BEOHAR RAJENDRA SINHA & ORS.

STATE OF M.P. & ORS.

March 11, 1969

[M. HIDAYATULLAH, C.J., V. RAMASWAMI AND G. K. MITTER, JJ.]

Civil Procedure Code 1908, S. 80-Karta of Hindu Joint fomily giving notice of suit under section SO-Thereafter members of family dividing on partition-Divided n1e1nbers joining as plaintiffs in suit- Whether fresh notice necessary by divided n1e111bers or previous notice of Karta was in representative capacity.

The appellant, who was at the time the Karta of a Hindu Joint Family, gave notice in January, 1954, to the respondent State under section 80 of the Civil Procedure Code. Thereafter a suit was filed in July, 1954, by \\'bich time a partition had taken place in the family.

In view of this the appellant's three grandsons were joined as plaintiffs in the suit; the plaintiffs sought a declaration that th'rec nazul plots in suit had been in the possession of the plaintiffs and their ancestors from time immemorial and their status was that of Raiyat Sarkar; so that an order of the State Government in the Survey and Settlement Department refusing to recognise their possession ove'r the plots was wrong and ultra vires. Apart from contesting the suit on themerits, the respondent State contended that plaintiffs 2, 3 and 4 i.e. the appellant's grand-sons had no right to institute a suit because no notice under SC9tion 80 C.P.C. was given on their behalf. The trial court dismissed the suit. In an appeal, the High Court held that the appellant had lost the right to represent the joint family as karta at the time of institution of the suit because their had been sevetence of joint status and the notic1c served by him could not enure to the benefit of other plaintiffs.

On the merits the High Court found that the plaintiffs had shown their possession for the statutory period of 6 years.

On appeal to this Court,

HELD: (1) The notice given hy the apellant in January, 1954, was sufficient in law to sustain a suit brought by all the divided coparceners who must be deemed to be as much the -nuthorsof the notice as the Karta who was the actual signatory of the notice.

Thc'rc was suhstantial identity bet\vcen the person givingthe notice and the persons bringing the suit in the present case. r959 Bl

At the time of giving notice the appellt\nt was admittedly the eldest n1cmber of the joint family and being a Karla he \Vas entitled to reprc- -; cnt the joint family in all its affairs. The cause of action had accrued at the time qf giving of the notice and it was not necessary to give a sccbnd notice merely because there \vas a severence of the joint family. before 20th July, 1954, when the suit was actuallv imtituted. [958 G-H]

Although the terms of section 80 C.P.C. must be strictly complied ... vith, that docs not mean that the terms of the notice should he scrutinised in an artificial or pedantic manner. [960 Al

Dhian SinRh Sabha Singh & Anr. v. The Union of India, [1958) S.C.R. 781, referred to.

:>late of Andhra Pradesh v. Gundugo/a Venkata Suryanarayan Garu, A !1964] 4 S.C.R. 945; Ve//ayan Chettiar & Ors. v. Government of the Province of Madras and Anr., A.l.R. 1947, P.C. 197; Government of the Province of Bombay v. Peslonji Ardeshir W adia & Ors., 76 I.A. 85, distinguished. ·

(2) On the merits, the appellants had failed to produce reliable oral or documentary evidence to prove that their ancestors had possession over the disputed land for many years. On the contrary this land was always B recognised as Milkiat Sarkar and the respondent State Government was justified in holding it as such.

CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 386 and 387 of 1966.

Appeal by special leave from the judgment and_ decree dated c April 16, 1963 of the Madhya Pradesh High Court in First Appeal No. 217 of 1959.

S. V. Gupte, P. C. Bhartari and J. B. Dadachanji, for the appellants (in C.A. No. 386 of 1966) and the respondents (in C.A. No. 387 of 1966).

I. N. Shroff a!lld Rama Gupta, for the State of Madhya Pradesh.

The Judgment of the Court was delivered by

Ramaswami, J.

