S.C.R.

SUPREME COURT REPORTS 519

Even assuming for argument's sake that we have got jurisdiction under article 136, the exercise of which would , depend upon the circumstances of each case, in view of the reasons which we have set out above, this is not an appeal which, in our opinion, should be a9mitted even if we have the power to do so.

-The result is that tlie preliminary objection succeeds and the appeal fails and dismissed with costs.

Bharat Bank Ltd

Employeu •f Bharat Bllllk

PATANJALI SASTRI J.-1 entirely agree with the PAiar!iali Sa11ri, judgment just now delivered by Mukherjea J. and I have oothing to add.

Appeal dismissed.

Agent for the appellant: Ganpat Rai for Tanubhai C. Desai.

Agent for the respondents : R. R. Biswas.

Agent for the Union of India: P. A. Mehta.

DR. N. B. KHARE

fl.

THE STATE OF DELHI

, SHRI HARILAL KANIA C. J., SAIYID FAZL Au,

PATANJALI SASTRI,

MEHR CHAND MAHAJAN, ' and MuKHERJEA, JJ.]

Constitution of India, Art 19, els. (1)

(d) and (5)-Fundamental rights-Freedom of movement-Law imposing restrictions- V alidity -Reasonableness of restrictions-Scope of enquiry-East P11n1ab Public Safety Act, 1949, s. 4(1) (c), (3), (6)-Provisions empowering Provincial Government or District Magistrate to extern persons mqking satisfaction of externing authority final, authorising e:rternment for indefinite period, and directing that authority "may communicate" grounds of e:rternment-Whether reasonable-Construction and Validity of Act.

May 26.

Dr. N. B. Khart v.

T ht St alt of Delhi

Section 4, sub-s. (I) (c), of the East Punjab Public Safety Act of 1949 which was passed on the 29th March, 1949, and was to be in force until the 14th August, 1951, provided that ''The Provincial Government or the District Mag.lstratC. if satisfied \Vith respect to any particular person that with a view to preventing hirn from acting in any manner prejudicial to the public safety or the maintenance of public order it is necessary to do so, 1nay, by order in writing, give a direction that such person shall rcn1ove himself fron1, and shall not return to, any area that 1nay oe specified in the order." Sub-section (3) of s. 4 provided that "an order under sub-s. (I) made by the District Magistrate shall not, unless the Provincial Government by special order othe, wise

directs, remain in force for more than three months fron1 the n1aking thereof," and sub-s. ( 6) laid down that "when an order has been macle in respect of any person under any of the clauses under s. 4, sub-s. (!) or sub-s. (2), the grounds of it may be communicated to him by the authority making the order, and in any case when the order is to be in force tor more than three months, he shall have a right of maki1'.g a representation which shall be referred to the Advisory Tribunal constituted under s. 3, subs. ( 4) ." The petitioner, against whom an order under s. 4 (I) ( c) of the Act was passed applied to the Court under Art. 32 of the Constitution for a writ of cntiorari contending that the order was illegal inasmuch as the provisions of t_he above mentioned Act under wliich the order was made infringed the fundamental right to move freely throughout the territory of India which was guaranteed by Art. 19 (I) (d) of the Constitution and were accordingly void under Art. 13 (I) of the Constitution : Held, per KANIA C. J., FAzL ALI and PATANJALI SAsTRI, JJ-

(MAHAJAN and MuKHERJEA, JJ. dissenting)-(i) that there was nothing unreasonable in the provision contained in sub-s. (I) (c) of s. 4 empowering the Provincial Government or the District Magistrate to make an extcrnment order, and making their satisfaction as to the necessity of making such an order final, or in the provisions contained in sub-s. ( 3) of s. 4 that an order of a District Magistrate may remain in force for three months and that the Provincial Government may make an order, or keep alive an order made by a District Magistrate, for a period exceeding three months without fixing any time limit; (ii) with regard to stJb-s. ( 6), the word "may" in the expression "may communicate" must, in the context, be read as meaning "shall" and under the subscction it is obligatory on the authority making an order to communicate the grounds to the externec; (iii) the restrictions imposed by the above-mentioned. provisions of the Act upon the fundamental right guaranteed by Art. (19) (!) (d) were not, therefore, unreasonable restrictions within the meaning of Art. 19 (5) and the provisions of the Act were not void under Art. 13 (I ), and the order of externment was not illegal.

Per MuKHERJEA J. (MlliAJAN J. concurring)-Though cercain authorities can be invested with power to make

initial orders on their own satisfaction in cases of this descrip- 1950 tion, and s. 4 ( 1) ( c) of the East Punjab Public Safety Act cannot be pronounced. to be unreasonable simply because an order Dr. N. B. Khm• could be passed by the Provincial Government or the District v.

Magistrate on their own personal satisfaction and not on The State of Delh7 materials, which satisfy certain objective' tests, yet, the position would be different if the order thus made is allowed to continue for any indefinite period of time without giving the aggrieved person an opp<lrtunity to say what he has got to say against the order; and inasmuch as sub-s.

(3) of s. 4 prescribes no limit to the period of time during which an externment order would remain in force if it is made by the Provincial Government, and the Provincial Government is also given power to keep an order made by a District Magistrate in force for an indefinite period, the provisions of sub-s. (3) are manifestly unreasonable. The provisions of sub-s. ( 6) of s. 4 are also unreasonable as they make it entirely optional with the authorities to communicate to the person affected, the grounds upon which the order is made.

Neither sub-s. ( 3) nor sub-s. ( 6) of s. 4 can, therefore, be said to have imposed restrictions which are reasonable in the i1tterests of the general public within the meaning of Art. 19 (5) and these provisions of the Act were consequently void and inoperative under Art. 13 ( 1) of the Constitution, and the externment order was illegal.

Held also, per KANIYA C. ]., F.1zL ALI,

MAHAJAN and MuKHERJEA ]].-Whether the restrictions imposed by legislative enactment upon the fundamental right guaranteed by Art. 19

(l) (d) are reasonable within the meaning of Art. 19 (5) of the Constitution would depend as much on the procedural portion of the law as the substantive part of it, and in considering whether such restrictions are reasonable the Court is not therefore bound to confine itself to an examination of the reasonableness of the restrictions in the abstract with reference to their duration and territorial extent. The Court can also consider the reasonableness of Lhe procedural part of the law and the circumstances under which, and the manner in which, the restrictions have been imposed. [PATANJALI SAsTR1 J. did not express any opinion on this point.]

ORIGINAL of 1950.

JURISDICTION:

PETITION

Application under article 32 of India for a writ of certiorari and facts are set out in the judgment.

B. Banerji for the petitioner.

No.

:XXXVII

the Constitution of prohibition.

The

M. C. Setalvad, Attorney-General for India (Gyan Chand, with him) for the opposite party.

1950 &. N. B. KJi., e

1950.

May 26.

The following judgments were delivered :-

Tiu S1att ef Delhi KANIA C. J .-This is an application for a writ of Certiorari and prohibition under article 32 of the Kania c. J.

Constitution of India.

The petitioner who is the President of the All- India Hindu Mahasabha since December, 1949, was served with an order of externment dated the 31st of March, 1950, that night.

By that order he is directed by the District Magistrate, Delhi, not to remain in the Delhi District, and immediately to remove himself from the Delhi District and not to return to the District.

The order was.to continue in force for three months.

By another. order of the Madhya Bharat Government he was directed to reside in Nagpur.

That order has been recently cancelled.

The petitioner disputes the validity of the first order on the ground that the East Punjab Public Safety Act, 1949, under which the order was made, is an infringement of his fundamental right given under article 19 ( 1) ( d) of the Constitution of India.

He further contends that the grounds of the order served on him are vague, insufficient and incomplete.

According to him the object of the externment order passed by the District Magistrate, Delhi, was to suppress political opposition to the policy of the Government in respect of Pakistan and the Muslim League.

It i; alleged that because the petitioner and the Hindu Mahasabha are against the Government policy of. appeasement this order is served on him.

It is therefore mala fide and illegal.

In support of his contention. about the invalidity of the East Punjab Public Safety Act and its provisions as regards externment, counsel for the petitioner relied on the recent unreported judgments of the Patna High Court in Miscellaneous Judicial Case No. 29 of 1950, Brijnandan v. The State of Bihar, and of the High Court of Bombay in Criminal Application No. 114 of 1950, re /aisinghbhai Ishwarlal Modi.

It is necessary first to ascertain the true meaning of article 19 (1) (d) read with clause (5) of the same article There is no doubt that by the order of externment the right of the p.:titioner to freedom of movement throughout the territory of India is abridged.

The only question is whether the limits of µermissible

legislation under clause (5) arc exceeded.

That clause provides as follows :- "19.

