore, manufactured only on receipt of orders upon tenders from the said Board, and not otherwise. The normal procedure for procuring raw material was that after an order was received from the Railway Board, the appellant submitted its requirement of pig iron to ,the Iron Steel Controller of the Government of India who allocates the quantity for the said commodity to the various manufactures, such as Tata Iron Steel Co. Ltd. and Indian Iron Steel Co. Ltd.", "Under a. 2 (kkk), lay-off means, inter alia, the failure, or inability of an employer on account of shortage of raw materials to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched. As we have already seen, there is no doubt that raw materials wore not available to the appellant at the relevant time and so, the lay-off which is the subject-matter of the present dispute satisfies the test prescribed by the definition. Section 25C provides for the right of workmen laid-off for compensation, and it is common ground that compensation, equal to 50 of the total of the basic wages and dearness allowance, as therein prescribed has been paid by the appellant to the respondents. The issue referred to the Tribunal was whether the action of the management in laying off the workmen was justified. If not, to what relief were, the respondents entitled ? In other words, the reference shows that it was only if the Tribunal came to the conclusion that the lay-off wag not justified that the question of considering what additional compensation should be paid to the respondents could arise.", "The appellant is, no doubt, expected to manage its affairs prudently, but it would, we think, not be reasonable or fair to hold that if the employer is faced with a situation under which for lack of raw materials he has to lay-off his workmen, it is necessary that he must submit to an enquiry by the Industrial Tribunal about the prudence of the management and the forethought displayed by it in anticipating and avoiding the difficulties. \nThat is why we think in embarking upon an enquiry as to whether the appellant had shown sufficient foresight in managing its affairs, the Tribunal has exceeded its jurisdiction. Besides, as we have just indicated, its finding on the question of negligence is not supported by any evidence on record nor by probabilities in the case. In that connection, it is significant that subsequently the section in question has been closed and the retrenched workmen have been paid retrenchment compensation due to them."], "rank3": ["Formerly, supply of pig iron used to come from the said two concerns to the appellant and the appellant used to pay cash to Tata Iron Steel Co. Ltd. for the pig iron supplied by it and by a Letter of credit to the Indian Iron Steel Co. Ltd. on which the said Company used to supply the raw material made by it. In 1959, both the companies stopped supply of pig iron in spite of the order issued in that behalf by the Controller, and they wrote to the appellant suggesting that the appellant should request the Controller to cancel his order and place the same with some other suppliers. Correspondence followed between the said companies and the appellant and finally in November, 1959, the appellant was informed by the said companies that they could not supply its requirements of raw material. In June, 1959, the Bhilai Steel Works made their first shipment of pig iron addressed to, the appellant. In August, 1959, the said Works despatched some wagons of pig iron to the appellant, but out of 20 wagons of the consignment, 14 were lost completely, and the rest misdelivered and were subsequently found somewhere in Gomoh and some in Tatanagar and they never reached the appellant in time.", "In May, 1959, the appellant arranged for Letter of Credit for a sum of Rs. 1,00,000/- for the Bhilai Steel Works. In August, there was a supply of 440 tons and in September, followed a supply of 36 wagons Containing pig iron to the extent of 20 to 21 tons each roughly. In all, this latter supply came to about 760 tons. \nIn the two subsequent months, no supply was received from Bhilai. The Letter of Credit which the appellant had opened for Bhilai Steel Works was revolving, with the result that as soon as one transaction was completed, the said letter was ready for the subsequent transaction. The effect of this revolving letter was that the value of credit of Rs.1,00,000/- continued to be outstanding all the time. In spite of this revolving letter, the Bhilai Steel Works failed to supply pig iron in the two months October and November.", "The appellant reminded the Works that no supply of pig iron was received from them and yet no advice of any despatch of pig iron was received from the Works after July 27, 1959. Even the 20 wagons which had been sent in August and September did not arrive at the factory. These wagons, it was later learnt, had been delivered to K. P. Docks and some other destinations. In regard to the supply of pig iron from Rourkela, the appellant arranged for finance on cash basis. In fact, between August and December a total advance of Rs. 1,75,000/- was made to the Rourkela Steel Works.", "A supply of pig iron worth about Rs. 1,64,000/- was received by the appellant, but the balance of Rs. 11,000/- was still outstanding.,In addition to the cash advances, the appellant also opened a Letter of Credit for Rs. 1,00,000/- in November, 1959, for financing the purchase of steel from the said Works. As early as 1959, TISCO informed the appellant that it regretted that it would not be possible for it to supply the requirements of the company regularly, while in regard to the supply from IISCO, the position was still worse. The appellant kept its employees and the Assistant Labour Commissioner fully informed of these unfortunate developments from time to time. Both the Assistant Labour Commissioner and Mr. John, President of the respondents Union, did what they could by moving the Government to assist the appellant in securing the raw material. Even so, when the situation did not show any signs of improvement and the appellant found that no raw material was available with which its foundry could carry on the manufacture of sleepers, it issued a notice on December 15,- 1959, and laid off the workers of the Sleeper Factory.", "This lay-off con- tinued until September, 11, 1960 and from September 12, 1960, the appellant closed the Sleeper Foundry department and issued notice of retrenchment. Subsequently, retrenchment compensation was duly paid to the workmen who had been retrenched. That, in short, is the background of the lay-off, the validity of which formed the subject-matter of the present reference. It appears that before the Tribunal it was urged by the respondents that the appellant had deliberately brought about a situation which led to the lay-off in order to divert the relevant orders for sleepers to its Belur factory. The argument was that at Belur, the appellant gets its work done at cheaper cost with the help of contract labour. Now, if this contention had been established then it would clearly have been a case of malafides on the part of the appellant and a claim for additional compensation may have been justified. But the Tribunal has rejected this contention and has hold that no evidence had been adduced to prove such a malafide intention on the part of the appellant.", "It was also urged by the respondents that even in the absence of pig iron, the manufacture of sleepers could have been carried on by utilising a substitute, and in support of this case, four witnesses were examined by the respondents. The Tribunal has rejected this case also. It has found that the evidence given by the four witnesses was unreliable and unsatisfactory and the statement made by the General Manager in cross-examination on this point was sufficient to show that in the absence of pig iron, castings with scrap iron and tin could not have been made. In fact, the General Manager categorically stated that the appellant had not casted any sleeper without pig iron at any time. Thus, the alternative plea raised by the respondents to suggest that if the appellant had so desired, it could have avoided to lay-off its workmen, has also been rejected by the Tribunal. The Tribunal, however, was inclined to take the view that if the management had been more foresighted, it could have avoided the unfortunate position which it had to face at the relevant time and because the Tribunal thought that the situation which faced the appellant at the relevant time was partly due to its negligence, it reached the final conclusion that the lay-off was not altogether justified. The Tribunals view appears to be that if reasonable care had been exercised by the appellant, the situation could have been avoided.", "It is this part, of its finding that is seriously disputed before us by the appellant.", "Under a. 2 (kkk), lay-off means, inter alia, the failure, or inability of an employer on account of shortage of raw materials to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched. As we have already seen, there is no doubt that raw materials wore not available to the appellant at the relevant time and so, the lay-off which is the subject-matter of the present dispute satisfies the test prescribed by the definition. Section 25C provides for the right of workmen laid-off for compensation, and it is common ground that compensation, equal to 50 of the total of the basic wages and dearness allowance, as therein prescribed has been paid by the appellant to the respondents. The issue referred to the Tribunal was whether the action of the management in laying off the workmen was justified.", "If the lay-off is justified and it satisfies the requirements of the definition under s. 2(kkk), the only relief to which the workmen laid off are entitled is the statutory relief prescribed by a. 25C.", "There is no doubt or dispute about this position. It is also not in dispute that if the lay-off is malafide in the sense that the employer has deliberately and maliciously brought about a situation where lay off became necessary, then it would not be a lay-off which is justified under s. 2(kkk) and the relief provided to the laid-off workmen under a. 25C would not be the only relief to which they are entitled. Malafides of the employer in declaring a lay-off really mean that no lay-off, as contemplated by the definition, has in law taken place and so, a finding as to malafides of the employer in declaring a lay-off naturally takes the lay-off out of the definition of s. 2(kkk) and as such a. 25C cannot be held to be applicable to it so as to confine the workmens right to the compensation therein prescribed.", "If the lay-off has been declared in order to victimise the workmen or for some other ulterior purpose, the position would be the same. It would Dot be a lay-off as contemplated by a. 2(kkk). But when dealing with a lay-off like the one with which we are concerned in the present appeal it would not be open to the Tribunal to enquire whether the appellant could have avoided the lay off if he had been more diligent, more careful or more far-sighted. That is a matter relating to the management of the undertaking and unless malafides are alleged or proved, it would be difficult to assume that the Industrial Tribunal has jurisdiction to sit in judgment over the acts of management of the employer and investigate whether a more prudent management could have avoided the situation which led to lay- off."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["But when dealing with a lay-off like the one with which we are concerned in the present appeal it would not be open to the Tribunal to enquire whether the appellant could have avoided the lay off if he had been more diligent, more careful or more far-sighted.", "unless malafides are alleged or proved, it would be difficult to assume that the Industrial Tribunal has jurisdiction to sit in judgment over the acts of management of the employer and investigate whether a more prudent management could have avoided the situation which led to lay- off.", "Tribunal exceeded its jurisdiction in trying to decide whether better. management could have avoided the crisis.", "it would, we think, not be reasonable or fair to hold that if the employer is faced with a situation under which for lack of raw materials he has to lay-off his workmen, it is necessary that he must submit to an enquiry by the Industrial Tribunal about the prudence of the management and the forethought displayed by it in anticipating and avoiding the difficulties."], "rank2": ["That is a matter relating to the management of the undertaking", "this conclusion does not appear to be borne out by any evidence on record"], "rank3": ["But the Tribunal has rejected this contention and has hold that no evidence had been adduced to prove such a malafide intention on the part of the appellant.", "It was also urged by the respondents that even in the absence of pig iron, the manufacture of sleepers could have been carried on by utilising a substitute, and in support of this case, four witnesses were examined by the respondents. The Tribunal has rejected this case also.", "It has found that the evidence given by the four witnesses was unreliable and unsatisfactory and the statement made by the General Manager in cross-examination on this point was sufficient to show that in the absence of pig iron, castings with scrap iron and tin could not have been made.", "In other words, the reference shows that it was only if the Tribunal came to the conclusion that the lay-off wag not justified that the question of considering what additional compensation should be paid to the respondents could arise.", "If the lay-off is justified and it satisfies the requirements of the definition under s. 2(kkk), the only relief to which the workmen laid off are entitled is the statutory relief prescribed by a. 25C.", "The Tribunal has found that the appellant was in financial difficulties at the relevant time it has found that the appellant was not actuated by any malafide intention, it has come to the conclusion that the lay-off was not the result of any uleriort motive"], "rank4": ["it had paid the respondents the statutory compensation for the said lay-off as prescribed by s.25C of the Industrial Disputes Act", "there is no doubt that raw materials wore not available to the appellant at the relevant time and so, the lay-off which is the subject-matter of the present dispute satisfies the test prescribed by the definition."], "rank5": ["out of 20 wagons of the consignment, 14 were lost completely, and the rest misdelivered and were subsequently found somewhere in Gomoh and some in Tatanagar and they never reached the appellant in time.", "The appellant reminded the Works that no supply of pig iron was received from them and yet no advice of any despatch of pig iron was received from the Works after July 27, 1959.", "Even the 20 wagons which had been sent in August and September did not arrive at the factory. These wagons, it was later learnt, had been delivered to K. P. Docks and some other destinations.", "TISCO informed the appellant that it regretted that it would not be possible for it to supply the requirements of the company regularly, while in regard to the supply from IISCO, the position was still worse."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1962_47", "text": "Petition for Review of this Courts Judgment and order dated May 4, 1962, in C. A. No. 533 of 1960. C. Chatterjee, Udaya Pratap Singh, Anil Kumar, R.K, Garg, P. Singh, S.C. Aggarwal and M.K. Ramamurthi, for the petitioners. K. Saran, S. K. Mehta and K. L. Mehta for the respondents. 1962. December 10. The judgment of the Court was delivered by RAGHUBAR DAYAL, J.-We allowed Civil Appeal No. 533 of 1960 on May 4, 1962, by our judgment dealing with the facts of the, case and giving the reasons for the opinion expressed. It is not necessary to repeat them. Suffice it to say that the appeal was allowed on the ground that the respondents bad lost their right to recover possession from the appellants on their estate vesting in the State of Bihar by virtue of se. 3 and 4 of the Bihar Land Reforms Act, 1950 (Bihar Act XXX of 1950), hereinafter called the Act, and their having no subsisting right to recover possession from the appellants. It was also hold that they could not get advantage of the provisions of cl. (c) of sub-s. (1) of s. 6 of the Act as amended by the Bihar Land Reforms (Amendment) Act, 1959 (Act XVI of 1959) as no mortgage subsisted on the date of vesting. The amended cl. (c) read a, follows (c) lands used for agricultural or horti. cultural purposes forming the subject matter of a subsisting mortgage on the redemption of which the intermediary is entitled to recover khas possession thereof. It is contended for the respondents, who applied for the review of our judgment, that our view that the mortgage was not subsisting on the date of vesting was wrong. The contention is that even though the respondents-mortgagors had paid up the mortgage money in 1943, the mortgage continued to subsist till the date of vesting as by that time the right of redemption given by s. 60 of the Transfer of Property Act had not come to an end. That right, according to the respondents contention, would not come to an end so long as the mortgagors right to ask the mortgagees to perform any of the acts mentioned in s. 60 continues. In sup. port of the contention that the mortgage continues till the right of redemption comes to an end, reliance is placed on the case reported as Thota China Subba Rao v. Mattapalli Roju. (1) We do not agree with these contentions. Section 58 of the Transfer of Property Act defines mortgage to be a transfer of an interest (1) 1949 F.C.R. 484, 498. in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. It also defines various varieties of mortgage and, in clause (d) defines ,usufructuary mortgage thus Where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee, and authorizes him to retain such possession until payment of the mortgage- money, and to receive the rents and profits accruing from the property or any part of such rents and profits and to appropriate the same in lieu of interest, or in payment of the mortgage money, or partly in lieu of interest or partly in payment of the mortgagemoney, the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee. When the mortgage money is paid by the mortgager to the mortgagee, there does not remain any debt due from the mortgagor to the mortgagee, and therefore the mortgage can no longer continue after the mortgage money has been paid. The transfer of interest represented by the mortgage .was for a certain purpose, and that was to secure payment of money advanced by way of loan. A security cannot exist after the loan had been paid up. If any interest in the property continues to vest in the mortgagee subsequent to the payment of the mortgage money to him, it would be an in- terest different from that of a mortgagees interest. The mortgage as a transfer of an interest in immoveable property for the purpose of securing payment of money advanced by way of loan must come to an end on the payment of the mortgage money Further, the definition of usufructuary mort gage itself leads to the conclusion that the authority given to the mortgagee to remain in possession of the mortgaged property ceases when the mortgage money has been paid up. The usufructuary mortgage, by the terms of its definition, authorises the mortgagee to retain possession only until payment of the mortgage money, and. to appropriate the rents and profits collected by him in lieu of interest or in payment of the mortgage money, or partly in lieu of interest or partly in lieu of payment of the mortgage money. When the mortgage money has been paid up, no question of appropriating the rents and profits accruing from the property towards interest or mortgage money can arise. It is clear therefore that on the payment of the mortgage money by the mortgagor to the mortgagee the mortgage comes to an end and the right of the mortgagee to remain in possession also comes to an end. The relevant portion of s. 60 on which the respondents rely reads \n At any time after the principal money has become due, the mortgagor has a right, on payment or tender, at a proper time and place of the mortgage-money, to require the mortgagee to deliver to the mortgagor the mortgage deed and all documents relating to the mortgaged property which are in the possession of power of the mortgagee where the mortgagee is in possession of the mortgaged property,, to deliver possession thereof to the mortgagor, and at the cost of the mortgagor either to re-transfer the mortgaged property to him or to such third person as he may direct,. or to execute and (where the mortgage has been effected by a registered instrument to have registered an acknowledg- ment in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished Provided that the right conferred by this section has not been extinguished by the act of the parties or by decree of a Court. The right conferred by this section is called a right to redeem and a suit to enforce it is called a suit for redemption. x x x x It is to be noted that these provisions do not. state when a mortgage ceases to be a mortgage. They simply describe the right of a mortgagor to redeem. Now, what is this right and, in what circumstances does it arise? The right arises oh the principal money, payment of which is secured by the mortgage deed, becoming due. The right entitles the mortgagor, on his paying or tendering to the mortgagee the mortgage money to ask him (i) to deliver to him the mortgage deed and other documents relating to the mortgaged property to deliver possession to the mortgagor, if the mortgagee is in possession and (iii) to re-transfer the mortgaged property in accordance with the desire of the mortgagor. \nIf the mortgagee receives the money and does not perform any of the three acts required of him to be done,, the question arises whether this non-compliance with the demands will make the mortgage continue. The provisions of the section do not say so and there appears no good reason why the mortgage should continue. If the mortgagee is not to perform these acts, the mortgagor is not to pay the amount. If, however, the mortgage money has been received by the mortgagee and thereafter he refuses to perform the acts he is bound to do, the mortgagor can enforce his right to get back the mortgage document, the possession of the mortgaged property and the reconveyance of that property through Court. A new right to get his demands enforced through the Court thus arises as a result of the provisions of s. 60 of the Act. If the mortgage money has been paid and then the mortgagor goes to Court to enforce his demands, that would not be to enforce his right of redemption which was really his right to make those demands on payment of the mortgage money. The right to demand the mortgagee to do certain things on payment of the mortgage money is different from enforcing the demands subsequent to the payment of the money. This is also clear from the decree for redemption. Order XXXIV, r. 7, C.P.C. provides for the preliminary decree in a redemption suit and the preliminary decree is to order that the account be taken of what was due to the defendant, viz., the mortgagee, at the date of the decree, for principal and interest on the mortgage and other matters. Rule 9 provides that if on such accounting, any sum be found due to the mortgagor, the decree would direct the mortgagee to pay such amount to the mortgagor. If the mortgage money due has been already paid by the mortgagor and has been accepted by the mortgagee in full discharge of the mortgage deed, no occasion for such accounting arises and therefore any suit to enforce the return of the mortgage deed and to get back the possession of the mortgaged property cannot be a suit for redemption. \nWhat Thota China Subba Raos Case (1), referred to by learned counsel for the respondents, lays down is simply this that, the right of redemption continues so long as the mortgage is alive. The case does not deal with the circumstances in which the mortgage ceases to exist. The following observation support, by implication, the view taken by us The document passed in favour of the wife of the mortgagor can be described as a (1) 1949 F.C.R. 484, 498. reward promised to her for bringing about the willingness of her husband to agree to convey the mortgaged lands to the mortgagees. That can in no event be considered as extinguishing the equity of redemption. The mortgagor was not even a party to that document. The second document executed by the mortgagor is a agreement to convey the lands after three months. There is however no document or evidence to show that the mortgagees agreed to accept these lands in full satisfaction of their claims or promised to pay the sum of Rs. 100 mentioned therein. This was only an agreement to convey the lands after three months, and, if at ail the question of extinction of the equity of redemption could arise on the conveyance being executed but not before. There are other oases also which throw a light on this question And go against the contention of the respondents. In Samar Ali v. Karim-ul-lah (1) it was said Now, as I have said, the contract of mortgage in the present case being subject to the provisions of the Regulation, the charge would have been redeemed as soon as the principal mortgage money with twelve percent interest had been realised by the mortgagee from the profits of the property. In Muhammed Mahmud Ali v. Kalyan Das (2) it was said It cannot be disputed that the right of redemption pre-supposes the existence of a mortgage on certain property which at the (1) (1886) I.L.R. 8 All. 402, 405. (2) (1895) I.L.R. 18 All. 189,192. time of redemption is security for the money due to the mortgagee. It therefore follows that the only property which a second or other subsequent mortgagee may redeem is the property on which the first mortgagee is entitled to enforce his security. From the very necessity of things the right of redemp- tion can be exercised in respect of such pro- perty only as is subject to a mortgage capable of enforcement. There can be nothing for enforcing a mortgage when the money has been paid up and therefore the right to redeem ceases on payment of the mortgage money. In Balakrishna v.Rangnath (1) it was said Now the right to redeem can only be extinguished by act of parties or by a decree of a Court. (See the proviso to section 60 of the Transfer of Property Act). But when it is by act of parties the Act must take the shape and observe the formalities which the law prescribes. One Method is by payment in cash. In that event nothing is necessary beyond the payment. In Ram Prasad v. Bishambhar Singh (2) the question formulated for determination was whether the suit being a suit to recover possession of the mortgaged property after the mortgage money had been paid off was a suit against the mortgagee to redeem or to recover possession of immovable property mortgaged. Braund J., said Now, it is quite obvious that that section (s. 60 of the Transfer of Property Act) can only refer to a case in which a mortgagor under a subsisting mortgage approaches the Court to establish his right to redeem and to I.L.R. 1950 Nag. 618, 621. (2) A.I.R. 1946. All. 400,402. have that redemption carried out by the pro- cess of the various declarations and orders of the Court by which it effects redemption. In other words. s. 60 contemplates a cage in which the mortgage is still subsisting and the mortgagor goes to the Court to obtain the return of his property on repayment of what is still due. Section 62, on the other hand, is in marked contract to s. 60. Section 62 says that in the case of a usufructuary mortgage the mortgagor has a right to recover possession of the property when (In a case in which the mortgagee is authorised to pay himself the mortgage money out of the rents and ,profits of the property) the principal money is paid off. As we see it, that is not a case of redemption at all. At the moment when the, rents and profits of the mortgaged property sufficed to discharge the principal secured by th e mortgage, the mortgage came to an end and the correlative right arose in the mortgagor to recover possession of the property. \nThe framers of the Transfer of Property Act have clearly recognised the distinction between the procedure which follows a mortgagors desire to redeem a subsisting mortgage and the procedure which follows the arising of a usufructuary mortgagors right to get his property back after the principal has been paid off. We therefore hold that the mortgage was not subsisting on the date of vesting, it having come to an end on payment of the mortgage money in 1943. and that the respondents cannot get the advantage of s. 6(1)(c) of the Act.\nDECISION ??", "expert_1": {"rank1": ["We therefore hold that the mortgage was not subsisting on the date of vesting, it having come to an end on payment of the mortgage money in 1943. and that the respondents cannot get the advantage of s. 6(1)(c) of the Act."], "rank2": ["The following observation support, by implication, the view taken by us The document passed in favour of the wife of the mortgagor can be described as a (1) 1949 F.C.R. 484, 498. reward promised to her for bringing about the willingness of her husband to agree to convey the mortgaged lands to the mortgagees. That can in no event be considered as extinguishing the equity of redemption.", "There is however no document or evidence to show that the mortgagees agreed to accept these lands in full satisfaction of their claims or promised to pay the sum of Rs. 100 mentioned therein. This was only an agreement to convey the lands after three months, and, if at ail the question of extinction of the equity of redemption could arise on the conveyance being executed but not before.", "As we see it, that is not a case of redemption at all. At the moment when the, rents and profits of the mortgaged property sufficed to discharge the principal secured by th e mortgage, the mortgage came to an end and the correlative right arose in the mortgagor to recover possession of the property. \nThe framers of the Transfer of Property Act have clearly recognised the distinction between the procedure which follows a mortgagors desire to redeem a subsisting mortgage and the procedure which follows the arising of a usufructuary mortgagors right to get his property back after the principal has been paid off."], "rank3": ["It is contended for the respondents, who applied for the review of our judgment, that our view that the mortgage was not subsisting on the date of vesting was wrong. The contention is that even though the respondents-mortgagors had paid up the mortgage money in 1943, the mortgage continued to subsist till the date of vesting as by that time the right of redemption given by s. 60 of the Transfer of Property Act had not come to an end. That right, according to the respondents contention, would not come to an end so long as the mortgagors right to ask the mortgagees to perform any of the acts mentioned in s. 60 continues. In sup. port of the contention that the mortgage continues till the right of redemption comes to an end, reliance is placed on the case reported as Thota China Subba Rao v. Mattapalli Roju. (1) We do not agree with these contentions.", "When the mortgage money is paid by the mortgager to the mortgagee, there does not remain any debt due from the mortgagor to the mortgagee, and therefore the mortgage can no longer continue after the mortgage money has been paid. The transfer of interest represented by the mortgage .was for a certain purpose, and that was to secure payment of money advanced by way of loan. A security cannot exist after the loan had been paid up. If any interest in the property continues to vest in the mortgagee subsequent to the payment of the mortgage money to him, it would be an in- terest different from that of a mortgagees interest. The mortgage as a transfer of an interest in immoveable property for the purpose of securing payment of money advanced by way of loan must come to an end on the payment of the mortgage money Further, the definition of usufructuary mort gage itself leads to the conclusion that the authority given to the mortgagee to remain in possession of the mortgaged property ceases when the mortgage money has been paid up. The usufructuary mortgage, by the terms of its definition, authorises the mortgagee to retain possession only until payment of the mortgage money, and. to appropriate the rents and profits collected by him in lieu of interest or in payment of the mortgage money, or partly in lieu of interest or partly in lieu of payment of the mortgage money. When the mortgage money has been paid up, no question of appropriating the rents and profits accruing from the property towards interest or mortgage money can arise. It is clear therefore that on the payment of the mortgage money by the mortgagor to the mortgagee the mortgage comes to an end and the right of the mortgagee to remain in possession also comes to an end.", "The right conferred by this section is called a right to redeem and a suit to enforce it is called a suit for redemption. x x x x It is to be noted that these provisions do not. state when a mortgage ceases to be a mortgage. They simply describe the right of a mortgagor to redeem. Now, what is this right and, in what circumstances does it arise? The right arises oh the principal money, payment of which is secured by the mortgage deed, becoming due. The right entitles the mortgagor, on his paying or tendering to the mortgagee the mortgage money to ask him (i) to deliver to him the mortgage deed and other documents relating to the mortgaged property to deliver possession to the mortgagor, if the mortgagee is in possession and (iii) to re-transfer the mortgaged property in accordance with the desire of the mortgagor. \nIf the mortgagee receives the money and does not perform any of the three acts required of him to be done,, the question arises whether this non-compliance with the demands will make the mortgage continue. The provisions of the section do not say so and there appears no good reason why the mortgage should continue. If the mortgagee is not to perform these acts, the mortgagor is not to pay the amount. If, however, the mortgage money has been received by the mortgagee and thereafter he refuses to perform the acts he is bound to do, the mortgagor can enforce his right to get back the mortgage document, the possession of the mortgaged property and the reconveyance of that property through Court. A new right to get his demands enforced through the Court thus arises as a result of the provisions of s. 60 of the Act. If the mortgage money has been paid and then the mortgagor goes to Court to enforce his demands, that would not be to enforce his right of redemption which was really his right to make those demands on payment of the mortgage money.", "The right to demand the mortgagee to do certain things on payment of the mortgage money is different from enforcing the demands subsequent to the payment of the money. This is also clear from the decree for redemption. Order XXXIV, r. 7, C.P.C. provides for the preliminary decree in a redemption suit and the preliminary decree is to order that the account be taken of what was due to the defendant, viz., the mortgagee, at the date of the decree, for principal and interest on the mortgage and other matters. Rule 9 provides that if on such accounting, any sum be found due to the mortgagor, the decree would direct the mortgagee to pay such amount to the mortgagor. If the mortgage money due has been already paid by the mortgagor and has been accepted by the mortgagee in full discharge of the mortgage deed, no occasion for such accounting arises and therefore any suit to enforce the return of the mortgage deed and to get back the possession of the mortgaged property cannot be a suit for redemption. \nWhat Thota China Subba Raos Case (1), referred to by learned counsel for the respondents, lays down is simply this that, the right of redemption continues so long as the mortgage is alive. The case does not deal with the circumstances in which the mortgage ceases to exist."], "rank4": ["We allowed Civil Appeal No. 533 of 1960 on May 4, 1962, by our judgment dealing with the facts of the, case and giving the reasons for the opinion expressed. It is not necessary to repeat them. Suffice it to say that the appeal was allowed on the ground that the respondents bad lost their right to recover possession from the appellants on their estate vesting in the State of Bihar by virtue of se. 3 and 4 of the Bihar Land Reforms Act, 1950 (Bihar Act XXX of 1950), hereinafter called the Act, and their having no subsisting right to recover possession from the appellants. It was also hold that they could not get advantage of the provisions of cl. (c) of sub-s. (1) of s. 6 of the Act as amended by the Bihar Land Reforms (Amendment) Act, 1959 (Act XVI of 1959) as no mortgage subsisted on the date of vesting."], "label": "REJECTED"}, "expert_2": {"rank1": ["Section 62 says that in the case of a usufructuary mortgage the mortgagor has a right to recover possession of the property when (In a case in which the mortgagee is authorised to pay himself the mortgage money out of the rents and ,profits of the property) the principal money is paid off. As we see it, that is not a case of redemption at all. At the moment when the, rents and profits of the mortgaged property sufficed to discharge the principal secured by th e mortgage, the mortgage came to an end and the correlative right arose in the mortgagor to recover possession of the property. \nThe framers of the Transfer of Property Act have clearly recognised the distinction between the procedure which follows a mortgagors desire to redeem a subsisting mortgage and the procedure which follows the arising of a usufructuary mortgagors right to get his property back after the principal has been paid off. We therefore hold that the mortgage was not subsisting on the date of vesting, it having come to an end on payment of the mortgage money in 1943. and that the respondents cannot get the advantage of s. 6(1)(c) of the Act."], "rank2": ["the appeal was allowed on the ground that the respondents bad lost their right to recover possession from the appellants on their estate vesting in the State of Bihar by virtue of se. 3 and 4 of the Bihar Land Reforms Act, 1950 (Bihar Act XXX of 1950), hereinafter called the Act, and their having no subsisting right to recover possession from the appellants. It was also hold that they could not get advantage of the provisions of cl. (c) of sub-s. (1) of s. 6 of the Act as amended by the Bihar Land Reforms (Amendment) Act, 1959 (Act XVI of 1959) as no mortgage subsisted on the date of vesting.", "If the mortgage money has been paid and then the mortgagor goes to Court to enforce his demands, that would not be to enforce his right of redemption which was really his right to make those demands on payment of the mortgage money. The right to demand the mortgagee to do certain things on payment of the mortgage money is different from enforcing the demands subsequent to the payment of the money.", "If the mortgage money due has been already paid by the mortgagor and has been accepted by the mortgagee in full discharge of the mortgage deed, no occasion for such accounting arises and therefore any suit to enforce the return of the mortgage deed and to get back the possession of the mortgaged property cannot be a suit for redemption.", "It therefore follows that the only property which a second or other subsequent mortgagee may redeem is the property on which the first mortgagee is entitled to enforce his security. From the very necessity of things the right of redemp- tion can be exercised in respect of such pro- perty only as is subject to a mortgage capable of enforcement. There can be nothing for enforcing a mortgage when the money has been paid up and therefore the right to redeem ceases on payment of the mortgage money."], "rank3": ["respondents-mortgagors had paid up the mortgage money in 1943, the mortgage continued to subsist till the date of vesting as by that time the right of redemption given by s. 60 of the Transfer of Property Act had not come to an end. That right, according to the respondents contention, would not come to an end so long as the mortgagors right to ask the mortgagees to perform any of the acts mentioned in s. 60 continues.", "The right arises oh the principal money, payment of which is secured by the mortgage deed, becoming due. The right entitles the mortgagor, on his paying or tendering to the mortgagee the mortgage money to ask him (i) to deliver to him the mortgage deed and other documents relating to the mortgaged property to deliver possession to the mortgagor, if the mortgagee is in possession and (iii) to re-transfer the mortgaged property in accordance with the desire of the mortgagor. \nIf the mortgagee receives the money and does not perform any of the three acts required of him to be done,, the question arises whether this non-compliance with the demands will make the mortgage continue.", "The document passed in favour of the wife of the mortgagor can be described as a (1) 1949 F.C.R. 484, 498. reward promised to her for bringing about the willingness of her husband to agree to convey the mortgaged lands to the mortgagees. That can in no event be considered as extinguishing the equity of redemption."], "rank4": ["When the mortgage money is paid by the mortgager to the mortgagee, there does not remain any debt due from the mortgagor to the mortgagee, and therefore the mortgage can no longer continue after the mortgage money has been paid. The transfer of interest represented by the mortgage .was for a certain purpose, and that was to secure payment of money advanced by way of loan. A security cannot exist after the loan had been paid up. If any interest in the property continues to vest in the mortgagee subsequent to the payment of the mortgage money to him, it would be an in- terest different from that of a mortgagees interest."], "rank5": ["The mortgage as a transfer of an interest in immoveable property for the purpose of securing payment of money advanced by way of loan must come to an end on the payment of the mortgage money Further, the definition of usufructuary mort gage itself leads to the conclusion that the authority given to the mortgagee to remain in possession of the mortgaged property ceases when the mortgage money has been paid up. The usufructuary mortgage, by the terms of its definition, authorises the mortgagee to retain possession only until payment of the mortgage money, and. to appropriate the rents and profits collected by him in lieu of interest or in payment of the mortgage money, or partly in lieu of interest or partly in lieu of payment of the mortgage money. When the mortgage money has been paid up, no question of appropriating the rents and profits accruing from the property towards interest or mortgage money can arise."