These appeals are brought by special leave from the judgment of the High Court of Madhya Pradesh dated 16th April, 1963 in First Appeal No. 217 of 1959, whereby the High Court modified partly the judgment of the first Additional District Judge, Jabalpur dismissing Civil Suit No. 10-A of 1954.

The suit was instituted against the State of Madhya Pradeshby Beohar Raghubir Singh and his three grand-sons.

Beohar Raghubir Singh's son, Beohar Rajendra Sinha, was a pro-forma defendant.

A notice under section 80 of Civil Procedure Code had been given by Raghubir Singh on 11th January, 1954. Plaintiffs 2, 3 and 4, his grand-sons were joined as plaintiffs because in a partition made subsequent to the giving of the notice, they were each entitled to 1 /5th share along with the firSt plaintiff.

Beohar Rajendra Sinha was joined as a defendant because he did not choose to join as the plaintiff. The plaintiffs sought a declaration (1) that the three nazul plots in sujt had been in possession of the plaintiffs and their predecessors in their own right from time immemorial and their status was that of Raiyat Sarkar; and

(2) that the order of the State Government in the Survey and Settlement Department refusing to recognise their possession over the plots was wrong a, nd ultra vires.

The dispute relates to Phoota Ta! a tank situated within the town of.Jabalpur. It was plot No. 282 in the settlement of 1863 A.D.

Its area then was

5.24 acres.

It was recorded as Malkiat Sarkar and in the last column there was an entry showing possession of Aman Singh Thakur Prasad.

The next settlement took place in 1890-91.

The survey number of Phoota Tai was changed to plot No. 325.

Its area remained the same, it was recorded

1as "water (pani)" and in the last column, the entry showed the possession of Beohar Narpatsingh Raghubir Singh.

The third settlement took place in 1909-10.

The plot number of Phoota Tai was then changed to 327. Its area remained t)Ie same, it was still recorded as 'water", but there was no entry in favour of any one showing possession.

The nazul settlement took place in 1922-23. In this settlement, the tank was given numbers 33, 34, 35, 36, 37 and 171. Its area was recorded as 5 .24 acres. In this settlement about 2 acres of land was found to be occupied by the Municipal Committee, Jabalpur.

The land so found to be occupied was recorded in the possession of the Municipal Committee, Jabalpur and the remaining land was again recorded as "Milkiat Sarkar".

There was no entry regarding possession in the remarks column so far as the remaining land was concerned. The plaintiffs alleged that Thakur Prasad and Aman Singh were their ancestors, that they had been in continuous possession of the disputed land and the omission to record their possession in the last two settlements of 1909-10 and 1922-23 was due to some oversight. In 1948 the first plaintiff made an application for correction to the Deputy Commissioner, Jabalpur who made an order in his favour E" Ex. P-5.. The order of the Deputy Commissioner was however set aside by the State Government on 28th May, 1953 and it was held that the plaintiffs had no title to the disputed land.

The plaintiff therefore prayed for a declaration of the title to the disputed plots and for the correction of the entry in the settlement record showing the status of the plaintiff as that of "Raiyat Sarkar". The suit was contested by the State of Madhya Pradesh.

It was urged that the plaintiff had no possession over the disputed land and the order of the State Government dated 28th May,

1953 wa:i corrt. . It was contended that plaintiffs 2, 3 and 4 had no nght to mstitute the suit because no notice under section 8~ of the Civil Procedure Code was given on their behalf. The Sl!It was not. contested by the second defendant Beohar Rajendra Sinha. By its judgment dated 24th January 1959 the trial court held that there was no documentary evidenc~ from 1891 to 1932 support the possession. of the ancestors of the plaintiffs regardmg Phoot!l Tai.