(5) 'Nothing in suh clauses (d), ( e) and ( f) of the said clause .shall effect the opertion of any existing law in so far as it imposes, or prevent the State from making any law imposing,, reasonable restrictions on the exercise of any of the rights conferred by the said sub-clauses either in the interests of the general public or for the protection of . the interests of any Scheduled Tribe." It is clear that the clause permits imposition of reasonable restriction.s on the exercise of the right conferred by sub-clause (d) in the interests of the general public.

The rest of the provision of clause. (5) is not materiil. and neither side relies on it.

Two interpretations of the clause are put before the Court.

It is argued that grammatii:ally understood the only question before the Court is whether the impugnep legislation imposes reasonable restrictions on the exercise of the right.

To put it in other words, the only justiciable issue to be decided by the Court is whether the restrictions imposed by the legislation on the exercise of the right arc reasor1able.

If those restriction.s on the exercise of the right are reasonable, the Court has not to consider whether the law imposing the restrictions is reasonable.

The other interpretation is that while the Constitution premits a law laying down reasonable restrictions on the exercise of the rights mentioned in sub-clause 19

(1) (d),

1 the reasonableness has to be of the law also.

It is submitted that in de.ciding whether the restrictions, on the exercise of the right are reasonable, the Court has to decide not onlv on the extent and nature of .the restrictions on the exercise of the right but also as to whether the conditions under which the right is restricted are reasonable.

The majority judgments of the Patna and the Bombay High Courts, although the impugned Acts of the State Legislatures before them were, materially different on certain important points, have given __ c; lause (5) of article 19 the latter mea!ling. -

19.W

Dr. }(. B. Khan

'1.· T Ill State of Dtlhi

Ka,, U. C.].

Dr. , Y. B. Khare

The State f Delhi

KaniaC. J.

In my opm10n, clause (5) must be given its full meaning. The question which the Court has to consider is whether th<lol restrictions put by the impugned legislation on the exercise of the right are reasonable or not.

The question whether the provisions of the Act provide reasonable safeguards against the abuse of the power given to the executive authority to administer the law is not relevant for the interpretation of the clause.

The Court, on either interpretation. will be entitled to consider whether the - restrictions on the right to move throughout India, 1.e., both as regards the territory and the duration, are reasonable or not.

The law providing reasonable restrictions on the exercise of the right conferred by article 19 may contain substantive provisions as well as proedural provisions.

While the reasonableness of the restrictions has to be considered with regard to the exercise of the right, it does not necessarily exclude from the consideration of the Court the question of reasonableness of the procedural part of the law.

It is obvious tl1at if the law prescribes five years externment or ten years externment, the question whether such period of extcrnment is reasomble, being the substantive part, is necessarily for the consideration of the court under clause (5).

Similarly, if the law provides the procedure under which the exercise of the right may b> restricted, the same is also for the consideration of the Court, as it has to determine if the exercise of the right has been reasonably restricted.

I do not think by this interpretation the scope and ambit of the word "reasonable" as applied to restrictions on the exercise of the right, is in any way unjustifiably enlarged. It seems that the narrow construction sought to be put on the expression, to restrict the Court's power to consider only the substantive law on the point, is not correct.

In my opinion this ospect of tlie construction of article 19 (5) has escaped the minority judgment in the two matters mentioned above.

I am. not concerned with the conclusions of the two Courts about the invalidity of the provisions of the Acts they were asked to consider.

To the extent they help in the interpretation of article 19 (5) only they are helpful.

The next question is whether the impugned Act contains reasonable restrictions on the exercise of the rigbt given under article 19 (1) (d) or (e). Itwas argiied on behalf of the petitioner that under sec tion 4the power to make the order of extern .. ment was given to the Provincial Government or the District Magistrate, whose satisfaction was final.

That decision was not open to review by the Court.

On that ground it was contended that there was an un reasonable restriction on the exercise of the citizen's right.

In my opinion, this argument is unsound.

This is not legislative delegation.

The desirability of passing an individual order of externment against a citizen has to be left to an officer.

In the Act such a provision cannot be made. - The satisfaction of the officer Jhus does not impose an unreasonable restriction on the exercise of the citizen's right.

So far as f4e Bombay Highl Court is concerned Chagla C. J. appears to have decided this point against the contention of the petitioner.· It was next urged that under section 4 (3) the order made by the District Magistrate shall not, unless the Proviricial Government by special order otherwise direct, remain in force for more than three months. It was argued that the period of three months itself was unreasonable as the externee had no remedy during that time. [ - It was contended that when the Provincial Governmefit directed the renewal of the order no limit of time was prescribed by. the legislature for the duration of the order.

The order therefore can be in operation for ari indefinite period.

This was argued to be an unreasonable restriction on the exercise of a citizen's right.

In this connection it may be pointed out that in respect of preventive detention, which is a more severe restiction on the right of the citizen, the Constitution itself under article 22 (4) to (7) permits preventive detention for three months without any remedy.

The period of three months therefore prim a f acie does

not appear unreasonable.

Under the proviso to section 4 (5) the Provincial Government is not permitted to direct the exclusion or removal from the Province of a person ordinarily residing in the Province, and similarly

Dr. N. B. Khare

The State of Dtilii

Kania C.J.

Dr. N. B. Khare

The Stak of Dllhi

Kania C.].

the District Magistrate is not permitted to order the exclusion or removal of a person ordinarily resident in his district from that district.

This is a great safeguard provided under the East Punjab Public Safety Act.

The further extension of the exter1.1ment order beyond three months may be for an indefinite period, but in that connection the fact that the whole Act is to

remain in force only up to the 14th August, 1951, cannot be overlooked.

Moreover, . this whole argument is based on the assumption that the Provincial Government when making the order will not pe, form its duty and may abuse the provisions of the sect10n.

In my opinion, it is improper to start with such an assumption and decide the legality of an Act on that basis.

Abuse of the power given by a law. sometimes occurs ; but the validity of the law cannot be contested because of such an apprehension.

In my opinion, therefore, this contention of .the petitioner cannot be accepted.

It "was next argued that there is no provision in the Act for furnishing grounds of externment to the citizen.

Section 4 (6) provides that when an externment order has been made its grounds may be communicated to the externee by the authority making the order and in any case when the order is to be enforced for more than three months he shall have a right of making a representation which shall be referred to the advisory tribunal constituted under section 3 ( 4).

While the word "may" ordinarily conveys the idea of a discretion and not compulsion, reading it with the last part of the clause it seems that when an externment order has to be enforced for more than three months an absolute right is given to the externee to make a representation.

He cannot make a representation unless he has been furnished grounds for the order.

In no other part of the Act a right to obtain the grounds for the order in such a case is given to him.

Therefore, that right has to be read as given under the first part of section 4 (6).

That can be done only by reading the word "may" for that purpose as having the meaning of "shall".

If the word "may" has to be so read for that purpose, it appears to be against the well-recognised canons of construction to

read the same "may" as having a different meaning when the order is to be in force for less than three months.

I do not think in putting the meaning of "shall" on "may" in the clause, I am unduly strainc ing . the language used in the clause. So read this argument must fail.

It was next argued that there is no provision in the Act showing what the advisory board has to do when it receives a representation. A reference to the advisory board necessarily implies a consideration of the case by s1,1ch board.

The absence of an express statement to that effect in the impugned act does not invalidate the Act.

It was finally contended on behalf of the petitioner that the grounds for the externment 011der supplied to him are vague, insufficient and incomplete.

The grounds are stated as follows :-

"Your activities generally and particularly . since the recent trouble in East and West Bengal have been of a communal nature tending to excite hatred between communities and whereas in the present composition of .the population of Delhi and the recent communal disturbances of Delhi feelings are roused be.tween the majority and minority communities your presence and activities in Delhi are likely to prove prejudicial to the maintenance of law and order, it is considered necessary to order you to leave Delhi.

These grounds cannot be described as vague, insufficient or incomplete.

It is expressly stated that the activities of the petitioner, who is the President of the Hindu Mahasabha, since the recent disturbances between two communities in the East and West Bengal have particularly been of a communal riature which excites hatred between the communities.

It is

rther stated that having regard to the recent disturbance in Delhi, the population of which is composed of both these communities, the excitement of such hatred . is likely to be dangerous to the peace and maintenance

of law and order.

Apart from. being vague, I think that these grounds are specific and if honestly believed can support the order.

The argument that lhe order

Dr. Jt. B. Kht11t-

K•aC.J.

Dr. N. B. n.,.,

Th• SlaJt of DI/hi

XatriaC.J.

Fazl Ali].

Patmfiali SGltri].

Mul<Mrjea].

was served to stifle oppostition to the Government policy of appeasement has little bearing because the District Magistrate of Delhi is not concerned with the policy of the Government of appeasement or otherwise.

The order is . made because the activities of the petitioner are likely to prove prejudicial to the maintenance of law and order and the grounds specified have a direct bearing on that conclusion of the District Magistrate. I therefore think that this contention of the petitioner must be rejected.

The result is that the petition fails and is dismissed.

FAzL Au J.-I agree.