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["Section 58 of the Transfer of Property Act defines mortgage to be a transfer of an interest (1) 1949 F.C.R. 484, 498. in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. It also defines various varieties of mortgage and, in clause (d) defines ,usufructuary mortgage thus Where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee, and authorizes him to retain such possession until payment of the mortgage- money, and to receive the rents and profits accruing from the property or any part of such rents and profits and to appropriate the same in lieu of interest, or in payment of the mortgage money, or partly in lieu of interest or partly in payment of the mortgagemoney, the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee", "When the mortgage money is paid by the mortgager to the mortgagee, there does not remain any debt due from the mortgagor to the mortgagee, and therefore the mortgage can no longer continue after the mortgage money has been paid. The transfer of interest represented by the mortgage .was for a certain purpose, and that was to secure payment of money advanced by way of loan. A security cannot exist after the loan had been paid up", "If any interest in the property continues to vest in the mortgagee subsequent to the payment of the mortgage money to him, it would be an in- terest different from that of a mortgagees interest. The mortgage as a transfer of an interest in immoveable property for the purpose of securing payment of money advanced by way of loan must come to an end on the payment of the mortgage money Further, the definition of usufructuary mort gage itself leads to the conclusion that the authority given to the mortgagee to remain in possession of the mortgaged property ceases when the mortgage money has been paid up.", "It is clear therefore that on the payment of the mortgage money by the mortgagor to the mortgagee the mortgage comes to an end and the right of the mortgagee to remain in possession also comes to an end", "Now, what is this right and, in what circumstances does it arise? The right arises oh the principal money, payment of which is secured by the mortgage deed, becoming due. The right entitles the mortgagor, on his paying or tendering to the mortgagee the mortgage money to ask him (i) to deliver to him the mortgage deed and other documents relating to the mortgaged property to deliver possession to the mortgagor, if the mortgagee is in possession and (iii) to re-transfer the mortgaged property in accordance with the desire of the mortgagor", "If the mortgagee receives the money and does not perform any of the three acts required of him to be done,, the question arises whether this non-compliance with the demands will make the mortgage continue. The provisions of the section do not say so and there appears no good reason why the mortgage should continue", "If the mortgagee is not to perform these acts, the mortgagor is not to pay the amount. If, however, the mortgage money has been received by the mortgagee and thereafter he refuses to perform the acts he is bound to do, the mortgagor can enforce his right to get back the mortgage document, the possession of the mortgaged property and the reconveyance of that property through Court. A new right to get his demands enforced through the Court thus arises as a result of the provisions of s. 60 of the Act.", "the right of redemption continues so long as the mortgage is alive. The case does not deal with the circumstances in which the mortgage ceases to exist.", "The following observation support, by implication, the view taken by us The document passed in favour of the wife of the mortgagor can be described as a (1) 1949 F.C.R. 484, 498. reward promised to her for bringing about the willingness of her husband to agree to convey the mortgaged lands to the mortgagees. That can in no event be considered as extinguishing the equity of redemption. The mortgagor was not even a party to that document", "The second document executed by the mortgagor is a agreement to convey the lands after three months. There is however no document or evidence to show that the mortgagees agreed to accept these lands in full satisfaction of their claims or promised to pay the sum of Rs. 100 mentioned therein", "This was only an agreement to convey the lands after three months, and, if at ail the question of extinction of the equity of redemption could arise on the conveyance being executed but not before", "It therefore follows that the only property which a second or other subsequent mortgagee may redeem is the property on which the first mortgagee is entitled to enforce his security. From the very necessity of things the right of redemp- tion can be exercised in respect of such pro- perty only as is subject to a mortgage capable of enforcement. There can be nothing for enforcing a mortgage when the money has been paid up and therefore the right to redeem ceases on payment of the mortgage money.", "But when it is by act of parties the Act must take the shape and observe the formalities which the law prescribes. One Method is by payment in cash. In that event nothing is necessary beyond the payment", "In other words. s. 60 contemplates a cage in which the mortgage is still subsisting and the mortgagor goes to the Court to obtain the return of his property on repayment of what is still due.", "As we see it, that is not a case of redemption at all. At the moment when the, rents and profits of the mortgaged property sufficed to discharge the principal secured by th e mortgage, the mortgage came to an end and the correlative right arose in the mortgagor to recover possession of the property. \nThe framers of the Transfer of Property Act have clearly recognised the distinction between the procedure which follows a mortgagors desire to redeem a subsisting mortgage and the procedure which follows the arising of a usufructuary mortgagors right to get his property back after the principal has been paid off.", "We therefore hold that the mortgage was not subsisting on the date of vesting, it having come to an end on payment of the mortgage money in 1943. and that the respondents cannot get the advantage of s. 6(1)(c) of the Act."], "rank2": ["It was also hold that they could not get advantage of the provisions of cl", "(c) of sub-s. (1) of s. 6 of the Act as amended by the Bihar Land Reforms (Amendment) Act, 1959 (Act XVI of 1959) as no mortgage subsisted on the date of vesting", "The amended cl. (c) read a, follows (c) lands used for agricultural or horti. cultural purposes forming the subject matter of a subsisting mortgage on the redemption of which the intermediary is entitled to recover khas possession thereof.", "The usufructuary mortgage, by the terms of its definition, authorises the mortgagee to retain possession only until payment of the mortgage money, and. to appropriate the rents and profits collected by him in lieu of interest or in payment of the mortgage money, or partly in lieu of interest or partly in lieu of payment of the mortgage money. When the mortgage money has been paid up, no question of appropriating the rents and profits accruing from the property towards interest or mortgage money can arise", "The relevant portion of s. 60 on which the respondents rely reads \n At any time after the principal money has become due, the mortgagor has a right, on payment or tender, at a proper time and place of the mortgage-money, to require the mortgagee to deliver to the mortgagor the mortgage deed and all documents relating to the mortgaged property which are in the possession of power of the mortgagee where the mortgagee is in possession of the mortgaged property,, to deliver possession thereof to the mortgagor, and at the cost of the mortgagor either to re-transfer the mortgaged property to him or to such third person as he may direct,. or to execute and (where the mortgage has been effected by a registered instrument to have registered an acknowledg- ment in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished Provided that the right conferred by this section has not been extinguished by the act of the parties or by decree of a Court", "If the mortgage money has been paid and then the mortgagor goes to Court to enforce his demands, that would not be to enforce his right of redemption which was really his right to make those demands on payment of the mortgage money. The right to demand the mortgagee to do certain things on payment of the mortgage money is different from enforcing the demands subsequent to the payment of the money.", "This is also clear from the decree for redemption. Order XXXIV, r. 7, C.P.C. provides for the preliminary decree in a redemption suit and the preliminary decree is to order that the account be taken of what was due to the defendant, viz., the mortgagee, at the date of the decree, for principal and interest on the mortgage and other matters. Rule 9 provides that if on such accounting, any sum be found due to the mortgagor, the decree would direct the mortgagee to pay such amount to the mortgagor", "If the mortgage money due has been already paid by the mortgagor and has been accepted by the mortgagee in full discharge of the mortgage deed, no occasion for such accounting arises and therefore any suit to enforce the return of the mortgage deed and to get back the possession of the mortgaged property cannot be a suit for redemption", "the contract of mortgage in the present case being subject to the provisions of the Regulation, the charge would have been redeemed as soon as the principal mortgage money with twelve percent interest had been realised by the mortgagee from the profits of the property", "It cannot be disputed that the right of redemption pre-supposes the existence of a mortgage on certain property which at the (1) (1886) I.L.R. 8 All. 402, 405. (2) (1895) I.L.R. 18 All. 189,192. time of redemption is security for the money due to the mortgagee.", "the right to redeem can only be extinguished by act of parties or by a decree of a Court", "In Ram Prasad v. Bishambhar Singh (2) the question formulated for determination was whether the suit being a suit to recover possession of the mortgaged property after the mortgage money had been paid off was a suit against the mortgagee to redeem or to recover possession of immovable property mortgaged", "Braund J., said Now, it is quite obvious that that section (s. 60 of the Transfer of Property Act) can only refer to a case in which a mortgagor under a subsisting mortgage approaches the Court to establish his right to redeem and to I.L.R. 1950 Nag. 618, 621. (2) A.I.R. 1946. All. 400,402. have that redemption carried out by the pro- cess of the various declarations and orders of the Court by which it effects redemption.", "Section 62, on the other hand, is in marked contract to s. 60. Section 62 says that in the case of a usufructuary mortgage the mortgagor has a right to recover possession of the property when (In a case in which the mortgagee is authorised to pay himself the mortgage money out of the rents and ,profits of the property) the principal money is paid off."], "rank3": ["-We allowed Civil Appeal No. 533 of 1960 on May 4, 1962, by our judgment dealing with the facts of the, case and giving the reasons for the opinion expressed. It is not necessary to repeat them. Suffice it to say that the appeal was allowed on the ground that the respondents bad lost their right to recover possession from the appellants on their estate vesting in the State of Bihar by virtue of se. 3 and 4 of the Bihar Land Reforms Act, 1950 (Bihar Act XXX of 1950), hereinafter called the Act, and their having no subsisting right to recover possession from the appellants", "The right conferred by this section is called a right to redeem and a suit to enforce it is called a suit for redemption. x x x x It is to be noted that these provisions do not. state when a mortgage ceases to be a mortgage. They simply describe the right of a mortgagor to redeem."], "label": "REJECTED"}, "expert_4": {"rank1": ["Suffice it to say that the appeal was allowed on the ground that the respondents bad lost their right to recover possession from the appellants on their estate vesting in the State of Bihar by virtue of se. 3 and 4 of the Bihar Land Reforms Act, 1950 (Bihar Act XXX of 1950), hereinafter called the Act, and their having no subsisting right to recover possession from the appellants.", "It was also hold that they could not get advantage of the provisions of cl. (c) of sub-s. (1) of s. 6 of the Act as amended by the Bihar Land Reforms (Amendment) Act, 1959 (Act XVI of 1959) as no mortgage subsisted on the date of vesting."], "rank2": ["The amended cl. (c) read a, follows (c) lands used for agricultural or horti. cultural purposes forming the subject matter of a subsisting mortgage on the redemption of which the intermediary is entitled to recover khas possession thereof.", "The right entitles the mortgagor, on his paying or tendering to the mortgagee the mortgage money to ask him (i) to deliver to him the mortgage deed and other documents relating to the mortgaged property to deliver possession to the mortgagor, if the mortgagee is in possession and (iii) to re-transfer the mortgaged property in accordance with the desire of the mortgagor.", "If the mortgagee receives the money and does not perform any of the three acts required of him to be done,, the question arises whether this non-compliance with the demands will make the mortgage continue. The provisions of the section do not say so and there appears no good reason why the mortgage should continue. If the mortgagee is not to perform these acts, the mortgagor is not to pay the amount.", "If, however, the mortgage money has been received by the mortgagee and thereafter he refuses to perform the acts he is bound to do, the mortgagor can enforce his right to get back the mortgage document, the possession of the mortgaged property and the reconveyance of that property through Court.", "A new right to get his demands enforced through the Court thus arises as a result of the provisions of s. 60 of the Act. If the mortgage money has been paid and then the mortgagor goes to Court to enforce his demands, that would not be to enforce his right of redemption which was really his right to make those demands on payment of the mortgage money. The right to demand the mortgagee to do certain things on payment of the mortgage money is different from enforcing the demands subsequent to the payment of the money.", "This is also clear from the decree for redemption.", "As we see it, that is not a case of redemption at all. At the moment when the, rents and profits of the mortgaged property sufficed to discharge the principal secured by th e mortgage, the mortgage came to an end and the correlative right arose in the mortgagor to recover possession of the property. \nThe framers of the Transfer of Property Act have clearly recognised the distinction between the procedure which follows a mortgagors desire to redeem a subsisting mortgage and the procedure which follows the arising of a usufructuary mortgagors right to get his property back after the principal has been paid off. We therefore hold that the mortgage was not subsisting on the date of vesting, it having come to an end on payment of the mortgage money in 1943. and that the respondents cannot get the advantage of s. 6(1)(c) of the Act."], "rank3": ["We do not agree with these contentions.", "Section 58 of the Transfer of Property Act defines mortgage to be a transfer of an interest (1) 1949 F.C.R. 484, 498. in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. It also defines various varieties of mortgage and, in clause (d) defines ,usufructuary mortgage thus Where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee, and authorizes him to retain such possession until payment of the mortgage- money, and to receive the rents and profits accruing from the property or any part of such rents and profits and to appropriate the same in lieu of interest, or in payment of the mortgage money, or partly in lieu of interest or partly in payment of the mortgagemoney, the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee. When the mortgage money is paid by the mortgager to the mortgagee, there does not remain any debt due from the mortgagor to the mortgagee, and therefore the mortgage can no longer continue after the mortgage money has been paid. The transfer of interest represented by the mortgage .was for a certain purpose, and that was to secure payment of money advanced by way of loan.", "A security cannot exist after the loan had been paid up. If any interest in the property continues to vest in the mortgagee subsequent to the payment of the mortgage money to him, it would be an in- terest different from that of a mortgagees interest. The mortgage as a transfer of an interest in immoveable property for the purpose of securing payment of money advanced by way of loan must come to an end on the payment of the mortgage money Further, the definition of usufructuary mort gage itself leads to the conclusion that the authority given to the mortgagee to remain in possession of the mortgaged property ceases when the mortgage money has been paid up.", "The usufructuary mortgage, by the terms of its definition, authorises the mortgagee to retain possession only until payment of the mortgage money, and. to appropriate the rents and profits collected by him in lieu of interest or in payment of the mortgage money, or partly in lieu of interest or partly in lieu of payment of the mortgage money.", "When the mortgage money has been paid up, no question of appropriating the rents and profits accruing from the property towards interest or mortgage money can arise. It is clear therefore that on the payment of the mortgage money by the mortgagor to the mortgagee the mortgage comes to an end and the right of the mortgagee to remain in possession also comes to an end. The relevant portion of s. 60 on which the respondents rely reads \n At any time after the principal money has become due, the mortgagor has a right, on payment or tender, at a proper time and place of the mortgage-money, to require the mortgagee to deliver to the mortgagor the mortgage deed and all documents relating to the mortgaged property which are in the possession of power of the mortgagee where the mortgagee is in possession of the mortgaged property,, to deliver possession thereof to the mortgagor, and at the cost of the mortgagor either to re-transfer the mortgaged property to him or to such third person as he may direct,. or to execute and (where the mortgage has been effected by a registered instrument to have registered an acknowledg- ment in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished Provided that the right conferred by this section has not been extinguished by the act of the parties or by decree of a Court.", "The right conferred by this section is called a right to redeem and a suit to enforce it is called a suit for redemption. x x x x It is to be noted that these provisions do not. state when a mortgage ceases to be a mortgage.", "They simply describe the right of a mortgagor to redeem. Now, what is this right and, in what circumstances does it arise? The right arises oh the principal money, payment of which is secured by the mortgage deed, becoming due.", "Order XXXIV, r. 7, C.P.C. provides for the preliminary decree in a redemption suit and the preliminary decree is to order that the account be taken of what was due to the defendant, viz., the mortgagee, at the date of the decree, for principal and interest on the mortgage and other matters. Rule 9 provides that if on such accounting, any sum be found due to the mortgagor, the decree would direct the mortgagee to pay such amount to the mortgagor. If the mortgage money due has been already paid by the mortgagor and has been accepted by the mortgagee in full discharge of the mortgage deed, no occasion for such accounting arises and therefore any suit to enforce the return of the mortgage deed and to get back the possession of the mortgaged property cannot be a suit for redemption.", "What Thota China Subba Raos Case (1), referred to by learned counsel for the respondents, lays down is simply this that, the right of redemption continues so long as the mortgage is alive.", "The case does not deal with the circumstances in which the mortgage ceases to exist. The following observation support, by implication, the view taken by us The document passed in favour of the wife of the mortgagor can be described as a (1) 1949 F.C.R. 484, 498. reward promised to her for bringing about the willingness of her husband to agree to convey the mortgaged lands to the mortgagees. That can in no event be considered as extinguishing the equity of redemption.", "The mortgagor was not even a party to that document.", "The second document executed by the mortgagor is a agreement to convey the lands after three months. There is however no document or evidence to show that the mortgagees agreed to accept these lands in full satisfaction of their claims or promised to pay the sum of Rs. 100 mentioned therein. This was only an agreement to convey the lands after three months, and, if at ail the question of extinction of the equity of redemption could arise on the conveyance being executed but not before.", "It therefore follows that the only property which a second or other subsequent mortgagee may redeem is the property on which the first mortgagee is entitled to enforce his security. From the very necessity of things the right of redemp- tion can be exercised in respect of such pro- perty only as is subject to a mortgage capable of enforcement. There can be nothing for enforcing a mortgage when the money has been paid up and therefore the right to redeem ceases on payment of the mortgage money.", "In Balakrishna v.Rangnath (1) it was said Now the right to redeem can only be extinguished by act of parties or by a decree of a Court.", "See the proviso to section 60 of the Transfer of Property Act). But when it is by act of parties the Act must take the shape and observe the formalities which the law prescribes. One Method is by payment in cash.", "In that event nothing is necessary beyond the payment.", "In other words. s. 60 contemplates a cage in which the mortgage is still subsisting and the mortgagor goes to the Court to obtain the return of his property on repayment of what is still due. Section 62, on the other hand, is in marked contract to s. 60."], "rank4": ["It is contended for the respondents, who applied for the review of our judgment, that our view that the mortgage was not subsisting on the date of vesting was wrong. The contention is that even though the respondents-mortgagors had paid up the mortgage money in 1943, the mortgage continued to subsist till the date of vesting as by that time the right of redemption given by s. 60 of the Transfer of Property Act had not come to an end.", "That right, according to the respondents contention, would not come to an end so long as the mortgagors right to ask the mortgagees to perform any of the acts mentioned in s. 60 continues. In sup. port of the contention that the mortgage continues till the right of redemption comes to an end, reliance is placed on the case reported as Thota China Subba Rao v.", "There are other oases also which throw a light on this question And go against the contention of the respondents.", "In Samar Ali v. Karim-ul-lah (1) it was said Now, as I have said, the contract of mortgage in the present case being subject to the provisions of the Regulation, the charge would have been redeemed as soon as the principal mortgage money with twelve percent interest had been realised by the mortgagee from the profits of the property. In Muhammed Mahmud Ali v. Kalyan Das (2) it was said It cannot be disputed that the right of redemption pre-supposes the existence of a mortgage on certain property which at the (1) (1886) I.L.R. 8 All. 402, 405. (2) (1895) I.L.R. 18 All. 189,192. time of redemption is security for the money due to the mortgagee.", "There can be nothing for enforcing a mortgage when the money has been paid up and therefore the right to redeem ceases on payment of the mortgage money. In Balakrishna v.Rangnath (1) it was said Now the right to redeem can only be extinguished by act of parties or by a decree of a Court. (See the proviso to section 60 of the Transfer of Property Act). But when it is by act of parties the Act must take the shape and observe the formalities which the law prescribes. One Method is by payment in cash. In that event nothing is necessary beyond the payment. In Ram Prasad v."], "label": "REJECTED"}, "expert_5": {"rank1": ["The provisions of the section do not say so and there appears no good reason why the mortgage should continue.", "The right to demand the mortgagee to do certain things on payment of the mortgage money is different from enforcing the demands subsequent to the payment of the money.", "There can be nothing for enforcing a mortgage when the money has been paid up and therefore the right to redeem ceases on payment of the mortgage money.", "s. 60 contemplates a cage in which the mortgage is still subsisting and the mortgagor goes to the Court to obtain the return of his property on repayment of what is still due.", "the mortgage was not subsisting on the date of vesting, it having come to an end on payment of the mortgage money in 1943"], "rank2": ["When the mortgage money has been paid up, no question of appropriating the rents and profits accruing from the property towards interest or mortgage money can arise.", "The right arises oh the principal money, payment of which is secured by the mortgage deed, becoming due.", "The right entitles the mortgagor, on his paying or tendering to the mortgagee the mortgage money to ask him (i) to deliver to him the mortgage deed and other documents relating to the mortgaged property to deliver possession to the mortgagor, if the mortgagee is in possession and (iii) to re-transfer the mortgaged property in accordance with the desire of the mortgagor.", "If the mortgage money has been paid and then the mortgagor goes to Court to enforce his demands, that would not be to enforce his right of redemption which was really his right to make those demands on payment of the mortgage money.", "There are other oases also which throw a light on this question And go against the contention of the respondents. In Samar Ali v. Karim-ul-lah (1) it was said Now, as I have said, the contract of mortgage in the present case being subject to the provisions of the Regulation, the charge would have been redeemed as soon as the principal mortgage money with twelve percent interest had been realised by the mortgagee from the profits of the property.", "In Muhammed Mahmud Ali v. Kalyan Das (2) it was said It cannot be disputed that the right of redemption pre-supposes the existence of a mortgage on certain property which at the (1) (1886) I.L.R. 8 All. 402, 405. (2) (1895) I.L.R. 18 All. 189,192. time of redemption is security for the money due to the mortgagee.", "The framers of the Transfer of Property Act have clearly recognised the distinction between the procedure which follows a mortgagors desire to redeem a subsisting mortgage and the procedure which follows the arising of a usufructuary mortgagors right to get his property back after the principal has been paid off."], "rank3": ["Further, the definition of usufructuary mort gage itself leads to the conclusion that the authority given to the mortgagee to remain in possession of the mortgaged property ceases when the mortgage money has been paid up.", "The usufructuary mortgage, by the terms of its definition, authorises the mortgagee to retain possession only until payment of the mortgage money, and. to appropriate the rents and profits collected by him in lieu of interest or in payment of the mortgage money, or partly in lieu of interest or partly in lieu of payment of the mortgage money.", "It is to be noted that these provisions do not. state when a mortgage ceases to be a mortgage.", "If, however, the mortgage money has been received by the mortgagee and thereafter he refuses to perform the acts he is bound to do, the mortgagor can enforce his right to get back the mortgage document, the possession of the mortgaged property and the reconveyance of that property through Court.", "What Thota China Subba Raos Case (1), referred to by learned counsel for the respondents, lays down is simply this that, the right of redemption continues so long as the mortgage is alive.", "In Balakrishna v.Rangnath (1) it was said Now the right to redeem can only be extinguished by act of parties or by a decree of a Court. (See the proviso to section 60 of the Transfer of Property Act). But when it is by act of parties the Act must take the shape and observe the formalities which the law prescribes. One Method is by payment in cash. In that event nothing is necessary beyond the payment.", "In Ram Prasad v. Bishambhar Singh (2) the question formulated for determination was whether the suit being a suit to recover possession of the mortgaged property after the mortgage money had been paid off was a suit against the mortgagee to redeem or to recover possession of immovable property mortgaged."], "rank4": ["When the mortgage money is paid by the mortgager to the mortgagee, there does not remain any debt due from the mortgagor to the mortgagee, and therefore the mortgage can no longer continue after the mortgage money has been paid. The transfer of interest represented by the mortgage .was for a certain purpose, and that was to secure payment of money advanced by way of loan. A security cannot exist after the loan had been paid up. If any interest in the property continues to vest in the mortgagee subsequent to the payment of the mortgage money to him, it would be an in- terest different from that of a mortgagees interest.", "The mortgage as a transfer of an interest in immoveable property for the purpose of securing payment of money advanced by way of loan must come to an end on the payment of the mortgage money", "Order XXXIV, r. 7, C.P.C. provides for the preliminary decree in a redemption suit and the preliminary decree is to order that the account be taken of what was due to the defendant, viz., the mortgagee, at the date of the decree, for principal and interest on the mortgage and other matters. Rule 9 provides that if on such accounting, any sum be found due to the mortgagor, the decree would direct the mortgagee to pay such amount to the mortgagor."], "rank5": ["Where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee, and authorizes him to retain such possession until payment of the mortgage- money, and to receive the rents and profits accruing from the property or any part of such rents and profits and to appropriate the same in lieu of interest, or in payment of the mortgage money, or partly in lieu of interest or partly in payment of the mortgagemoney, the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee.", "Section 62 says that in the case of a usufructuary mortgage the mortgagor has a right to recover possession of the property when (In a case in which the mortgagee is authorised to pay himself the mortgage money out of the rents and ,profits of the property) the principal money is paid off."], "label": "ACCEPTED"}, "label": "REJECTED"}
{"id": "1963_37", "text": "Appeal by special leave from the Award dated September 13, 1961, of the Second Labour Court, West Bengal, in Case No. VIII-C-40 of 1960. M .C Setalvad, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellant. K. Daphtary, Solicitor General of India and Janardhan Sharma, for the respondent No. 1 1963. February 15. The judgment of the Court was delivered by GAJENDRAGADKAR J.--Mr. R. K. Banerjee had been employed by the appellant, the Tata Oil Mills Co. Ltd.as a Salesman on April 3, 1956, as a probationer and he was confirmed on November 5, 1956. On December 5, 1959, his services were terminated and he was informed that the appellant had lost confidence in him, and so, it bad decided to discharge him. Accordingly, in lieu of notice, he was paid a months salary and was told that he ceased to be the employee of the appe- llant as from the date next after he received the order from the appellant. \nThe discharge of Mr. Banerjee was resented by the Union to which he belonged and the Union took up his case. Since the dispute could not be settled amicably, the Union succeeded in persuading the Government of West Bengal to refer the dispute for adjudication to the Second Labour Court on the ground that the said discharge was not justified. That is how the discharge of Mr. Banerjee became an industrial dispute between the appellant and the respondents, its workmen represented by their Union. The Labour Court which tried the dispute came to the conclusion that the appellant had failed to justify the discharge of Mr. Banerjee and so, it has directed the appellant to reinstate him and pay him full emoluments from the date of his discharge up to the date of his reinstatement. It is this order which is challenged by the appellant by its present appeal brought to this Court by special leave. The material facts leading to the termination of Mr. Banerjees services lie within a very narrow compass. in November, 1959 Mr. Banerjee was working in the Assam area and as such, had to work as a Salesman at Dhubri, Bongaigoan, Rangia and Tejpur. The appellant expected that as its Salesman Mr. Banerjee should visit dealers in his area and carry on intelligent and intensive propaganda to popularise the sale of the appellants products. The appellant has a Sales ice in Calcutta and the manager of the said ice visits the areas within his jurisdiction to inspect the work of Salesmen. \nAccordingly Mr. Gupta who was then the manager of the Calcutta ice visited the area assigned to Mr. Banerjee, in the last week of October. He found that Mr. Banerjee was networking satisfactorily as a Salesman. In particular, he noticed that whereas Mr. Banerjee had reported to the ice that the Bongaigoan Stockists had 20 boxes of dried up and deshaped 501 Special Soap which could not be distributed in the market he had in fact not opened a single box and had not cared to satisfy himself that the soaps had either dried up or had been deshaped. In fact, Mr. Gupta found that the boxes were intact and he opened them and discovered that five boxes contained soap which had dried up and had become deshaped, whereas the 15 other boxes were in good condition. Thereupon, Mr. Gupta made a report to the zonal Manager on November 2, 1959, adversely commenting on Mr. Banerjees work. The said report was in due course forwarded to the Head ice in Bombay. The Head ice then instructed the Calcutta Sales ice by telephone to send for Mr. Banerjee and call for his explanation. Accordingly, Mr. Banerjee was sent for and his explanation taken Mr. Gupta then made another report expressing his dissatisfaction with the explanation given by Mr. Banerjee. This report was sent on November 24, 1959. The Head ice accepted this report and on December 5, 1959, issued to Mr, Banerjee the order terminating his services. That, in brief, is the case set out by the appellant in support of the action taken by it against Mr. Banerjee. The appellant had alleged that the termination of Mr. Banerjees services was not dismissal but was a discharge simpliciter, and according to it, the discharge was justified by the terms of contract between the appellant and Mr. Banerjee as embodied in Rule 40 (1) of the Service Rules of -the appellant. The appellant, therefore, urged that the Labour Court had no jurisdiction to consider the propriety of the appellants action in discharging Mr. Banerjee. The respondents, on the other hand, contended that the discharge was not discharge simpliciter but was, in substance, dismissal, and so, it was urged that the Labour Court was entitled to consider the propriety of the appellants action. Basing themselves on the plea that the discharge amounted to dismissal, the respondents pleaded that the failure of the appellant to hold an enquiry against Mr. Banerjee introduced a serious infirmity in the order passed against him and they argued that the conduct of the appellant was malafide and the dismissal of Mr. Banerjee amounted to victimisation. The Labour Court has found that according to the terms of contract under which Mr. Banerjee was employed by the appellant, the appellant was entitled to discharge Mr. Banerjee from its employment under Rule 40 (1) of the Service Rules but it held that merely because the order served on Mr. Banerjee purported to be an order of discharge, that would not exclude the jurisdiction of the Labour Court to examine the substance of the matter. In fact, Mr. joshi who appeared for the appellant conceded before the Labour Court that an adjudicating Court can look into the reasons behind the discharge of an employee. That is why evidence was led by- both the parties before the Labour Court. Having considered that evidence, the Labour Court has found that the respondents plea about the mala fides of the appellant was not proved and it held that the termination of Mr. Banerjees services could not be said to amount to an act of victimisation or an unfair labour practice. Even so, it held that the discharge was not justified, and so, it,has directed the appellant to reinstate Mr. Banerjee. It is the validity of this order that is challenged before us by Mi. Setalvad on behalf of the appellant. The true legal position about the Industrial Courts jurisdiction and authority in dealing with cases of this kind is no longer in doubt. It is true that in several cases, contract of employment or provisions in Standing Orders authorise an industrial employer to terminate the service, of his employees. after giving notice for one month or paying salary for one month in lieu of notice, and normally, an employer may, in a proper case, -be entitled to exercise the said power. But where an order of discharge passed by an employer gives rise to an industrial dispute. the form of the order by which the employees services are terminated, would not be decisive industrial adjudication would be entitled to examine the substance of the matter and decide whether the termination is in fact discharge simpli- citer or it amounts to dismissal which has put on the cloak of a discharge simpliciter. If the Industrial Court is satisfied that the order of discharge is punitive, that it is malafide, or that it amounts to victimisation or unfair labour practice, it is competent to the Industrial Court to set aside the order and in a proper case, direct the reinstatement of the employee. \nIn some cases, the termination of the employees services may appear to the Industrial Court to be capricious or so unreasonably severe that an inherence may legitimately and reasonably be drawn that in terminating the services, the employer was not acting bonafide. The test always has to be whether the act of the employer is bonafide or not. If the act is malafide, or appears to be a colourable exercise of the powers conferred on the employer either by the terms of contract or by the standing orders, then notwithstanding the form of the order, industrial adjudication would examine the substance and would direct reinstatement in a fit case. This position was recognised by the Labour Appellate Tribunal as early as 1951 in Buckingham and Carnatic Co. Ltd., v. Workers of the Company, (1), and since then, it has been consistently followed vide Chartered Bank, Bombay, v. Chartered Bank Employees Union (2) , and U. B. Dutt Co. (Private) Ltd. v. Its Workmen (3). In the present