The tnal court also held that in all the settlement ;, nt~1e~, the land,, was recorded as belonging to the Government Milk1at arkar . In any event, between 1891 to 1932

thee .was no ~VIdence regarding the user of the property by the plamts and m .the subsequent years a part of the property was found 1~ P.ossessmn of the Municipal Committee. The trial court d1snnssed the suit. Against the judgment of. the trial court

the plaintiffs preferred an appeal to the High Court. The High Court held in the first place the notice Ex. P-8 was not in conformity with section 80 of the Civil Procedure Code. The High Court held that Beohar Raghubir Singh had lost the right to represent the joint family as karta at the time of institution of the suit because there had been a severence of joint status and the notice served by Beohar Raghubir Singh could not ensure to the benefit of the other plaintiffs. On the merits of the case, the High Court found that the plaintiffs had established their possession for the statutory period of 60 years. The High Court held that the plaintiffs had acquired the right of Raiyat Sarkar and that the order of the State Government refusing to correct the revenue record was illegal.

On these findings the High Court modified the judgment of the trial court to the extent that there was a declaration in favour of the plaintiffs that they were entitled to I/5th share of the property in dispute and the claim regarding the 4/5th share was dismissed. The order of the State Government dated 28th May, 1953 refusing to recognise the possession of the plaintiffs was held to be wrong and illegal.

The first question to be considered in these appeals is whether the High Court was right in holding that the notice given under section 80 of the Civil Procedure Code by the first plaintiff was effective only with regard to Raghubir Singh and the notice was ineffective with regard to the other plaintiffs and therefore Raghubir Singh alone was entitled to a declaration as regards the I/5th share of the dispute plot. On behalf of defendant No. 1 it was contended by Mr. Shroff that at the time of giving notice the plaintiffs and the second defendant were joint and plaintiff No. 1 Raghubir Singh was karta of the joint family. The notice was given on 11th January, 1954 and the suit was instituted 011 20th July, 1954. It was admitted that between these two dates there was a disruption of the joint family of which Raghubir Singh was a karta. It was argued that the right of the first plaintiff to represent the family had come to an end before the institution of the suit, and hence plaintiffs 2, 3 and 4 had to comply individually with the provisions of section 80 of the Civil Procedure Code before appearing as plaintiffs in the suit.

In our opir1icn, there is no justification for this argument. We consider that thrc is substantial identity between the person giving the notice and the persons filing the suit in the present case.

At the time of giving notice the first plaintiff Beohar Raghubir Singh was admittedly the eldest member cif the joint family and being a karta he was entitled to represent the joint family in all its affairs. The cause of action had accrued at the time of giving of the notice and i, t was not necessary to give a second notice merely because there was a severence of the joint family, before 20th

July, 1954 when the suit was actually instituted. It is obvious

that the notice was given by Beohar Raghubir Singh as a reprc:sn tative of the joint family and in view of the subsequent partition the suit had to be instituted by: ail the divided members of the joint family.

We are of the opinion that the notice given by Beohar Raghubir Singh on 11th January, 1954 was sufficient in law to sustain a suit brought by ail the divided coparceners who must be deemed to be as much the authors of the notice as the karta who was the actual signatQIY of the notice.. There is substantial identity between the person giving the notice and the persons bringing the suit in the present case and the argument of defendant No. 1 on this point must be rejected.

The object of the notice under section 80, Civil Procedure Code is to give to the Government or the public servant Goncerned

an opportunity to reconsider its or his legal position and if that CQ.UrSe is justified to make amends or settle the claim out of court.

The section is no doubt imperative; failure to serve notice complying with the requirements of the statute will entail dismissal of the suit.

But the notice raust be reasonably construed.