PATANJALI SASTRI J.-I agree that this application must fail.

As I share the views expressed by my Lord in the judgment just delivered by him on the reasonableness of the restrictions imposed by the impugned legislation whichever construction of article 19

(5) of the Constitution is adopted, I consider it unnecessary to express any opinion on the true scope of the judicial review permitted under that article, and I hold myself free to deal with that point when it becomes necessary to do so.

MAHAJAN J.-1 concur in the judgment which my brother Mukherjea is delivering and for the reasons given hy him I allow the petition and quash the order of externment.

MuKHERJEA J.-This is an application under article 32 of the Constitution, praying for quashing of an externment order made by the District Magistrate of Delhi, against the petitioner Dr. N. B. Khare, on 31st March, 195p,. by which the latter was directed to remove himself immediately . from the Delhi District and not to return to that District so long as the order remained in force.

The order is for three months at present.

Complaint was also made in the petition in respect of another and a subsequent order passed by the Government of Madhva Bharat which was served on the petitioner on his way to Nagpur and which

directed him to reside within the limits , of the Nagpur Muriicipality and not to leave that area without the permission of the District Magistrate of that place.

This order of the Government of Madhya Bharat, we are told, has since been withdrawn and we are not concerned with that order or the Act under which it was passed in the present proceeding.

The substantial contention raised on behalf of the petitioner is that the particular provision of the East Punjab Public Safety Act, 194j, under which the District Magistrate of Delhi purported to make the externment order, became void and ceased to be operative after the new Constitution came into force, by reason of these provisions being inconsistent with the fundamental rights guaranteed under article 19 ( 1) ( d) of the Constitution read with clause (5) of the same article.

The argument is that any order passed under such void legislative provisions must necessarily be void and of no effect in law.

In order to appreciate the merits of this contention, it may be convenient to advert to the material provisions of the East Punjab Public Safety Act which are alleged to have become void as well as to the articles of the Constitution, upon which reliance has been placed by the learned, counsel for the petitioner.

The East Punjab Public Safety Act came into force on 29th March, 1949, and its object; as stated in the preamble, is to provide for special measures to ensure public safety and maintenance of public order.

Section 4 ( 1) of the Act provides :

"The Provincial Government or the District Magistrate, if satisfied with respect to any particular person that . with a view to preventing him from acting in any manner prejudicial to the public safety or the maintenance of public order it is necessary so to do, may, by order in writing, give anyone or more of the following directions, namely that such person ......... . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( c) shall remove himself from, and shall not return to, any area that may be specified in the order."

Dr. N. B. Khtm

Thi Slate of D_•lhi

Mukher:iea j

Dr: JV. B: lrhare

T Stal• of Delhi

Sub-section (3) of the section lays down that

"An order under sub-section

(1) made by the District Magistrate shall not, unless the Provincial Government by special order otherwise directs, remain in force for more than three months from the making thereof."

The contention of the petitioner is that the restrictive provisions mentioned above, under which a person could be removed from a particular area or prohibited from returning to it are inconsistent with the fundamental right guaranteed by article 19 ( 1) ( d) of the Constitution under which all citizerts shall have the right "to move freely throughout the territory of India." This right indeed is not absolute and the extent to which it could be curtailed by .legislation is laid down in clause (5) of article 19 which runs as follows:

"Nothing in sub-clauses (d), (e) and (£) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State frotn making any law imposing reasonable restictions on the exercise of any of the rights conferred by the said sub-clauses either in the interests of the general public or for the protection of the interests of any Schedule•!

Tribe."

Thus the primary question which requires consideration is, whether the impugned legislation which apparently seems to be in conflict with the fundamental right enunciated in article 19 ( 1) ( d) of the Constitution is pro.tected by clause (5) of the article, under which a law would be valid if it imposes reasonable restncttons on the exercise of the right . in the interests of the general public.

It is not disputed that the question of reasonableness is a justiciable matter which has to be determined by the Court.

If the Courts hold the restrictions imposed by the law to be reasonable, the petitioner would certainly have no remedy.

If, one the other hand, they are held to be unreasonable, article 13 (1) of the Constitution imposes a duty upon the Court to pronounce the law to be invalid to the extent that it is inconsistent with the fundamental rights guaranteed under J>art III of the Constitution.

It has been urged, though somewhat faintly, by the learned Attorney-General that the; right of free movement throughout the Indian territory as enunciated in article 19 (1) (d) of the Constitution contemplates nothing else but absence of inter-State restrictions, which might prevent citizens of the Indian Union from moving from one State to another.

A law which does not impose barriers of this kind, it is said, cannot be inconsistent with the fundamental right secured by this clause.

Such a restricted interpretation is, in my opinion, not at all warranted by the language of the sub-clause.

What article 19 (1) (d) of the Constitution guarantees is the free right of all citizens to go wherever they like in the Indian territocywithout any kind of restriction whatsoever.

They can move not merely from one State to another but from one place to another within the same State ind what the Constitution lays stress upon is that the entire Indian territory is one unit so far as the citizens arc concerned.

Clause (c) of section 4 (1) of the Eaet Punjab Public Safety Act, 1949, authorises the Provincial Government or the District Magistrate to direct any person to remo\'e himself from any area and prohibit him from entering the same.

On the face of it such provision represents an interference with the fundamental right guaranteed by article 19 (1) (d) of the Constitution.

The controversy, therefore, narrows down to this, whether the impugned legislation is saved by reason of its being within the permissible limits prescribed by clause (5) of article 19 ..

With regard to clause (5), the learned Attorney- General points out at the outset that the word "reasonable" occurring in the clause qualifies "restrictions" and not "law". It is argued that in applying the clause,. all that we haye to see is whether 'the restrictions that are imposed upon the exercise of the right by law are reasonable or not and we have not to enquire into the reason; ibleness or otherwise of the law itself.

The reasonableness of the restrictions can be judged, according to the learned Attorney-General from the nature of the restrictions themselves and not from the manner in which or the authorities by which they are

2-5 S.C. Indiil (N.D.)(~

195ct

Dr. J'{. JJ. KIJMr

T& Siau of Delhi

Mherjea].

Dr. N. B. Khare

Tiu State of Delhi

Muti...jea J.

imposed.

The question whether the operation of the law produces hardship in individual cases is also a matter which is quite irrelevant to our enquiry.

I do agree that in clause (5) the adjective 'reasonable' is predicated of the restrictions that are imposed by law and not of the law itself ; but that does not mean that in deciding the reasonableness or otherwise of the restrictions, we have to confine ourselves to an examination of t'he restrictions in the abstract with reference merely to their duration or territorial extent, and that it is beyond our province to look up to the circumstances under which or the manner in whicl\ the n; strictions have been imposed.

It is not possible to formulate an effective test which would enable us to pronounce any particular restriction to be reasonable or unreasonable per se.

All the attendant circumstances must be taken into consideration and one cannot dissociate the actual contents of the restnct1ons from the manner of their imposition or the mode of 1ft1tting them into practice. The question of reasonableness of the restrictions imposed by. a law may arise as much from the substantive part of the law as from its procedural portion.

Thus, although I agree with the learned Attorney-General that the word "reasonable" in clause (5) of article 19 goes with "restrictions" and not with "law", I cannot accept his suggestion as regards the proper way of determining the reasonableness of the restrictions which a legislation might impose upon the exercise of the right of free movement.

Coming now to the provisions of the impugned Act, Mr. Banerjee's main contention is that section 4

(1) (c) of the East Punjab Public Safety Act, which provides for passing of orders removing a person from a particular area, on the satisfaction of the Provincial Government or the District Magistrate, cannot be a reasonable piece of legislation inasmuch as the only pre-requisite for imposition of the restrictions is the personal satisfaction of certain individuals or authorities, the propriety or reasonableness of which cannot be tested by the application of any external rule or standard.

It is said that any law which places the liberty

of a subject at the mercy of an executive officer, however high placed he might be and whose action 'Cannot

be reviewed by a judicial tribunal, is an arbitrary and not a reasonable exercise of legislative powers.

The contention requires careful examination.

It is not disputed that under clause (5) of article 19, the reasonableness of a challenged legislation has to be determined by a Court and the Court decides such matters by applying some objective standard which is said to be the standard of an average prudent man.

Judged by such standard which is sometimes described as an external yard-stick, the vesting of authority in particular officers to take prompt action under emergent circumstances, entirely on their own responsibility or personal satisfaction, is not necessarily unreasonable.

One has to take into account the whole scheme of the legislation and the circumstances under which the restrictive orders could be made.

The object of the East Punjab Public Safety Act is to provide for special measures to ensure public safety . and maintenance of public order. Under section 4 (1) (c) of the Act, the Provincial Government or the District Magistrate may make an order directing the removal of a certain person from a particular area, if they are satisfied that such order is necessary to prevent such person from acting in any way prejudicial to public safety . or maintenance of public order.