case, the Labour Court has made a definite finding in favour of -the appellant that its action in terminating the services of Mr. Banerjee was not malafide and did not amount to victimisation. Even so, it proceeded to examine the propriety of the said action and came to the conclusion that Mr. Banerjees discharge from employment did not appear to it to be justified. In coming to this conclusion, the Labour Court has given some reasons which are clearly unsupportable. It has observed, for instance, that the appellant has not produced any documentary evidence in support of its allegation against the efficiency of Mr. Banerjee. This is clearly wrong because the two reports made by Mr. Gupta in respect of Mr. Banerjees conduct do amount to documentary evidence which cannot be lightly brushed aside. It has then commented on the fact that the allegations made by Mr. Gupta against Mr. Banerjee on six counts are of a general character. This comment again cannot be justified because Mr. Gupta stated in clear terms the defects in Mr. Banerjees work which had come to his notice. These defects are specific and it is idle to refuse to give importance to this evidence merely on the ground that no specific instances had been cited. In regard .to the question as to whether the 20 boxes had been opened by Mr. Banerjee before he made his report (1) (1951) 11 L.L J. 314. (2) (1960) 11 L.L.J. 221. (3) (1962)1 L.L J. 374. to the Zonal ice, the Labour Court has observed that on this point there is the evidence of Mr. Banerjee against that of Mr. Gupta and there was no particular reason to believe one in preference to the other. Now, it is clear that such an -observation is hardly of any help because it was necessary for the Labour Court to express its conclusion on this point it might have believed either Mr. Banerjee or Mr. Gupta, but by saying that there is no reason why one should be believed rather than the other, the Labour Court left this part of the dispute entirely undecided. Similarly, the Labour Court has accepted the fact that Mr. Gupta that called for and received Mr. Banerjees explanation and to that extent it has rejected Mr. Banerjee suggestion that he had not given any explanation a all but even so, the Labour Court has not considered the effect of this conclusion on the main controversy between the parties. \nIn our opinion, therefore, the-reasons given by the Labour Court in support of its conclusion that the discharge of Mr. Banerjee was not justified are wholly unsatisfactory and so, it has become necessary for us to examine the evidence ourselves. The first report made by Mr. Gupta expressly states six grounds on which Mr. Banerjees work was found to be unsatisfactory. Mr. Gupta took the view that Mr. Banerjee was very slow in his work as a Salesman, that he was not able to judge the capacity of the dealers and to give them sufficient stocks in time, that he took no steps to put the products of the appellant on prominent view in the dealers shops, that he wag not looking after the pasting of the posters, in fact in one place the poster was pasted upside down, that he was not educating the stockists and dealers as he could have done and that he was reluctant to put hard and intelligent work. It is remarkable that when Mr. Banerjee was asked about this report in cross-examination, he frankly stated that Mr. Gupta was not unfriendly towards him and he was really unable to say why Mr. Gupta should have made these adverse comments against his work. In fact, the Labour Court itself has found that the appellant was not actuated by any ulterior considerations in discharging Mr. Banerjee. This report was made by Mr. Gupta soon after he inspected Mc. Banerjees work and there is no reason, whatever, why the Labour Court should have been reluctant to accept this report. Confining ourselves to the main complaint against Mr. Banerjee that he had not examined even a single box before he reported that the contents of the said boxes were not marketable, Mr. Gupta expressly stated that he had seen the 20 boxes and found that none of them had been opened at all. They were intact in the companys packing with the straps on them. Mr Gupta got them opened and found that the contents to the extent of 5 cases were really damaged and that the remaining contents were alright and could be marketed at the companys prices. Mr. Banerjee stated in his evidence that he had all the cases opened and he added, as he. had to, that the said cases were repacked for avoiding further deterioration. When he was asked how that could be done, he agreed that the metal straps had to be removed for opening of the boxes, but he added that he had arranged to have them restrapped and nailed. It is clear that the strapping is done in a factory by machines. Mr. Banerjee, however, suggested that he could manage to get the straps put and nailed with hands. \nThis evidence is patently unreliable. Besides, it is significant that when he gave his explanation to Mr. Gupta Mr. Banerjee admitted that he had opened only 5 or 6 out of the 20 boxes in question though his report suggested that he had opened all the 20 boxes. Therefore, there can be no doubt that Mr. Guptas statetment is absolutely true and that Mr. Banerjee had made his report about the unsatisfactory condition of the contents of the 20 boxes without as much as opening any one of them. That being so, it is difficult to understand how the Labour Court could -have come to the conclusion that the order of discharge was not justified. The learned Solicitor-General, however, attempted to argue that there was nothing on the record to show that the 20 boxes which Mr. Gupta got opened were the same boxes in respect of which Mr. Banerjee had made his report. We do not think that having regard to the evidence given by Mr. Gupta and Mr. Banerjee and the explanation offered by the latter when he was called to Calcutta by Mr. Gupta, there is any room for such an ingenious suggestion. Both parties knew that they were talking about the same 20 boxes and so,, it is futile now to suggest that the 20 boxes which Mr. Gupta examined were different from the boxes in respect of which Mr. Banerjee had made his report. It was also suggested on behalf of the respondents that Mr. Gupta did not admit that he had received some letters from Mr. Banerjee in which he had complained that owing to heavy rains, conditions were not favourable for effective work in the area entrusted to him. It is true that when Mr. Gupta was asked about these letters, he said he did not remember if he had received them. We do not think that the answers given by Mr. Gupta in respect of these letters can be of any assistance to the respondents in discrediting Mr. Guptas evidence in any manner. On the whole, we have no hesitation in holding that the appellant acted bonafide in discharging Mr. Banerjees services when it accepted Mr. Guptas report and concurred with his conclusions that the explanation given by Mr. Banerjee was not satisfactory. \nDECISION ??", "expert_1": {"rank1": ["In our opinion, therefore, the-reasons given by the Labour Court in support of its conclusion that the discharge of Mr. Banerjee was not justified are wholly unsatisfactory and so, it has become necessary for us to examine the evidence ourselves.", "Mr. Banerjee stated in his evidence that he had all the cases opened and he added, as he. had to, that the said cases were repacked for avoiding further deterioration. When he", "was asked how that could be done, he agreed that the metal straps had to be removed for opening of the boxes, but he added that he had arranged to have them restrapped and nailed. It is clear that the strapping is done in a factory by machines. Mr. Banerjee, however, suggested that he could manage to get the straps put and nailed with hands. \nThis evidence is patently unreliable.", "Therefore, there can be no doubt that Mr. Guptas statetment is absolutely true and that Mr. Banerjee had made his report about the unsatisfactory condition of the contents of the 20 boxes without as much as opening any one of them. That being so, it is difficult to understand how the Labour Court could -have come to the conclusion that the order of discharge was not justified.", "We do not think that having regard to the evidence given by Mr. Gupta and Mr. Banerjee and the explanation offered by the latter when he was called to Calcutta by Mr. Gupta, there is any room for such an ingenious suggestion. Both parties knew that they were talking about the same 20 boxes and so,, it is futile now to suggest that the 20 boxes which Mr. Gupta examined were different from the boxes in respect of which Mr. Banerjee had made his report.", "It is true that when Mr. Gupta was asked about these letters, he said he did not remember if he had received them. We do not think that the answers given by Mr. Gupta in respect of these letters can be of any assistance to the respondents in discrediting Mr. Guptas evidence in any manner. On the whole, we have no hesitation in holding that the appellant acted bonafide in discharging Mr. Banerjees services when it accepted Mr. Guptas report and concurred with his conclusions that the explanation given by Mr. Banerjee was not satisfactory."], "rank2": ["In the present case, the Labour Court has made a definite finding in favour of -the appellant that its action in terminating the services of Mr. Banerjee was not malafide and did not amount to victimisation. Even so, it proceeded to examine the propriety of the said action and came to the conclusion that Mr. Banerjees discharge from employment did not appear to it to be justified. In coming to this conclusion, the Labour Court has given some reasons which are clearly unsupportable. It has observed, for instance, that the appellant has not produced any documentary evidence in support of its allegation against the efficiency of Mr. Banerjee. This is clearly wrong because the two reports made by Mr. Gupta in respect of Mr. Banerjees conduct do amount to documentary evidence which cannot be lightly brushed aside. It has then commented on the fact that the allegations made by Mr. Gupta against Mr. Banerjee on six counts are of a general character. This comment again cannot be justified because Mr. Gupta stated in clear terms the defects in Mr. Banerjees work which had come to his notice. These defects are specific and it is idle to refuse to give importance to this evidence merely on the ground that no specific instances had been cited.", "Besides, it is significant that when he gave his explanation to Mr. Gupta Mr. Banerjee admitted that he had opened only 5 or 6 out of the 20 boxes in question though his report suggested that he had opened all the 20 boxes."], "rank3": ["It is this order which is challenged by the appellant by its present appeal brought to this Court by special leave.", "The material facts leading to the termination of Mr. Banerjees services lie within a very narrow compass. in November, 1959 Mr. Banerjee was working in the Assam area and as such, had to work as a Salesman at Dhubri, Bongaigoan, Rangia and Tejpur. The appellant expected that as its Salesman Mr. Banerjee should visit dealers in his area and carry on intelligent and intensive propaganda to popularise the sale of the appellants products. The appellant has a Sales ice in Calcutta and the manager of the said ice visits the areas within his jurisdiction to inspect the work of Salesmen. \nAccordingly Mr. Gupta who was then the manager of the Calcutta ice visited the area assigned to Mr. Banerjee, in the last week of October. He found that Mr. Banerjee was networking satisfactorily as a Salesman. In particular, he noticed that whereas Mr. Banerjee had reported to the ice that the Bongaigoan Stockists had 20 boxes of dried up and deshaped 501 Special Soap which could not be distributed in the market he had in fact not opened a single box and had not cared to satisfy himself that the soaps had either dried up or had been deshaped. In fact, Mr. Gupta found that the boxes were intact and he opened them and discovered that five boxes contained soap which had dried up and had become deshaped, whereas the 15 other boxes were in good condition.", "Thereupon, Mr. Gupta made a report to the zonal Manager on November 2, 1959, adversely commenting on Mr. Banerjees work. The said report was in due course forwarded to the Head ice in Bombay. The Head ice then instructed the Calcutta Sales ice by telephone to send for Mr. Banerjee and call for his explanation. Accordingly, Mr. Banerjee was sent for and his explanation taken Mr. Gupta then made another report expressing his dissatisfaction with the explanation given by Mr. Banerjee. This report was sent on November 24, 1959. The Head ice accepted this report and on December 5, 1959, issued to Mr, Banerjee the order terminating his services. That, in brief, is the case set out by the appellant in support of the action taken by it against Mr. Banerjee. The appellant had alleged that the termination of Mr. Banerjees services was not dismissal but was a discharge simpliciter, and according to it, the discharge was justified by the terms of contract between the appellant and Mr. Banerjee as embodied in Rule 40 (1) of the Service Rules of -the appellant. The appellant, therefore, urged that the Labour Court had no jurisdiction to consider the propriety of the appellants action in discharging Mr. Banerjee. The respondents, on the other hand, contended that the discharge was not discharge simpliciter but was, in substance, dismissal, and so, it was urged that the Labour Court was entitled to consider the propriety of the appellants action. Basing themselves on the plea that the discharge amounted to dismissal, the respondents pleaded that the failure of the appellant to hold an enquiry against Mr. Banerjee introduced a serious infirmity in the order passed against him and they argued that the conduct of the appellant was malafide and the dismissal of Mr. Banerjee amounted to victimisation. The Labour Court has found that according to the terms of contract under which Mr. Banerjee was employed by the appellant, the appellant was entitled to discharge Mr.", "Banerjee from its employment under Rule 40 (1) of the Service Rules but it held that merely because the order served on Mr. Banerjee purported to be an order of discharge, that would not exclude the jurisdiction of the Labour Court to examine the substance of the matter. In fact, Mr. joshi who appeared for the appellant conceded before the Labour Court that an adjudicating Court can look into the reasons behind the discharge of an employee. That is why evidence was led by- both the parties before the Labour Court. Having considered that evidence, the Labour Court has found that the respondents plea about the mala fides of the appellant was not proved and it held that the termination of Mr. Banerjees services could not be said to amount to an act of victimisation or an unfair labour practice. Even so, it held that the discharge was not justified, and so, it,has directed the appellant to reinstate Mr. Banerjee. It is the validity of this order that is challenged before us by Mi. Setalvad on behalf of the appellant. The true legal position about the Industrial Courts jurisdiction and authority in dealing with cases of this kind is no longer in doubt. It is true that in several cases, contract of employment or provisions in Standing Orders authorise an industrial employer to terminate the service, of his employees. after giving notice for one month or paying salary for one month in lieu of notice, and normally, an employer may, in a proper case, -be entitled to exercise the said power. But where an order of discharge passed by an employer gives rise to an industrial dispute. the form of the order by which the employees services are terminated, would not be decisive industrial adjudication would be entitled to examine the substance of the matter and decide whether the termination is in fact discharge simpli- citer or it amounts to dismissal which has put on the cloak of a discharge simpliciter. If the Industrial Court is satisfied that the order of discharge is punitive, that it is malafide, or that it amounts to victimisation or unfair labour practice, it is competent to the Industrial Court to set aside the order and in a proper case, direct the reinstatement of the employee. \nIn some cases, the termination of the employees services may appear to the Industrial Court to be capricious or so unreasonably severe that an inherence may legitimately and reasonably be drawn that in terminating the services, the employer was not acting bonafide. The test always has to be whether the act of the employer is bonafide or not. If the act is malafide, or appears to be a colourable exercise of the powers conferred on the employer either by the terms of contract or by the standing orders, then notwithstanding the form of the order, industrial adjudication would examine the substance and would direct reinstatement in a fit case.", "In regard .to the question as to whether the 20 boxes had been opened by Mr. Banerjee before he made his report (1) (1951) 11 L.L J. 314. (2) (1960) 11 L.L.J. 221. (3) (1962)1 L.L J. 374. to the Zonal ice, the Labour Court has observed that on this point there is the evidence of Mr. Banerjee against that of Mr. Gupta and there was no particular reason to believe one in preference to the other. Now, it is clear that such an -observation is hardly of any help because it was necessary for the Labour Court to express its conclusion on this point it might have believed either Mr. Banerjee or Mr. Gupta, but by saying that there is no reason why one should be believed rather than the other, the Labour Court left this part of the dispute entirely undecided. Similarly, the Labour Court has accepted the fact that Mr. Gupta that called for and received Mr. Banerjees explanation and to that extent it has rejected Mr. Banerjee suggestion that he had not given any explanation a all but even so, the Labour Court has not considered the effect of this conclusion on the main controversy between the parties.", "The first report made by Mr. Gupta expressly states six grounds on which Mr. Banerjees work was found to be unsatisfactory. Mr. Gupta took the view that Mr. Banerjee was very slow in his work as a Salesman, that he was not able to judge the capacity of the dealers and to give them sufficient stocks in time, that he took no steps to put the products of the appellant on prominent view in the dealers shops, that he wag not looking after the pasting of the posters, in fact in one place the poster was pasted upside down, that he was not educating the stockists and dealers as he could have done and that he was reluctant to put hard and intelligent work.", "It is remarkable that when Mr. Banerjee was asked about this report in cross-examination, he frankly stated that Mr. Gupta was not unfriendly towards him and he was really unable to say why Mr. Gupta should have made these adverse comments against his work. In fact, the Labour Court itself has found that the appellant was not actuated by any ulterior considerations in discharging Mr. Banerjee. This report was made by Mr. Gupta soon after he inspected Mc. Banerjees work and there is no reason, whatever, why the Labour Court should have been reluctant to accept this report. Confining ourselves to the main complaint against Mr. Banerjee that he had not examined even a single box before he reported that the contents of the said boxes were not marketable, Mr. Gupta expressly stated that he had seen the 20 boxes and found that none of them had been opened at all. They were intact in the companys packing with the straps on them. Mr Gupta got them opened and found that the contents to the extent of 5 cases were really damaged and that the remaining contents were alright and could be marketed at the companys prices."], "rank4": ["Mr. R. K. Banerjee had been employed by the appellant, the Tata Oil Mills Co. Ltd.as a Salesman on April 3, 1956, as a probationer and he was confirmed on November 5, 1956. On December 5, 1959, his services were terminated and he was informed that the appellant had lost confidence in him, and so, it bad decided to discharge him. Accordingly, in lieu of notice, he was paid a months salary and was told that he ceased to be the employee of the appe- llant as from the date next after he received the order from the appellant. \nThe discharge of Mr. Banerjee was resented by the Union to which he belonged and the Union took up his case. Since the dispute could not be settled amicably, the Union succeeded in persuading the Government of West Bengal to refer the dispute for adjudication to the Second Labour Court on the ground that the said discharge was not justified. That is how the discharge of Mr. Banerjee became an industrial dispute between the appellant and the respondents, its workmen represented by their Union. The Labour Court which tried the dispute came to the conclusion that the appellant had failed to justify the discharge of Mr. Banerjee and so, it has directed the appellant to reinstate him and pay him full emoluments from the date of his discharge up to the date of his reinstatement."], "label": "ACCEPTED"}, "expert_2": {"rank1": ["Banerjee that he had not examined even a single box before he reported that the contents of the said boxes were not marketable, Mr. Gupta expressly stated that he had seen the 20 boxes and found that none of them had been opened at all. They were intact in the companys packing with the straps on them. Mr Gupta got them opened and found that the contents to the extent of 5 cases were really damaged and that the remaining contents were alright and could be marketed at the companys prices."], "rank2": ["The Labour Court which tried the dispute came to the conclusion that the appellant had failed to justify the discharge of Mr. Banerjee and so, it has directed the appellant to reinstate him and pay him full emoluments from the date of his discharge up to the date of his reinstatement. It is this order which is challenged by the appellant by its present appeal brought to this Court by special leave.", "the Labour Court has found that the respondents plea about the mala fides of the appellant was not proved and it held that the termination of Mr. Banerjees services could not be said to amount to an act of victimisation or an unfair labour practice. Even so, it held that the discharge was not justified, and so, it,has directed the appellant to reinstate Mr. Banerjee. It is the validity of this order that is challenged before us by Mi. Setalvad on behalf of the appellant.", "In coming to this conclusion, the Labour Court has given some reasons which are clearly unsupportable. It has observed, for instance, that the appellant has not produced any documentary evidence in support of its allegation against the efficiency of Mr. Banerjee. This is clearly wrong because the two reports made by Mr. Gupta in respect of Mr. Banerjees conduct do amount to documentary evidence which cannot be lightly brushed aside.", "Gupta took the view that Mr. Banerjee was very slow in his work as a Salesman, that he was not able to judge the capacity of the dealers and to give them sufficient stocks in time, that he took no steps to put the products of the appellant on prominent view in the dealers shops, that he wag not looking after the pasting of the posters, in fact in one place the poster was pasted upside down, that he was not educating the stockists and dealers as he could have done and that he was reluctant to put hard and intelligent work."], "rank3": ["Banerjee had been employed by the appellant, the Tata Oil Mills Co. Ltd.as a Salesman on April 3, 1956, as a probationer and he was confirmed on November 5, 1956. On December 5, 1959, his services were terminated and he was informed that the appellant had lost confidence in him, and so, it bad decided to discharge him. Accordingly, in lieu of notice, he was paid a months salary and was told that he ceased to be the employee of the appe- llant as from the date next after he received the order from the appellant.", "The appellant had alleged that the termination of Mr. Banerjees services was not dismissal but was a discharge simpliciter, and according to it, the discharge was justified by the terms of contract between the appellant and Mr. Banerjee as embodied in Rule 40 (1) of the Service Rules of -the appellant. The appellant, therefore, urged that the Labour Court had no jurisdiction to consider the propriety of the appellants action in discharging Mr. Banerjee.", "The respondents, on the other hand, contended that the discharge was not discharge simpliciter but was, in substance, dismissal, and so, it was urged that the Labour Court was entitled to consider the propriety of the appellants action.", "the Labour Court has accepted the fact that Mr. Gupta that called for and received Mr. Banerjees explanation and to that extent it has rejected Mr. Banerjee suggestion that he had not given any explanation a all but even so, the Labour Court has not considered the effect of this conclusion on the main controversy between the parties. \nIn our opinion, therefore, the-reasons given by the Labour Court in support of its conclusion that the discharge of Mr. Banerjee was not justified are wholly unsatisfactory and so, it has become necessary for us to examine the evidence ourselves."], "rank4": ["The appellant expected that as its Salesman Mr. Banerjee should visit dealers in his area and carry on intelligent and intensive propaganda to popularise the sale of the appellants products. The appellant has a Sales ice in Calcutta and the manager of the said ice visits the areas within his jurisdiction to inspect the work of Salesmen.", "The Labour Court has found that according to the terms of contract under which Mr. Banerjee was employed by the appellant, the appellant was entitled to discharge Mr. Banerjee from its employment under Rule 40 (1) of the Service Rules but it held that merely because the order served on Mr. Banerjee purported to be an order of discharge, that would not exclude the jurisdiction of the Labour Court to examine the substance of the matter."], "rank5": ["But where an order of discharge passed by an employer gives rise to an industrial dispute. the form of the order by which the employees services are terminated, would not be decisive industrial adjudication would be entitled to examine the substance of the matter and decide whether the termination is in fact discharge simpli- citer or it amounts to dismissal which has put on the cloak of a discharge simpliciter. If the Industrial Court is satisfied that the order of discharge is punitive, that it is malafide, or that it amounts to victimisation or unfair labour practice, it is competent to the Industrial Court to set aside the order and in a proper case, direct the reinstatement of the employee."], "label": "ACCEPTED"}, "expert_3": {"rank1": ["It is true that in several cases, contract of employment or provisions in Standing Orders authorise an industrial employer to terminate the service, of his employees. after giving notice for one month or paying salary for one month in lieu of notice, and normally, an employer may, in a proper case, -be entitled to exercise the said power. But where an order of discharge passed by an employer gives rise to an industrial dispute. the form of the order by which the employees services are terminated, would not be decisive industrial adjudication would be entitled to examine the substance of the matter and decide whether the termination is in fact discharge simpli- citer or it amounts to dismissal which has put on the cloak of a discharge simpliciter.", "If the Industrial Court is satisfied that the order of discharge is punitive, that it is malafide, or that it amounts to victimisation or unfair labour practice, it is competent to the Industrial Court to set aside the order and in a proper case, direct the reinstatement of the employee. \nIn some cases, the termination of the employees services may appear to the Industrial Court to be capricious or so unreasonably severe that an inherence may legitimately and reasonably be drawn that in terminating the services, the employer was not acting bonafide. The test always has to be whether the act of the employer is bonafide or not. If the act is malafide, or appears to be a colourable exercise of the powers conferred on the employer either by the terms of contract or by the standing orders, then notwithstanding the form of the order, industrial adjudication would examine the substance and would direct reinstatement in a fit case", "Even so, it proceeded to examine the propriety of the said action and came to the conclusion that Mr. Banerjees discharge from employment did not appear to it to be justified. In coming to this conclusion, the Labour Court has given some reasons which are clearly unsupportable", "It has observed, for instance, that the appellant has not produced any documentary evidence in support of its allegation against the efficiency of Mr. Banerjee. This is clearly wrong because the two reports made by Mr. Gupta in respect of Mr. Banerjees conduct do amount to documentary evidence which cannot be lightly brushed aside. It has then commented on the fact that the allegations made by Mr. Gupta against Mr", "Banerjee on six counts are of a general character. This comment again cannot be justified because Mr. Gupta stated in clear terms the defects in Mr", "Banerjees work which had come to his notice. These defects are specific and it is idle to refuse to give importance to this evidence merely on the ground that no specific instances had been cited.", "In regard .to the question as to whether the 20 boxes had been opened by Mr. Banerjee before he made his report (1) (1951) 11 L.L J. 314. (2) (1960) 11 L.L.J. 221. (3) (1962)1 L.L J. 374. to the Zonal ice, the Labour Court has observed that on this point there is the evidence of Mr. Banerjee against that of Mr.", "Gupta and there was no particular reason to believe one in preference to the other. Now, it is clear that such an -observation is hardly of any help because it was necessary for the Labour Court to express its conclusion on this point it might have believed either Mr.", "Banerjee or Mr. Gupta, but by saying that there is no reason why one should be believed rather than the other, the Labour Court left this part of the dispute entirely undecided.", "Similarly, the Labour Court has accepted the fact that Mr. Gupta that called for and received Mr. Banerjees explanation and to that extent it has rejected Mr", "Banerjee suggestion that he had not given any explanation a all but even so, the Labour Court has not considered the effect of this conclusion on the main controversy between the parties. \nIn our opinion, therefore, the-reasons given by the Labour Court in support of its conclusion that the discharge of Mr.", "Banerjee was not justified are wholly unsatisfactory and so, it has become necessary for us to examine the evidence ourselves", "Confining ourselves to the main complaint against Mr. Banerjee that he had not examined even a single box before he reported that the contents of the said boxes were not marketable, Mr. Gupta expressly stated that he had seen the 20 boxes and found that none of them had been opened at all. They were intact in the companys packing with the straps on them. Mr Gupta got them opened and found that the contents to the extent of 5 cases were really damaged and that the remaining contents were alright and could be marketed at the companys prices.", "Mr. Banerjee stated in his evidence that he had all the cases opened and he added, as he. had to, that the said cases were repacked for avoiding further deterioration. When he was asked how that could be done, he agreed that the metal straps had to be removed for opening of the boxes, but he added that he had arranged to have them restrapped and nailed. It is clear that the strapping is done in a factory by machines", "Mr. Banerjee, however, suggested that he could manage to get the straps put and nailed with hands. \nThis evidence is patently unreliable", "Besides, it is significant that when he gave his explanation to Mr. Gupta Mr. Banerjee admitted that he had opened only 5 or 6 out of the 20 boxes in question though his report suggested that he had opened all the 20 boxes. Therefore, there can be no doubt that Mr. Guptas statetment is absolutely true and that Mr. Banerjee had made his report about the unsatisfactory condition of the contents of the 20 boxes without as much as opening any one of them. That being so, it is difficult to understand how the Labour Court could -have come to the conclusion that the order of discharge was not justified.", "Both parties knew that they were talking about the same 20 boxes and so,, it is futile now to suggest that the 20 boxes which Mr. Gupta examined were different from the boxes in respect of which Mr. Banerjee had made his report", "It is true that when Mr. Gupta was asked about these letters, he said he did not remember if he had received them. We do not think that the answers given by Mr. Gupta in respect of these letters can be of any assistance to the respondents in discrediting Mr", "Guptas evidence in any manner", "On the whole, we have no hesitation in holding that the appellant acted bonafide in discharging Mr. Banerjees services when it accepted Mr. Guptas report and concurred with his conclusions that the explanation given by Mr. Banerjee was not satisfactory"], "rank2": ["The Labour Court which tried the dispute came to the conclusion that the appellant had failed to justify the discharge of Mr. Banerjee and so, it has directed the appellant to reinstate him and pay him full emoluments from the date of his discharge up to the date of his reinstatement. It is this order which is challenged by the appellant by its present appeal brought to this Court by special leave", "The appellant had alleged that the termination of Mr. Banerjees services was not dismissal but was a discharge simpliciter, and according to it, the discharge was justified by the terms of contract between the appellant and Mr. Banerjee as embodied in Rule 40 (1) of the Service Rules of -the appellant. The appellant, therefore, urged that the Labour Court had no jurisdiction to consider the propriety of the appellants action in discharging Mr. Banerjee. The respondents, on the other hand, contended that the discharge was not discharge simpliciter but was, in substance, dismissal, and so, it was urged that the Labour Court was entitled to consider the propriety of the appellants action", "Basing themselves on the plea that the discharge amounted to dismissal, the respondents pleaded that the failure of the appellant to hold an enquiry against Mr. Banerjee introduced a serious infirmity in the order passed against him and they argued that the conduct of the appellant was malafide and the dismissal of Mr. Banerjee amounted to victimisation", "The Labour Court has found that according to the terms of contract under which Mr. Banerjee was employed by the appellant, the appellant was entitled to discharge Mr", "Banerjee from its employment under Rule 40 (1) of the Service Rules but it held that merely because the order served on Mr. Banerjee purported to be an order of discharge, that would not exclude the jurisdiction of the Labour Court to examine the substance of the matter. In fact, Mr. joshi who appeared for the appellant conceded before the Labour Court that an adjudicating Court can look into the reasons behind the discharge of an employee", "That is why evidence was led by- both the parties before the Labour Court. Having considered that evidence, the Labour Court has found that the respondents plea about the mala fides of the appellant was not proved and it held that the termination of Mr.", "Banerjees services could not be said to amount to an act of victimisation or an unfair labour practice. Even so, it held that the discharge was not justified, and so, it,has directed the appellant to reinstate Mr. Banerjee", "It is the validity of this order that is challenged before us", "In the present case, the Labour Court has made a definite finding in favour of -the appellant that its action in terminating the services of Mr. Banerjee was not malafide and did not amount to victimisation.", "The first report made by Mr. Gupta expressly states six grounds on which Mr. Banerjees work was found to be unsatisfactory", "Mr. Gupta took the view that Mr. Banerjee was very slow in his work as a Salesman, that he was not able to judge the capacity of the dealers and to give them sufficient stocks in time, that he took no steps to put the products of the appellant on prominent view in the dealers shops, that he wag not looking after the pasting of the posters, in fact in one place the poster was pasted upside down, that he was not educating the stockists and dealers as he could have done and that he was reluctant to put hard and intelligent work", "It is remarkable that when Mr. Banerjee was asked about this report in cross-examination, he frankly stated that Mr. Gupta was not unfriendly towards him and he was really unable to say why Mr. Gupta should have made these adverse comments against his work. In fact, the Labour Court itself has found that the appellant was not actuated by any ulterior considerations in discharging Mr. Banerjee.", "This report was made by Mr. Gupta soon after he inspected Mc. Banerjees work and there is no reason, whatever, why the Labour Court should have been reluctant to accept this report."], "rank3": ["On December 5, 1959, his services were terminated and he was informed that the appellant had lost confidence in him, and so, it bad decided to discharge him.", "Accordingly, in lieu of notice, he was paid a months salary and was told that he ceased to be the employee of the appe- llant as from the date next after he received the order from the appellant. \nThe discharge of Mr. Banerjee was resented by the Union to which he belonged and the Union took up his case", "Since the dispute could not be settled amicably, the Union succeeded in persuading the Government of West Bengal to refer the dispute for adjudication to the Second Labour Court on the ground that the said discharge was not justified. That is how the discharge of Mr.", "Banerjee became an industrial dispute between the appellant and the respondents, its workmen represented by their Union", "Banerjees services lie within a very narrow compass. in November, 1959 Mr. Banerjee was working in the Assam area and as such, had to work as a Salesman at Dhubri, Bongaigoan, Rangia and Tejpur. The appellant expected that as its Salesman Mr. Banerjee should visit dealers in his area and carry on intelligent and intensive propaganda to popularise the sale of the appellants products. The appellant has a Sales ice in Calcutta and the manager of the said ice visits the areas within his jurisdiction to inspect the work of Salesmen.", "Accordingly Mr. Gupta who was then the manager of the Calcutta ice visited the area assigned to Mr. Banerjee, in the last week of October. He found that Mr. Banerjee was networking satisfactorily as a Salesman", "In particular, he noticed that whereas Mr. Banerjee had reported to the ice that the Bongaigoan Stockists had 20 boxes of dried up and deshaped 501 Special Soap which could not be distributed in the market he had in fact not opened a single box and had not cared to satisfy himself that the soaps had either dried up or had been deshaped. In fact, Mr. Gupta found that the boxes were intact and he opened them and discovered that five boxes contained soap which had dried up and had become deshaped, whereas the 15 other boxes were in good condition", "Thereupon, Mr. Gupta made a report to the zonal Manager on November 2, 1959, adversely commenting on Mr. Banerjees work. The said report was in due course forwarded to the Head ice in Bombay. The Head ice then instructed the Calcutta Sales ice by telephone to send for Mr. Banerjee and call for his explanation", "Accordingly, Mr. Banerjee was sent for and his explanation taken Mr. Gupta then made another report expressing his dissatisfaction with the explanation given by Mr. Banerjee", "This report was sent on November 24, 1959. The Head ice accepted this report and on December 5, 1959, issued to Mr, Banerjee the order terminating his services. That, in brief, is the case set out by the appellant in support of the action taken by it against Mr. Banerjee"], "rank4": ["R. K. Banerjee had been employed by the appellant, the Tata Oil Mills Co. Ltd.as a Salesman on April 3, 1956, as a probationer and he was confirmed on November 5, 1956"], "label": "ACCEPTED"}, "expert_4": {"rank2": ["Banerjee had been employed by the appellant, the Tata Oil Mills Co. Ltd.as a Salesman on April 3, 1956, as a probationer and he was confirmed on November 5, 1956. On December 5, 1959, his services were terminated and he was informed that the appellant had lost confidence in him, and so, it bad decided to discharge him. Accordingly, in lieu of notice, he was paid a months salary and was told that he ceased to be the employee of the appe- llant as from the date next after he received the order from the appellant. \nThe discharge of Mr. Banerjee was resented by the Union to which he belonged and the Union took up his case. Since the dispute could not be settled amicably, the Union succeeded in persuading the