Any unimportant error or defect cannot be permitted to be treated as an excuse for defeating a just claim. In considering whet11er the provisions of the statute are complied with, the Court must take into account the following matters in each case (1) whether • the name, description and residence of the plaintiff are given so as to enable the authorities to identify the person serving the notice; (2) whether the cause of action and the relief which the plaintiff claims are set out with sufficient particularity; ( 3) whether a notice in writing has been delivered to or left at the office of the 1ppropriate authority mentioned in the section; and ( 4) whether the suit is instituted after the expiration of two months next after notice has been served, and the plaint contains a statement that

sue~ a notice has been so-delivered or left. In construing the nott17 the Court cannot ignore the object of the legislature, viz., to give to the Government or the public servant concerned an

opportuniy to reconsider its or his legal position. If on a reasonble reamg of. the notice the plaintiff is shown to have given the information which the statute requires him to give any incidental defects or irregularities should be ignored. '

In the present case, the notice was served on 11th January 19~4 by ~7oh~ Raghubir Singh. The notice stated the cause of aetion ansmg m avour of the joint family.

The requirements as !O .cause of action: the !lame, description and residence of the Pl3!11tiff were complied with and the reliefs which the plaintiff

claimed. we dul)'. set out in the notice. It is true that Beohar Raghubll'; Smgh did not expressly describe himself as the karta. ut reag the contents of the notice Ex. P-8 in a reasonable manner 1t appears to us that the claim of Beohar Raghubir Singh

was made on behalf of the joint family. It is true that the term of section 80 of the Civil Procedure Code must be strictly complied but that does not mean that the terms of the notice should be scrutinised in an artificial or pedantic manner. In Dhian Singh Sobha Singh & Anr. v. The Union of India & Anr.(1) Bhagwati, J. observed in the course of his judgment :-

"We are constrained to observe that the approach of the High Court to this question was not well-founded. The Privy Council no doubt laid dOWlll in Bhagchand Dagadusa v.

Secretary of State(') that the terms of this section should be strictly complied with.

That does not however mean that the terms of the notice should be scrutinised in a pedantic manner or in a manner completely divorced from common sense.

As was stated by Pollock C. B. in Jones v. Nicholls(') 'We must import a little common sense into notices oi this kind'. Beaumonth, C.J., also observed in Chandu Lal Vadilal v. Government of Lombay(') "One must construe section 80 with some regard to common sense and to the object with which it appears to have been d " passe ..... .

As already pointed out, the suit was instituted in the present case by the divided members of Hindu joint family on 20th July,

1954. The notice had been given Cl!Jl 11th January, 1954 by Beohar Raghubir Singh who was the karta of the undivided joint family. In our opinion, there was identity between the person giving a notice and the persons filiJng the suit because it must be deemed in law that each of the plaintiffs had given the notice under s. 80 of the Civil Procedure Code through the karta Beohar Raghubir Singh. It is not disputed that the cause of action set out in the notice remained unchanged in the suit. It is also not said that the relief set out in the plaint is different from the relief set out in the notice. We are accordingly of the opiinion that the notice given by the karta was sufficient to sustain the suit brought by the divided coparceners and the decision of the High Court on this point must be over-ruled. ' The view that we have expressed is borne out by the judgment of this Court in State of Andhra Pradesh v. Gundugo/a Venkata Suryanarayan Garu('). In that case, the Government of Madras app.Jied the provisi ans of the Madras Estates Rent Reduction Act, 194 7 to the lands in the village Mallindhapuram on the ground that the grant was o.f the whole village and hence an estate within the meaning of s. 3(2) (d) of the Madras Estates

(1) [1958] S.C.R. 781. (Ji [1844J 13 .'Vf & W 361. 363: 153 E.R. 149. 150.

(5) [1964] 4 S.C.R. 945.

(2) [1927] L.R. 541.A . ..; JJS.

(4) l.L.R. [1943] llom. 128.

Land Act, 1908. The respQ!lldent and another person served a notice under s. 80 of the Code of Civil Procedure upon the Government of the State of Madras in which they challenged the above mentioned notification and asked the Government not to act upqn it.