Preventive orders by their very nature cannot be made after any judicial enquiry or trial. If emergent steps have got to be taken to prevent apprehended acts which are likely to jeopardise the interests or safety of the public, somebody must be given the power of taking the initial steps ori his own responsibility ; and no reasonable objection could be taken if the authority, whp is given the power; is also entrusted with the responsibility of iµaintaining order and public-. peace in any particular district or province.

The preventive provisions of the Criminal Procedure Code are based on similar principle.

In my opinion, therefore, the provision of section 4 ( 1)

(c) of the East Punjab Public Safety Act cannot be pronounced . to be um:easonable, simply because the order could be passed by the Provincial Government

Dr. N. B. Khan

The Stau of Delhi

l'rfukknjeaJ.

Dr. N. B. Khar•

Tiu Stall of Delhi

or the District Magistrate on their own personal satisfaction and not on materials which satisfy certain objective tests.

But though certain authorities can be invested with powers to make the initial orders on their own satisfaction in cases of this description, the position would certainly be different if the order thus made is allowed to continue for any indefinite period of time without giving the aggrieved person an opportunity to say what he has got to say against the order.

I have already set out the provisions of sub-section (3) of section 4 which deals with duration of the orders made under the various clauses of sub-section (1).

It will be seen from this sub-section that there is absolutely no limit as to the period of time during which an externment order would remain in force if the 9rder is made by the Provincial Government.

The Provincial Government has been given unlimited authority in this respect and they can keep the order in force as long as they chose to do so.

As regards orders made by a District Magistrate, the period indeed has been fixed at three months; but Cllen here the Provincial Government is competent to extend it to any length of time by means of a special order.

The law does not fix an¥ maximum period beyond which the order cannot continue ; and the fact that the Act itself would expire in August, 1951, is, in my op1ruon, not a relevant matter for consideration in this connection at all.

I have no hesi(lltion in holding that the provision of sub-section (3) of section 4 is manifestly unreasonable and cannot be supportc:d on . any just ground.

One could understand that . the exigencies of circumstances might justify. the vesting of plenary powers on certain authorities which could pass -0rders on their own personal satisfaction temporarily and for a short period of time; but if these orders are to continue indefinitely, it is only fair that an opportunity should be given to the person against whom such order is made to say what he has to say in answer to the allegations made against him.

There may riot be an investigation by a regular Court but it is necessary that the aggrieved person should be given a fair hearing and that by an

impartial tribunal.

The provision of the impugned Act which has bearing on this point is contained" in sub-sectioh (6) of section 4 and it runs as follows :

"When an order has been made in respect of any person under any of the clauses under section 4, sub-section (1), or sub-section (2) the grounds of it may be communicated to him by the authority making the order and in any case, when the order is to be in force for more than three months, he shall have a right of making a representation which shall be referred to the Advisory Tribunal, constituted under section 3, sub-section ( 4) ,"

It will be noted that the first part of the subsection makes it entirely optional with the authorities to communicate the grounds, upon which the order is made, to the person affected by it.

The grounds need not be communicated at all if the authorities so desire.

As regards the right of representation the latter part of the sub-section seems to imply that when the order is to remain in force for more than three months, the right of representation should be given to the aggrieved person and the representation shall be referred for consideration to the advisory tribunal constituted under section 3, sub-section ( 4), of the Act.

The right, however, is purely illusory as would appear from the fact that even in cases where the order is to be operative for more than three . months, there is no obligation on the part of the authorities o communicate to _ the person the grounds upon which the order was made.

The aggrieved person consequently may not at all be apprised of the allegations made against him and it will be impossible for him to make any adequate or proper representation, if he is not told on what grounds the order was passed. In my opinion, this is an equally unreasonable provision and neither sub-section (3) nor sub-section (6) of. section 4 of the Act can be said to have imposed restrictions which are reasoriable in the interests of the general public.

My conclusion, therefore, is that under article 13 ( 1) of the Indian. Constitution, these provisions of the Act became void and inoperative after the Constitution came into

Dr. N. B. Khare

.v.

The State of Delhi

Mukherjea ].

Dr.N.B. Khare v.

The Stale of Delhi

Mukhnjea].

force, and consequently the order made by the District Magistrate in the present case cannot stand.

I would, therefore, allow the application and quash the externment order that has been passed against the petitioner.

Petition dismissed.

Agent for the petitioner: Gan pat Rai.

Agent for the opposite party: P. A. Mehta.

CHIEF CONTROLLING REVENUE AUTHORITY

AND

SUPERINTENDENT OF STAMPS

ti.

MAHARASHTRA SUGAR MILLS

LTD.

[SHR1 HARILAL KANg C. J., SAIYID FAzL Au,

PATANJALI SASTRI, MEHR CHAND MAHAJAN

and MUKHERJEA J J.)

Indian Stamp Act (II of 1899), ss. 57, 59 (2)-Reference lo High Court-Nature of power .to refer-Duty to refer on reque.11

of party affected-Order directing Chief Controlling Authority to refer-Whether "matter concerning revenues"-furisdiction of Original Side of High Court-Government of India Act, 1935, s. 266(1).

The power conferred on the Chief Revenue Authority by Sec. 57 of the Indian Stamp Act, to make a reference to the High Court is not intended for the benefit of the Revenue Authority alone, but ensures, also for the benefit of the party affected by the assessment. It is threforc coupled with a duty to make a reference when he is called upon to do so by the party affected, and if he declines to do so, it is within the power of the Court to direct him to discharge that ducy and make a reference to the Court.

Alcock Ashdown & Co., Ltd. v. Chief Revenue Authority (SO I.A. 227) and /ulius v. Bishop of Orford (5 A.C. 214) applied.

article 136

Bharat Bank Ltd

PATANJALI SASTRI J.

Ganpat Rai

R. R. Biswas

P. A. Mehta

N. B. KHARE

THE STATE OF DELHI

SHRI HARILAL KANIA

MEHR CHAND MAHAJAN

Constitution of India

Art 19

Public Safety Act, 1949

s. 4(1)

N. B.

Section 4

29th March, 1949

14th August, 1951

s. 4

s. 4

s. 3

s. 4

Art. 32

India

Art. 19

Art. 13

KANIA

FAzL ALI

PATANJALI SAsTRI

MAHAJAN

s. 4

s. 4

Art. 19

Art. 13

MlliAJAN

s. 4

N. B. Khm•

s. 4

s. 4

s. 4

Art. 19

Art. 13

KANIYA C.

F.1zL ALI

MuKHERJEA

Art. 19

Art. 19

PATANJALI SAsTR1

article 32

B. Banerji

M. C. Setalvad

Gyan Chand

article 32

Constitution of India

District Magistrate, Delhi

Delhi District

Madhya Bharat Government

Nagpur

article 19

Constitution of India

Pakistan

Patna High Court

High Court of Bombay

/aisinghbhai Ishwarlal Modi

article 19

clause 19

Patna and the

The majority judgments of the Patna and the Bombay High Courts, although the impugned Acts of the State Legislatures before them were, materially different on certain important points, have given  c; lause (5) of article 19 the latter mea!ling. -

Bombay High Courts

article 19

B. Khan

Y. B. Khare

article 19

article 19

article 19

article 19

Chagla

section 4

article 22

section 4

N. B. Khare

State of Dtilii

Kania

Section 4

section 3

section 4

Delhi

West Bengal

B. Kht11t-

N. B.

FAzL

article 19

Mukherjea

article 32

N. B. Khare

31st March, 195p

Government of Madhva Bharat

Nagpur Muriicipality

Government of Madhya Bharat

District Magistrate of Delhi

article 19

Section 4

N. B. Khtm

article 19

article 19

article 19

article 13

article 19

article 19

section 4

Eaet Punjab Public Safety Act, 1949

article 19

article 19

S.C. Indiil

T& Siau

article 19

Banerjee

section 4

article 19

section 4

section 4

N. B. Khan

N. B. Khar•

section 4

section 4

section 4

section 4

section 3

section 3

section 4

article 13

State of Delhi

Gan pat Rai

CHIEF CONTROLLING REVENUE AUTHORITY

MAHARASHTRA SUGAR MILLS

HARILAL KANg

SAIYID FAzL Au

MUKHERJEA

Indian Stamp Act

ss. 57, 59

s. 266(1)

Sec. 57

Indian Stamp Act


Dr.N.B. Khare v.

The Stale of Delhi

Mukhnjea].

SUPREME COURT REPORTS [19501

force, and consequently the order made by the District Magistrate in the present case cannot stand.

I would, therefore, allow the application and quash the externment order that has been passed against the petitioner.

Petition dismissed.

Agent for the petitioner: Gan pat Rai.

Agent for the opposite party: P. A. Mehta.

CHIEF CONTROLLING REVENUE AUTHORITY

AND

SUPERINTENDENT OF STAMPS

ti.

MAHARASHTRA SUGAR MILLS

LTD.