Government of West Bengal to refer the dispute for adjudication to the Second Labour Court on the ground that the said discharge was not justified.", "That is how the discharge of Mr. Banerjee became an industrial dispute between the appellant and the respondents, its workmen represented by their Union. The Labour Court which tried the dispute came to the conclusion that the appellant had failed to justify the discharge of Mr. Banerjee and so, it has directed the appellant to reinstate him and pay him full emoluments from the date of his discharge up to the date of his reinstatement. It is this order which is challenged by the appellant by its present appeal brought to this Court by special leave. The material facts leading to the termination of Mr. Banerjees services lie within a very narrow compass. in November, 1959 Mr.", "Banerjees services was not dismissal but was a discharge simpliciter, and according to it, the discharge was justified by the terms of contract between the appellant and Mr. Banerjee as embodied in Rule 40 (1) of the Service Rules of -the appellant.", "In some cases, the termination of the employees services may appear to the Industrial Court to be capricious or so unreasonably severe that an inherence may legitimately and reasonably be drawn that in terminating the services, the employer was not acting bonafide. The test always has to be whether the act of the employer is bonafide or not.", "If the act is malafide, or appears to be a colourable exercise of the powers conferred on the employer either by the terms of contract or by the standing orders, then notwithstanding the form of the order, industrial adjudication would examine the substance and would direct reinstatement in a fit case. This position was recognised by the Labour Appellate Tribunal as early as 1951 in Buckingham and Carnatic Co.", "This evidence is patently unreliable."], "rank3": ["It is this order which is challenged by the appellant by its present appeal brought to this Court by special leave.", "Banerjee was working in the Assam area and as such, had to work as a Salesman at Dhubri, Bongaigoan, Rangia and Tejpur. The appellant expected that as its Salesman Mr. Banerjee should visit dealers in his area and carry on intelligent and intensive propaganda to popularise the sale of the appellants products. The appellant has a Sales ice in Calcutta and the manager of the said ice visits the areas within his jurisdiction to inspect the work of Salesmen. \nAccordingly Mr. Gupta who was then the manager of the Calcutta ice visited the area assigned to Mr. Banerjee, in the last week of October", "Banerjee was networking satisfactorily as a Salesman. In particular, he noticed that whereas Mr. Banerjee had reported to the ice that the Bongaigoan Stockists had 20 boxes of dried up and deshaped 501 Special Soap which could not be distributed in the market he had in fact not opened a single box and had not cared to satisfy himself that the soaps had either dried up or had been deshaped.", "Banerjees work. The said report was in due course forwarded to the Head ice in Bombay. The Head ice then instructed the Calcutta Sales ice by telephone to send for Mr. Banerjee and call for his explanation. Accordingly, Mr. Banerjee was sent for and his explanation taken Mr. Gupta then made another report expressing his dissatisfaction with the explanation given by Mr.", "Banerjee. This report was sent on November 24, 1959. The Head ice accepted this report and on December 5, 1959, issued to Mr, Banerjee the order terminating his services. That, in brief, is the case set out by the appellant in support of the action taken by it against Mr. Banerjee. The appellant had alleged that the termination of Mr.", "The appellant, therefore, urged that the Labour Court had no jurisdiction to consider the propriety of the appellants action in discharging Mr. Banerjee.", "The respondents, on the other hand, contended that the discharge was not discharge simpliciter but was, in substance, dismissal, and so, it was urged that the Labour Court was entitled to consider the propriety of the appellants action.", "Basing themselves on the plea that the discharge amounted to dismissal, the respondents pleaded that the failure of the appellant to hold an enquiry against Mr. Banerjee introduced a serious infirmity in the order passed against him and they argued that the conduct of the appellant was malafide and the dismissal of Mr. Banerjee amounted to victimisation.", "The Labour Court has found that according to the terms of contract under which Mr.", "Banerjee was employed by the appellant, the appellant was entitled to discharge Mr. Banerjee from its employment under Rule 40 (1) of the Service Rules but it held that merely because the order served on Mr. Banerjee purported to be an order of discharge, that would not exclude the jurisdiction of the Labour Court to examine the substance of the matter.", "Having considered that evidence, the Labour Court has found that the respondents plea about the mala fides of the appellant was not proved and it held that the termination of Mr. Banerjees services could not be said to amount to an act of victimisation or an unfair labour practice.", "Even so, it held that the discharge was not justified, and so, it,has directed the appellant to reinstate Mr. Banerjee.", "It is the validity of this order that is challenged before us by", "But where an order of discharge passed by an employer gives rise to an industrial dispute. the form of the order by which the employees services are terminated, would not be decisive industrial adjudication would be entitled to examine the substance of the matter and decide whether the termination is in fact discharge simpli- citer or it amounts to dismissal which has put on the cloak of a discharge simpliciter. If the Industrial Court is satisfied that the order of discharge is punitive, that it is malafide, or that it amounts to victimisation or unfair labour practice, it is competent to the Industrial Court to set aside the order and in a proper case, direct the reinstatement of the employee.", "Workers of the Company, (1), and since then, it has been consistently followed vide Chartered Bank, Bombay, v.", "In coming to this conclusion, the Labour Court has given some reasons which are clearly unsupportable.", "It has observed, for instance, that the appellant has not produced any documentary evidence in support of its allegation against the efficiency of Mr. Banerjee. This is clearly wrong because the two reports made by Mr.", "Gupta in respect of Mr.", "Banerjees conduct do amount to documentary evidence which cannot be lightly brushed aside. It has then commented on the fact that the allegations made by Mr. Gupta against Mr. Banerjee on six counts are of a general character.", "This comment again cannot be justified because Mr. Gupta stated in clear terms the defects in Mr. Banerjees work which had come to his notice.", "These defects are specific and it is idle to refuse to give importance to this evidence merely on the ground that no specific instances had been cited.", "Now, it is clear that such an -observation is hardly of any help because it was necessary for the Labour Court to express its conclusion on this point it might have believed either Mr. Banerjee or Mr. Gupta, but by saying that there is no reason why one should be believed rather than the other, the Labour Court left this part of the dispute entirely undecided.", "Similarly, the Labour Court has accepted the fact that Mr.", "Gupta that called for and received Mr. Banerjees explanation and to that extent it has rejected Mr. Banerjee suggestion that he had not given any explanation a all but even so, the Labour Court has not considered the effect of this conclusion on the main controversy between the parties.", "In our opinion, therefore, the-reasons given by the Labour Court in support of its conclusion that the discharge of Mr.", "Banerjee was not justified are wholly unsatisfactory and so, it has become necessary for us to examine the evidence ourselves.", "In fact, the Labour Court itself has found that the appellant was not actuated by any ulterior considerations in discharging Mr.", "Gupta expressly stated that he had seen the 20 boxes and found that none of them had been opened at all. They were intact in the companys packing with the straps on them. Mr Gupta got them opened and found that the contents to the extent of 5 cases were really damaged and that the remaining contents were alright and could be marketed at the companys prices. Mr. Banerjee stated in his evidence that he had all the cases opened and he added, as he. had to, that the said cases were repacked for avoiding further deterioration. When he was asked how that could be done, he agreed that the metal straps had to be removed for opening of the boxes, but he added that he had arranged to have them restrapped and nailed. It is clear that the strapping is done in a factory by machines.", "Mr. Banerjee, however, suggested that he could manage to get the straps put and nailed with hands.", "Therefore, there can be no doubt that Mr.", "Guptas statetment is absolutely true and that Mr. Banerjee had made his report about the unsatisfactory condition of the contents of the 20 boxes without as much as opening any one of them.", "That being so, it is difficult to understand how the Labour Court could -have come to the conclusion that the order of discharge was not justified. The learned Solicitor-General, however, attempted to argue that there was nothing on the record to show that the 20 boxes which Mr.", "Gupta got opened were the same boxes in respect of which Mr. Banerjee had made his report.", "We do not think that having regard to the evidence given by Mr. Gupta and Mr.", "Banerjee and the explanation offered by the latter when he was called to Calcutta by Mr. Gupta, there is any room for such an ingenious suggestion.", "Both parties knew that they were talking about the same 20 boxes and so,, it is futile now to suggest that the 20 boxes which Mr. Gupta examined were different from the boxes in respect of which Mr.", "Banerjee had made his report. It was also suggested on behalf of the respondents that Mr.", "Gupta did not admit that he had received some letters from Mr. Banerjee in which he had complained that owing to heavy rains, conditions were not favourable for effective work in the area entrusted to him.", "It is true that when Mr. Gupta was asked about these letters, he said he did not remember if he had received them.", "We do not think that the answers given by Mr. Gupta in respect of these letters can be of any assistance to the respondents in discrediting Mr.", "Guptas evidence in any manner. On the whole, we have no hesitation in holding that the appellant acted bonafide in discharging Mr.", "Banerjees services when it accepted Mr. Guptas report and concurred with his conclusions that the explanation given by Mr.", "Banerjee was not satisfactory."], "rank4": ["In fact, Mr. joshi who appeared for the appellant conceded before the Labour Court that an adjudicating Court can look into the reasons behind the discharge of an employee.", "The true legal position about the Industrial Courts jurisdiction and authority in dealing with cases of this kind is no longer in doubt. It is true that in several cases, contract of employment or provisions in Standing Orders authorise an industrial employer to terminate the service, of his employees. after giving notice for one month or paying salary for one month in lieu of notice, and normally, an employer may, in a proper case, -be entitled to exercise the said power.", "In the present case, the Labour Court has made a definite finding in favour of -the appellant that its action in terminating the services of Mr.", "Banerjee was not malafide and did not amount to victimisation. Even so, it proceeded to examine the propriety of the said action and came to the conclusion that Mr. Banerjees discharge from employment did not appear to it to be justified.", "In regard .to the question as to whether the 20 boxes had been opened by Mr. Banerjee before he made his report (1) (1951) 11 L.L J. 314. (2) (1960) 11 L.L.J. 221. (3) (1962)1 L.L J. 374. to the Zonal ice, the Labour Court has observed that on this point there is the evidence of Mr. Banerjee against that of Mr.", "Gupta and there was no particular reason to believe one in preference to the other.", "The first report made by Mr. Gupta expressly states six grounds on which Mr. Banerjees work was found to be unsatisfactory.", "Banerjee was asked about this report in cross-examination, he frankly stated that Mr. Gupta was not unfriendly towards him and he was really unable to say why Mr. Gupta should have made these adverse comments against his work. In fact, the Labour Court itself has found that the appellant was not actuated by any ulterior considerations in discharging Mr. Banerjee. This report was made by Mr. Gupta soon after he inspected Mc.", "Besides, it is significant that when he gave his explanation to Mr. Gupta Mr. Banerjee admitted that he had opened only 5 or 6 out of the 20 boxes in question though his report suggested that he had opened all the 20 boxes."], "label": "ACCEPTED"}, "expert_5": {"rank1": ["punitive, that it is malafide, or that it amounts to victimisation or unfair labour practice", "The test always has to be whether the act of the employer is bonafide or not.", "the-reasons given by the Labour Court in support of its conclusion that the discharge of Mr. Banerjee was not justified are wholly unsatisfactory", "there can be no doubt that Mr. Guptas statetment is absolutely true and that Mr. Banerjee had made his report about the unsatisfactory condition of the contents of the 20 boxes without as much as opening any one of them.", "we have no hesitation in holding that the appellant acted bonafide in discharging Mr. Banerjees services when it accepted Mr. Guptas report and concurred with his conclusions that the explanation given by Mr. Banerjee was not satisfactory."], "rank2": ["whereas Mr. Banerjee had reported to the ice that the Bongaigoan Stockists had 20 boxes of dried up and deshaped 501 Special Soap which could not be distributed in the market he had in fact not opened a single box and had not cared to satisfy himself that the soaps had either dried up or had been deshaped. In fact, Mr. Gupta found that the boxes were intact and he opened them and discovered that five boxes contained soap which had dried up and had become deshaped, whereas the 15 other boxes were in good condition.", "If the act is malafide, or appears to be a colourable exercise of the powers conferred on the employer either by the terms of contract or by the standing orders, then notwithstanding the form of the order, industrial adjudication would examine the substance and would direct reinstatement in a fit case.", "This position was recognised by the Labour Appellate Tribunal as early as 1951 in Buckingham and Carnatic Co. Ltd., v. Workers of the Company, (1), and since then, it has been consistently followed vide Chartered Bank, Bombay, v. Chartered Bank Employees Union (2) , and U. B. Dutt Co. (Private) Ltd. v. Its Workmen (3).", "Even so, it proceeded to examine the propriety of the said action and came to the conclusion that Mr. Banerjees discharge from employment did not appear to it to be justified. In coming to this conclusion, the Labour Court has given some reasons which are clearly unsupportable.", "Mr. Gupta expressly stated that he had seen the 20 boxes and found that none of them had been opened at all. They were intact in the companys packing with the straps on them. Mr Gupta got them opened and found that the contents to the extent of 5 cases were really damaged and that the remaining contents were alright and could be marketed at the companys prices."], "rank3": ["Having considered that evidence, the Labour Court has found that the respondents plea about the mala fides of the appellant was not proved and it held that the termination of Mr. Banerjees services could not be said to amount to an act of victimisation or an unfair labour practice.", "If the Industrial Court is satisfied that the order of discharge is punitive, that it is malafide, or that it amounts to victimisation or unfair labour practice, it is competent to the Industrial Court to set aside the order and in a proper case, direct the reinstatement of the employee.", "In the present case, the Labour Court has made a definite finding in favour of -the appellant that its action in terminating the services of Mr. Banerjee was not malafide and did not amount to victimisation.", "Mr. Banerjee was very slow in his work as a Salesman, that he was not able to judge the capacity of the dealers and to give them sufficient stocks in time, that he took no steps to put the products of the appellant on prominent view in the dealers shops, that he wag not looking after the pasting of the posters, in fact in one place the poster was pasted upside down, that he was not educating the stockists and dealers as he could have done and that he was reluctant to put hard and intelligent work.", "when he gave his explanation to Mr. Gupta Mr. Banerjee admitted that he had opened only 5 or 6 out of the 20 boxes in question though his report suggested that he had opened all the 20 boxes."], "rank4": ["Banerjee should visit dealers in his area and carry on intelligent and intensive propaganda to popularise the sale of the appellants products.", "the two reports made by Mr. Gupta in respect of Mr. Banerjees conduct do amount to documentary evidence which cannot be lightly brushed aside.", "Mr. Gupta stated in clear terms the defects in Mr. Banerjees work which had come to his notice. These defects are specific and it is idle to refuse to give importance to this evidence merely on the ground that no specific instances had been cited.", "The first report made by Mr. Gupta expressly states six grounds on which Mr. Banerjees work was found to be unsatisfactory.", "there is no reason, whatever, why the Labour Court should have been reluctant to accept this report.", "It is clear that the strapping is done in a factory by machines. Mr. Banerjee, however, suggested that he could manage to get the straps put and nailed with hands. \nThis evidence is patently unreliable."], "rank5": ["Gupta made a report to the zonal Manager", "Mr. Gupta then made another report expressing his dissatisfaction with the explanation given by Mr. Banerjee.", "Now, it is clear that such an -observation is hardly of any help because it was necessary for the Labour Court to express its conclusion on this point it might have believed either Mr. Banerjee or Mr. Gupta, but by saying that there is no reason why one should be believed rather than the other, the Labour Court left this part of the dispute entirely undecided.", "when Mr. Banerjee was asked about this report in cross-examination, he frankly stated that Mr. Gupta was not unfriendly towards him", "Labour Court itself has found that the appellant was not actuated by any ulterior considerations in discharging Mr. Banerjee.", "Both parties knew that they were talking about the same 20 boxes and so,, it is futile now to suggest that the 20 boxes which Mr. Gupta examined were different from the boxes in respect of which Mr. Banerjee had made his report."], "label": "ACCEPTED"}, "label": "ACCEPTED"}
{"id": "1999_1001", "text": "Special leave granted.\n Respondent 1 was suspended by order dated 28 7 1998 on the same day when disciplinary proceedings were initiated against him. He filed a writ petition in the High Court challenging the order of suspension.\n By the impugned order the High Court noted that Respondent I had been empanelled for promotion to the post of Joint Commissioner on 28 5 1998 and the disciplinary proceedings commenced on 28 7 1998 and on the same day i.e 28 7 1998 he was suspended. From this the High Court concluded that the act of suspension was an after thought. Consequently the High Court directed that no effect should be given to the order of suspension and the select list for promotion should be given effect to forthwith.\n We are at a loss the understand as to how the High Court could pass such an order. Admittedly the disciplinary proceedings had commenced on 28 7 1998. Even if before that date the said respondent had been empanelled for promotion the Government cannot be prohibited from starting disciplinary proceedings if there are reasons for doing so. The High Court has not quashed the disciplinary proceedings and looking at the charges leveled against the respondent it cant of be said that there was any ulterior motive for the respondent being put under suspension. Furthermore where disciplinary proceedings are pending we are doubtful whether it was appropriate for the High Court to have directed that the select list for promotion should be given effect to forthwith especially when the High Court in the said order has permitted the disciplinary proceedings to continue. It is also difficult to appreciate the High Court holding that even though disciplinary proceedings could continue but no final order should be passed. No reasons for coming to this conclusion have been given.\n We therefore have no hesitation in set ting aside the impugned judgment of the High Court. The effect of this would be that Respondent 1 who was reinstated pursuant to an order passed by the High Court during the proceedings for contempt which are stated to have been initiated by the respondent would be placed under suspension forthwith till the conclusion of the disciplinary proceedings or the withdrawal of the suspension order by the Government.\nDECISION ?", "expert_1": {"rank2": ["ven if before that date the said respondent had been empanelled for promotion the Government cannot be prohibited from starting disciplinary proceedings if there are reasons for doing so. The High Court has not quashed the disciplinary proceedings and looking at the charges leveled against the respondent it cant of be said that there was any ulterior motive for the respondent being put under suspension. Furthermore where disciplinary proceedings are pending we are doubtful whether it was appropriate for the High Court to have directed that the select list for promotion should be given effect to forthwith especially when the High Court in the said order has permitted the disciplinary proceedings to continue. "], "rank3": ["y the impugned order the High Court noted that Respondent I had been empanelled for promotion to the post of Joint Commissioner on 28 5 1998 and the disciplinary proceedings commenced on 28 7 1998 and on the same day i.e 28 7 1998 he was suspended. From this the High Court concluded that the act of suspension was an after thought. Consequently the High Court directed that no effect should be given to the order of suspension and the select list for promotion should be given effect to forthwith.\n"], "label": "REJECTED"}, "expert_2": {"rank2": ["espondent I had been empanelled for promotion to the post of Joint Commissioner on 28 5 1998 and the disciplinary proceedings commenced on 28 7 1998 and on the same day i.e 28 7 1998 he was suspended. From this the High Court concluded that the act of suspension was an after thought. ", "he High Court directed that no effect should be given to the order of suspension ", "elect list for promotion should be given effect to forthwith.\n", "he High Court has not quashed the disciplinary proceedings and looking at the charges leveled against the respondent it cant of be said that there was any ulterior motive for the respondent being put under suspension. "], "label": "REJECTED"}, "expert_3": {"rank2": ["espondent 1 was suspended by order dated 28 7 1998 on the same day when disciplinary proceedings were initiated against him.", "he High Court noted that Respondent I had been empanelled for promotion to the post of Joint Commissioner on 28 5 1998 and the disciplinary proceedings commenced on 28 7 1998 and on the same day i.e 28 7 1998 he was suspended. From this the High Court concluded that the act of suspension was an after thought.", "onsequently the High Court directed that no effect should be given to the order of suspension and the select list for promotion should be given effect to forthwith.\n", "here disciplinary proceedings are pending we are doubtful whether it was appropriate for the High Court to have directed that the select list for promotion should be given effect to forthwith especially when the High Court in the said order has permitted the disciplinary proceedings to continue."], "rank3": ["e filed a writ petition in the High Court challenging the order of suspension.\n", "ven if before that date the said respondent had been empanelled for promotion the Government cannot be prohibited from starting disciplinary proceedings if there are reasons for doing so. "], "rank4": ["he effect of this would be that Respondent 1 who was reinstated pursuant to an order passed by the High Court during the proceedings for contempt which are stated to have been initiated by the respondent would be placed under suspension forthwith till the conclusion of the disciplinary proceedings or the withdrawal of the suspension order by the Government.\n"], "label": "REJECTED"}, "expert_4": {"rank2": ["y the impugned order the High Court noted that Respondent I had been empanelled for promotion to the post of Joint Commissioner on 28 5 1998 and the disciplinary proceedings commenced on 28 7 1998 and on the same day i.e 28 7 1998 he was suspended. ", "rom this the High Court concluded that the act of suspension was an after thought.", "dmittedly the disciplinary proceedings had commenced on 28 7 1998. ", "o reasons for coming to this conclusion have been given.\n"], "label": "REJECTED"}, "expert_5": {"rank2": ["ooking at the charges leveled against the respondent it cant of be said that there was any ulterior motive for the respondent being put under suspension."], "rank3": ["igh Court has not quashed the disciplinary proceedings ", "here disciplinary proceedings are pending we are doubtful whether it was appropriate for the High Court to have directed that the select list for promotion should be given effect to forthwith especially when the High Court in the said order has permitted the disciplinary proceedings to continue.", "t is also difficult to appreciate the High Court holding that even though disciplinary proceedings could continue but no final order should be passed. No reasons for coming to this conclusion have been given.\n"], "label": "REJECTED"}, "label": "ACCEPTED"}
{"id": "2003_794", "text": "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 notice 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.\nA 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 contended that it had no liability to pay the excise dues of respondent No 4. The Department not 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 contentions were raised including the question that the liability is only that of respondent No 4 and not of the appellant that appellant having taken over the unit from the third respondent had no liability to pay the excise dues that Rule 230 2 of the Central Excise Rules 1944 has no application 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.\nIn this appeal Ms. Radha Rangaswamy learned Counsel for the appellant very strenuously contended 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 notice that this aspect is under consideration 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 not 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 contend 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 could not be made.\nNow taking the last contention first we may notice that this Court in Isha Marbles considered the scope of Section 24 of the Electricity Act and held that there is no charge over the property in question and when a premises comes 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 contract entered into by the erstwhile consumer with the Board and the Board cannot seek the enforcement of contractual liability against the third party. Therefore this decision in Isha Marbles cannot be taken advantage of by the appellant at all in this case.\nIn 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 could be recovered even from the successor.\nThe argument advanced by the appellant that sale having taken place under the State Act free of encumbrances and the transferor s rights or liabilities cannot be that of transferee does not 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 corporation 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.\nWe are not 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 conflict arises this aspect need not be examined. In this case no such conflict arises between the corporation and the Excise Department. Hence it is unnecessary to examine this aspect of the matter.\nDECESION ?", "expert_1": {"rank2": ["ppellant 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. ", " 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 contended that it had no liability to pay the excise dues of respondent No 4. ", "he Department not having acceded to it a writ petition was filed in the High Court challenging the recovery proceedings initiated by the Department. ", "n the writ petition several contentions were raised including the question that the liability is only that of respondent No 4 and not of the appellant that appellant having taken over the unit from the third respondent had no liability to pay the excise dues that Rule 230 2 of the Central Excise Rules 1944 has no application 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.\n", "he also relied upon the decision of this Court in Isha Marbles v Bihar State Electricity Board and Anr to contend 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 could not be made.\n", "herefore this decision in Isha Marbles cannot be taken advantage of by the appellant at all in this case.\n", "ection 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 corporation 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.\n"], "rank3": ["n 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. ", "n 4 12 1987 the Additional Collector of Central Excise adjudicated in a proceeding arising out of show cause notice 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.\n", "n this appeal Ms. Radha Rangaswamy learned Counsel for the appellant very strenuously contended 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 notice that this aspect is under consideration in another matter before this Court. ", "ow taking the last contention first we may notice that this Court in Isha Marbles considered the scope of Section 24 of the Electricity Act and held that there is no charge over the property in question and when a premises comes 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 contract entered into by the erstwhile consumer with the Board and the Board cannot seek the enforcement of contractual liability against the third party. "], "label": "REJECTED"}, "expert_2": {"rank2": ["ppellant 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. "], "rank3": ["etter 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 contended that it had no liability to pay the excise dues of respondent No 4. "], "label": "REJECTED"}, "expert_3": {"rank2": ["ppellant 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.", "he appellant in his letter to the Department contended that it had no liability to pay the excise dues of respondent No 4. The Department not having acceded to it a writ petition was filed in the High Court challenging the recovery proceedings initiated by the Department. ", "owever the said amount was paid.", "earned Counsel for the appellant very strenuously contended 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 ", "he 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. ", "t 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 not attracted in the present case at all.", "he also relied upon the decision of this Court in Isha Marbles v Bihar State Electricity Board and Anr to contend 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 could not be made.", "ection 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.", "hen sale made by the corporation 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."], "rank3": ["n 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. ", "n 4 12 1987 the Additional Collector of Central Excise adjudicated in a proceeding arising out of show cause notice 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.\nA 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 ", "n the writ petition several contentions were raised including the question that the liability is only that of respondent No 4 and not of the appellant that appellant having taken over the unit from the third respondent had no liability to pay the excise dues that Rule 230 2 of the Central Excise Rules 1944 has no application 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."], "label": "REJECTED"}, "expert_4": {"rank2": ["he 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. ", "he 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. ", "he also relied upon the decision of this Court in Isha Marbles v Bihar State Electricity Board and Anr to contend 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 could not be made.\n", "his decision in Isha Marbles cannot be taken advantage of by the appellant at all in this case.\n", "ection 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. ", "hen sale made by the corporation 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.\n", "e are not 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 conflict arises this aspect need not be examined. ", "n this case no such conflict arises between the corporation and the Excise Department. "], "rank3": ["n 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. ", " 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 contended that it had no liability to pay the excise dues of respondent No 4. ", "he said amount was paid. ", "adha Rangaswamy learned Counsel for the appellant very strenuously contended 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. ", "he argument advanced by the appellant that sale having taken place under the State Act free of encumbrances and the transferor s rights or liabilities cannot be that of transferee does not hold good. "], "rank4": ["n 4 12 1987 the Additional Collector of Central Excise adjudicated in a proceeding arising out of show cause notice 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.\n", "he Department not having acceded to it a writ petition was filed in the High Court challenging the recovery proceedings initiated by the Department. ", "n the writ petition several contentions were raised including the question that the liability is only that of respondent No 4 and not of the appellant that appellant having taken over the unit from the third respondent had no liability to pay the excise dues that Rule 230 2 of the Central Excise Rules 1944 has no application to the present case. "], "rank5": ["t is brought to our notice that this aspect is under consideration 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 not attracted in the present case at all. ", "ow taking the last contention first we may notice that this Court in Isha Marbles considered the scope of Section 24 of the Electricity Act and held that there is no charge over the property in question and when a premises comes 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 contract entered into by the erstwhile consumer with the Board and the Board cannot seek the enforcement of contractual liability against the third party. "], "label": "REJECTED"}, "expert_5": {"rank2": ["his Court in Isha Marbles considered the scope of Section 24 of the Electricity Act and held that there is no charge over the property in question and when a premises comes 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 contract entered into by the erstwhile consumer with the Board and the Board cannot seek the enforcement of contractual liability against the third party. Therefore this decision in Isha Marbles cannot be taken advantage of by the appellant at all in this case.\n"], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "2013_30", "text": "Leave granted.\n The appellant A2 Azeez along with two others i.e. A1 Khalid and A3 Babu was tried by the Judicial Magistrate First Class I Aluva for offences punishable under Sections 457 and 380 read with Section 34 of the Indian Penal Code for short the IPC . By order dated 15 12 2000 learned Magistrate convicted the appellant under Section 457 of the IPC and sentenced him to undergo rigorous imprisonment for one year. The appellant was further convicted for offence under Section 380 of the IPC and sentenced to undergo rigorous imprisonment for two years. The substantive sentences were ordered to run concurrently. A1 Khalid and A3 Babu were acquitted.\n The appellant challenged the said order before the Additional Sessions Judge Ernakulam. Learned Sessions Judge by his order dated 28 11 2002 confirmed the conviction and sentence and dismissed the appeal. Being aggrieved by the said conviction and sentence the appellant filed a criminal revision petition in the Kerala High Court. By the impugned judgment the High Court dismissed the revision petition. Hence this appeal by special leave is filed against the said judgment.\n According to the prosecution the appellant along with A1 Khalid and A3 Babu with an intention of committing theft entered the house of PW1 Radha at Karumalloor Village on 12 11 1995 at 4.00 a.m through the door which was kept open. They entered the bedroom where PW2 Renuka Devi was sleeping and committed theft of a gold chain weighing 14 grams worth Rs7 500 which PW2 was wearing while she was sleeping. A1 and A3 assisted the appellant in committing the offence. They gave the gold chain to the appellant for selling. The appellant sold the gold chain and the accused divided the sale proceeds and thereby committed the offence.\n This case presents rather unusual facts. PW7 the Circle Inspector stated that he arrested the accused on 28 11 1995 at 1 a.m near the parking area Municipal Buildings Aluva while they were moving in suspicious circumstances. On questioning them it was revealed that they had committed the offence involved in this case hence they proceeded to the house of PW1 at Aduvathuruthu and recorded her F.I.R Ext.P1 .\n PW1 in her evidence stated that her daughter PW2 was sleeping in her room on the night of 12 11 1995. PW2 was wearing Thara fashion gold chain. The gold chain was stolen but no complaint was lodged at the police station because PW2 did not realize that her gold chain was stolen. It is only on 28 11 1995 when the police came to their house along with the accused and the gold chain was shown to her that she realized that the gold chain was stolen. She identified the gold chain MO1. FIR Ext.P1 was then lodged. PW2 the daughter stated that on 12 11 1995 at about 11 p.m. she went to sleep. On the next day morning the gold chain was not seen. On 28 11 1995 when the police came to her house with the accused and showed her the chain she realized that her chain was stolen. She identified the chain.\n Evidence of PWs 1 and 2 raise several question marks. If gold chain worn by PW2 was removed by the accused at night it is unbelievable that she would not realize it in the morning. Even PW1 the mother did not realize that the chain worn by PW2 was not around her neck. Assuming this to be true PWs 1 and 2 would at least realize the loss on the next day or a day thereafter. They did not realize that the chain was stolen till 28 11 1995 when the police came to their house with the accused and showed them the chain. At that time they realized that chain was stolen. It is on 28 11 1995 that PW1 lodged her complaint. Thus the complaint came to be lodged about sixteen days after the incident that too after the police came to PW1s house with the chain. The sequence of events is not convincing and does not stand to reason.\n According to the prosecution the appellant made a discovery statement to PW7 the Circle Inspector and pursuant to that statement PW7 went to the shop of PW8 Pradeep along with the appellant. The appellant is stated to have pointed out to PW8 as the man to whom he had sold the chain. However PW8 has not supported the prosecution case. The courts below have while convicting the appellant placed reliance on the evidence of PW7 the Circle Inspector and PW3 the Head Constable who sought to corroborate the version of PW7 regarding recovery of chain at the instance of the appellant from the shop of PW8. We find it difficult to do so. Trial Court has observed that offence under Section 457 of the IPC is not made out because according to PW1 the thieves entered the door which was kept open. The Trial Court therefore acquitted the appellant of the offence punishable under Section 457 of the IPC. The Trial Court also acquitted A1 and A3 of the offence punishable under Section 457 read with Section 34 of the IPC. The Trial Court however observed that from the evidence of PWs 1 and 2 it is seen that theft had taken in the room in which PW2 was sleeping the thief entered the house and committed theft of gold chain which PW2 was wearing and therefore this act will be covered by Section 451 of the IPC i.e. house trespass in order to commit offence punishable with imprisonment. The Trial Court further held that since the recovery of gold chain was effected on the basis of statement given by the appellant the only inference that can be drawn is that he committed the theft of gold chain and therefore the case is covered by Section 380 of the IPC i.e theft in a dwelling house. After observing that there is nothing in the evidence of PWs 1 to 8 to connect A1 and A3 with the crime the Trial Court acquitted them of all the offences. This view is affirmed by the Sessions Court and the High Court.