Out of the two persons who gave the notice, the respondent alone filed the suit. The trial court held that tqe original grant was not of the entire vi1!age and was not so confirmed or recognised by the Government of Madras and as it was not an "Estate" withip the meaning of s. 3(2)(d) of the Madras Estates Land Act, the Madras Rent Reduction Act, 1947 did not apply to it. But the suit was dismissed on the ground that , although two persons had given notice under s. 80 of the Code of Civil Procedure, only one person had filed the suit. The High Court agreed with the trial court that the grant was not of an entire village but it also held that the notice was not defective and the suit was maintainable as it was a representative suit and the permission of the Court under 0.1, r. 8 had been obtained in this case.

The High Court granted the respoodent the relief prayed for by him.

Against the order of the High Court the appellant appealed to this Court which dismissed the appeal holding that in the circumstances of the case there was no illegality even though the notice was given by two persons and the suit was filed by only one. If the Court grants permission to one person to institute a representative suit and if the person had served the notice under s. 80, the circumstance that another person had joined him in serving the notice but did not join him in the suit. was not a sufficient ground for regarding the suit as defective. At page 953 of the Report Shah, J. observed as follows:-

"The notice in the present suit was served by the plaintiff and Yegneswara Sastri.

They raised a grievance about the notification issued by the Government of Madras on May 16, 1950; it was not an individual grievance of the two persons who served the notice but of all the Inamdars or agrahamdars. The relief for which the suit was intended to be filed was also not restricted to their personal claim, The notice slated the cause of action arising in favour of all the Inamdars, and it is not disputed that the notice set out the relief which would be claimable by all the Inamdars or on their behalf in default of compliance with the requisition. The plaintiff it is true alone filed the suit, but he was permitted to sue for and on behalf of all the Inamdars by an order of the Court unuder 0. 1, r. 8 of the Code of Civil Procedure. The requirements as to the cause of action. the name, description and place of residence of the plaintiff was therefore

co1:1plied with and the relief which the plaintiff claimed was duly set out in the notice. The only departure from the notice was that two persons served a notice under s. 80 infotmiing the Government that proceedings would be started, in default of compliance with the requisition, for violation of the rights of the Inamdars, and one person only out of the two instituted the suit. That in our judgment is not a defect which brings the case within the terms of s. 80".

On behalf of respondent No. 1 reference was made to the two decisions of the Judicial Committee in Vellayan Chettiar & Ors. v. Government of the Province of Madras and Anr.(') and Government of the Provinpe of Bombay v. Pestonji Ardeshir Wadia & Ors.( 2 ) But the principle of these decisions has no bearing on the question presented for determination in the present case.

In Vellayan Chettiar's case(') a notice was given by one "plaintiff stating the cause of action, his name, description and .place of his residence and the relief which he claimed although the suit was instituted by him and another. It was observed by the Judicial Committee :

"The section according to its plaijn meaning requires that there should be in the language of the High Court of Madras 'identity of the person who issues the notice with the person who brings the suit' : See Venkata R.angiah Appa Rao v. Secretary of State( 8 ) and on appeal Venkata Rangiah Appa Rao v.

Secretary of State('). To hold otherwise would be to admit an implicatiQ!l or exception for which there is no jurisdiction".

Two persons had sued for a declaration that certain lands belonged to them, and for an order setting aside the decision of the Appellate Survey Officer in regard to those lands. It was found that one alone out , of the two persons had served the notice. The relief claimed by the two persons was personal to them and the right thereto arose out of their title to the land claimed by them.

It was held by the Judicial Committee that without a proper notice under s. 80 the suit could not be instituted for to hold otherwise would be to admit an implication or exception for which there was no justification. In the other case, in Pestonji Ardeshir Wadia's case(2 ) two trustees of a trust served a notice in October; 1933 upon the Government of Bombay under s. 80 intimating that the trustees intended to institute a suit against the Government on the cause of action and for the relief set out

(l) A.I.R.1947 P.C.197.

(3) J.L.R. Mad 416.

(2) 76 I.A. 85.

(4) A.J.R. 1935 Mad. 389.