[SHR1 HARILAL KANg C. J., SAIYID FAzL Au,

PATANJALI SASTRI, MEHR CHAND MAHAJAN

and MUKHERJEA J J.)

Indian Stamp Act (II of 1899), ss. 57, 59 (2)-Reference lo High Court-Nature of power .to refer-Duty to refer on reque.11

of party affected-Order directing Chief Controlling Authority to refer-Whether "matter concerning revenues"-furisdiction of Original Side of High Court-Government of India Act, 1935, s. 266(1).

The power conferred on the Chief Revenue Authority by Sec. 57 of the Indian Stamp Act, to make a reference to the High Court is not intended for the benefit of the Revenue Authority alone, but ensures, also for the benefit of the party affected by the assessment. It is threforc coupled with a duty to make a reference when he is called upon to do so by the party affected, and if he declines to do so, it is within the power of the Court to direct him to discharge that ducy and make a reference to the Court.

Alcock Ashdown & Co., Ltd. v. Chief Revenue Authority (SO I.A. 227) and /ulius v. Bishop of Orford (5 A.C. 214) applied.

The order of a High Court to a revenue officer to do his duty would not be the exercise of original jurisdiction in a matter concerning the revenue within the meaning of Sec. 226 of the Government of India Act, 1935, and the jurisdiction of the High Court to direct the Chief Controlling Revenue Authority to make a reference under Sec. 57 of the Stamp Act was not barred by Sec. 226 of the Government of India Act.

The fact that the proceedings had passed beyond the stage -:if enforcing payment does not preyent the High Court from directing the Revenue Authority to make a reference, for, if the opinion of the Court on the reference is against the Revenue Autho- . rity he will have to refund whatever has been recovered in excess, under Sec. 59 (2) of the Act.

APPEAL from the High Court of Judicature at Bombay : Civil Appeal No. XII of 1950.

This was an appeal from a judgment and order of the High Court of Bombay (Chagla, Acting C. J. and Bhagwati J.) dated 2nd September, 1947, in Appeal No. 60 of 1946.

The facts are fully set out in the judgment.

K. Daphtary, Advocate-General of Bombay (M. M. Desai, with him) for the appellant.

M. C. Setalvad, Attorney-General for India (S.S.

Ragnekar, with him) for the respondent.

1950.

May 27.

The judgment of the Court was delivered by . ·

KANIA C. J.-This is an appe-al from a judgment of the High Court at Bombay and it relates to the jurisdiction of the Court to direct the Chief Controlling Revenue Authority and the Superintendent of Stamps at Bombay to state a case for the opinion of the Court under section 57 of the Stamp Act.

The respondent company, for its business, borrowed money from the Central Bank of India Ltd. at Bombay.

In order to secure the loan a document was executed on the 22nd of March, 1945, with a stamp of Rs. 16-8-0, on the footing that it was a deed of hypothecation without possession of the goods.

When the deed was sent to the Sub-Registrar for registration he impounded the same and sent it to the Stamp Office.

The Assistant Superintendent of Stamps

Chief Conli'ollina

Rev. Authority

MaharashlTa Sugar Mills Ltd.

Kania C.J.

CliiAJ ConJrol/ing

Rev. Aflthori!J

Vo Maharashlr• Gug"r Mills-W.

Eam•C.J.

wrote to the respondent that the document was a mortgage with possession, chargeable with duty under article 40 (a) of the Schedule and inquired why it was not duly stamped before execution.

The respondent's solicitors in their reply contended that the document was not, and was never intended by the parties to be, a mortgage with possession.

They pointed out that no possession of the property had been given or was intended to 'be given, except in certain contingencies and therefore the document was properly stamped.

In reply the Assistant Superintendent intimated that the document was chargeable with duty of Rs. 56,250 and a penalty of Rs. 5,000

had been imposed.

The respondents were asked to pay the amount forthwith.

On the 27th July, 1945, the respondent filed a suit against the Central Bank contending that the document was not a mortgage with possession.

It was alleged that since a doubt had arisen as to whether the document gave effect to the common intention of the parties the Court's directions were sought for and if the Court found that the document as framed did not give effect to the said common intention of the parties the instrument may be rectified.

On 9th August, 1945, the respondent's solicitors informed the Assistant Superintendent that such a suit had been filed and requested that the demand for payment of stamp duty and penalty may not be pressed under the circumstances.

In the further correspondence, on behalf of the appellant, the demand was reiterated and resort to the coercive procedure of section 48 of the Stamp Act was threatened.

The Collector thereafter sent a letter to the respondents on the 17th January, 1946, demanding payment. On the 25th of January, 1946. the suit filed by the respondent was disposed of by the Court and the rectification as prayed was ord. ered.

The respondent's solicitors immediately intimated the result of the suit to the Assistant Superintendent and sent a copy of the deed showing the rectifications made in the original document.

A similar letter was also sent to the Collector of Bombay.

On the Jst February, 1946, the respondent's solicitors enquired of

the Assistant Superintendent of Stamps whether he was agreeable to make a reference under section 56 (2) to the appellant, as the question of liability to pay the stamp duty and penalty involved important questions of law.

A petition on behalf of the respondent to the appellant was also filed on the 5th of February in which it was prayed that either the order of the Assistant Superintendent of Stamps be rescinded or in the alternative a case may be referred under section 57 of the Stamp' Act for the opinion of the High Court.

This petition was rejected on the 4th July, 1946.

The respondent thereupon filed a petition in the High Court on the 19th of July, i94b, praying that a writ of certiorari way be issued against the appellant, or an order may be made against him under section 45 of the Specific Relief Act, to cancel the levy of the stamp duty and penalty as claimed on behalf of the appellant or in the alternative the appellant may be ordered under section 57 of the Stamp Act to refer the matter to the High Court for its opinion.

The matter came for hearing before Mr. Justice Blagden who did not grant the first relief but directed the appellant to state a case under section 57 of the Stamp Act to the Court for its opinion.

The appellant filed an appeal but failed. He has now co.me . in appeal to this Court.

Two points have been urged on behalf of the appellant.

The first is whether under section 57 of the Stamp Act there is an obligation on the appellant to state a case, and if not whether the High Court had jurisdiction to give a direction to that effect. The second point is whether having regard to the terms of section 226 (1) of the Government of India Act, 1935, ' the High Court had jurisdiction to order the appellant to state the case, it being a matter relating to the revenue.

Under this head it is also argued that the matter had proceeded beyond the stage of assessment and had reached the stage of recovery.

Therefore, the High Court of Bombay had no jurisdiction to pass the order it did.

The material part of section 57 of the Stamp Act runs as follows :

"57. (1) The Chief Controlling Revenue-authority

Chief Conlrolling

Rev. Authoriv

MaharasMra Sugar Mills Ltd.

KaniaC.J.

C/JUf ConJrolliog

a ••. AuJiiorit7

Y, Maharashtra Sugar Mills Lid.

KaiaC.J.

may state any case referred to it under section 56. sub-section (2), or otherwise coming to its notice, and refer such case, with its own opinion thereon-

* * * •

(b) if it arises in the Province of Bombay, to the High Court at Bombay; ...... "

Section 226 (l) of the Government of India Ac~, 1935, runs as follows :-

"226. (l) Until otherwise provided by Act of the appropriate -legislature, no High Court shall have any original jurisdiction in any matter concerning the revenue, or concerning any act ordered or done in the collection thereof according to the usage and practice of the country or the law for the time being in force."

On behalf of the appeilant it is contended that the very words of section 57 of the Stamp Act show that it is a power given to the appellant to _state a case and it is not an obligation.

The section is framed and worded only to give the benefit thereof to the appellant and it is not for the benefit of any other party.

The word "may" used in the section was deliberately used for that purpose.

It was pointed out that under section 56 (2) of the Stamp Act if the Collector felt doubt as to the amount of duty with which the instrument was chargeable "he may draw up a statement of the case and refer it with his opinion for the decision of the Chief Controlling Revenue Authority". Similarly under section 60 if any Court felt doubt as to the amount of .!uty to be paid it was given power to draw up a statement of case for the opinion of_ the High Court.

It was argued that both these sections gave only power to the Collector and the Court to make a reference for their own benefit.

Section 57, it was argued, was on the same lines for the benefit of the appellant.

In none of these, any other party had any right to insist on a reference.

It was pointec\ out that under the Stamp Act a Collector could certify that the document was properly stamped, although it was not sufficiently stamped oh a true construction, and when such a certificate was given the Controlling Authority could do nothing.

He had not even the

power to refer that case to the Court to levy a higher stamp duty.

For these reasons, it was contended that the scheme of the Stamp Act was materially different from the scheme of the Income Tax Act.

In our opinion the appellant's contentions are unsound.

The first contention that section 57 of the Stamp Act gives only a discretion and does not cast a duty on the appellant to make a reference overlooks the fact that the appellant has not to make a reference only when he is in doubt about his decision or conclusion.

In his conclusion the party liable to pay the assessed stamp duty is materially interested.