\n We find it difficult to uphold the above view so far as it relates to the appellant. As we have already noted that FIR was registered after about sixteen days from the date of alleged theft. PWs 1 and 2 did not even realize that the chain was stolen. It is only when the accused were brought to their house after about sixteen days that they realized that the chain was stolen and FIR was lodged. The chain in question was being worn by PW2. It is stated to have been stolen while she was sleeping. It is inconceivable that she would not realize that she had lost her chain. The incident in our view is not unfolded truthfully. A1 and A3 have been rightly acquitted because nothing links them to the offence. But similar is the case with the appellant. The only evidence against him is the alleged recovery of gold chain at his instance. That cannot connect the appellant to the theft. The Trial Court has stated that since chain was recovered at the instance of the appellant the only inference which can be drawn is that he committed the theft. Drawing such inference in the facts of this case would be totally unjust.\nDECISION ?", "expert_1": {"rank2": ["he appellant A2 Azeez along with two others i.e. A1 Khalid and A3 Babu was tried by the Judicial Magistrate First Class I Aluva for offences punishable under Sections 457 and 380 read with Section 34 of the Indian Penal Code for short the IPC . By order dated 15 12 2000 learned Magistrate convicted the appellant under Section 457 of the IPC and sentenced him to undergo rigorous imprisonment for one year. The appellant was further convicted for offence under Section 380 of the IPC and sentenced to undergo rigorous imprisonment for two years. The substantive sentences were ordered to run concurrently. A1 Khalid and A3 Babu were acquitted.\n", "he appellant challenged the said order before the Additional Sessions Judge Ernakulam. Learned Sessions Judge by his order dated 28 11 2002 confirmed the conviction and sentence and dismissed the appeal. Being aggrieved by the said conviction and sentence the appellant filed a criminal revision petition in the Kerala High Court. By the impugned judgment the High Court dismissed the revision petition. Hence this appeal by special leave is filed against the said judgment.\n", "he courts below have while convicting the appellant placed reliance on the evidence of PW7 the Circle Inspector and PW3 the Head Constable who sought to corroborate the version of PW7 regarding recovery of chain at the instance of the appellant from the shop of PW8. We find it difficult to do so. ", "his view is affirmed by the Sessions Court and the High Court.\n We find it difficult to uphold the above view so far as it relates to the appellant. ", "he incident in our view is not unfolded truthfully. A1 and A3 have been rightly acquitted because nothing links them to the offence. But similar is the case with the appellant. "], "rank3": ["1 Khalid and A3 Babu were acquitted.\n", "vidence of PWs 1 and 2 raise several question marks. If gold chain worn by PW2 was removed by the accused at night it is unbelievable that she would not realize it in the morning. Even PW1 the mother did not realize that the chain worn by PW2 was not around her neck. Assuming this to be true PWs 1 and 2 would at least realize the loss on the next day or a day thereafter. They did not realize that the chain was stolen till 28 11 1995 when the police came to their house with the accused and showed them the chain. ", "he sequence of events is not convincing and does not stand to reason.\n", "he appellant is stated to have pointed out to PW8 as the man to whom he had sold the chain. However PW8 has not supported the prosecution case. "], "label": "REJECTED"}, "expert_2": {"rank2": ["he gold chain was stolen but no complaint was lodged at the police station because PW2 did not realize that her gold chain was stolen. It is only on 28 11 1995 when the police came to their house along with the accused and the gold chain was shown to her that she realized that the gold chain was stolen. She identified the gold chain MO1. ", "he Trial Court however observed that from the evidence of PWs 1 and 2 it is seen that theft had taken in the room in which PW2 was sleeping the thief entered the house and committed theft of gold chain which PW2 was wearing and therefore this act will be covered by Section 451 of the IPC i.e. house trespass in order to commit offence punishable with imprisonment. The Trial Court further held that since the recovery of gold chain was effected on the basis of statement given by the appellant the only inference that can be drawn is that he committed the theft of gold chain and therefore the case is covered by Section 380 of the IPC i.e theft in a dwelling house."], "rank3": ["he appellant along with A1 Khalid and A3 Babu with an intention of committing theft entered the house of PW1 Radha at Karumalloor Village on 12 11 1995 at 4.00 a.m through the door which was kept open. They entered the bedroom where PW2 Renuka Devi was sleeping and committed theft of a gold chain weighing 14 grams worth Rs7 500 which PW2 was wearing while she was sleeping. A1 and A3 assisted the appellant in committing the offence. They gave the gold chain to the appellant for selling. The appellant sold the gold chain and the accused divided the sale proceeds and thereby committed the offence.\n"], "label": "REJECTED"}, "expert_3": {"rank2": ["ircle Inspector stated that he arrested the accused on 28 11 1995 at 1 a.m near the parking area Municipal Buildings Aluva while they were moving in suspicious circumstances. On questioning them it was revealed that they had committed the offence involved in this case hence they proceeded to the house of PW1 at Aduvathuruthu and recorded her F.I.R Ext.P1 ", "W1 in her evidence stated that her daughter PW2 was sleeping in her room on the night of 12 11 1995. PW2 was wearing Thara fashion gold chain. The gold chain was stolen but no complaint was lodged at the police station because PW2 did not realize that her gold chain was stolen. ", "t is only on 28 11 1995 when the police came to their house along with the accused and the gold chain was shown to her that she realized that the gold chain was stolen. She identified the gold chain MO1. FIR Ext.P1 was then lodged. PW2 the daughter stated that on 12 11 1995 at about 11 p.m. she went to sleep. On the next day morning the gold chain was not seen. ", "n 28 11 1995 when the police came to her house with the accused and showed her the chain she realized that her chain was stolen. She identified the chain.\n", "ccording to the prosecution the appellant made a discovery statement to PW7 the Circle Inspector and pursuant to that statement PW7 went to the shop of PW8 Pradeep along with the appellant. The appellant is stated to have pointed out to PW8 as the man to whom he had sold the chain.", "fter observing that there is nothing in the evidence of PWs 1 to 8 to connect A1 and A3 with the crime the Trial Court acquitted them of all the offences. This view is affirmed by the Sessions Court and the High Court.\n", "1 and A3 have been rightly acquitted because nothing links them to the offence.", "he Trial Court has stated that since chain was recovered at the instance of the appellant the only inference which can be drawn is that he committed the theft. "], "rank3": ["ppellant challenged the said order before the Additional Sessions Judge Ernakulam. Learned Sessions Judge by his order dated 28 11 2002 confirmed the conviction and sentence and dismissed the appeal. Being aggrieved by the said conviction and sentence the appellant filed a criminal revision petition in the Kerala High Court.", "y the impugned judgment the High Court dismissed the revision petition. Hence this appeal by special leave is filed against the said judgment.\n", "ccording to the prosecution the appellant along with A1 Khalid and A3 Babu with an intention of committing theft entered the house of PW1 Radha at Karumalloor Village on 12 11 1995 at 4.00 a.m through the door which was kept open.", "hey entered the bedroom where PW2 Renuka Devi was sleeping and committed theft of a gold chain weighing 14 grams worth Rs7 500 which PW2 was wearing while she was sleeping. A1 and A3 assisted the appellant in committing the offence.", "hey gave the gold chain to the appellant for selling.", "he appellant sold the gold chain and the accused divided the sale proceeds and thereby committed the offence.\n"], "rank4": ["ppellant A2 Azeez along with two others i.e. A1 Khalid and A3 Babu was tried by the Judicial Magistrate First Class I Aluva for offences punishable under Sections 457 and 380 read with Section 34 of the Indian Penal Code for short the IPC . By order dated 15 12 2000 learned Magistrate convicted the appellant under Section 457 of the IPC and sentenced him to undergo rigorous imprisonment for one year. The appellant was further convicted for offence under Section 380 of the IPC and sentenced to undergo rigorous imprisonment for two years. ", "1 Khalid and A3 Babu were acquitted."], "label": "REJECTED"}, "expert_4": {"rank2": ["hey entered the bedroom where PW2 Renuka Devi was sleeping and committed theft of a gold chain weighing 14 grams worth Rs7 500 which PW2 was wearing while she was sleeping. ", "W7 the Circle Inspector stated that he arrested the accused on 28 11 1995 at 1 a.m near the parking area Municipal Buildings Aluva while they were moving in suspicious circumstances. ", "n questioning them it was revealed that they had committed the offence involved in this case hence they proceeded to the house of PW1 at Aduvathuruthu and recorded her F.I.R Ext.P1 .\n", "hus the complaint came to be lodged about sixteen days after the incident that too after the police came to PW1s house with the chain. ", "he Trial Court however observed that from the evidence of PWs 1 and 2 it is seen that theft had taken in the room in which PW2 was sleeping the thief entered the house and committed theft of gold chain which PW2 was wearing and therefore this act will be covered by Section 451 of the IPC i.e. house trespass in order to commit offence punishable with imprisonment. ", "he Trial Court further held that since the recovery of gold chain was effected on the basis of statement given by the appellant the only inference that can be drawn is that he committed the theft of gold chain and therefore the case is covered by Section 380 of the IPC i.e theft in a dwelling house. ", "s we have already noted that FIR was registered after about sixteen days from the date of alleged theft. ", "Ws 1 and 2 did not even realize that the chain was stolen. ", "1 and A3 have been rightly acquitted because nothing links them to the offence. ", "ut similar is the case with the appellant. ", "he Trial Court has stated that since chain was recovered at the instance of the appellant the only inference which can be drawn is that he committed the theft. Drawing such inference in the facts of this case would be totally unjust.\n"], "rank3": ["earned Magistrate convicted the appellant under Section 457 of the IPC and sentenced him to undergo rigorous imprisonment for one year. The appellant was further convicted for offence under Section 380 of the IPC and sentenced to undergo rigorous imprisonment for two years. ", "1 Khalid and A3 Babu were acquitted.\n", "earned Sessions Judge by his order dated 28 11 2002 confirmed the conviction and sentence and dismissed the appeal. ", "y the impugned judgment the High Court dismissed the revision petition. ", "ccording to the prosecution the appellant along with A1 Khalid and A3 Babu with an intention of committing theft entered the house of PW1 Radha at Karumalloor Village on 12 11 1995 at 4.00 a.m through the door which was kept open. ", "he appellant sold the gold chain and the accused divided the sale proceeds and thereby committed the offence.\n", "his case presents rather unusual facts. ", "W1 in her evidence stated that her daughter PW2 was sleeping in her room on the night of 12 11 1995. ", "W2 was wearing Thara fashion gold chain. ", "he gold chain was stolen but no complaint was lodged at the police station because PW2 did not realize that her gold chain was stolen. ", "t is only on 28 11 1995 when the police came to their house along with the accused and the gold chain was shown to her that she realized that the gold chain was stolen. ", "he identified the gold chain MO1. ", "f gold chain worn by PW2 was removed by the accused at night it is unbelievable that she would not realize it in the morning. ", "ven PW1 the mother did not realize that the chain worn by PW2 was not around her neck. ", "hey did not realize that the chain was stolen till 28 11 1995 when the police came to their house with the accused and showed them the chain. ", "t is on 28 11 1995 that PW1 lodged her complaint. ", "ccording to the prosecution the appellant made a discovery statement to PW7 the Circle Inspector and pursuant to that statement PW7 went to the shop of PW8 Pradeep along with the appellant. ", "he appellant is stated to have pointed out to PW8 as the man to whom he had sold the chain. ", "owever PW8 has not supported the prosecution case. ", "he courts below have while convicting the appellant placed reliance on the evidence of PW7 the Circle Inspector and PW3 the Head Constable who sought to corroborate the version of PW7 regarding recovery of chain at the instance of the appellant from the shop of PW8. ", "e find it difficult to do so. ", "he Trial Court therefore acquitted the appellant of the offence punishable under Section 457 of the IPC. ", "he Trial Court also acquitted A1 and A3 of the offence punishable under Section 457 read with Section 34 of the IPC. ", "t is only when the accused were brought to their house after about sixteen days that they realized that the chain was stolen and FIR was lodged. ", "he chain in question was being worn by PW2. ", "t is stated to have been stolen while she was sleeping. ", "t is inconceivable that she would not realize that she had lost her chain. The incident in our view is not unfolded truthfully. "], "rank4": ["ence this appeal by special leave is filed against the said judgment.\n", "1 and A3 assisted the appellant in committing the offence. ", "hey gave the gold chain to the appellant for selling. ", "vidence of PWs 1 and 2 raise several question marks. ", "he sequence of events is not convincing and does not stand to reason.\n", "rial Court has observed that offence under Section 457 of the IPC is not made out because according to PW1 the thieves entered the door which was kept open. "], "rank5": ["IR Ext.P1 was then lodged. ", "W2 the daughter stated that on 12 11 1995 at about 11 p.m. she went to sleep. ", "n the next day morning the gold chain was not seen. ", "n 28 11 1995 when the police came to her house with the accused and showed her the chain she realized that her chain was stolen. ", "he identified the chain.\n", "fter observing that there is nothing in the evidence of PWs 1 to 8 to connect A1 and A3 with the crime the Trial Court acquitted them of all the offences. ", "his view is affirmed by the Sessions Court and the High Court.\n"], "label": "REJECTED"}, "expert_5": {"rank2": ["2 11 1995 ", "8 11 1995 ", "he chain in question was being worn by PW2. It is stated to have been stolen while she was sleeping. It is inconceivable that she would not realize that she had lost her chain. "], "rank3": ["ntered the house of PW1 Radha at Karumalloor Village on 12 11 1995 at 4.00 a.m through the door which was kept open. ", "he appellant is stated to have pointed out to PW8 as the man to whom he had sold the chain. However PW8 has not supported the prosecution case. ", "he Trial Court has stated that since chain was recovered at the instance of the appellant the only inference which can be drawn is that he committed the theft. Drawing such inference in the facts of this case would be totally unjust.\n"], "rank4": ["his case presents rather unusual facts. ", "fter observing that there is nothing in the evidence of PWs 1 to 8 to connect A1 and A3 with the crime the Trial Court acquitted them of all the offences. ", "1 and A3 have been rightly acquitted because nothing links them to the offence. "], "rank5": ["he identified the gold chain MO1. ", "n 28 11 1995 when the police came to her house with the accused and showed her the chain she realized that her chain was stolen. She identified the chain.\n"], "label": "REJECTED"}, "label": "ACCEPTED"}
{"id": "2013_35", "text": "These appeals are directed against the judgment and order passed by the High Court of Judicature for Rajasthan Jaipur Bench Jaipur in Criminal Appeal No 130 of 2000 dated 03.06.2005. The High Court while affirming the judgment of the Trial Court in Sessions Case No 49 99 dated 15.03.2000 has convicted Shri Ram A 1 under Section 302 read with Section 34 of the Indian Penal Code the IPC for short and reversed the judgment of the Trial Court and acquitted Shobha Ram A 2. It is the acquittal of A 2 which is called in question by the appellant  State of Rajasthan in Criminal Appeal No 592 of 2008.\n Criminal Appeal No 593 of 2008 is preferred by Shri Ram A 1 being aggrieved by the order of conviction and sentence passed by the Trial Court and confirmed by the High Court.\n The facts in brief are The incident occurred on 16.02.1999 at about 5.30 p.m. PW 1 Mohanlal who is the brother of the deceased Trilokchand had lodged the FIR before S.H.O Police Station Chechat regarding the alleged assault on the deceased by the accused persons. On the fateful day the appellants on account of their past enmity over the well located in their lands formed common intention to cause death of Trilokchand since deceased and in furtherance of their common intention they caused injuries to the deceased with stones resulting in his death. The FIR was registered and after the completion of the investigation the investigating agency had filed a charge sheet against A 1 and A 2 under Section 302 read with Section 34 of the IPC. The accused persons denied the charge and pleaded false implication and therefore the Trial had commenced against both the accused A 1 and A 2.\n During the Trial the prosecution in order to prove the guilt of the accused persons had examined several witnesses including PW 1 and PW 2 Smt. Manoharbai wife of the deceased PW 3 Bhawanishankar PW 4 Kalulal PW 6 Basantilal and other witnesses. Prosecution had projected PW 2 and PW 6 as eye witnesses to the incident.\n The Trial Court after appreciating the evidence of the eye witnesses and others has come to the conclusion that the testimony of PW 2 does not corroborate with the FIR and other material available on record and therefore it could be safely concluded that PW 2 had not seen the occurrence of actual incident and therefore the evidence at the most can only be an hearsay evidence. However the Trial Court has believed the evidence of PW 6 who in his evidence has categorically stated that A 1 was assaulting the deceased with the stones and A 2 was sitting on the chest of the deceased. The Trial Court placing reliance on the evidence of PW 6 has convicted and sentenced the accused persons under Section 302 read with Section 34 of the IPC to suffer imprisonment for life and to pay a fine of Rs1000 each and in default to undergo simple imprisonment for a further period of six months.\n Aggrieved by the order of conviction and sentence passed by the Trial Court the accused persons had filed appeals before the High Court. The High Court has confirmed the conviction and sentence of A 1 passed by the Trial Court. However the High Court has acquitted A 2 only on the ground that A 2 had not actively participated in the commission of the offence and therefore the Trial Court was not justified in convicting A 2 for an offence punishable under Section 302 read with Section 34 of the IPC.\n It is the correctness or otherwise of the judgment and order passed by the High Court which is called in question by the appellants in this appeal.\n We will first take up the appeal of A 1. The Trial Court and the High Court has convicted A 1 based on the evidence of the sole eye witness namely PW 6. In order to satisfy ourselves we have once again carefully analyzed the evidence on record and the conviction of A 1 by the Trial Court with the aid of the sole eye witness of PW 6. In his evidence PW 6 has stated A 2 was acting in concert with A 1 in causing the murder of the deceased wherein A 1 was assaulting the deceased with stones and A 2 had facilitated the execution of the common design by sitting on the chest of the deceased. Despite cross examination at length PW 6 has maintained his version thereby not leaving any scope for the defense to elicit anything against the prosecution witness. Therefore in our opinion the evidence of the said witness is of sterling quality and therefore reliable and trustworthy leaving us with no other alternative but to accept his evidence. Therefore we decline to interfere with the finding and conclusion reached by the Trial Court insofar as convicting A 1 is concerned. Therefore we reject the appeal filed by A 1 and confirm the orders passed by the Trial Court and the High Court.\n While considering the appeal filed by the State of Rajasthan we have carefully perused the judgment and order passed by the High Court. The High Court has acquitted A 2 only on the ground that merely sitting on the chest of the deceased rules out the possibility of active participation by A 2 in the commission of offence and therefore has acquitted him from the charges under Section 302 read with Section 34 of the IPC.\n The nuances of Section 34 of the IPC has been explained by this Court in several decisions but we will only refer to the decision in the case of Nadodi Jayaraman and others vs. State of Tamil Nadu 1992 3 SCC 161 and Saravanan and Another vs. State of Pondicherry 2004 13 SCC 238 . In the case of Nadodi Jayaraman and others Supra the Court has observed  9. Section 34 of IPC enacts that when a criminal act is done by several persons in furtherance of the common intention of all each of such persons is liable for that act in the same manner as if it were done by him alone. The section thus lays down a principle of joint liability in the doing of a criminal act. The essence of that liability is found in the existence of common intention animating the accused leading to the doing of a criminal act in furtherance of such intention. The section is intended to meet a case in which it is difficult to distinguish between the act of individual members of a party and to prove exactly what part was played by each of them. It therefore enacts that once it is found that a criminal act has been committed by several persons in furtherance of the common intention of all each of such persons is liable for the criminal act as if it were done by him alone. It is thus an exception to the general rule of criminal jurisprudence that it is the primary responsibility of the person who actually commits a crime and only that person can be held guilty and punished in accordance with law for his individual act. 15. It is thus clear that the criminal act referred to in Section 34 IPC is the result of the concerted action of more than one person if the said result was reached in furtherance of the common intention and each person must be held liable for the ultimate result as if he had done it himself. \n A perusal of Section 34 of the IPC would clearly indicate that there must be two ingredients for convicting a person with the aid of Section 34 of the IPC. Firstly there must be a common intention and secondly there must be participation by the accused persons in furtherance of the common intention. If the common intention is proved it may not be necessary that the acts of the several persons charged with commission of an offence jointly must be the same or identically similar. The acts may be different in character but must be arising out of the same common intention in order to attract the provision. The said principle is reiterated in a three judge bench decision in Suresh Anr vs. State of U.P 2001 3 SCC 673 and Ramaswami Ayyangar and others vs. State of Tamil Nadu 1976 3 SCC 779 wherein the court has stated that the acts committed by different confederates in the criminal action may be different but all must in one way or the other participate and engage in the criminal enterprise for instance one may only stand guard to prevent any person coming to the relief of the victim or to otherwise facilitate the commission of crime. Such a person also commits an act as much as his co participants actually committing the planned crime. In the case of an offence involving physical violence the person who instigates or aids the commission of the crime must be physically present and such presence of those who in one way or the other facilitate the execution of the common design is itself tantamount to actual participation in the criminal act \n Insofar as common intention is concerned it is a state of mind of an accused which can be inferred objectively from his conduct displayed in the course of commission of crime and also from prior and subsequent attendant circumstances. As observed in Hari Ram vs.State of U.P 2004 8 SCC 146 the existence of direct proof of common 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. Therefore in order to bring home the charge of common 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 commit the offence before a person can be vicariously convicted for the act of the other.\n The facts in the present case in the light of the evidences on record are that A 1 and A 2 are brothers having an old enmity with the deceased resulting in a constant skirmish over the well located in their lands. On the said date of incident the animosity culminated to an assault on the deceased by the accused persons when the deceased was nearing his land. It has come in the evidence of PW 6 that A 1 was assaulting the deceased with stones and A 2 was sitting on the chest of the deceased. The aforesaid chain of events gives a clear picture of the whole incident that had taken place on that fateful day. The evidence of PW 6 when seen in entirety and in its proper perspective we can conclude that both the accused persons i.e. A 1 and A 2 had a common intention to assault and kill the deceased person with A 2 as a participant in the crime with the intention of lending weight to the commission of an offence pursuant to a pre concerted plan.\nDECISION ?", "expert_1": {"rank2": ["he nuances of Section 34 of the IPC has been explained by this Court in several decisions but we will only refer to the decision in the case of Nadodi Jayaraman and others vs. State of Tamil Nadu 1992 3 SCC 161 and Saravanan and Another vs. State of Pondicherry 2004 13 SCC 238 . In the case of Nadodi Jayaraman and others Supra the Court has observed  9. Section 34 of IPC enacts that when a criminal act is done by several persons in furtherance of the common intention of all each of such persons is liable for that act in the same manner as if it were done by him alone. The section thus lays down a principle of joint liability in the doing of a criminal act. The essence of that liability is found in the existence of common intention animating the accused leading to the doing of a criminal act in furtherance of such intention. The section is intended to meet a case in which it is difficult to distinguish between the act of individual members of a party and to prove exactly what part was played by each of them. It therefore enacts that once it is found that a criminal act has been committed by several persons in furtherance of the common intention of all each of such persons is liable for the criminal act as if it were done by him alone. It is thus an exception to the general rule of criminal jurisprudence that it is the primary responsibility of the person who actually commits a crime and only that person can be held guilty and punished in accordance with law for his individual act. 15. It is thus clear that the criminal act referred to in Section 34 IPC is the result of the concerted action of more than one person if the said result was reached in furtherance of the common intention and each person must be held liable for the ultimate result as if he had done it himself. ", " perusal of Section 34 of the IPC would clearly indicate that there must be two ingredients for convicting a person with the aid of Section 34 of the IPC. Firstly there must be a common intention and secondly there must be participation by the accused persons in furtherance of the common intention. If the common intention is proved it may not be necessary that the acts of the several persons charged with commission of an offence jointly must be the same or identically similar. The acts may be different in character but must be arising out of the same common intention in order to attract the provision. The said principle is reiterated in a three judge bench decision in Suresh Anr vs. State of U.P 2001 3 SCC 673 and Ramaswami Ayyangar and others vs. State of Tamil Nadu 1976 3 SCC 779 wherein the court has stated that the acts committed by different confederates in the criminal action may be different but all must in one way or the other participate and engage in the criminal enterprise for instance one may only stand guard to prevent any person coming to the relief of the victim or to otherwise facilitate the commission of crime. Such a person also commits an act as much as his co participants actually committing the planned crime. In the case of an offence involving physical violence the person who instigates or aids the commission of the crime must be physically present and such presence of those who in one way or the other facilitate the execution of the common design is itself tantamount to actual participation in the criminal act \n Insofar as common intention is concerned it is a state of mind of an accused which can be inferred objectively from his conduct displayed in the course of commission of crime and also from prior and subsequent attendant circumstances. ", "s observed in Hari Ram vs.State of U.P 2004 8 SCC 146 the existence of direct proof of common 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. Therefore in order to bring home the charge of common 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 commit the offence before a person can be vicariously convicted for the act of the other.\n"], "rank3": ["he High Court while affirming the judgment of the Trial Court in Sessions Case No 49 99 dated 15.03.2000 has convicted Shri Ram A 1 under Section 302 read with Section 34 of the Indian Penal Code the IPC for short and reversed the judgment of the Trial Court and acquitted Shobha Ram A 2. ", "he High Court has confirmed the conviction and sentence of A 1 passed by the Trial Court. However the High Court has acquitted A 2 only on the ground that A 2 had not actively participated in the commission of the offence and therefore the Trial Court was not justified in convicting A 2 for an offence punishable under Section 302 read with Section 34 of the IPC.\n It is the correctness or otherwise of the judgment and order passed by the High Court which is called in question by the appellants in this appeal.\n"], "label": "REJECTED"}, "expert_2": {"rank2": ["he High Court has acquitted A 2 only on the ground that A 2 had not actively participated in the commission of the offence and therefore the Trial Court was not justified in convicting A 2 for an offence punishable under Section 302 read with Section 34 of the IPC.\n", "ection 34 of IPC enacts that when a criminal act is done by several persons in furtherance of the common intention of all each of such persons is liable for that act in the same manner as if it were done by him alone. ", "he essence of that liability is found in the existence of common intention animating the accused leading to the doing of a criminal act in furtherance of such intention. ", " perusal of Section 34 of the IPC would clearly indicate that there must be two ingredients for convicting a person with the aid of Section 34 of the IPC. Firstly there must be a common intention and secondly there must be participation by the accused persons in furtherance of the common intention. ", "n the case of an offence involving physical violence the person who instigates or aids the commission of the crime must be physically present and such presence of those who in one way or the other facilitate the execution of the common design is itself tantamount to actual participation in the criminal act "], "rank3": ["amaswami Ayyangar and others vs. State of Tamil Nadu 1976 3 SCC 779 wherein the court has stated that the acts committed by different confederates in the criminal action may be different but all must in one way or the other participate and engage in the criminal enterprise for instance one may only stand guard to prevent any person coming to the relief of the victim or to otherwise facilitate the commission of crime. "], "label": "REJECTED"}, "expert_3": {"rank2": ["t is the acquittal of A 2 which is called in question by the appellant  State of Rajasthan in Criminal Appeal No 592 of 2008.\n Criminal Appeal No 593 of 2008 is preferred by Shri Ram A 1 being aggrieved by the order of conviction and sentence passed by the Trial Court and confirmed by the High Court.", "W 1 Mohanlal who is the brother of the deceased Trilokchand had lodged the FIR before S.H.O Police Station Chechat regarding the alleged assault on the deceased by the accused persons. On the fateful day the appellants on account of their past enmity over the well located in their lands formed common intention to cause death of Trilokchand since deceased and in furtherance of their common intention they caused injuries to the deceased with stones resulting in his death.", "he accused persons denied the charge and pleaded false implication and therefore the Trial had commenced against both the accused A 1 and A 2.\n During the Trial the prosecution in order to prove the guilt of the accused persons had examined several witnesses including PW 1 and PW 2 Smt.", "anoharbai wife of the deceased PW 3 Bhawanishankar PW 4 Kalulal PW 6 Basantilal and other witnesses.", "rosecution had projected PW 2 and PW 6 as eye witnesses to the incident.\n The Trial Court after appreciating the evidence of the eye witnesses and others has come to the conclusion that the testimony of PW 2 does not corroborate with the FIR and other material available on record and therefore it could be safely concluded that PW 2 had not seen the occurrence of actual incident and therefore the evidence at the most can only be an hearsay evidence.", "owever the Trial Court has believed the evidence of PW 6 who in his evidence has categorically stated that A 1 was assaulting the deceased with the stones and A 2 was sitting on the chest of the deceased.", "he Trial Court placing reliance on the evidence of PW 6 has convicted and sentenced the accused persons ", "he High Court has acquitted A 2 only on the ground that A 2 had not actively participated in the commission of the offence and therefore the Trial Court was not justified in convicting A 2 for an offence punishable under Section 302 read with Section 34 of the IPC.\n", "he essence of that liability is found in the existence of common intention animating the accused leading to the doing of a criminal act in furtherance of such intention. The section is intended to meet a case in which it is difficult to distinguish between the act of individual members of a party and to prove exactly what part was played by each of them. It therefore enacts that once it is found that a criminal act has been committed by several persons in furtherance of the common intention of all each of such persons is liable for the criminal act as if it were done by him alone. It is thus an exception to the general rule of criminal jurisprudence that it is the primary responsibility of the person who actually commits a crime and only that person can be held guilty and punished in accordance with law for his individual act.", "he said principle is reiterated in a three judge bench decision in Suresh Anr vs.", "tate of U.P 2001 3 SCC 673 and Ramaswami Ayyangar and others vs. State of Tamil Nadu 1976 3 SCC 779 wherein the court has stated that the acts committed by different confederates in the criminal action may be different but all must in one way or the other participate and engage in the criminal enterprise for instance one may only stand guard to prevent any person coming to the relief of the victim or to otherwise facilitate the commission of crime. ", "uch a person also commits an act as much as his co participants actually committing the planned crime. ", "s observed in Hari Ram vs.State of U.P 2004 8 SCC 146 the existence of direct proof of common 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.", "herefore in order to bring home the charge of common 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 commit the offence before a person can be vicariously convicted for the act of the other."], "rank3": ["he incident occurred on 16.02.1999 at about 5.30 p.m. ", "ggrieved by the order of conviction and sentence passed by the Trial Court the accused persons had filed appeals before the High Court. The High Court has confirmed the conviction and sentence of A 1 passed by the Trial Court. "], "rank4": ["hese appeals are directed against the judgment and order passed by the High Court of Judicature for Rajasthan Jaipur Bench Jaipur in Criminal Appeal No 130 of 2000 dated 03.06.2005. The High Court while affirming the judgment of the Trial Court in Sessions Case No 49 99 dated 15.03.2000 has convicted Shri Ram A 1 under Section 302 read with Section 34 of the Indian Penal Code the IPC for short and reversed the judgment of the Trial Court and acquitted Shobha Ram A 2. "], "label": "REJECTED"}, "expert_4": {"rank2": ["herefore in our opinion the evidence of the said witness is of sterling quality and therefore reliable and trustworthy leaving us with no other alternative but to accept his evidence. ", "herefore we decline to interfere with the finding and conclusion reached by the Trial Court insofar as convicting A 1 is concerned. ", "irstly there must be a common intention and secondly there must be participation by the accused persons in furtherance of the common intention. ", "f the common intention is proved it may not be necessary that the acts of the several persons charged with commission of an offence jointly must be the same or identically similar. ", "he acts may be different in character but must be arising out of the same common intention in order to attract the provision. ", "herefore in order to bring home the charge of common 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 commit the offence before a person can be vicariously convicted for the act of the other.\n", "t has come in the evidence of PW 6 that A 1 was assaulting the deceased with stones and A 2 was sitting on the chest of the deceased. ", "he evidence of PW 6 when seen in entirety and in its proper perspective we can conclude that both the accused persons i.e. A 1 and A 2 had a common intention to assault and kill the deceased person with A 2 as a participant in the crime with the intention of lending weight to the commission of an offence pursuant to a pre concerted plan.\n"], "rank3": ["W 1 Mohanlal who is the brother of the deceased Trilokchand had lodged the FIR before S.H.O Police Station Chechat regarding the alleged assault on the deceased by the accused persons. ", "n the fateful day the appellants on account of their past enmity over the well located in their lands formed common intention to cause death of Trilokchand since deceased and in furtherance of their common intention they caused injuries to the deceased with stones resulting in his death. ", "he Trial Court after appreciating the evidence of the eye witnesses and others has come to the conclusion that the testimony of PW 2 does not corroborate with the FIR and other material available on record and therefore it could be safely concluded that PW 2 had not seen the occurrence of actual incident and therefore the evidence at the most can only be an hearsay evidence. ", "owever the Trial Court has believed the evidence of PW 6 who in his evidence has categorically stated that A 1 was assaulting the deceased with the stones and A 2 was sitting on the chest of the deceased. ", "he Trial Court placing reliance on the evidence of PW 6 has convicted and sentenced the accused persons under Section 302 read with Section 34 of the IPC to suffer imprisonment for life and to pay a fine of Rs1000 each and in default to undergo simple imprisonment for a further period of six months.