B. R. SINHA v. M. P. STATE (kamaswami, J.) 903

A therein. One of the trustees died before the plaint was lodged in court, and two more trustees were appointed in the place of the deceased trustee. Thereafter the two new trustees and the surviving trustee filed the suit out of which the appeal arose which was decided by the Judicial Committee. No notice was served on the Government on behalf of the two new trustees.

The Judicial li Committee accepted the view of the High Court that where there were three plaintiffs, the names and addresses of all of them must be given in the notice. Their Lordships observed that :

"the provisions of s. 80 of the Code are imperative and should be strictly complied with before it can be said that a notice valid in law has been served on the c Government. In the present case it is not contended that any notice on behalf of plaintiffs 2 and 3 was served on the Government before the filirig of the suit".

It is clear that the principle of these two decisions of the Judicial Committee has no application in the present case because the material facts are different.

D We proceed to consider the next question arising in these appeals viz., whether the High Court was right in holding that the plaintiffs had established their title as raiyat sarkar with regard to l/5th share in nazul plots Nos. 34/3, 33 and 171/l mentioned in the .Deputy Commissioner's order dated 7th May, 1948 in Revenue Case No. 9 / 45-46. It was argued on behalf of E defendant No. 1 that there was no evidence to show that the plaintiffs were in possession of the land from 1909 to 1932, and the plaintiffs had not established their title by prescription for the statutory period of 60 years.

It was contended that the High Court had no justification for holding that the plaintiffs had es!ablished the title of "Raiyat Sarkar" and the finding of the High Court was not based upon any evidence. In our opinion, F the argument put forward on behalf of defendant No. 1 is wellfounded and must be accepted as correct. In the settlement of 1863-64 Ex. P-1 the names of Amansingh and Thakurprasad were not~ in. the rearks column. But the column regarding tenancy nght 1s defirutely blank.

The owner is shown in the Khasra as.the State "M_ilkiat Sarkar". In the settlement of 1890- G 91 Amansmgh Narpatsmgh is again shown in the remarks column o_f th~ kha1'.1 But the column regarding any kind of tenancy nght is agam blank. It is clear that in the settlements of 1860 and 1890-91 the ownership of the land is recorded as that of the Government. The.possession of the plaintiffs or of their ancestors could not be attributed to ownership or tenancy right of the H property. In the settlement of 1909-10, Ex.P3 there is no entry m the earks column showing the possession of the ancestors Gf the plamtiffs. It was said on behlf of the plaintiffs that no

(I) 7o I.A. 85.

Lil Sup. C.l.{69-12

964 SUl'REME COURT REPORTS [1969] 3 s.c.R.

notice was given to them of the proceedings of the settlement of

1909-10. Even assuming that this allegation is correct, the entries of the khasra P-3 cannot be treated to be a nullity and of no effect. In any event, it was open to the plaintiffs to adduce other reliable evidence to prove their possession between the years 1909 to 1932. But the plaintiffs have failed to produce any such evidence. In the nazul settlement of 1922-23 the tank was given new plot numbers 33, 34, 35, 36, 37 and 171 and its area was recorded as 5.24 acres.

In this settlement about 2 acres of land was found to be occupied by the Municipal Committee, Jabalpur. The land so found to be occupied was recorded in the possession of the Municipal Committee, J abalpur and the remaining land was again recorded as

"Milkiat Sarkar". There is no entry as regards the remaining land recording anybody's possession in the remarks column.

Actually proclamations were made during this settlement and objections were invited as per f:x.ID-14.

A date was fixed upto 31-8-1924 but no one came forward.

The proclamation clearly recited that the vacant sites which were not in possession of anybody were not recognised as belonging to any person. It is impossible to believe that the plaintiffs or their ancestors were unaware of such a proclamation. Had they been in possession they would not have failed to make a claim. For the. period after 1933-34 the plaintiffs produced account books to show that they exercised certain rights.