The appellant's decision is not necessarily based only on the reading of the entries in the Schedule to the Stamp Act.

As in the present case, the question under what item stamp duty is levia:ble may depend on tfie true construction of a document.

It may also involve the decision of the question, as in the present case, as to what is the effect of the .Court's order directing a rectification of the instrument.

It does not appear, on principle, sound to hold that these difficult questions should be left under the Stamp Act to the final decision of the appellant, and if the party affected by the assessment has a grievance there is no relief at all in law for him.

The construction of a document is not always an easy matter and on the ground that it is a substantial question of law, parties have been permitted to take the matter up to the highest Court.

If so, it appears difficult to start with the assumption that because this is a Revenue Act the decision of the appellant should be considered final and conclusive.

The provisions of section 56 (2) afid section 60 giving power to the Collector and the Court to send a state- . ment of case to the appellant and the High Court respectively, in our opinion, instead of helping the appellant, go against his contention.

In those two sections this power is given when the referring authority has a doubt to solve for himself.

The absence of the words "feels doubt as to the amount of d.uty to be paid

n respect of an instrument" . in section 57 supports the , view that the reference contemplated under that section is not for the benefit of the appellant only but , enures

Chief Controlling

Rev. Authority

Maharashtra Sugar Mills Ltd.

KaniaC.J.

CloiefConfrollillg

.Rto. Authoritf

v. .Maharashlra Sugar Mills Lid.

KaniaC.J.

also for the benefit of the party affected by the assessment.

In our opinion, the power contained in section 57 is in the rtature of an obligation or is coupled with an obligation and undor the circumstances can be demanded to be used' also by the parties affected by the assessment of the stamp duty.

Our attention has been drawn in this connection to the decision of the Judicial Committee of the Privy Council in Alcock, Ashdown & Co. Ltd. v. Chief Revenue Authority, Bobmay ( 1 ). In that case a question arose about an .assessee's right to ask the Commissioner of Income Tax to state a case for the opinion of the Court under section 51 of the Indian Income Ta.J, C Act, 1918.

The material part of that section was in these terms :-

"51. (1) If, in the course of any assessment under this Act or any proceeding in connection therewith other than]. proceeding uilder Chapter VII, a question has arisen with reference to the interpretation of any of the ptovisions of this Act or of any rule thereunder, the Chief Revenue Authority may, either on its own motion or on reference from any Revenue officer subprdinate"to it, draw up a statement of the case, and refer it, with its own opinion thereon, to the High Court, . and shall so refer any such question on the l)pplication of the assessce, unless it is satisfied that the application is frinolous or . that a reference is unnecessary.

(3) The High Court upon the hearing of any such case shall decide the questions raised thereby, and shall deliver its judgment thereon containing the grounds on which such decision is founded, and shall send to the Revenue authority by which the case was stated a copy of such judgment under the seal of the Court and the signature of the Registrar, and the Revenue-authority shall dispose of the case accordingly, or, if the case arose on reference from any Revenue-0flicer subordinate to it, _ shall forward a copy of such judgment to such officer who shall dispose of the case conformably to such judgment".

In that case, . after the a§CSSlllent was made and

(') 50 I.A,227.

the proceedings went to the Commissioner of Income Tax, the assessee requested that a case may be stated for the opinion of the Court under the aforesaid section, but the Commissioner refused to do so.

Thereupon, a Rule was obtained from the High Court calling upon the hief Revenue Authority; Bombay, to show cause why a case should not be so stated.

It was argued. before the High Court that . the Court had no jurisdiction to order the Commissioner to state a case for its opm1on.

When the matter reached the Privy Council the objection to the jurisdiction was p, ut more broadly.

Before the High Court the only question raised was whether the Authority had a duty, in the ircum stances, to state a case.

The point raised before the Judicial Committee of the Privy Council took the form of saying that even if the Authority had a duty, the Court could not require him to exercise it ; and for this purpose reliance was placed upon the well-known general purview of the Indian Legislation which excludes matter of revenue from the consideration of the ordinary civil Courts,. the principle being exemplified in the case of Spooner v. /t1ddotli (1) and upon section 106 (2) of the Government of India Act, 1915. The judgment of the Board consisting of Viscount Haldane, Lord Phillimore and Lord Carson was delivered by Lord Phillimore.

In the judgment it is stated as follows :-"It is Sjlid that, though under this section, the Chief Revenue Authority may, if he thinks fit, draw up a statement of the case and refer it to the High Court he is not bound to do so even on the appli- 1.:atlon of the person to be assessed, if he is satisfied that the application is frivolous or that the reference is unnecessary and that the Authority has in the present case shown that he is satisfied that the application was frivolous and the reference was unnecessary.".

This argument was rejected by the High Court.

Their Lordships of the Privy Council agreed with the view of the High Court that this was too narrow a construction of the section.

They observed : "Take first the case which is last in the -clause. If the assessee applies for a case the Authority must state it unless he can

(1} (1850) 4 Moo. I.A. 353.

Chief Controllin8

Rtv. Authority

M ahara.rhlra Sugar Mills Ltd.

KaniaC.]-

ChUf Controlling

Re~. Authori!1

Mah11Tashlra .Sugar Mills Lid.

Eania C. ].

say that it is frivolous or unnecessary.

He 1s not .to wait for the court to order him to do it ; it will be a misfeasance and a breach of the statutory duty if he does not do it." The judgment did not end by relying only on that portion of section 51 (!) of the Indian Income Tax Act, 1918.

It proceeds to state as follows :-"Put that case aside.

The rule here is supported upon the earlier part of the section.

No doubt that part does not say that he shall state a case, it only says that he may.

And as the learned counsel for the respondent rightly urged, may does not mean 'shall'.

Neither are the words 'it shall be lawful' those of compulsion.

Only the capacity or power is given to the Authority.

But when a capacity or power is given to a public authority there may be circumstances which couple with the power a duty to exercise it.

To use the language of Lord Cairns in the case of /ulius v. Bishop of Oxford ( 1 ): 'There may be something in the nature of the thing empowered to be done, something in the object for which it is to be done, something in the conditions under which it is to be done, something in the title of the person or persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is reposed to exercise that power when called upon to do so.' In their Lordships' view, always supposing. that there is a serious point of law to be considered, there does lie a ducy upon the Chief Revenue Authority to state a case for the opinion of the Court, and if he does not apyreciate that there is such a serious point, it is in the power of the Court to control him and to order him to state a case."

This reasoning and conclusions, although they have not now the compelling force they had before the 26th of January, 1950, are entitled to great respect.

Apart from that, we entirely agree with that line of reasoning and the conclusion.

In our opinion, in the present case the power to make a reference under section 57 is not only for the benefit of the appellant.

(') 5 A.C. '214, 222.

It is coupled with a duty cast on him, as a public -0flicer to do the right thing and when an important and

intricate question of law in respect of the construction of a document arises, as a public servant it is his duty to make the reference.

If he omits to do so it is w, ithin the power of the Court to direct him to discharge that duty and make .a reference to the Court.

Mr. Daphtary on behalf of the appellant tried to distinguish ' this case on the ground that the scheme -of the Income Tax Act was different from the scheme

-Of the Stamp Act.

In our opinion, . the observations quoted above and the principles underlying the same are applicable to the duty cast on the am>ellant under section 57 of the Stamp Act and minor points of distinction between the schemes of the two Acts are immaterial for the present discussion.

In t;.he words of Lord Cairns the very nature. of the thing empowered to be. done by t; he appellant and the conditions under which he has to fix the amount of the duty, couple the power with the duty to state a case for the opinion of the Court.

The provisions of section 51 (1) and (3) run on the same lines as section 59 of the Stamp Act.

Mr.

Daphtary next pointed out that there was a difference in the scheme of the Act, because when the Collector issued a certificate under section 32, even though his assessment might be faulty and against the interest of the State, the State or the appellant had no remedy.

This overlooks the provisions of the . section empowering the Collector to issue the certificate.

The scheme of the Stamp Act may be briefly noticed. Chapter II • contains provisions about the liability of instruments 'tq duty, of the time of stamping instruments, of valuations for duty and provisions as to the person by whom duty is payable.

Chapter III which contains only two .. sections deals with the adjudication as to stamps.

The first (section 31) is where an instrument, whether executed or not and whether previously stamped or not, is brought to the Collector with an application to have his opinion as to the duty with which it is chargeable.

For obtaining that opinion the applicant has to pay a "fee. , The Collector mav call for information and t.akc evidence. After he has done so he determines the

Chief Controlling

Riv. Authoril.J

v •.

Maharashtra Sugar Mills Lid.

KaniaC.J.

Chief CmitrDlling

&f}. Authority

v. ftlaharashlra S•gar MiJu Ltd.

SUJ,>REME COURT REPORTS [19501

amount of the stamp duty and certifies under section 32 thar the full duty with which it is chargeable has been paid, It is obvious that the party applying is interested in obtaining the opinion and therefore he cannot object to the certificate of the Collector.