\n", "owever the High Court has acquitted A 2 only on the ground that A 2 had not actively participated in the commission of the offence and therefore the Trial Court was not justified in convicting A 2 for an offence punishable under Section 302 read with Section 34 of the IPC.\n", "he Trial Court and the High Court has convicted A 1 based on the evidence of the sole eye witness namely PW 6. ", "n his evidence PW 6 has stated A 2 was acting in concert with A 1 in causing the murder of the deceased wherein A 1 was assaulting the deceased with stones and A 2 had facilitated the execution of the common design by sitting on the chest of the deceased. ", "espite cross examination at length PW 6 has maintained his version thereby not leaving any scope for the defense to elicit anything against the prosecution witness.", "he High Court has acquitted A 2 only on the ground that merely sitting on the chest of the deceased rules out the possibility of active participation by A 2 in the commission of offence and therefore has acquitted him from the charges under Section 302 read with Section 34 of the IPC.\n", "he essence of that liability is found in the existence of common intention animating the accused leading to the doing of a criminal act in furtherance of such intention. ", "t therefore enacts that once it is found that a criminal act has been committed by several persons in furtherance of the common intention of all each of such persons is liable for the criminal act as if it were done by him alone. ", "n the case of an offence involving physical violence the person who instigates or aids the commission of the crime must be physically present and such presence of those who in one way or the other facilitate the execution of the common design is itself tantamount to actual participation in the criminal act \n Insofar as common intention is concerned it is a state of mind of an accused which can be inferred objectively from his conduct displayed in the course of commission of crime and also from prior and subsequent attendant circumstances. ", "s observed in Hari Ram vs.State of U.P 2004 8 SCC 146 the existence of direct proof of common 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. ", "he aforesaid chain of events gives a clear picture of the whole incident that had taken place on that fateful day. "], "rank4": ["he incident occurred on 16.02.1999 at about 5.30 p.m. ", "he FIR was registered and after the completion of the investigation the investigating agency had filed a charge sheet against A 1 and A 2 under Section 302 read with Section 34 of the IPC. ", "he accused persons denied the charge and pleaded false implication and therefore the Trial had commenced against both the accused A 1 and A 2.\n", "rosecution had projected PW 2 and PW 6 as eye witnesses to the incident.\n", "he nuances of Section 34 of the IPC has been explained by this Court in several decisions ", "n the case of Nadodi Jayaraman and others Supra the Court has observed  9. Section 34 of IPC enacts that when a criminal act is done by several persons in furtherance of the common intention of all each of such persons is liable for that act in the same manner as if it were done by him alone. ", "he section thus lays down a principle of joint liability in the doing of a criminal act. ", "he section is intended to meet a case in which it is difficult to distinguish between the act of individual members of a party and to prove exactly what part was played by each of them. ", "t is thus an exception to the general rule of criminal jurisprudence that it is the primary responsibility of the person who actually commits a crime and only that person can be held guilty and punished in accordance with law for his individual act. ", "t is thus clear that the criminal act referred to in Section 34 IPC is the result of the concerted action of more than one person if the said result was reached in furtherance of the common intention and each person must be held liable for the ultimate result as if he had done it himself. ", "erusal of Section 34 of the IPC would clearly indicate that there must be two ingredients for convicting a person with the aid of Section 34 of the IPC. ", "he said principle is reiterated in a three judge bench decision in Suresh Anr vs. State of U.P 2001 3 SCC 673 and Ramaswami Ayyangar and others vs. State of Tamil Nadu 1976 3 SCC 779 wherein the court has stated that the acts committed by different confederates in the criminal action may be different but all must in one way or the other participate and engage in the criminal enterprise for instance one may only stand guard to prevent any person coming to the relief of the victim or to otherwise facilitate the commission of crime. ", "uch a person also commits an act as much as his co participants actually committing the planned crime. "], "rank5": ["uring the Trial the prosecution in order to prove the guilt of the accused persons had examined several witnesses including PW 1 and PW 2 Smt. ", "ggrieved by the order of conviction and sentence passed by the Trial Court the accused persons had filed appeals before the High Court. ", "he High Court has confirmed the conviction and sentence of A 1 passed by the Trial Court. "], "label": "REJECTED"}, "expert_5": {"rank2": ["n his evidence PW 6 has stated A 2 was acting in concert with A 1 in causing the murder of the deceased wherein A 1 was assaulting the deceased with stones and A 2 had facilitated the execution of the common design by sitting on the chest of the deceased. ", "n the said date of incident the animosity culminated to an assault on the deceased by the accused persons when the deceased was nearing his land. "], "rank3": ["ection 34 of IPC enacts that when a criminal act is done by several persons in furtherance of the common intention of all each of such persons is liable for that act in the same manner as if it were done by him alone. ", "xistence of common intention animating the accused leading to the doing of a criminal act in furtherance of such intention. ", "t therefore enacts that once it is found that a criminal act has been committed by several persons in furtherance of the common intention of all each of such persons is liable for the criminal act as if it were done by him alone. ", "t is thus clear that the criminal act referred to in Section 34 IPC is the result of the concerted action of more than one person if the said result was reached in furtherance of the common intention and each person must be held liable for the ultimate result as if he had done it himself. ", "irstly there must be a common intention and secondly there must be participation by the accused persons in furtherance of the common intention. ", "f the common intention is proved it may not be necessary that the acts of the several persons charged with commission of an offence jointly must be the same or identically similar. The acts may be different in character but must be arising out of the same common intention in order to attract the provision. ", "n the case of an offence involving physical violence the person who instigates or aids the commission of the crime must be physically present and such presence of those who in one way or the other facilitate the execution of the common design is itself tantamount to actual participation in the criminal act ", "nsofar as common intention is concerned it is a state of mind of an accused which can be inferred objectively from his conduct displayed in the course of commission of crime and also from prior and subsequent attendant circumstances. ", "aving an old enmity with the deceased resulting in a constant skirmish over the well located in their lands. "], "rank4": ["he said principle is reiterated in a three judge bench decision in Suresh Anr vs. State of U.P 2001 3 SCC 673 and Ramaswami Ayyangar and others vs. State of Tamil Nadu 1976 3 SCC 779 ", "he court has stated that the acts committed by different confederates in the criminal action may be different but all must in one way or the other participate and engage in the criminal enterprise for instance one may only stand guard to prevent any person coming to the relief of the victim or to otherwise facilitate the commission of crime. ", "s observed in Hari Ram vs.State of U.P 2004 8 SCC 146 the existence of direct proof of common 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. "], "rank5": ["owever the Trial Court has believed the evidence of PW 6 who in his evidence has categorically stated that A 1 was assaulting the deceased with the stones and A 2 was sitting on the chest of the deceased."], "label": "REJECTED"}, "label": "ACCEPTED"}
{"id": "2013_57", "text": "These applications have been preferred under Order XVIII Rule 5 of the Supreme Court Rules 1966 for short the Rules against the order of the Registrar dated 28.8.2012 alleging that the applications under Order XVIII Rule 5 of the Rules lodging the applications for clarification modification of the Judgment dated 11.1.2012 of this Court in Civil Appeal Nos281 282 of 2012 cannot be sustained in law. Applications for clarification modification were filed on 21.2.12 seeking the following reliefs a Clarify modify the observations contained in paragraphs 21 and 22 of the Judgment dated 11.1.2012 in view of the Notifications being produced by the Applicant herein along with the present application specially Notification dated 20.9.1965 issued by the State Government in exercise of powers under Section 52 of the Madhya Pradesh Town Improvement Trusts Act 1960 b Clarify modify operative directions in the Judgment dated 11.1.2012 by which it has been held that the Gwalior Development Authority did not have authority or power to execute the lease in favour of the applicant herein c Direct the Appellant to produce before this Honble Court the official records in respect of Scheme 2 B framed by the then Gwalior Improvement Trust including the Notifications and orders issued by the State Government in respect thereto photocopies of some of which are being produced along with the present applications and d Pass such other order or orders as may be deemed fit and proper in the facts and circumstances of the case. Applications were rejected holding those applications filed would amount to seeking review of the Judgment and order passed by this Court on 11.1.2012. It was noticed that on the pretext of application for clarification modification applicant in fact sought nothing but recalling of the Judgment and order dated 11.1.2012 and substitution of the directions contained therein which according to the Registrar would amount to a prayer for reviewing the Judgment. Applications were therefore rejected placing reliance on the Judgment of this Court in Delhi Administration v. Gurdip Singh Urban and others 2000 7 SCC 296.\n Dr. Rajeev Dhawan learned senior counsel appearing for the applicants submitted that the respondent State of Madhya Pradesh had suppressed various documents which had substantial bearing on the outcome of the appeals. According to the learned senior counsel the following are some of the documents which were suppressed from this Court i Gazette Notification dated 27th September 1963 formulating Housing Scheme under Section 46 of the Madhya Pradesh Town Improvement Trust Act 1960 Act of 1960 . ii Gazette Notification dated 4th October 1963 for Housing Schemes iii Details of the Acquisition of land and structure of village Ghospura and Mehra Annexure R 1 3 iv Gazette Notification under Section 52 1 s of the Act of 1960 sanctioning the Scheme\n Learned senior counsel submitted that the only argument urged before the Bench was that since the property in question was Government land which had not been transferred by it to Gwalior Development Authority the authority could not have dealt with such land by executing a lease which had been in favour of the applicants. Learned senior counsel submitted that various statements made by the State were couched with malice fraud and material suppression of facts. Consequently it was stated that the Registrar should have entertained the applications for modification clarification and were wrongly lodged.\n We fully endorse the view expressed by the Registrar that the prayers made in the applications would clearly fall in the realm of an application for review of the Judgment of this Court dated 11.1.2012 on the ground of fraud and material suppression of documents and there is no question of clarification modification of the Judgment of this Court dated 11.1.2012.\n We are of the view that the practice of overcoming the provision for review under Order XL of the Rules by filing an application for re hearing modification clarification has to be deprecated. Registrar of this Court earlier in an application for re hearing took the same stand in the year 1981. This Court dismissed a Criminal Appeal No220 of 1974 on 3.4.1981. Appellant therein filed an application for re hearing of the appeal on 20.4.1981. The counsel was informed by the Registry that since appeal had been disposed of after hearing the counsel for the parties no application for re hearing would lie and if he so advised could file a review petition under the Rules. Consequently the application was not registered. The order of the Registrar is reported in Sone Lal and others v. State of Uttar Pradesh 1982 2 SCC 398.\n The above mentioned order of the Registrar was later endorsed by this Court in Delhi Administration v. Gurdip Singh Uban and others 2000 7 SCC 296. In that case Civil Appeal Nos4656 57 of 1999 were allowed by a two Judge Bench Judgment of this Court reported in Delhi Administration v. Gurdip Singh Uban 1999 7 SCC 44 and the appeals of Delhi Administration and Delhi Development Authority were allowed. The appellant in Civil Appeal No4656 of 1999 was the Delhi Administration while the appellant in CA No4657 of 1999 was Delhi Development Authority. After the appeals were allowed by this Court on 20.8.1999 Review Petition Nos1402 03 of 1999 were filed in the two appeals by Gurdip Singh Uban and they were dismissed in circulation by a reasoned order on 24.11.1999. Another Review Petition No21 of 2000 filed by another person was not listed on that date. IA No3 of 1999 was later listed along with IA Nos4 5 filed by Gurdip Singh Uban on 23.12.1999. Gurdip Singh Uban it may be noted had filed IA Nos4 5 in spite of dismissal of his review petition on 24.11.1999. IA Nos4 5 were listed before the Court and a preliminary objection was raised stating that the applications couched as applications for clarification modification or for recall could not be entertained once the review petitions filed by the applicant were dismissed. This Court examined the question in detail in Gurdip Singh Uban supra and held as follows 16. At the outset we have to refer to the practice of filing review applications in large numbers in undeserving cases without properly examining whether the cases strictly come within the narrow confines of Rule XL of the Supreme Court Rules. In several cases it has become almost everyday experience that review applications are filed mechanically as a matter of routine and the grounds for review are a mere reproduction of the grounds of special leave and there is no indication as to which ground strictly falls within the narrow limits of Rule XL of the Rules. We seriously deprecate this practice. If parties file review petitions indiscriminately the time of the Court is unnecessarily wasted even it be in chambers where the review petitions are listed. Greater care seriousness and restraint is needed in filing review applications. 17. We next come to applications described as applications for clarification modification or recall of judgments or orders finally passed. We may point out that under the relevant Rule XL of the Supreme Court Rules 1966 a review application has first to go before the learned Judges in circulation and it will be for the Court to consider whether the application is to be rejected without giving an oral hearing or whether notice is to be issued. Order XL Rule 3 states as follows 3. Unless otherwise ordered by the Court an application for review shall be disposed of by circulation without any oral arguments but the petitioner may supplement his petition by additional written arguments. The Court may either dismiss the petition or direct notice to the opposite party.... In case notice is issued the review petition will be listed for hearing after notice is served. This procedure is meant to save the time of the Court and to preclude frivolous review petitions being filed and heard in open court. However with a view to avoid this procedure of no hearing we find that sometimes applications are filed for clarification modification or recall etc not because any such clarification modification is indeed necessary but because the applicant in reality wants a review and also wants a hearing thus avoiding listing of the same in chambers by way of circulation. Such applications if they are in substance review applications deserve to be rejected straight away inasmuch as the attempt is obviously to bypass Order XL Rule 3 relating to circulation of the application in chambers for consideration without oral hearing. By describing an application as one for clarification or modification  though it is really one of review  a party cannot be permitted to circumvent or bypass the circulation procedure and indirectly obtain a hearing in the open court. What cannot be done directly cannot be permitted to be done indirectly See in this connection a detailed order of the then Registrar of this Court in Sone Lal v. State of U.P deprecating a similar practice 18. We therefore agree with the learned Solicitor General that the Court should not permit hearing of such an application for clarification modification or recall if the application is in substance one for review. In that event the Court could either reject the application straight away with or without costs or permit withdrawal with leave to file a review application to be listed initially in chambers. 19. What we have said above equally applies to such applications filed after rejection of review applications particularly when a second review is not permissible under the Rules. Under Order XL Rule 5 a second review is not permitted. The said Rule reads as follows 5. Where an application for review of any judgment and order has been made and disposed of no further application for review shall be entertained in the same matter. 20. We should not however be understood as saying that in no case an application for clarification modification or recall is maintainable after the first disposal of the matter. All that we are saying is that once such an application is listed in Court the Court will examine whether it is in substance in the nature of review and is to be rejected with or without costs or requires to be withdrawn with leave to file a review petition to be listed in chambers by circulation. Point 1 is decided accordingly.\n We are of the view that the ratio laid down in the above mentioned Judgment squarely applies to the facts of this case as well. Generally an application for correction of a typographical error or omission of a word etc in a Judgment or order would lie but a petition which is intended to review an order or Judgment under Order XLVII Rule 1 of the Code of Civil Procedure and in criminal proceedings except on the ground of an error apparent on the face of the record could not be achieved by filing an application for clarification modification recall or rehearing for which a properly constituted review is the remedy.\nDECISION ?", "expert_1": {"rank2": ["hese applications have been preferred under Order XVIII Rule 5 of the Supreme Court Rules 1966 for short the Rules against the order of the Registrar dated 28.8.2012 alleging that the applications under Order XVIII Rule 5 of the Rules lodging the applications for clarification modification of the Judgment dated 11.1.2012 of this Court in Civil Appeal Nos281 282 of 2012 cannot be sustained in law. ", "owever with a view to avoid this procedure of no hearing we find that sometimes applications are filed for clarification modification or recall etc not because any such clarification modification is indeed necessary but because the applicant in reality wants a review and also wants a hearing thus avoiding listing of the same in chambers by way of circulation. Such applications if they are in substance review applications deserve to be rejected straight away inasmuch as the attempt is obviously to bypass Order XL Rule 3 relating to circulation of the application in chambers for consideration without oral hearing. By describing an application as one for clarification or modification  though it is really one of review  a party cannot be permitted to circumvent or bypass the circulation procedure and indirectly obtain a hearing in the open court. ", "n that event the Court could either reject the application straight away with or without costs or permit withdrawal with leave to file a review application to be listed initially in chambers. ", "hat we have said above equally applies to such applications filed after rejection of review applications particularly when a second review is not permissible under the Rules. ", "e are of the view that the ratio laid down in the above mentioned Judgment squarely applies to the facts of this case as well. "], "rank3": ["hese applications have been preferred under Order XVIII Rule 5 of the Supreme Court Rules 1966 for short the Rules against the order of the Registrar dated 28.8.2012 alleging that the applications under Order XVIII Rule 5 of the Rules lodging the applications for clarification modification of the Judgment dated 11.1.2012 of this Court in Civil Appeal Nos281 282 of 2012 cannot be sustained in law. ", "e fully endorse the view expressed by the Registrar that the prayers made in the applications would clearly fall in the realm of an application for review of the Judgment of this Court dated 11.1.2012 on the ground of fraud and material suppression of documents and there is no question of clarification modification of the Judgment of this Court dated 11.1.2012.\n We are of the view that the practice of overcoming the provision for review under Order XL of the Rules by filing an application for re hearing modification clarification has to be deprecated. ", "t the outset we have to refer to the practice of filing review applications in large numbers in undeserving cases without properly examining whether the cases strictly come within the narrow confines of Rule XL of the Supreme Court Rules. ", "n several cases it has become almost everyday experience that review applications are filed mechanically as a matter of routine and the grounds for review are a mere reproduction of the grounds of special leave and there is no indication as to which ground strictly falls within the narrow limits of Rule XL of the Rules. We seriously deprecate this practice. "], "rank4": ["pplications for clarification modification were filed on 21.2.12 seeking the following reliefs ", "pplications were rejected holding those applications filed would amount to seeking review of the Judgment and order passed by this Court on 11.1.2012. ", "pplications were therefore rejected placing reliance on the Judgment of this Court in Delhi Administration v. Gurdip Singh Urban and others 2000 7 SCC 296.\n", "ajeev Dhawan learned senior counsel appearing for the applicants submitted that the respondent State of Madhya Pradesh had suppressed various documents which had substantial bearing on the outcome of the appeals. ", "earned senior counsel submitted that various statements made by the State were couched with malice fraud and material suppression of facts. Consequently it was stated that the Registrar should have entertained the applications for modification clarification and were wrongly lodged.\n"], "label": "REJECTED"}, "expert_2": {"rank2": ["hese applications have been preferred under Order XVIII Rule 5 of the Supreme Court Rules 1966 for short the Rules against the order of the Registrar dated 28.8.2012 alleging that the applications under Order XVIII Rule 5 of the Rules lodging the applications for clarification modification of the Judgment dated 11.1.2012 of this Court in Civil Appeal Nos281 282 of 2012 cannot be sustained in law. ", "pplications were rejected holding those applications filed would amount to seeking review of the Judgment and order passed by this Court on 11.1.2012. ", "his procedure is meant to save the time of the Court and to preclude frivolous review petitions being filed and heard in open court. However with a view to avoid this procedure of no hearing we find that sometimes applications are filed for clarification modification or recall etc not because any such clarification modification is indeed necessary but because the applicant in reality wants a review and also wants a hearing thus avoiding listing of the same in chambers by way of circulation. ", "e therefore agree with the learned Solicitor General that the Court should not permit hearing of such an application for clarification modification or recall if the application is in substance one for review. ", "e should not however be understood as saying that in no case an application for clarification modification or recall is maintainable after the first disposal of the matter. ", "enerally an application for correction of a typographical error or omission of a word etc in a Judgment or order would lie but a petition which is intended to review an order or Judgment under Order XLVII Rule 1 of the Code of Civil Procedure and in criminal proceedings except on the ground of an error apparent on the face of the record could not be achieved by filing an application for clarification modification recall or rehearing for which a properly constituted review is the remedy.\n"], "rank3": ["enior counsel appearing for the applicants submitted that the respondent State of Madhya Pradesh had suppressed various documents which had substantial bearing on the outcome of the appeals. ", "t was stated that the Registrar should have entertained the applications for modification clarification and were wrongly lodged.\n", "A Nos4 5 were listed before the Court and a preliminary objection was raised stating that the applications couched as applications for clarification modification or for recall could not be entertained once the review petitions filed by the applicant were dismissed. "], "rank4": ["e are of the view that the practice of overcoming the provision for review under Order XL of the Rules by filing an application for re hearing modification clarification has to be deprecated. "], "label": "REJECTED"}, "expert_3": {"rank2": ["t was noticed that on the pretext of application for clarification modification applicant in fact sought nothing but recalling of the Judgment and order dated 11.1.2012 and substitution of the directions contained therein which according to the Registrar would amount to a prayer for reviewing the Judgment. Applications were therefore rejected placing reliance on the Judgment of this Court in Delhi Administration v.", "urdip Singh Urban and others ", "earned senior counsel appearing for the applicants submitted that the respondent State of Madhya Pradesh had suppressed various documents which had substantial bearing on the outcome of the appeals. ", "earned senior counsel submitted that various statements made by the State were couched with malice fraud and material suppression of facts.", "his Court examined the question in detail in Gurdip Singh Uban supra and held as follows 16. At the outset we have to refer to the practice of filing review applications in large numbers in undeserving cases without properly examining whether the cases strictly come within the narrow confines of Rule XL of the Supreme Court Rules. In several cases it has become almost everyday experience that review applications are filed mechanically as a matter of routine and the grounds for review are a mere reproduction of the grounds of special leave and there is no indication as to which ground strictly falls within the narrow limits of Rule XL of the Rules. We seriously deprecate this practice. If parties file review petitions indiscriminately the time of the Court is unnecessarily wasted even it be in chambers where the review petitions are listed. ", "reater care seriousness and restraint is needed in filing review applications.", "his procedure is meant to save the time of the Court and to preclude frivolous review petitions being filed and heard in open court.", "hat cannot be done directly cannot be permitted to be done indirectly "], "rank3": ["hese applications have been preferred under Order XVIII Rule 5 of the Supreme Court Rules 1966 for short the Rules against the order of the Registrar dated 28.8.2012 alleging that the applications under Order XVIII Rule 5 of the Rules lodging the applications for clarification modification of the Judgment dated 11.1.2012 of this Court in Civil Appeal Nos281 282 of 2012 cannot be sustained in law.", "pplications for clarification modification were filed on 21.2.12 seeking the following reliefs a Clarify modify the observations contained in paragraphs 21 and 22 of the Judgment dated 11.1.2012 in view of the Notifications being produced by the Applicant herein along with the present application specially Notification dated 20.9.1965 issued by the State Government in exercise of powers under Section 52 of the Madhya Pradesh Town Improvement Trusts Act 1960 b Clarify modify operative directions in the Judgment dated 11.1.2012 by which it has been held that the Gwalior Development Authority did not have authority or power to execute the lease in favour of the applicant herein c Direct the Appellant to produce before this Honble Court the official records in respect of Scheme 2 B framed by the then Gwalior Improvement Trust including the Notifications and orders issued by the State Government in respect thereto photocopies of some of which are being produced along with the present applications and d Pass such other order or orders as may be deemed fit and proper in the facts and circumstances of the case. Applications were rejected holding those applications filed would amount to seeking review of the Judgment and order passed by this Court on 11.1.2012. ", "egistrar of this Court earlier in an application for re hearing took the same stand in the year 1981. This Court dismissed a Criminal Appeal No220 of 1974 on 3.4.1981. ", "ppellant therein filed an application for re hearing of the appeal on 20.4.1981.", "he counsel was informed by the Registry that since appeal had been disposed of after hearing the counsel for the parties no application for re hearing would lie and if he so advised could file a review petition under the Rules. Consequently the application was not registered. "], "label": "REJECTED"}, "expert_4": {"rank2": ["pplications for clarification modification were filed on 21.2.12 seeking the following reliefs a Clarify modify the observations contained in paragraphs 21 and 22 of the Judgment dated 11.1.2012 in view of the Notifications being produced by the Applicant herein along with the present application specially Notification dated 20.9.1965 issued by the State Government in exercise of powers under Section 52 of the Madhya Pradesh Town Improvement Trusts Act 1960 b Clarify modify operative directions in the Judgment dated 11.1.2012 by which it has been held that the Gwalior Development Authority did not have authority or power to execute the lease in favour of the applicant herein c Direct the Appellant to produce before this Honble Court the official records in respect of Scheme 2 B framed by the then Gwalior Improvement Trust including the Notifications and orders issued by the State Government in respect thereto photocopies of some of which are being produced along with the present applications and d Pass such other order or orders as may be deemed fit and proper in the facts and circumstances of the case. ", "t was noticed that on the pretext of application for clarification modification applicant in fact sought nothing but recalling of the Judgment and order dated 11.1.2012 and substitution of the directions contained therein which according to the Registrar would amount to a prayer for reviewing the Judgment. ", "r. Rajeev Dhawan learned senior counsel appearing for the applicants submitted that the respondent State of Madhya Pradesh had suppressed various documents which had substantial bearing on the outcome of the appeals.", "earned senior counsel submitted that various statements made by the State were couched with malice fraud and material suppression of facts. ", "e are of the view that the practice of overcoming the provision for review under Order XL of the Rules by filing an application for re hearing modification clarification has to be deprecated. ", "owever with a view to avoid this procedure of no hearing we find that sometimes applications are filed for clarification modification or recall etc not because any such clarification modification is indeed necessary but because the applicant in reality wants a review and also wants a hearing thus avoiding listing of the same in chambers by way of circulation. ", "uch applications if they are in substance review applications deserve to be rejected straight away inasmuch as the attempt is obviously to bypass Order XL Rule 3 relating to circulation of the application in chambers for consideration without oral hearing. ", "e therefore agree with the learned Solicitor General that the Court should not permit hearing of such an application for clarification modification or recall if the application is in substance one for review. ", "n that event the Court could either reject the application straight away with or without costs or permit withdrawal with leave to file a review application to be listed initially in chambers. ", "hat we have said above equally applies to such applications filed after rejection of review applications particularly when a second review is not permissible under the Rules. ", "ll that we are saying is that once such an application is listed in Court the Court will examine whether it is in substance in the nature of review and is to be rejected with or without costs or requires to be withdrawn with leave to file a review petition to be listed in chambers by circulation. "], "rank3": ["pplications were rejected holding those applications filed would amount to seeking review of the Judgment and order passed by this Court on 11.1.2012. ", "pplications were therefore rejected placing reliance on the Judgment of this Court in Delhi Administration v. Gurdip Singh Urban and others 2000 7 SCC 296.\n", "ccording to the learned senior counsel the following are some of the documents which were suppressed from this Court i Gazette Notification dated 27th September 1963 formulating Housing Scheme under Section 46 of the Madhya Pradesh Town Improvement Trust Act 1960 Act of 1960 . ii Gazette Notification dated 4th October 1963 for Housing Schemes iii Details of the Acquisition of land and structure of village Ghospura and Mehra Annexure R 1 3 iv Gazette Notification under Section 52 1 s of the Act of 1960 sanctioning the Scheme\n Learned senior counsel submitted that the only argument urged before the Bench was that since the property in question was Government land which had not been transferred by it to Gwalior Development Authority the authority could not have dealt with such land by executing a lease which had been in favour of the applicants. ", "onsequently it was stated that the Registrar should have entertained the applications for modification clarification and were wrongly lodged.\n", "e fully endorse the view expressed by the Registrar that the prayers made in the applications would clearly fall in the realm of an application for review of the Judgment of this Court dated 11.1.2012 on the ground of fraud and material suppression of documents and there is no question of clarification modification of the Judgment of this Court dated 11.1.2012.\n", "n several cases it has become almost everyday experience that review applications are filed mechanically as a matter of routine and the grounds for review are a mere reproduction of the grounds of special leave and there is no indication as to which ground strictly falls within the narrow limits of Rule XL of the Rules. ", "reater care seriousness and restraint is needed in filing review applications. ", "e may point out that under the relevant Rule XL of the Supreme Court Rules 1966 a review application has first to go before the learned Judges in circulation and it will be for the Court to consider whether the application is to be rejected without giving an oral hearing or whether notice is to be issued. ", "he Court may either dismiss the petition or direct notice to the opposite party.... In case notice is issued the review petition will be listed for hearing after notice is served. ", "his procedure is meant to save the time of the Court and to preclude frivolous review petitions being filed and heard in open court. ", "y describing an application as one for clarification or modification  though it is really one of review  a party cannot be permitted to circumvent or bypass the circulation procedure and indirectly obtain a hearing in the open court. ", "nder Order XL Rule 5 a second review is not permitted. ", "e should not however be understood as saying that in no case an application for clarification modification or recall is maintainable after the first disposal of the matter. "], "rank4": ["egistrar of this Court earlier in an application for re hearing took the same stand in the year 1981. ", "onsequently the application was not registered. ", "he above mentioned order of the Registrar was later endorsed by this Court in Delhi Administration v. Gurdip Singh Uban and others 2000 7 SCC 296. ", "fter the appeals were allowed by this Court on 20.8.1999 Review Petition Nos1402 03 of 1999 were filed in the two appeals by Gurdip Singh Uban and they were dismissed in circulation by a reasoned order on 24.11.1999. ", "t the outset we have to refer to the practice of filing review applications in large numbers in undeserving cases without properly examining whether the cases strictly come within the narrow confines of Rule XL of the Supreme Court Rules. ", "e seriously deprecate this practice. ", "f parties file review petitions indiscriminately the time of the Court is unnecessarily wasted even it be in chambers where the review petitions are listed. ", "rder XL Rule 3 states as follows 3.", "nless otherwise ordered by the Court an application for review shall be disposed of by circulation without any oral arguments but the petitioner may supplement his petition by additional written arguments. ", "hat cannot be done directly cannot be permitted to be done indirectly See in this connection a detailed order of the then Registrar of this Court in Sone Lal v. State of U.P deprecating a similar practice ", "he said Rule reads as follows 5. ", "here an application for review of any judgment and order has been made and disposed of no further application for review shall be entertained in the same matter. "], "rank5": ["his Court dismissed a Criminal Appeal No220 of 1974 on 3.4.1981. Appellant therein filed an application for re hearing of the appeal on 20.4.1981. The counsel was informed by the Registry that since appeal had been disposed of after hearing the counsel for the parties no application for re hearing would lie and if he so advised could file a review petition under the Rules. ", "he order of the Registrar is reported in Sone Lal and others v. State of Uttar Pradesh 1982 2 SCC 398.\n", "n that case Civil Appeal Nos4656 57 of 1999 were allowed by a two Judge Bench Judgment of this Court reported in Delhi Administration v. Gurdip Singh Uban 1999 7 SCC 44 and the appeals of Delhi Administration and Delhi Development Authority were allowed. The appellant in Civil Appeal No4656 of 1999 was the Delhi Administration while the appellant in CA No4657 of 1999 was Delhi Development Authority. ", "nother Review Petition No21 of 2000 filed by another person was not listed on that date. IA No3 of 1999 was later listed along with IA Nos4 5 filed by Gurdip Singh Uban on 23.12.1999. Gurdip Singh Uban it may be noted had filed IA Nos4 5 in spite of dismissal of his review petition on 24.11.1999. ", "A Nos4 5 were listed before the Court and a preliminary objection was raised stating that the applications couched as applications for clarification modification or for recall could not be entertained once the review petitions filed by the applicant were dismissed. ", "his Court examined the question in detail in Gurdip Singh Uban supra and held as follows ", "e next come to applications described as applications for clarification modification or recall of judgments or orders finally passed. "], "label": "REJECTED"}, "expert_5": {"rank2": ["e are of the view that the practice of overcoming the provision for review under Order XL of the Rules by filing an application for re hearing modification clarification has to be deprecated. ", "he above mentioned order of the Registrar was later endorsed by this Court in Delhi Administration v. Gurdip Singh Uban and others 2000 7 SCC 296. ", "f parties file review petitions indiscriminately the time of the Court is unnecessarily wasted even it be in chambers where the review petitions are listed. ", "his procedure is meant to save the time of the Court and to preclude frivolous review petitions being filed and heard in open court. ", "e are of the view that the ratio laid down in the above mentioned Judgment squarely applies to the facts of this case as well. "], "rank3": ["egistrar of this Court earlier in an application for re hearing took the same stand in the year 1981. ", "he practice of filing review applications in large numbers in undeserving cases without properly examining whether the cases strictly come within the narrow confines of Rule XL of the Supreme Court Rules. ", "n several cases it has become almost everyday experience that review applications are filed mechanically as a matter of routine and the grounds for review are a mere reproduction of the grounds of special leave and there is no indication as to which ground strictly falls within the narrow limits of Rule XL of the Rules. ", "owever with a view to avoid this procedure of no hearing we find that sometimes applications are filed for clarification modification or recall etc not because any such clarification modification is indeed necessary but because the applicant in reality wants a review and also wants a hearing thus avoiding listing of the same in chambers by way of circulation. ", "uch applications if they are in substance review applications deserve to be rejected straight away inasmuch as the attempt is obviously to bypass Order XL Rule 3 relating to circulation of the application in chambers for consideration without oral hearing. ", "hat we have said above equally applies to such applications filed after rejection of review applications particularly when a second review is not permissible under the Rules. "], "rank4": ["nder the relevant Rule XL of the Supreme Court Rules 1966 a review application has first to go before the learned Judges in circulation and it will be for the Court to consider whether the application is to be rejected without giving an oral hearing or whether notice is to be issued. Order XL Rule 3 states as follows 3. Unless otherwise ordered by the Court an application for review shall be disposed of by circulation without any oral arguments but the petitioner may supplement his petition by additional written arguments. The Court may either dismiss the petition or direct notice to the opposite party.... In case notice is issued the review petition will be listed for hearing after notice is served. "], "label": "REJECTED"}, "label": "REJECTED"}