Certain receipts were also proved but they also relate to a period after 1939. We have gone through the oral evidence produced by the plaintiffs and it appears to be unreliable. The result is that for the period 1891 till 1932 there is no reliable oral or documentary evidence to prove that the plaintiffs or their ancestors had any possession over the disputed land. On the contrary the disputed land i.e. Phoota Tai was always recognised as Milkiat Sarkar and the SJate Government was justified in holding that the order of the Deputy Commissioner dated 7th May, 1948 should be set aside.

In the course of the argument reference was made by Mr.

Gupte to the following passage in the Central Provinces Settlement Instructions (Reprint of 1953) page 213 :

"In dealing with proposed method of the settlement of titles it will be convenient in order to remove all causes for misapprehension among residents, to lay emphasis on the policy of Government in making these settlements.

That policy was defined in the Chief Commissioner's Resolution No. 502-B-X dated the 19th October, 1917, in the Revenue & Scarcity Department, but its maiJl principles will bear repetition.

A' it is 1wt the intcntiun of Gowrnmnt in making the settlement to disturb long possession, but only to

obtain an accurate record of the lands which are its property and to secure its right to any land revenue to which it may be entitled, long possession, even without clear proof of a definite grant from Government will be recognised as entitled the holder to possession. In deciding what constitutes long possession in any individual town, regard will be had to the special circumstances of the place, and while this point will .be dealt with more particularly in the Deputy Commissioner's report, the following general principles will ordinarily be observed : (I) all .occupants who are able to prove possession to any land prior to 1891 or such later date as may be fixed for each town, either by themselves or by a valid title from a previous holder, and all occupants who can prove a definite grant or lease from Government will be recorded as entitled to hold such land as against Government (paragraph 6 of the Resolution)".

On the basis of this passage it was argued that it was the duty of the settlement officer to treat tl1e plaintiffs as having established their title because they were shown to be in possession in the settlement of the year 1890-91.

We are unable to accept this argument as correct. The passage quoted above only applies to a case where the ownership of the land was unknown i.e. where possession is proved for a long time, but its original title could not be traced, and not to a case where the land is recorded as Government land.

For the reasons expressed, we hold that the suit brought by the plaintiffs being Civil Suit No. 10-A of 1954 should be dismissed. Civil Appeal 386 of 1966 is accordingly dismissed and Civil Appeal 3&7 of 1966 is allowed with costs in favour of defendant No. I i.e. State of Madhya Pradesh. There will be one hearing. fee.

R.K.P.S.

Civil Appeal 386/66 dismissed.

Civil Appeal 387 /66 allowed.

BEOHAR RAJENDRA SINHA & ORS

STATE OF M.P. & ORS

March 11, 1969

M. HIDAYATULLAH, C.J.

V. RAMASWAMI

G. K. MITTER, JJ.

Civil Procedure Code 1908

S. 80

section 80

Raiyat Sarkar

C.P.C

20th July, 1954

section 80

C.P.C

1964] 4 S.C.R. 945

April 16, 1963

Madhya Pradesh High Court

S. V. Gupte

P. C. Bhartari

J. B. Dadachanji

I. N. Shroff

Ramaswami

High Court of Madhya Pradesh

State of Madhya Pradeshby

Beohar Raghubir Singh

Beohar Raghubir Singh

Beohar Rajendra Sinha

section 80

Civil Procedure Code

Raghubir Singh

11th January, 1954

Beohar Rajendra Sinha

Jabalpur

Aman Singh Thakur Prasad

Beohar Narpatsingh Raghubir Singh

Municipal Committee,

Municipal Committee, Jabalpur

Thakur Prasad

Aman Singh

28th May, 1953

State of Madhya Pradesh

28th May,

1953

section 8

Beohar Rajendra Sinha

24th January 1959

section 80

section 80

Shroff

Raghubir Singh

011 20th July, 1954

section 80

20th

July, 1954

section 80

Civil Procedure Code

11th January 19~4 by

Beohar Raghubll

section 80

Bhagwati

Pollock

Beaumonth

section 80

20th July,

1954

s. 80

Government of Madras

Mallindhapuram

s. 3(2)