If the Collector himself is in doubt he has the power under section 56 (2) to ask for the opinion of the appellant.

It is therefore clear that in respect of these two provisions under Chapter III no grievance could exist on either side.

From section 33 and Chapter IV onwards there are provisions in which the opinion of the Stamp Officer and of the party interested in paying the stamp duty may come in conflict.

The sections in Chapters IV, V and VI ending with section 61, deal with situations arising from such difference of opinion.

Section 57 (!) falls under this .heading.

In our opinion, there fore, this contention of the aP, pellant fails.

The next point urged was whether tl'ie High Coun has jurisdiction to order the Revenue Authority to state a case in face of the provisions of section 226 of the Government of India Act,

1935. The argument was urged in two parts : Firstly, that this being a revenue matter, the jurisdiction of the Court was excluded.

Secondly, that the matter had ceased to be in the stage of assessment but had reached the stage of collection of stamp duty.

On that ground the present case was sought to be distinguished from A/cock's case ( ').

In our opinion this argument of the appellant must also fail.

A similar argument based on the wording of the corresponding section 106 (2) of the Government of India Act, 1915, as mentioned above, was urged in Alcock'; case ( 1 ). On that point their Lordships observed i!S follows :-"Upon the point thus broadly stated their Lordships have no difficulty in pronouncing a decision.

To argue that if the legislature says that a public officer. even a revenue officer, shall do a thing and he, without cause or justification, refused to do that thing, yet the Specific Relief Act would not be applicable and there would be no power in the Conn to compel him to give relief to the subject is to state a

(') 50 I.A. 227.

proposition to which their Lordships must refuse assent." In dealing with the argument that because of section 106 (2) of the Government of India Act, 1915 the High Court had no jurisdiction to make the order, the Board observed as follows :-"In their Lordships' view the order of a High Court to a revenue officer to do his statutory duty would not be the exercise of original . jurisdiction in any matter concerning the revenue." In our opi_n_ion, in the present case also the respondent seeks the Court's intervention to make the appellant perform his statutory duty to state a case.

That is not exercising the original jurisdiction of the Court in any matter concerning the revenue.

It is only asking the appellant to perform his statutory duty. The further argument that the proceedings in this case had passed beyond . the stage of assessment and had reached the stage of

. enforcing payment is again irrelevant because by the -relief granted by the High Court no attempt is made

to obstruct the Revenue Authority in the discharge of his duties.

At one stage an injunction was granted _ against the appellant but that has been cancelled.

In fact, this aspect of the discussion is only academic because if payment .is enforced and the opinion of the Court, on the statement of the case is against the appellant, he will have to act in conformity with that . opinion under section 59 (2) of the Stamp Act and refund whatever may be held to be recovered in excess.

In our opinion therefore the contentions of the: appellant fail and the appeal is dismissed with costs.

Appeal dismissed.

Agent for the appellant: R. S. Narula.

Agent for the respondent: Tanuhhai C. Desai.

3-5 S. C India (N.D.> 58

Chief Con1,,, l/ing

Rtv. Authorit.7

Maharashtra Sugar Mills lJd.

KaniaC.J.

Gan pat Rai

P. A. Mehta

CHIEF CONTROLLING REVENUE AUTHORITY

SUPERINTENDENT OF STAMPS AND MAHARASHTRA SUGAR MILLS LTD

PATANJALI SASTRI

MEHR CHAND MAHAJAN

MUKHERJEA J

Indian Stamp Act

ss. 57, 59

s. 266(1)

Sec. 57

Indian Stamp Act

Sec. 226

Government of India Act, 1935

Sec. 57

Sec. 226

Sec. 59

High Court of Judicature at Bombay

High Court of Bombay

Chagla

Bhagwati

2nd September, 1947

K. Daphtary

M. M. Desai

M. C. Setalvad

S.S.

Ragnekar

KANIA

section 57

Central Bank of India Ltd.

Bombay

22nd of March, 1945

Kania

article 40

27th July, 1945

Central Bank

9th August, 1945

section 48

17th January, 1946

25th of January, 1946

section 56

5th of February

section 57

4th July, 1946

19th of July, i94b

section 45

Specific Relief Act

section 57

Blagden

section 57

section 57

section 226

Government of India Act, 1935

section 57

section 56

Section 226

Government of India Ac~, 1935

sub-section (2), or otherwise coming to its notice, and refer such case, with its own opinion thereon-
•

(b) if it arises in the Province of Bombay, to the High Court at Bombay; ...... "

Section 226 (l) of the Government of India Ac~, 1935, runs as follows :-

"226. (

section 57

section 56

section 60

Section 57

section 57

section 56

section 60

section 57

.Maharashlra Sugar

section 57

section 51

section 106

Government of India Act, 1915

Viscount Haldane

Phillimore

Carson

section 51

Indian Income Tax Act, 1918

Cairns

Chief Revenue Authority

26th of January, 1950

section 57

Daphtary

Mr. Daphtary on behalf of the appellant tried to distinguish ' this case on the ground that the scheme -of the Income Tax Act was different from the scheme
Of the Stamp Act.

section 57

section 51

section 59

section 32

section 31

Maharashtra Sugar Mills Lid

ftlaharashlra S•gar MiJu Ltd.

section 32

section 56

section 33

section 61

Section 57

section 226

Government of India Act

section 106

Government of India Act, 1915

Alcock

Specific Relief Act

section 106

Government of India Act, 1915

section 59

R. S. Narula

Tanuhhai C. Desai

S. C India

Maharashtra Sugar Mills

Authorit.7

Maharashtra Sugar Mills lJd.


M<g 5

SUPREME COURT REPORTS

RACHPAL MAHRAJ

BHAGW ANDAS. DARUKA and OTHERS

[SHRI HARILAL KANIA c. J.,

PATANJALI SASTRI and DAs J J.]

(1950]

Indian Registration Act (XVI of 1908), s. 17-Transfer of Property Act (IV of 1882), s. 58 (f)-Memorandum of deposit of title deeds-When compulsorily registrable.

The question whether a memorandum of deposit of title deeds is compulsorily registrable under section 17 of the Indian Registration Act, 1908, as an instrument creating an interest in immoveable property, depends on whether the parties intended to reduce their bargain regarding the deposit to the form of a document.

If so, the document requires registration. If, on the other hand, its proper construction and the surrounding circun1stances lead to the conclusion that the oarties did not intend to do so, there being no express bargain; the contract to create the mortgge arises by implication of the law from the deposit itself with the requisite intention, and the document, being merely evidential does not require registration. The time factor is not decisive.

Where accounts relating to the appeilant's dealings with the respondents were taken on a certain date and the appellant gave certain title dee9s to the respondents for being held as security for the amounts then found due and \.vhich may become due, and on the satne day the appellant gave a memorandum to the respondents in the form of a letter addressed to tlie respondents \.Vhich stated : "We write to put on record that to secure the repay1nent of the money already due to you from us on account of the business transactions bet\veen yourselves and ourselves and the monev that mav hereafter beco1ne due on account of such transactios we have this day deposited with you the following title deeds relating to our properties at ...... with i11tent to create an equitable mortgage on the said properties to secure all moneys including interest that may be found due .... " ·

Held that the parties <lid not intend to create a charge by the • execution of the document, but merelv to record a transaction which had already been concluded and under which rights and liabilities had already been created and the document did not require registration. '

Obla Sundarachariar v. Narayana Ayyar (58 I. A. 68) and Hari Sank,_ar Paul v. Kedar Nath Saha (66 I. A. 184) referred to.

APPEAL (Civil Appeal No. LXVII of 1949 from a Judgment and Decree of the High Court of Judicature at Patna dated the 11th March, 1947, in F. A. No. 218 of 1944. The material facts appear from the judgment.

Shiva Prasad Sinha (Sri Kishan, with him) for the appellant.

B. K. Saran for the 1st respondent.

Respondents 2 to 13 did not enter appearance.

1950. May 5.

The jtidgrµent of the Court was delivered by

19"50

Rach pa!, Mahraj v.

Bha.wandas

DarUka And Others

PATANJALI

SASTRI J.-This appeal arises out of Pataiyali Sn, tri ]. a suit brought by the respondents against the appellant and other members of 11is joint family to enforce a mortgage alleged to have been created by the a11pellant by deposit of title deeds on the 23rd October, 1936, at Calcutta.

The short point for determination in the appeal 1s whether the memorandum signed and delivered by the appellant on 23rd October, 1936, and relied upon by the respondents as evidencing the cre:.ll ion of tne mortgage was compulsorily registrable under section 17 of the Indian Registration Act, 1903, and, not ha1ing been registered, was inadmissible in evidence to prove the mortgage.

The Subordinate Judge of Darbha!1ga who tried the suit, and the High Court at Patna on appeal, held that the document did not require registration 1md was admissible in evidence, and accordingly <lecrcnl the suit.