{"id": "2013_95", "text": "This appeal is directed against judgment dated 3.2.2010 of the Division Bench of the Madras High Court whereby the writ appeal filed by the appellant was dismissed and the order passed by the learned Single Judge negating his challenge to the order of punishment was upheld.\n The appellant joined service as Junior Assistant in the Tamil Nadu Public Service Commission for short the Commission in 1973. He was promoted as Assistant in 1975 and as Assistant Selection Grade in 1988. In February 1990 the appellant was sanctioned unearned leave from 12.2.1990 to 25.2.1990 for private work. During that period P Section of the Commission is said to have directed him to work as Invigilator at Bharathiyar Women Arts College Chennai which was one of the centers for the written examination on 17.2.1990 and 18.2.1990 held for recruitment of Assistant Surgeons.\n In the examination held on 17.2.1990 six candidates sitting in Hall No76 were given the question papers of the afternoon examination in the morning examination. As soon as the Chief Invigilator Shri Syed Abdul Kareem came to know about this he took back the question papers of the afternoon examination and issued the question papers meant for morning examination. This incident was reported in the newspapers. The Commission took serious view of the matter and got registered a First Information Report. Simultaneously the Controller of Examinations recorded the statement of the Chief Invigilator on 20.2.1990 and 22.2.1990. The same is reproduced below STATEMENT OF SYED ABDUL KAREEM GIVEN TO THE COTROLLER. The following fact are submitted. I was posted as chief Invigilator to conduct examination in Bharathi Arts College for women North Madras on 17.2.90 FN AN and on 18.2.90 FN. I collected the question papers in two bundles one for FN Session and another for AN session at 8.00 A.M from the TNPSC office and took them by Auto to the examination centre. At about 9.50 A.M on 17.2.90 myself with two other invigilators. Mr. Balasubramanian Assistant from D.M.E.s Office and other Mr.Syed Abdul Kareem opened the sealed packet of question paper. The question papers were distributed to all the eight halls which were distributed to the candidates by the invigilators posted in the Halls. But in one of the Halls i.e Hall No 76 where 41 candidates were allotted it was found that after noon question papers were mingled. On hearing the fact I immediately received back 6 question papers from 6 candidates and issued them other question papers intended for fore noon session. These six papers were kept in my personal custody till the end of the examination. When I wanted to inform the facts to the TNPSC office immediately the invigilator Thiru Mahalingam Assistant TNPSC office who was assisting me requested me not to inform since the papers were immediately received back from the candidates. Further he said that the staff attached to TNPSC office who were responsible for this mingling the question papers would be punished and the name of the TNPSC will be spoiled. Since he is a serviced employee of the TNPSC I had to take his advice considering that he is pleading knowing all pros and cons. The after noon question papers bundle was opened at 1.50 p.m on 17.2.1990 by myself and two other invigilators Mr. R. Balan Assistant D.M.Es office and one Mr. N. R. Sundararaman Assistant KCH Madras. These papers were distributed to the candidates at 2 p.m there was no complaint about mingling or shortage of question papers. At the close of examination myself and Thiru Mahalingam with the assistance of two staff of college packed the un used answer papers and unused question papers 64 question papers of FN session and 11 A.N. Session papers and another bundle of 71 AN session papers. While packing a lady sweeper brought certain question papers and handed over to the persons who were packing. Immediately these papers has also been packed along with the balance question papers. During end morning session the six candidates who were served the A.N session question papers were asked to wait and the answer papers were received back and they were requested to be seated in a separate room opposite to the Hall till the commencement of after noon session. The candidates were seated in a small rook till the after session when Tiffin or coffee offered to them they refused to get. The AN session question papers received back from the candidates six in no were kept in my pocket first and then kept in my bag after 2 p.m. Before me Sd Sd Syed Abdul Kareem. Controller of Examinations 20.2.90. In continuation of my statement dated 20.2.90 given to the Controller of Examinations it is further stated that I missed to mention the following facts there in it at about 12.30 p.m. Thiru Gurumoorthy a Member of TNPSC visited the examination centre and met me and enquired about the conduct of the examination. Though I was prepared to inform the Member about the receipt of Mingling of question papers again Mr. Mahalingam stopped me and requested not to tell. After about some time the Member left the centre. At about 3.00 P.M one of the Under Secretaries of the TNPSC office visited the Examination Centre and took a written statement from me. Again I did not inform him the fact of the mingle of the question papers in the morning session at the insistence of the same person Mr. Mahalingm. Though I should have informed the fact to the both the officials but did not do so under the impression that being a senior staff of the TNPSC office Mr. Mahalingam might have had the knowledge of the consequences and he would have known the gravity of the incident I had to take his words. Had he not been posted I would not have been mislead. But on 15.2.90 he visited my office at about 11.30 AM and informed me that he had been posted as Invigilator to Bharathi College for Women where I was posted as Chief Invigilator. He assured me that he would assist me on 16.2.90 after noon also in arranging the examination halls. So he did what he promised and after posting all the other invigilators to various halls I retained Mr. Mahalingam with me to assist so he was with me all along the day till I left the examination centre at about 6.45 pm on 17.2.90. The list of invigilators posted to my centre does not contain the names of the three staff of TNPSC office who were posted as Invigilators. They are Mr. Mahalingam Mr. Sekarao and Mr. Udhaya Kumar. But they are having their individual orders that too they did not handed over to me. I did not ask for any help in writing from the TNPSC office. The absentees statement were also prepared by Mr. Mahalingam only. Before Me. Sd Sd Syed Abdul Kareem. Controller of Examns 22.2.90 underlining is ours reproduced from the SLP paper book \n Inspector State Crime Investigation Department to whom the investigation of the criminal case was entrusted also recorded the statement of the Chief Invigilator on 26.2.1990. The relevant portions thereof are extracted below STATEMENT OF SYED ABDUL KAREEM AGE 55 90 S O SYED THASTAGINI NO8 S.R.P.KOIL STREET NORTH THIRU VI.KA.NAGAR MADRAS 82. .. During the month of February 1990 an order from the office of TNPSC came to me on 14.2.90 to conduct the TNPSC Examination for Assistant Medical Officer post on 17.2.90 full day and 18.2.90 half day fore noon only . I went to TNPSC office on 15.2.90 and met the Superintendent of the concerned Section I do not remember his name in person. I told him that I am suffering from heart ailment as such it is not possible for me to conduct the examination and hence made a request to appoint some other person. He told me that this order is passed by District Collector Chennai as such it is not possible for us to do anything and asked me to get the amount by sending a man with me. I got the cheque and came to him and asked a list of persons who are going to assist me. At this time TNPSC gave 19 persons to assist me. But certain persons informed me over phone at G.H that it is not possible for them to assist me. Again I went to the TNPSC Office on 16.2.90 and informed the position to the concerned Superintendent at about 2 noon. He told me that they had posted 5 persons to assist me from their section. Kindly conduct the examination with them and asked his Assistant by name Saveriyar to give me the names of 5 persons in writing. He gave me a list in his hand writing as 1 Udhayakumar 2 Sekaran 3 Mahalingam 4 Aasir and the name of another person not known but know the person. On 16.2.90 Mahalingam came to my office at G.H at 12.00 hours and told me that he is on leave and studying for Group I examination but he will come and assist me. Mahalingam is known to me from the year 1985 86 onwards. On the next day that is on 17.2.90 I went to TNPSC office at 8.00 AM and got two bundles containing question papers by affixing seal on the cloth as 17.2.90 Forenoon 10.00 AM to 12.00 Noon as one bundle and 17.2.90 Afternoon 2.00 PM to 5 PM as another bundle and went Bharathi Womens College in an Auto and reached there at about 8.45 AM. Mahalingam was waiting there 19 persons came there to assist me invigilators . I gave them answer sheets thread and white papers and send them to each and every hall. Then at 9.50 hours I took the question bundle for the forenoon and affixed my signature in the face slip of the said bundle in the presence of two invigilators 1 G.Balasubramaniam Assistant D.M.E Chennai 5 and 2 Aazir School Assistant Thayar Sahib Street Anna Salai Chennai 2 and also got their signature. Then I have ripped the seal of the bundle and got the signature of the said two persons in the paper inside the bundle and I have also put my signature. Then at 10 hours I gave the question papers to invigilators and instructed them to take the question papers to the respective halls. I have appointed Syed Ibrahim and Thiru N.R.Sundararaman as invigilators for hall No76. The said Ibrahim told me that six students told him that the question papers issued to them are for the afternoon examination as it seems that six question papers for the afternoon examination have been found mixed with the question papers for the forenoon examination. Immediately I went to that hall No 76 and made enquiry and came to know it as true. Immediately I got back the afternoon question papers from the six students and issued the question papers for the forenoon. I kept the said six question papers which are intended for the afternoon at my custody. Then I have decided to inform it to TNPSC office and it was written by Mahalingam as per my dictation. Mahalingam told me that if the said letter is sent the staff of TNPSC office will get some trouble that the name of Controller will be spoiled that the said Controller belongs to his community and that he is going to get the post of District Collector shortly. Hence I have not informed it to TNPSC over phone. Mahalingam also turned the letter written by him. He also told me that he had got back the after noon question papers immediately as such there is no possibility for the students to read over it. No problem will arise and pleaded me that do not inform it to any one. Then the examination was going on. I went around all the halls. No complaint received from the students. It was written in the face slip of the forenoon bundle as 410 question papers. On counting it is found 412 question papers. I gave 339 persons from it and out of the remaining 75 64 question papers for forenoon and 9 for the afternoon. I kept the said question papers in a cover. At about 12 Noon one member of TNPSC Mr. Gurumurthi came there. He asked me whether any problem. I asked Mahalingam whether we will inform to him. But Mahalingam told me that it is not necessary to say this now as we have not given any report in the morning itself as such if we say it now it will became a mistake. Hence I have not informed it to him. He saw the afternoon bundle with the seal and he did not verify the forenoon question paper bundle and left away. All the invigilators made a complaint to Gurumurthi that the amount paid to them is not sufficient. He gave a reply that we had already informed about it to the Government. Then at 2.00 PM Mr. Nithyanandam Under Secretary of TNPSC office came there. He also made enquiry about the examination. He got a statement from me. I gave a report as nothing special. At that time at about 1.50 Noon I have opened the afternoon bundle in the presence of 1 Balan and 2 Sundararaman in the face slip it is found as 17.2.90 2.00 PM to 5.00 PM and written as 410 Question papers and I got the signature from both of them and I have also affixed my signature. Then I gave the answer sheets and question papers to the invigilators and send them to the examination hall. Examination was over. There was no problem. \nAt 00 PM I have collected the answer sheets and the remaining question papers. All the invigilators returned except Mahalingam. We made bundle of the answer sheets after counting. I kept the remaining question papers in a cover. At about 6.30 PM the sweeper handed over to me two question papers and I found some scribbling and I have kept that also in a cover and put Seal. I have kept the model question paper given to me in the said cover. Mahalingam went away after putting all these in an Auto. I went to TNPSC Office with Electrician at about 7 PM. The said electrician was working at Bharathi Womens College. One under Secretary was in the upstairs and I do not know his name. I have handed over the bundles to him for which he gave acknowledgement and I got it. I went to TNPSC Office on the next day 18.2.90 at 8.00 AM. They gave me the question papers at 8.20 AM. One Under Secretary came with me in the auto who got the bundles from me on 17.2.90 evening. Then Mahalingam came there and all invigilators came. I have sent the answer sheets to the respective halls. Then at 9.50 AM I have opened the bundle in the presence of two invigilators and the Under Secretary and in the label of the bundle it is written as 18.2.90 Forenoon 10.00 AM to 12 Noon and got the signature of two invigilators and I have also affixed my signature. I do not remember their names. Then I have opened the bundle and after counting it was 410 papers. I gave the required question papers at 10.00 Hours. On that day there was no problem in the examination. At 12.00 Noon 1 have collected the answer sheets made bundle by affixing seal and took it TNPSC office by Auto and handed over it there and got the acknowledgement. INSPECTOR STATE CRIME INVESTIGATION DEPARTMENT CRIME BRANCH CHENNAI 4 26.2.90 underlining is ours reproduced from the SLP paper book 5. After about one month the Commission issued Memorandum dated 27.3.1990 for holding departmental inquiry against the appellant under Rule 17 b of the Tamil Nadu Civil Services Classification Control and Appeal Rules for short the Rules on the following charges 1. That Thiru R. Mahalingam Assistant had gone to the examination hall unauthorisedly on the pretext of assisting the Chief Invigilator while he was on Unearned Leave on Private Affairs. 2. That he had gone to the examination hall and take up the official work and acted as Invigilator while he was on leave. 3. That he had prevented the Chief Invigilator from sending a report to the Controller of Examinations about the distribution of afternoon question paper in the forenoon and the resultant leakage of question paper.\n In his reply the appellant pointed out that his name did not figure in the first information report got registered with the police and the remand report and that the real culprits had already been apprehended. The appellant also claimed that he was not connected with the leakage of question papers.\n The copies of two statements made by the Chief Invigilator were not supplied to the appellant and he was asked to make a statement by the Enquiry Officer. In his statement dated 12.10.1990 the appellant denied all the allegations levelled against him. For the sake of reference the appellants statement is reproduced below Charges framed in this office Memorandum No 2316 D5 1990 dated 27.3.90 have been read out to Thiru R. Mahalingam. Question Do you accept the charges Answer No. Three charges were framed against me. I sought time to offer my explanation after filing the charge sheet or receipt of a final police report. My letter seeking permission to offer my explanation refused and directed me to appear for the oral enquiry. Even though I have not preferred for the oral enquiry as directed by the imperative authority of the office I simply obeyed the orders and appeared for the oral enquiry. Question Have you applied leave during February 1990 and if so what kind of leave Ans. I have applied U.E.L on private affairs during February 1990. Que For how many days you have applied UEL on private affairs during February 1990 Ans I do not know. Que Have you got prior permission for the said leave Ans I have applied leave sufficiently in advance. But the leave sanction order was received during my leave period to my home. Que It is reported that you have gone to the examination hall unauthorisedly on the pretext of assisting the Chief Invigilator while you were on unearned leave on private affairs. What do you say about this charge Ans Regarding the first and second charges I wish to inform you that though the charges have been framed on two counts they have been famed so on the sole ground that my presence in the examination hall unauthorized one. Before adverting to the allegations made in charges 1 and 2 I wish to inform you Sir Please refer our office letter No 377 Pl 90 dated 16.2.90 which is a letter appointing me as an Invigilator which was signed and issued by the competent authority. A Xerox copy of the letter is produced. I also found my name in the list sent to the Chief Invigilator. The chief Invigilator verified the list with the appointment letter issued by the office and permitted me to act as Invigilator. Que Have you received the appointment order by post or in person Ans I have received in person. Que For what reason you have come to office though you were on leave at that time Ans I used to visit University Library during my leave period I have also happened to visit to office to see whether any letter was received to my name. Que At the examination hall what kind of work was allotted to you by the chief Invigilator And I have been instructed to do the distribution of main and additional answer books and collection of answer books from each hall except question papers. Que Have you been allotted to the work of distribution of question paper to each hall Ans No. Que What do you say about charge 3 framed against you Ans I have nothing to say about the charge No3 since the office in its Memorandum dated 11.10.90 has stated to the effect that enquiry by the Police in connection with the leakage of question papers Assistant Surgeon recruitment is going on separately whereas departmental action has been taken against him mainly for his having unauthorisedly acted as Invigilator while he was on leave. Que Do you want personal hearing besides oral enquiry Ans No Que Whether you want to say anything more about the charges Ans Yes. Three charges were framed. First two charges are one and the same for which I have given authoritative evidence. For the third charge i.e resultant leakage of question paper was referred to police for investigation. Moreover the third charge has not been pressed in the office Memorandum dated 11.10.90. When I moved the court for anticipatory bail it was stated before the Court in the counter affidavit that the Petitioner was interrogated in connection with mixing of question paper and not to the leakage of question paper. Secondly when I was seeking permission to officer my explanation in my letter dated 22.8.90 it was misconstrued by the office that I have submitted my explanation vide its letter dated 11.9.90. In my letter dated 18.9.90 to furnish a copy of my explanation the office in its letter dated 11.10.90 it has been stated that I have failed to submit the explanation. In my letter dated 18.9.90 I have also requested to state the provision of rules relating to departmental action has nothing to do with the filing of charge sheet or receipt of police report in the matter relating to leakage of question papers. This has not been informed to me. Again in my letter dated 22.8.90 I requested the office to state whether the proposed enquiry is in super session of the earlier orders of the office calling for an explanation or it is part and parcel of these orders calling for an explanation or it is a separate one nothing to do with the charges. My request has not been answered. In the charge memorandum framed against Thiru Savariar it was stated how the appointment order was issue to him even though he was on leave. Hence the office is fully aware that my presence in the examination hall was authorized one. A notice of the proposed enquiry was given only a day in advance. Ample opportunity was not given. Que Are you satisfied with the opportunity given to you during enquiry to defend your case Ans So far as the conduct of the oral enquiry is concerned I am fully satisfied. Sd R. Mahalingam reproduced from the SLP paper book \n Thereafter the Enquiry Officer submitted report holding the appellant guilty of all the charges. A copy of the enquiry report was made available to the appellant and he was asked to submit further written statement of defence. In reply the appellant submitted representation dated 21.11.1990 and prayed that he may be allowed to submit further written statement of defence either after filing of chargesheet by the police or receipt of the detailed police report. He submitted another representation on 4.2.1991 to the Deputy Secretary Admn of the Commission. The same reads as under To The Deputy Secretary Admn Madras 600002 TNPSC Madras 600002 Dated 4th Feb 1991. Sir Sub Establishment TNPSC R. Mahalingam Assistant Disciplinary Action. Ref This office Memorandum No 2316 D5 90 dated 11.1.1991. Kindly refer to the report of the enquiry officer which appears to have been made out entirely relying upon the report Dated 22nd February 1990 of the Chief Invigilator miserably superseding the factual evidences deposed by me at the oral enquiry. While the Chief Invigilator was apparently not at all interrogated in regard to the correctness of his statement the credibility of his report is doubtful. As such the report of the Enquiry officer which is entirely based upon it is seemingly questionable and appears arbitrary too. However to enable me to defend the charges a copy of the report of the Chief Invigilator may kindly be furnished to me. Further to back up my statement that the Chief Invigilator before permitting me to take up the Invigilation Duty did verify with his papers and records and ticked against my name found therein among other personnel of the Tamil Nadu Public Service Commission appointed as Invigilators by the Office viz. Thiruvalargal M. Segaran and Udhayakumar a copy preferably Xerox copy of the list of Invigilators sent to the Chief Invigilator may kindly be obtained from the Chief Invigilator and furnished to me. On receipt of the above copies of the records I shall submit my statement to defend the charges as called for in the reference cited. Thanking you Yours faithfully Sd R. Mahalingam. reproduced from the SLP paper book \n In response to the appellants request the Commission made available the statement of the Chief Invigilator recorded by the Controller of Examination. After receiving the same the appellant submitted application dated 18.4.1991 to the Deputy Secretary Administration for grant of permission to cross examine the Chief Invigilator the officer of the Commission in whose presence request is sought to have been made to the Chief Invigilator not to report the matter to the Commission and the person who appointed him along with others as Invigilators. He also submitted representation dated 20.5.1991 to the Chairman of the Commission and sought his intervention for ensuring compliance of the rules of natural justice. However without waiting for the decision of his representations the Secretary of the Commission passed order dated 10.10.1991 and imposed punishment of removal from service.\n The departmental appeal filed by the appellant was dismissed by the Chairman of the Commission vide order dated 14.8.1992. He reiterated the findings recorded by the Enquiry Officer and the Secretary that the appellant had unauthorisedly done the work of Invigilator and prevented the Chief Invigilator from reporting the matter to the Commission.\n The appellant challenged the order of punishment and the appellate order in Writ Petition No19251 1992 but could not convince the learned Single Judge to quash orders dated 10.10.1991 and 14.8.1992. The writ appeal filed by him was dismissed by the Division Bench of the High Court which expressed concurrence with the learned Single Judge that the enquiry was held against the appellant in consonance with the rules of natural justice and the findings recorded by the Enquiry Officer were based on proper analysis of the records produced during the enquiry.\n We have heard learned counsel for the parties. The scope of judicial review in matters involving challenge to the disciplinary action taken by the employer is very limited. The Courts are primarily concerned with the question whether the enquiry has been held by the competent authority in accordance with the prescribed procedure and whether the rules of natural justice have been followed. The Court can also consider whether there was some tangible evidence for proving the charge against the delinquent and such evidence reasonably supports the conclusions recorded by the competent authority. If the Court comes to the conclusion that the enquiry was held in consonance with the prescribed procedure and the rules of natural justice and the conclusion recorded by the disciplinary authority is supported by some tangible evidence then there is no scope for interference with the discretion exercised by the disciplinary authority to impose the particular punishment except when the same is found to be wholly disproportionate to the misconduct found proved or shocks the conscience of the Court.\n Having noticed the parameters laid down by this Court for exercise of the power of judicial review in such matters we shall now consider whether the appellant has succeeded in showing that the High Court committed an error by declining his prayer for quashing the order of punishment.\n Rule 8 of the Rules specifies various penalties including dismissal from service which can be imposed on a member of the Civil Service of the State or a person holding Civil Post under the State. Rule 17 b which contains the procedure for holding enquiry reads as under 17 a xxx xxx xxx b i Without prejudice to the provisions of the Public Servants Inquiries Act 1850 Central Act XXXVII of 1850 in every case where it is proposed to impose on a member of a service or on a person holding a Civil Post under the State any of the penalties specified in items iv vi vii and viii in rule 8 the grounds on which it is proposed to take action shall be reduced to the form of a definite charge or charges which shall be communicated to the person charged together with a statement of the allegation on which each charge is based and of any other circumstances which it is proposed to take into consideration in passing orders on the case. He shall be required within a reasonable time to put in a written statement of his defence and to state whether he desires an oral inquiry or to be heard in person or both. An oral inquiry shall be held if such an inquiry is desired by the person charged or is directed by the authority concerned. Even if a person charged has waived an oral inquiry such inquiry shall be held by the authority concerned in respect of charges which are not admitted by the person charged and which can be proved only through the evidence of witnesses. At that inquiry oral evidence shall be heard as to such of the allegations as are not admitted and the person charged shall be entitled to cross examine the witnesses to give evidence in person and to have such witnesses called as he may wish provided that the officer conducting the inquiry may for special and sufficient reason to be recorded in writing refuse to call a witness. Whether or not the person charged desired or had an oral inquiry he shall be heard in person at any stage if he so desires before passing of final orders. A report of the inquiry or personal hearing as the case may be shall be prepared by the authority holding the inquiry or personal hearing whether or not such authority is competent to impose the penalty. Such report shall contain a sufficient record of the evidence if any and a statement of the findings and the grounds thereof. Whenever any inquiring authority after having heard and recorded the whole or any part of the evidence in an inquiry ceases to exercise jurisdiction therein and is succeeded by another inquiring authority which has and which exercises such jurisdiction the inquiring authority so succeeding may act on the evidence so recorded by its predecessor or partly recorded by its predecessor and partly recorded by itself Provided that if the succeeding inquiring authority is of the opinion that further examination of any of the witnesses whose evidence has already been recorded is necessary in the interest of justice it may recall examine cross examine and re examine any such witnesses as hereinbefore provided  ii After the inquiry or personal hearing referred to in clause i has been completed the authority competent to impose the penalty specified in that clause is of the opinion on the basis of the evidence adduced during the inquiry that any of the penalties specified therein should be imposed on the Government Servant it shall make an order imposing such penalty and it shall not be necessary to give the person charged any opportunity of making representation on the penalty proposed to be imposed xxx xxx xxx\n An analysis of the above reproduced rule makes it clear that holding of an oral enquiry is sine qua non for recording a finding by the enquiring authority and the report of enquiry must contain sufficient record of evidence and statement of the findings together with grounds thereof.\n The main allegations leveled against the appellant were that he had unauthorisedly worked as Invigilator and prevented the Chief Invigilator Syed Abdul Kareem from sending report about the incident involving mixing of the question papers of two sessions. On behalf of the Commission oral evidence is said to have been adduced to substantiate the allegations leveled against the appellant but neither the report of the Enquiry Officer nor the orders passed by the Secretary and the Chairman of the Commission make a mention of that evidence. As a matter of fact neither of them relied upon the same for recording a finding of guilty against the appellant. Rather the Enquiry Officer and the two authorities relied upon the portions of the statement made by the Chief Invigilator before the Controller of Examinations and the Inspector completely ignoring that it was he who had asked for substitute Invigilators because those already nominated had conveyed their unwillingness to work and that in the statements made before the Controller of Examinations and the Inspector Crime Investigation Department the Chief Invigilator categorically stated that the appellant had produced the order by which he had been nominated to work as Invigilator and he had no role in bringing the question papers from the office of the Commission or distribution thereof.\n Unfortunately the learned Single Judge and the Division Bench of the High Court failed to take cognizance of the admission made by the Chief Invigilator that on a request made by him five substitute Invigilators including R.Mahalingam had been appointed by P Section of the Commission and he had produced the order of his appointment and that the question papers etc had been brought by him i.e the Chief Invigilator from the office of the Commission and opened seals in the presence of two other invigilators . The High Court also did not pay due weightage to the fact that the appellant had not handled the question papers at any stage and he had no role in distribution of wrong question papers to six candidates. These errors and omissions on the part of the learned Single Judge and the Division Bench in our considered view are fatal to their concurrence with the finding recorded by the Enquiry Officer the Secretary and the Chairman of the Commission that the appellant had unauthorisedly worked as Invigilator on 17.2.1990 and 18.2.1990.\n At the cost of repetition it deserves to be mentioned that the appellant had no role to play in the matter of mixing of the question papers of the afternoon examination with the morning examination. Before the Enquiry Officer no evidence was produced by the Commission to prove that the appellant had the custody of the question papers. Rather the statements made by the Chief Invigilator before the Inspector Crime Investigation Department and the Controller of Examinations clearly show that he had collected the question papers from the office of the Commission that the seals were opened at the examination center in the presence of two persons and the appellant had not played any role in the exercise. Therefore the appellant cannot be blamed for distribution of wrong question papers to the candidates or the so called leakage of the question papers.\nDECISION ?", "expert_1": {"rank2": ["his appeal is directed against judgment dated 3.2.2010 of the Division Bench of the Madras High Court whereby the writ appeal filed by the appellant was dismissed and the order passed by the learned Single Judge negating his challenge to the order of punishment was upheld.\n", "he main allegations leveled against the appellant were that he had unauthorisedly worked as Invigilator and prevented the Chief Invigilator Syed Abdul Kareem from sending report about the incident involving mixing of the question papers of two sessions. On behalf of the Commission oral evidence is said to have been adduced to substantiate the allegations leveled against the appellant but neither the report of the Enquiry Officer nor the orders passed by the Secretary and the Chairman of the Commission make a mention of that evidence. As a matter of fact neither of them relied upon the same for recording a finding of guilty against the appellant. ", "ather the Enquiry Officer and the two authorities relied upon the portions of the statement made by the Chief Invigilator before the Controller of Examinations and the Inspector completely ignoring that it was he who had asked for substitute Invigilators because those already nominated had conveyed their unwillingness to work and that in the statements made before the Controller of Examinations and the Inspector Crime Investigation Department the Chief Invigilator categorically stated that the appellant had produced the order by which he had been nominated to work as Invigilator and he had no role in bringing the question papers from the office of the Commission or distribution thereof.\n Unfortunately the learned Single Judge and the Division Bench of the High Court failed to take cognizance of the admission made by the Chief Invigilator that on a request made by him five substitute Invigilators including R.Mahalingam had been appointed by P Section of the Commission and he had produced the order of his appointment and that the question papers etc had been brought by him i.e the Chief Invigilator from the office of the Commission and opened seals in the presence of two other invigilators . "], "rank3": ["he writ appeal filed by him was dismissed by the Division Bench of the High Court which expressed concurrence with the learned Single Judge that the enquiry was held against the appellant in consonance with the rules of natural justice and the findings recorded by the Enquiry Officer were based on proper analysis of the records produced during the enquiry.\n", "he Courts are primarily concerned with the question whether the enquiry has been held by the competent authority in accordance with the prescribed procedure and whether the rules of natural justice have been followed. The Court can also consider whether there was some tangible evidence for proving the charge against the delinquent and such evidence reasonably supports the conclusions recorded by the competent authority. If the Court comes to the conclusion that the enquiry was held in consonance with the prescribed procedure and the rules of natural justice and the conclusion recorded by the disciplinary authority is supported by some tangible evidence then there is no scope for interference with the discretion exercised by the disciplinary authority to impose the particular punishment except when the same is found to be wholly disproportionate to the misconduct found proved or shocks the conscience of the Court.\n", "n analysis of the above reproduced rule makes it clear that holding of an oral enquiry is sine qua non for recording a finding by the enquiring authority and the report of enquiry must contain sufficient record of evidence and statement of the findings together with grounds thereof.\n", "efore the Enquiry Officer no evidence was produced by the Commission to prove that the appellant had the custody of the question papers. Rather the statements made by the Chief Invigilator before the Inspector Crime Investigation Department and the Controller of Examinations clearly show that he had collected the question papers from the office of the Commission that the seals were opened at the examination center in the presence of two persons and the appellant had not played any role in the exercise. "], "rank4": ["indly refer to the report of the enquiry officer which appears to have been made out entirely relying upon the report Dated 22nd February 1990 of the Chief Invigilator miserably superseding the factual evidences deposed by me at the oral enquiry. While the Chief Invigilator was apparently not at all interrogated in regard to the correctness of his statement the credibility of his report is doubtful. As such the report of the Enquiry officer which is entirely based upon it is seemingly questionable and appears arbitrary too. ", "n response to the appellants request the Commission made available the statement of the Chief Invigilator recorded by the Controller of Examination. After receiving the same the appellant submitted application dated 18.4.1991 to the Deputy Secretary Administration for grant of permission to cross examine the Chief Invigilator the officer of the Commission in whose presence request is sought to have been made to the Chief Invigilator not to report the matter to the Commission and the person who appointed him along with others as Invigilators. ", "e also submitted representation dated 20.5.1991 to the Chairman of the Commission and sought his intervention for ensuring compliance of the rules of natural justice. However without waiting for the decision of his representations the Secretary of the Commission passed order dated 10.10.1991 and imposed punishment of removal from service.