The question turns on the proper construction ot die memorandum and the circumstances under which it was delivered to the respondents.

Accorrling to the evidence of the respondents' witnesses which has been accepted by the Courts below, the accounts relating to the appellant's dealings were examined on the 23rd October, 1936, and a large sum was found due to the respondents who deman<lcJ payment.

The appelhnt thereupon brought aml gave certain documents, being

Rach pal Mahraj

Bhagwandas

Daruka And Others

Patanjali Sastri ].

title deeds relating to immovable properties belonging to his family, for the purpose of being held as security for the amounts then due and to become due on further dealings.

A draft of the memorandum was thereafter prepared which the appellant took with him to be shown to his lawyer and he returned in the afternoon, and signed and delivered it to the respondents.

All this took place in Calcutta.

The memorandum is in the form of a letter addressed to the respondents' firm and is in the following terms :

"We write to put on record that to secure the repayment of the money already due to you from us on account of the business . transactions between yourselves and ourselves and the money that may hereafter become due on account of such transactions we have this day deposited with you the following title deeds in Calcutta at your . place of business at No. 7

Sambhu Mullick Lane, relating to our properties at Samastipur with intent to create an. equitable mortgage on the said properties to secure all moneys including interest that may be found due and payable by us to you on account of the said transactions ........ "

A mortgage by deposit of title deeds is a form of mortgage recognised by section 58 (f) of the Transfer of Property Act which provides that it may be effected in , certain towns (including Calcutta) by a person "delivering to his creditor or his agent documents of title to immovable property with intent tg create a security thereon." That is to say, when the debtor deposits with the creditor the title deeds of his property with intent to create a security, the law implies a contract between the parties to create a mortgage, and no registered instrument is required under Section 59 as in other forms of mortgage.

But if the parties choo, se to reduce the contract to writing, the implication is excluded by their express bargain, and the document will be the sole evidence of its terms.

In such a case the deposit and the document both form integral parts of the transaction and are essential ingredients in the creation of the mortgage.

As the deposit alone is not intended to create the charge and the document, which

...

constitutes the bargain regarding the ecurity, is also necessary arid operates to create the charge in conjunction with the deposit, it requires registration under section 17 of the Indian Registration Act, 1908, as a non-testamentary instrument creating an interest in immovable property, where the value of such property is one hundred rupees and upwards.

The time factor is not decisive.

The document may be handed over to the creditor along with the titl, e deeds and yet may not be registrable, as in Obla Sundarachariar v. Narayana Ayyar ( 1 ) Or, it may be delivered at a later dated and nevertheless be registrable, as in Hari Sankar Paul v.

Kedar Nath Saha (2 ) The crucial question is: Did the parties intend to reduce their bargain regarding the deposit of the title deeds to the form of a document ?

If so, the document requires registration.

If, on the other hand, its proper construction and the surrounding circumstances lead to the conclusion that the parties did not intend to do so, t; Jien, there being no express bargain, the contract to create the mortgage arises by implication of the . law from . the deposit itself with the requisite intention, and the document, being merely evidential does not require registration.

There are numerous decisions, some of them not easy to reconcile, where this question was considered with reference to the document concerned in the particula:r case.

It is unnecessary to review them, as the two latest pronouncements of the Privy Council, to which reference has been made, aptly illustrate cases falling on either side of the line.

In Obla Sundarachariar v.

Narayana Ayyar ( 1 ) a signed memorandum was delivered to the mortgagee along with the title deeds of cei:tain i; roperties deposited as security.

The merrioran-. dum stated "As agreed upon in person, I have delivered to you the under-mentioned documents as security," and listed the title deeds deposited.

It was held that the memorandum was no more than a mere record of the particulars of the deeds and did not require registration.

The criterion. applied was : "No such memorandum can be within the section (section 17 of the Registration i\ct) unless on its face it embodies such terms

( 1) 58 I.A. 68.

(') 66 I.A 184.

RochJal Ma/irqj

Bhagwandas

D41'11ko And Othtrs

Patanjali Saslri J.

Roehpal MalrT'!f

Blu1gwandas

DOTuka And Others

PaJahjali Sastri J.

and is signed and delivered at such time and place and in such circumstances as to lead legitimately to the conclusion that, so far as the deposit is concerned, it constitutes the agreement between the parties." In Hari Sankar Paul v. Kedar Nath Saha (') the title deeds were deposited accompanied by a memorandum 'part of the advance arranged for was made.

So!lle days later when the balance was advanced, another memorandum was delivered superseding the earlier one, and this was a formal document stating the essential terms of the transaction "hereby agreed" and referred to the moneys "hereby secured".

It also conferred an express power of sale on the mortgagee.

Lord Macmillan, after reviewing the eariler decisions of the Board, held that the document required registration, observing, "where, as here, the parties professing to create a mortgage by a deposit of title deeds contemporaneously enter into a contractual agreement, in writing, whiih is made an integral part of the transaction, and is itself an operative instrument and not merely evidential, such a document must. under the statute, be registered."

Turning now to the memorandum before us, 1t 1s clear, on the face of it, that the parties did not intend thereby to create the charge.

The document purports only to record a transaction which had been concluded and under which the rights and libilities had been orally agreed upon.

No doubt it was taken by the respondents to show that the title deeds of the appellant's properties were deposited with them as security for the moneys advanced by them, and to obviate a possible plea that the deeds were left with them for other purposes, as indeed was contended by the appellant in his written statement, taking. advantage of the non-registration of the memorandum in question.

But that is far from intending to reduce the bargain to writing and make the document the basis of the rights and liabilities of the parties.

In agreement with the High Court, we are of opinion, that the memorandum delivered by the appellant along with the title deeds

('). 66 LA. 1~4.

deposited with the respondents did not require registration and was properly admitted in evidence to prove the creation of the charge.

The appeal fails and is dismissed with costs.

Appeal dismissed.

Agent for the appellant: Tarachand Brijmohanlal.

Agent for respondent No. 1 : S. P. Varma.

THE NEW PIECEGOODS BAZAR CO., LTD.,

BOMBAY

ti.

THE COMMISSIONER OF INCOME-TAX,

BOMBAY

[SAIYID FAZL ALI, PATANJALI SASTRI,

MEHR CHAND MAHAJAN and

, MUKHERJEA JJ.]

Indian Income-tax Act (XI of 1922), s. 9(1) (iv)-Income from pt"Operty-Computation-Deductions-"Annual charge .not being capital charge"-"Annual charge" and 'capital .charge", mean-· ittgi of-Charge for. municipal . property tax and urban immoveable pro,, my tax-Whether deductible--City of Bombay Municipal Act, 1888, s. 212--,-Bombay Finance Act, I 932, s. 22.

The charge created in respect of municipal property tax by s. 212 af the City of Bombay Municipal Act, 1888, is an "annual charge not being a capital charge" within the meaning of s. 9 ( 1)

(it) of the Indian Income-tax Act, 1922, and the amount of such charge should therefore be deducted in computing the income from such property for the purposes of .s- 9 of the Indian Income tax Act.

The charge in . respect of urban immoveable property tax created by the Bombay Finance Act, 1932, is similar in character

and the amount of such charge should also be deducted_

Tl* expression "capital charge" in s. 9 (1) (iv) means a charge created for a capital sum, that is to say, a charge created to secure the discharge of a liability of a capital nature; and an

"annual charge" means a charge to secure an annual liability.

R~ Mfl"'qj

v. Bliagwandas Daruka AtttJ Othm

P atanjali Sastri J.

May26

RACHPAL MAHRAJ

BHAGW ANDAS. DARUKA and OTHERS

SHRI HARILAL KANIA

PATANJALI SASTRI

DAs J

Indian Registration Act

s. 17

Transfer of Property Act

s. 58

section 17

Indian Registration Act, 1908

APPEAL

High Court of Judicature at Patna

Shiva Prasad Sinha

Kishan

B. K. Saran

Calcutta

23rd October, 1936

section 17

Indian Registration Act, 1903

Subordinate Judge of Darbha!1ga who

Daruka

Patanjali Sastri

Samastipur

section 58

Transfer of Property Act

Section 59

section 17

Indian Registration Act, 1908

section 17

RochJal Ma

Patanjali Saslri

Roehpal MalrT'!f

DOTuka

PaJahjali Sastri

Macmillan

Tarachand Brijmohanlal

S. P. Varma

NEW PIECEGOODS BAZAR CO., LTD

COMMISSIONER OF INCOME-TAX,

BOMBAY

SAIYID FAZL ALI

PATANJALI SASTRI

MEHR CHAND MAHAJAN

, MUKHERJEA

Indian Income-tax Act

s. 9(1)

s. 212

Bombay Finance Act

s. 22

s. 212

City of Bombay Municipal Act, 1888

s. 9

Indian Income-tax Act, 1922

Bombay Finance Act, 1932

s. 9