\n The departmental appeal filed by the appellant was dismissed by the Chairman of the Commission vide order dated 14.8.1992. He reiterated the findings recorded by the Enquiry Officer and the Secretary that the appellant had unauthorisedly done the work of Invigilator and prevented the Chief Invigilator from reporting the matter to the Commission.\n The appellant challenged the order of punishment and the appellate order in Writ Petition No19251 1992 but could not convince the learned Single Judge to quash orders dated 10.10.1991 and 14.8.1992. "], "label": "REJECTED"}, "expert_2": {"rank2": ["e told me that this order is passed by District Collector Chennai as such it is not possible for us to do anything and asked me to get the amount by sending a man with me. I got the cheque and came to him and asked a list of persons who are going to assist me. At this time TNPSC gave 19 persons to assist me. But certain persons informed me over phone at G.H that it is not possible for them to assist me. Again I went to the TNPSC Office on 16.2.90 and informed the position to the concerned Superintendent at about 2 noon. He told me that they had posted 5 persons to assist me from their section. ", "hen I have decided to inform it to TNPSC office and it was written by Mahalingam as per my dictation. Mahalingam told me that if the said letter is sent the staff of TNPSC office will get some trouble that the name of Controller will be spoiled that the said Controller belongs to his community and that he is going to get the post of District Collector shortly. Hence I have not informed it to TNPSC over phone. ", "he scope of judicial review in matters involving challenge to the disciplinary action taken by the employer is very limited. The Courts are primarily concerned with the question whether the enquiry has been held by the competent authority in accordance with the prescribed procedure and whether the rules of natural justice have been followed. ", "f the Court comes to the conclusion that the enquiry was held in consonance with the prescribed procedure and the rules of natural justice and the conclusion recorded by the disciplinary authority is supported by some tangible evidence then there is no scope for interference with the discretion exercised by the disciplinary authority to impose the particular punishment except when the same is found to be wholly disproportionate to the misconduct found proved or shocks the conscience of the Court.\n"], "rank3": ["uring the month of February 1990 an order from the office of TNPSC came to me on 14.2.90 to conduct the TNPSC Examination for Assistant Medical Officer post on 17.2.90 full day and 18.2.90 half day fore noon only . ", " have nothing to say about the charge No3 since the office in its Memorandum dated 11.10.90 has stated to the effect that enquiry by the Police in connection with the leakage of question papers Assistant Surgeon recruitment is going on separately whereas departmental action has been taken against him mainly for his having unauthorisedly acted as Invigilator while he was on leave. ", "or the third charge i.e resultant leakage of question paper was referred to police for investigation. Moreover the third charge has not been pressed in the office Memorandum dated 11.10.90. ", "e shall be required within a reasonable time to put in a written statement of his defence and to state whether he desires an oral inquiry or to be heard in person or both. An oral inquiry shall be held if such an inquiry is desired by the person charged or is directed by the authority concerned. Even if a person charged has waived an oral inquiry such inquiry shall be held by the authority concerned in respect of charges which are not admitted by the person charged and which can be proved only through the evidence of witnesses."], "rank4": [" notice of the proposed enquiry was given only a day in advance. Ample opportunity was not given. "], "rank5": ["n his reply the appellant pointed out that his name did not figure in the first information report got registered with the police and the remand report and that the real culprits had already been apprehended. The appellant also claimed that he was not connected with the leakage of question papers.\n"], "label": "REJECTED"}, "expert_3": {"rank2": ["n the examination held on 17.2.1990 six candidates sitting in Hall No76 were given the question papers of the afternoon examination in the morning examination. ", "ut in one of the Halls i.e Hall No 76 where 41 candidates were allotted it was found that after noon question papers were mingled. On hearing the fact I immediately received back 6 question papers from 6 candidates and issued them other question papers intended for fore noon session. ", "hen I wanted to inform the facts to the TNPSC office immediately the invigilator Thiru Mahalingam Assistant TNPSC office who was assisting me requested me not to inform since the papers were immediately received back from the candidates. Further he said that the staff attached to TNPSC office who were responsible for this mingling the question papers would be punished and the name of the TNPSC will be spoiled.", "ince he is a serviced employee of the TNPSC I had to take his advice considering that he is pleading knowing all pros and cons.", "hiru Gurumoorthy a Member of TNPSC visited the examination centre and met me and enquired about the conduct of the examination. Though I was prepared to inform the Member about the receipt of Mingling of question papers again Mr. ", "ahalingam stopped me and requested not to tell. ", "gain I did not inform him the fact of the mingle of the question papers in the morning session at the insistence of the same person Mr. Mahalingm.", "hough I should have informed the fact to the both the officials but did not do so under the impression that being a senior staff of the TNPSC office Mr. Mahalingam might have had the knowledge of the consequences and he would have known the gravity of the incident I had to take his words. Had he not been posted I would not have been mislead.", "he said Ibrahim told me that six students told him that the question papers issued to them are for the afternoon examination as it seems that six question papers for the afternoon examination have been found mixed with the question papers for the forenoon examination. ", "mmediately I got back the afternoon question papers from the six students and issued the question papers for the forenoon. ", "hen I have decided to inform it to TNPSC office and it was written by Mahalingam as per my dictation. Mahalingam told me that if the said letter is sent the staff of TNPSC office will get some trouble that the name of Controller will be spoiled that the said Controller belongs to his community and that he is going to get the post of District Collector shortly. ", "ence I have not informed it to TNPSC over phone. ", "ahalingam also turned the letter written by him. ", "e also told me that he had got back the after noon question papers immediately as such there is no possibility for the students to read over it. ", "o problem will arise and pleaded me that do not inform it to any one.", " asked Mahalingam whether we will inform to him. But Mahalingam told me that it is not necessary to say this now as we have not given any report in the morning itself as such if we say it now it will became a mistake. Hence I have not informed it to him.", "fter about one month the Commission issued Memorandum dated 27.3.1990 for holding departmental inquiry against the appellant under Rule 17 b of the Tamil Nadu Civil Services Classification Control and Appeal Rules for short the Rules on the following charges 1. That Thiru R. ", "ahalingam Assistant had gone to the examination hall unauthorisedly on the pretext of assisting the Chief Invigilator while he was on Unearned Leave on Private Affairs.", "hat he had gone to the examination hall and take up the official work and acted as Invigilator while he was on leave. 3. That he had prevented the Chief Invigilator from sending a report to the Controller of Examinations about the distribution of afternoon question paper in the forenoon and the resultant leakage of question paper.\n", "efore adverting to the allegations made in charges 1 and 2 I wish to inform you Sir Please refer our office letter No 377 Pl 90 dated 16.2.90 which is a letter appointing me as an Invigilator which was signed and issued by the competent authority.", " also found my name in the list sent to the Chief Invigilator.", "he chief Invigilator verified the list with the appointment letter issued by the office and permitted me to act as Invigilator. ", "or the third charge i.e resultant leakage of question paper was referred to police for investigation. ", "t was stated before the Court in the counter affidavit that the Petitioner was interrogated in connection with mixing of question paper and not to the leakage of question paper. ", "ence the office is fully aware that my presence in the examination hall was authorized one.", "hile the Chief Invigilator was apparently not at all interrogated in regard to the correctness of his statement the credibility of his report is doubtful. ", "owever without waiting for the decision of his representations the Secretary of the Commission passed order dated 10.10.1991 and imposed punishment of removal from service.", "he scope of judicial review in matters involving challenge to the disciplinary action taken by the employer is very limited. The Courts are primarily concerned with the question whether the enquiry has been held by the competent authority in accordance with the prescribed procedure and whether the rules of natural justice have been followed. The Court can also consider whether there was some tangible evidence for proving the charge against the delinquent and such evidence reasonably supports the conclusions recorded by the competent authority."], "rank3": ["n February 1990 the appellant was sanctioned unearned leave from 12.2.1990 to 25.2.1990 for private work. During that period P Section of the Commission is said to have directed him to work as Invigilator at Bharathiyar Women Arts College Chennai which was one of the centers for the written examination on 17.2.1990 and 18.2.1990 held for recruitment of Assistant Surgeons.\n", "he Commission took serious view of the matter and got registered a First Information Report. ", "hereafter the Enquiry Officer submitted report holding the appellant guilty of all the charges. ", "he departmental appeal filed by the appellant was dismissed by the Chairman of the Commission vide order dated 14.8.1992. He reiterated the findings recorded by the Enquiry Officer and the Secretary that the appellant had unauthorisedly done the work of Invigilator and prevented the Chief Invigilator from reporting the matter to the Commission.\n", "he appellant challenged the order of punishment and the appellate order in Writ Petition No19251 1992 but could not convince the learned Single Judge to quash orders dated 10.10.1991 and 14.8.1992.", "he writ appeal filed by him was dismissed by the Division Bench of the High Court which expressed concurrence with the learned Single Judge that the enquiry was held against the appellant in consonance with the rules of natural justice and the findings recorded by the Enquiry Officer were based on proper analysis of the records produced during the enquiry.\n"], "label": "REJECTED"}, "expert_4": {"rank2": ["his appeal is directed against judgment dated 3.2.2010 of the Division Bench of the Madras High Court whereby the writ appeal filed by the appellant was dismissed and the order passed by the learned Single Judge negating his challenge to the order of punishment was upheld.\n", "n the examination held on 17.2.1990 six candidates sitting in Hall No76 were given the question papers of the afternoon examination in the morning examination.", "hese six papers were kept in my personal custody till the end of the examination. ", "hen I wanted to inform the facts to the TNPSC office immediately the invigilator Thiru Mahalingam Assistant TNPSC office who was assisting me requested me not to inform since the papers were immediately received back from the candidates.", "e said that the staff attached to TNPSC office who were responsible for this mingling the question papers would be punished and the name of the TNPSC will be spoiled. ", "ince he is a serviced employee of the TNPSC I had to take his advice considering that he is pleading knowing all pros and cons. ", "hile packing a lady sweeper brought certain question papers and handed over to the persons who were packing. ", "mmediately these papers has also been packed along with the balance question papers. ", "uring end morning session the six candidates who were served the A.N session question papers were asked to wait and the answer papers were received back and they were requested to be seated in a separate room opposite to the Hall till the commencement of after noon session. ", "he AN session question papers received back from the candidates six in no were kept in my pocket first and then kept in my bag after 2 p.m. ", "hough I was prepared to inform the Member about the receipt of Mingling of question papers again Mr. Mahalingam stopped me and requested not to tell. ", "hough I should have informed the fact to the both the officials but did not do so under the impression that being a senior staff of the TNPSC office Mr. Mahalingam might have had the knowledge of the consequences and he would have known the gravity of the incident I had to take his words. Had he not been posted I would not have been mislead. ", "he list of invigilators posted to my centre does not contain the names of the three staff of TNPSC office who were posted as Invigilators. They are Mr. Mahalingam Mr. Sekarao and Mr. Udhaya Kumar. ", "ut they are having their individual orders that too they did not handed over to me. ", "he absentees statement were also prepared by Mr. Mahalingam only. ", " went to TNPSC office on 15.2.90 and met the Superintendent of the concerned Section I do not remember his name in person. ", " told him that I am suffering from heart ailment as such it is not possible for me to conduct the examination and hence made a request to appoint some other person. ", "NPSC gave 19 persons to assist me. ", "ut certain persons informed me over phone at G.H that it is not possible for them to assist me. ", "gain I went to the TNPSC Office on 16.2.90 and informed the position to the concerned Superintendent ", "e told me that they had posted 5 persons to assist me from their section. Kindly conduct the examination with them and asked his Assistant by name Saveriyar to give me the names of 5 persons in writing. He gave me a list in his hand writing as 1 Udhayakumar 2 Sekaran 3 Mahalingam 4 Aasir and the name of another person not known but know the person. ", "n 16.2.90 Mahalingam came to my office at G.H at 12.00 hours and told me that he is on leave and studying for Group I examination but he will come and assist me. ", "hen at 9.50 hours I took the question bundle for the forenoon and affixed my signature in the face slip of the said bundle in the presence of two invigilators 1 G.Balasubramaniam Assistant D.M.E Chennai 5 and 2 Aazir School Assistant Thayar Sahib Street Anna Salai Chennai 2 and also got their signature. ", "hen I have ripped the seal of the bundle and got the signature of the said two persons in the paper inside the bundle and I have also put my signature. ", "he said Ibrahim told me that six students told him that the question papers issued to them are for the afternoon examination as it seems that six question papers for the afternoon examination have been found mixed with the question papers for the forenoon examination.", "mmediately I went to that hall No 76 and made enquiry and came to know it as true. ", "mmediately I got back the afternoon question papers from the six students and issued the question papers for the forenoon. I kept the said six question papers which are intended for the afternoon at my custody. ", "hen I have decided to inform it to TNPSC office and it was written by Mahalingam as per my dictation. ", "ence I have not informed it to TNPSC over phone. ", "ahalingam also turned the letter written by him. ", "e also told me that he had got back the after noon question papers immediately as such there is no possibility for the students to read over it. ", "o problem will arise and pleaded me that do not inform it to any one. ", "t was written in the face slip of the forenoon bundle as 410 question papers. On counting it is found 412 question papers. ", "e asked me whether any problem. I asked Mahalingam whether we will inform to him. But Mahalingam told me that it is not necessary to say this now as we have not given any report in the morning itself as such if we say it now it will became a mistake. Hence I have not informed it to him. ", "e got a statement from me. I gave a report as nothing special. ", "fter about one month the Commission issued Memorandum dated 27.3.1990 for holding departmental inquiry against the appellant under Rule 17 b of the Tamil Nadu Civil Services Classification Control and Appeal Rules for short the Rules on the following charges 1. ", "n his reply the appellant pointed out that his name did not figure in the first information report got registered with the police and the remand report and that the real culprits had already been apprehended. ", " have applied U.E.L on private affairs during February 1990. ", "ue For how many days you have applied UEL on private affairs during February 1990 Ans I do not know. ", " have applied leave sufficiently in advance. But the leave sanction order was received during my leave period to my home. ", "lease refer our office letter No 377 Pl 90 dated 16.2.90 which is a letter appointing me as an Invigilator which was signed and issued by the competent authority. ", " also found my name in the list sent to the Chief Invigilator. ", "he chief Invigilator verified the list with the appointment letter issued by the office and permitted me to act as Invigilator. ", " have received in person. Que For what reason you have come to office though you were on leave at that time Ans ", " used to visit University Library during my leave period I have also happened to visit to office to see whether any letter was received to my name. ", " have been instructed to do the distribution of main and additional answer books and collection of answer books from each hall except question papers. ", "or the third charge i.e resultant leakage of question paper was referred to police for investigation. ", "hen I moved the court for anticipatory bail it was stated before the Court in the counter affidavit that the Petitioner was interrogated in connection with mixing of question paper and not to the leakage of question paper. ", "econdly when I was seeking permission to officer my explanation in my letter dated 22.8.90 it was misconstrued by the office that I have submitted my explanation vide its letter dated 11.9.90. ", "n my letter dated 18.9.90 I have also requested to state the provision of rules relating to departmental action has nothing to do with the filing of charge sheet or receipt of police report in the matter relating to leakage of question papers. This has not been informed to me. ", "n the charge memorandum framed against Thiru Savariar it was stated how the appointment order was issue to him even though he was on leave. Hence the office is fully aware that my presence in the examination hall was authorized one. ", " notice of the proposed enquiry was given only a day in advance. Ample opportunity was not given. ", "he Chief Invigilator before permitting me to take up the Invigilation Duty did verify with his papers and records and ticked against my name found therein among other personnel of the Tamil Nadu Public Service Commission appointed as Invigilators by the Office ", "owever without waiting for the decision of his representations the Secretary of the Commission passed order dated 10.10.1991 and imposed punishment of removal from service.\n", "he departmental appeal filed by the appellant was dismissed by the Chairman of the Commission vide order dated 14.8.1992. ", "e reiterated the findings recorded by the Enquiry Officer and the Secretary that the appellant had unauthorisedly done the work of Invigilator and prevented the Chief Invigilator from reporting the matter to the Commission.\n", "he Courts are primarily concerned with the question whether the enquiry has been held by the competent authority in accordance with the prescribed procedure and whether the rules of natural justice have been followed. ", "he Court can also consider whether there was some tangible evidence for proving the charge against the delinquent and such evidence reasonably supports the conclusions recorded by the competent authority. ", "f the Court comes to the conclusion that the enquiry was held in consonance with the prescribed procedure and the rules of natural justice and the conclusion recorded by the disciplinary authority is supported by some tangible evidence then there is no scope for interference with the discretion exercised by the disciplinary authority to impose the particular punishment except when the same is found to be wholly disproportionate to the misconduct found proved or shocks the conscience of the Court.\n", "e shall be required within a reasonable time to put in a written statement of his defence and to state whether he desires an oral inquiry or to be heard in person or both. ", "n oral inquiry shall be held if such an inquiry is desired by the person charged or is directed by the authority concerned. ", "ven if a person charged has waived an oral inquiry such inquiry shall be held by the authority concerned in respect of charges which are not admitted by the person charged and which can be proved only through the evidence of witnesses. ", "n behalf of the Commission oral evidence is said to have been adduced to substantiate the allegations leveled against the appellant but neither the report of the Enquiry Officer nor the orders passed by the Secretary and the Chairman of the Commission make a mention of that evidence. ", "s a matter of fact neither of them relied upon the same for recording a finding of guilty against the appellant.", "ather the Enquiry Officer and the two authorities relied upon the portions of the statement made by the Chief Invigilator before the Controller of Examinations and the Inspector completely ignoring that it was he who had asked for substitute Invigilators because those already nominated had conveyed their unwillingness to work and that in the statements made before the Controller of Examinations and the Inspector Crime Investigation Department the Chief Invigilator categorically stated that the appellant had produced the order by which he had been nominated to work as Invigilator and he had no role in bringing the question papers from the office of the Commission or distribution thereof.\n", "hese errors and omissions on the part of the learned Single Judge and the Division Bench in our considered view are fatal to their concurrence with the finding recorded by the Enquiry Officer the Secretary and the Chairman of the Commission that the appellant had unauthorisedly worked as Invigilator on 17.2.1990 and 18.2.1990.\n", "t the cost of repetition it deserves to be mentioned that the appellant had no role to play in the matter of mixing of the question papers of the afternoon examination with the morning examination. ", "ather the statements made by the Chief Invigilator before the Inspector Crime Investigation Department and the Controller of Examinations clearly show that he had collected the question papers from the office of the Commission that the seals were opened at the examination center in the presence of two persons and the appellant had not played any role in the exercise. "], "rank3": ["n February 1990 the appellant was sanctioned unearned leave from 12.2.1990 to 25.2.1990 for private work. ", "uring that period P Section of the Commission is said to have directed him to work as Invigilator at Bharathiyar Women Arts College Chennai which was one of the centers for the written examination on 17.2.1990 and 18.2.1990 held for recruitment of Assistant Surgeons.\n", "s soon as the Chief Invigilator Shri Syed Abdul Kareem came to know about this he took back the question papers of the afternoon examination and issued the question papers meant for morning examination. ", "he after noon question papers bundle was opened at 1.50 p.m on 17.2.1990 by myself and two other invigilators Mr. R. Balan Assistant D.M.Es office and one Mr. N. R. Sundararaman Assistant KCH Madras. These papers were distributed to the candidates at 2 p.m there was no complaint about mingling or shortage of question papers. ", "he candidates were seated in a small rook till the after session when Tiffin or coffee offered to them they refused to get. ", "hiru Gurumoorthy a Member of TNPSC visited the examination centre and met me and enquired about the conduct of the examination. ", "fter about some time the Member left the centre. At about 3.00 P.M one of the Under Secretaries of the TNPSC office visited the Examination Centre and took a written statement from me. ", "ut on 15.2.90 he visited my office at about 11.30 AM and informed me that he had been posted as Invigilator to Bharathi College for Women where I was posted as Chief Invigilator. ", "e assured me that he would assist me on 16.2.90 after noon also in arranging the examination halls. ", "o he did what he promised and after posting all the other invigilators to various halls I retained Mr. Mahalingam with me to assist so he was with me all along the day till I left the examination centre at about 6.45 pm on 17.2.90. ", "ontroller of Examns 22.2.90 underlining is ours reproduced from the SLP paper book \n Inspector State Crime Investigation Department to whom the investigation of the criminal case was entrusted also recorded the statement of the Chief Invigilator on 26.2.1990. ", "uring the month of February 1990 an order from the office of TNPSC came to me on 14.2.90 to conduct the TNPSC Examination for Assistant Medical Officer post on 17.2.90 full day and 18.2.90 half day fore noon only . ", "e told me that this order is passed by District Collector Chennai as such it is not possible for us to do anything and asked me to get the amount by sending a man with me. ", " got the cheque and came to him and asked a list of persons who are going to assist me. ", "ahalingam is known to me from the year 1985 86 onwards. ", "n the next day that is on 17.2.90 I went to TNPSC office at 8.00 AM and got two bundles containing question papers by affixing seal on the cloth as 17.2.90 Forenoon 10.00 AM to 12.00 Noon as one bundle and 17.2.90 Afternoon 2.00 PM to 5 PM as another bundle and went Bharathi Womens College in an Auto and reached there at about 8.45 AM. ", "ahalingam was waiting there 19 persons came there to assist me invigilators . ", " gave them answer sheets thread and white papers and send them to each and every hall. ", "hen at 10 hours I gave the question papers to invigilators and instructed them to take the question papers to the respective halls. ", "hen the examination was going on. I went around all the halls. No complaint received from the students. ", "e saw the afternoon bundle with the seal and he did not verify the forenoon question paper bundle and left away. ", "hen at 2.00 PM Mr. Nithyanandam Under Secretary of TNPSC office came there. He also made enquiry about the examination. ", "ahalingam went away after putting all these in an Auto. ", "ne under Secretary was in the upstairs and I do not know his name. I have handed over the bundles to him for which he gave acknowledgement and I got it. ", "hen at 9.50 AM I have opened the bundle in the presence of two invigilators and the Under Secretary and in the label of the bundle it is written as 18.2.90 Forenoon 10.00 AM to 12 Noon and got the signature of two invigilators and I have also affixed my signature. ", "hen I have opened the bundle and after counting it was 410 papers. I gave the required question papers at 10.00 Hours. On that day there was no problem in the examination. ", "he copies of two statements made by the Chief Invigilator were not supplied to the appellant and he was asked to make a statement by the Enquiry Officer. ", "n his statement dated 12.10.1990 the appellant denied all the allegations levelled against him. ", "y letter seeking permission to offer my explanation refused and directed me to appear for the oral enquiry. ", "egarding the first and second charges I wish to inform you that though the charges have been framed on two counts they have been famed so on the sole ground that my presence in the examination hall unauthorized one. ", "oreover the third charge has not been pressed in the office Memorandum dated 11.10.90. ", "gain in my letter dated 22.8.90 I requested the office to state whether the proposed enquiry is in super session of the earlier orders of the office calling for an explanation or it is part and parcel of these orders calling for an explanation or it is a separate one nothing to do with the charges. My request has not been answered. ", "ue Are you satisfied with the opportunity given to you during enquiry to defend your case Ans So far as the conduct of the oral enquiry is concerned I am fully satisfied. ", "nquiry Officer submitted report holding the appellant guilty of all the charges. ", " copy of the enquiry report was made available to the appellant and he was asked to submit further written statement of defence. ", "e submitted another representation on 4.2.1991 to the Deputy Secretary Admn of the Commission. ", "indly refer to the report of the enquiry officer which appears to have been made out entirely relying upon the report Dated 22nd February 1990 of the Chief Invigilator miserably superseding the factual evidences deposed by me at the oral enquiry. ", "he credibility of his report is doubtful. ", "n response to the appellants request the Commission made available the statement of the Chief Invigilator recorded by the Controller of Examination. ", "ppellant submitted application dated 18.4.1991 to the Deputy Secretary Administration for grant of permission to cross examine the Chief Invigilator the officer of the Commission in whose presence request is sought to have been made to the Chief Invigilator not to report the matter to the Commission and the person who appointed him along with others as Invigilators. ", "e also submitted representation dated 20.5.1991 to the Chairman of the Commission and sought his intervention for ensuring compliance of the rules of natural justice. ", "he appellant challenged the order of punishment and the appellate order in Writ Petition No19251 1992 but could not convince the learned Single Judge to quash orders dated 10.10.1991 and 14.8.1992. ", "he writ appeal filed by him was dismissed by the Division Bench of the High Court ", "ule 17 b which contains the procedure for holding enquiry reads as under 17 a xxx xxx xxx b i Without prejudice to the provisions of the Public Servants Inquiries Act 1850 Central Act XXXVII of 1850 in every case where it is proposed to impose on a member of a service or on a person holding a Civil Post under the State any of the penalties specified in items iv vi vii and viii in rule 8 the grounds on which it is proposed to take action shall be reduced to the form of a definite charge or charges which shall be communicated to the person charged together with a statement of the allegation on which each charge is based and of any other circumstances which it is proposed to take into consideration in passing orders on the case. ", "t that inquiry oral evidence shall be heard as to such of the allegations as are not admitted and the person charged shall be entitled to cross examine the witnesses to give evidence in person and to have such witnesses called as he may wish provided that the officer conducting the inquiry may for special and sufficient reason to be recorded in writing refuse to call a witness. ", "hether or not the person charged desired or had an oral inquiry he shall be heard in person at any stage if he so desires before passing of final orders. ", " report of the inquiry or personal hearing as the case may be shall be prepared by the authority holding the inquiry or personal hearing whether or not such authority is competent to impose the penalty. ", "he main allegations leveled against the appellant were that he had unauthorisedly worked as Invigilator and prevented the Chief Invigilator Syed Abdul Kareem from sending report about the incident involving mixing of the question papers of two sessions. "], "rank4": ["he appellant joined service as Junior Assistant in the Tamil Nadu Public Service Commission for short the Commission in 1973. He was promoted as Assistant in 1975 and as Assistant Selection Grade in 1988. ", " have appointed Syed Ibrahim and Thiru N.R.Sundararaman as invigilators for hall No76. ", " gave 339 persons from it and out of the remaining 75 64 question papers for forenoon and 9 for the afternoon. I kept the said question papers in a cover. At about 12 Noon one member of TNPSC Mr. Gurumurthi came there. ", "ll the invigilators made a complaint to Gurumurthi that the amount paid to them is not sufficient. He gave a reply that we had already informed about it to the Government. ", "t that time at about 1.50 Noon I have opened the afternoon bundle in the presence of 1 Balan and 2 Sundararaman in the face slip it is found as 17.2.90 2.00 PM to 5.00 PM and written as 410 Question papers and I got the signature from both of them and I have also affixed my signature. Then I gave the answer sheets and question papers to the invigilators and send them to the examination hall. Examination was over. There was no problem. \nAt 00 PM I have collected the answer sheets and the remaining question papers. ", "ll the invigilators returned except Mahalingam. We made bundle of the answer sheets after counting. I kept the remaining question papers in a cover. At about 6.30 PM the sweeper handed over to me two question papers and I found some scribbling and I have kept that also in a cover and put Seal. I have kept the model question paper given to me in the said cover.", "uch report shall contain a sufficient record of the evidence if any and a statement of the findings and the grounds thereof. ", "henever any inquiring authority after having heard and recorded the whole or any part of the evidence in an inquiry ceases to exercise jurisdiction therein and is succeeded by another inquiring authority which has and which exercises such jurisdiction the inquiring authority so succeeding may act on the evidence so recorded by its predecessor or partly recorded by its predecessor and partly recorded by itself Provided that if the succeeding inquiring authority is of the opinion that further examination of any of the witnesses whose evidence has already been recorded is necessary in the interest of justice it may recall examine cross examine and re examine any such witnesses as hereinbefore provided  ii After the inquiry or personal hearing referred to in clause i has been completed the authority competent to impose the penalty specified in that clause is of the opinion on the basis of the evidence adduced during the inquiry that any of the penalties specified therein should be imposed on the Government Servant it shall make an order imposing such penalty and it shall not be necessary to give the person charged any opportunity of making representation on the penalty proposed to be imposed xxx xxx xxx\n An analysis of the above reproduced rule makes it clear that holding of an oral enquiry is sine qua non for recording a finding by the enquiring authority and the report of enquiry must contain sufficient record of evidence and statement of the findings together with grounds thereof.\n"], "rank5": ["his incident was reported in the newspapers. ", "t the close of examination myself and Thiru Mahalingam with the assistance of two staff of college packed the un used answer papers and unused question papers 64 question papers of FN session and 11 A.N. ", "ession papers and another bundle of 71 AN session papers. ", " went to TNPSC Office on the next day 18.2.90 at 8.00 AM. They gave me the question papers at 8.20 AM. One Under Secretary came with me in the auto who got the bundles from me on 17.2.90 evening. Then Mahalingam came there and all invigilators came. ", " have sent the answer sheets to the respective halls. ", "t 12.00 Noon 1 have collected the answer sheets made bundle by affixing seal and took it TNPSC office by Auto and handed over it there and got the acknowledgement. "], "label": "REJECTED"}, "expert_5": {"rank2": ["e told me that they had posted 5 persons to assist me from their section. Kindly conduct the examination with them and asked his Assistant by name Saveriyar to give me the names of 5 persons in writing. He gave me a list in his hand writing as 1 Udhayakumar 2 Sekaran 3 Mahalingam 4 Aasir and the name of another person not known but know the person. ", " have appointed Syed Ibrahim and Thiru N.R.Sundararaman as invigilators for hall No76. The said Ibrahim told me that six students told him that the question papers issued to them are for the afternoon examination as it seems that six question papers for the afternoon examination have been found mixed with the question papers for the forenoon examination. ", "owever without waiting for the decision of his representations the Secretary of the Commission passed order dated 10.10.1991 and imposed punishment of removal from service.\n", "ather the Enquiry Officer and the two authorities relied upon the portions of the statement made by the Chief Invigilator before the Controller of Examinations and the Inspector completely ignoring that it was he who had asked for substitute Invigilators because those already nominated had conveyed their unwillingness to work ", "e had no role in bringing the question papers from the office of the Commission or distribution thereof.\n", "he question papers etc had been brought by him i.e the Chief Invigilator from the office of the Commission and opened seals in the presence of two other invigilators . ", "he High Court also did not pay due weightage to the fact that the appellant had not handled the question papers at any stage and he had no role in distribution of wrong question papers to six candidates. ", "ather the statements made by the Chief Invigilator before the Inspector Crime Investigation Department and the Controller of Examinations clearly show that he had collected the question papers from the office of the Commission that the seals were opened at the examination center in the presence of two persons and the appellant had not played any role in the exercise. "], "rank3": ["ut on 15.2.90 he visited my office at about 11.30 AM and informed me that he had been posted as Invigilator to Bharathi College for Women where I was posted as Chief Invigilator. ", " retained Mr. Mahalingam with me to assist so he was with me all along the day till I left the examination centre at about 6.45 pm on 17.2.90.", "n 16.2.90 Mahalingam came to my office at G.H at 12.00 hours and told me that he is on leave and studying for Group I examination but he will come and assist me. ", "hen at 9.50 hours I took the question bundle for the forenoon and affixed my signature in the face slip of the said bundle in the presence of two invigilators 1 G.Balasubramaniam Assistant D.M.E Chennai 5 and 2 Aazir School Assistant Thayar Sahib Street Anna Salai Chennai 2 and also got their signature. Then I have ripped the seal of the bundle and got the signature of the said two persons in the paper inside the bundle and I have also put my signature. ", " have been instructed to do the distribution of main and additional answer books and collection of answer books from each hall except question papers. Que Have you been allotted to the work of distribution of question paper to each hall Ans No. ", "he Court can also consider whether there was some tangible evidence for proving the charge against the delinquent and such evidence reasonably supports the conclusions recorded by the competent authority. "], "rank4": ["gain I did not inform him the fact of the mingle of the question papers in the morning session at the insistence of the same person Mr. Mahalingm. ", "he Courts are primarily concerned with the question whether the enquiry has been held by the competent authority in accordance with the prescribed procedure and whether the rules of natural justice have been followed. "], "rank5": ["hen I wanted to inform the facts to the TNPSC office immediately the invigilator Thiru Mahalingam Assistant TNPSC office who was assisting me requested me not to inform since the papers were immediately received back from the candidates. Further he said that the staff attached to TNPSC office who were responsible for this mingling the question papers would be punished and the name of the TNPSC will be spoiled. "], "label": "REJECTED"}, "label": "ACCEPTED"}