[1964] 4 S.C.R. 945

Land Act, 1908

s. 80

the Code of Civil Procedure

s. 3(2)(d)

Madras Rent Reduction Act, 1947

s. 80

the Code of Civil Procedure

s. 80

Shah

Yegneswara Sastri

May 16, 1950

the Code of Civil Procedure

s. 80

s. 80

Vellayan Chettiar

High Court of Madras

s. 80

Pestonji Ardeshir Wadia

Government of Bombay

s. 80

kamaswami

s. 80

7th May, 1948

Amansingh

Thakurprasad

Municipal Committee, J abalpur

Phoota Tai

Milkiat Sarkar

Gupte

State of Madhya Pradesh


SHAIK MOHAMMAD UMAR SAHEB v.

KALASKAR BASHAM KARIMSAB & ORS.

March 11, 1969

[M. HIDAYATULLAH, C.J. AND G. K. MITTER, J.J

Election petition-Maharashtra Municipalities Act 1965, s. 21(1)- Trial Court rejecting application to summon peti1ioner's witnesses-1'hereafter summoning them as court witnesses-Whether empo.wered lo do &o- Cour1 not framing separate clear cut issue for each charge-Whether trial vitiated.

Constitution of India Arts. 226 and 221-Jurisdiction of High Court-

Whether can reappreciate evidence.

The first respondent challenged the appellant's election to the Sangli City Municipality held in June 1967 under the Maharashtra Municipalities Act, 1965. lt was alleged that the respondent had published and circulated pamphlets contaming defamatory statements against the respondent and in particular instigating Muslim voters to vote against him by arousing their religious sentrments.

At the trial of the petition the respondents applied to have two witnesses examined but the Trial Judge re- D jected the application.

Later, however, the same two witnesses were called by the trial jud.e as court witnesses. The Trial Court allowed the petition and disqualified the appellant from being a member of a Municipality for five years.

A petition under Arts. 226 and 227 of the Constitution by the appellant was rejected in limine by the High Court. ·

In appeal to this Court it was contended inter alia by the appellant (i) that the trial court was wrong in callin2 as court wjtnesses the same two witnesses who h.i.d been cited as the resPondent's witnesses and having earlier rejected the respondent's application to call them;

(ii) on the evidence the trial court's findina was not justifiable; (iii) that the result of the election was published in the Gazette on the 8th June as well as 15th June but the limitation of JO days ran from 8th June and the petition was therefore time-barred; (iv) the first issue which was decided against the appellant was confusing and misleading whereby the appellant had been denied a fair trial; (v) the order of the Judge disqualifying the appellant for a period of five years was unduly harsh.

HELD : Dismissing the appeal : (i) Although the trial court's earlier order refusing to issue summons to the two witnesses was not justifiable, under s. 21(7) of the Maharashtra Municipalities Act, 1965, the Trial Judge is given pov.:ers wider than those given by the Code of Civil Procedure under Order 16, Rule 14, as the section does not prescribe any pre-requisite to the examination of a person as a. court witness as envisaged by the Code of Civil Procedure .. The trial Judge thereto.re had jurisdiction to call the two persons as witnesses under the prov1s1ons uf

the Act. [972 DJ R. M. Seshadri v. G. Vasanta Pai, [1969] 2 S.C.R. 1019, referred to.

(ii) On the evidence, no exception could be taken to. the trial Judge deciding the issue against the appellant on the facts and ctrcumstaces of the case.

It could not be said that there \vas no evidence on which the Judge could have come to that conclusion. \Vb.en the trial Judge accepted

UMAR SAHEB v. KAR!MSAB !Mitter, ]. ) 967

the evidence with regard to the distribution of the pamphlets by the appellant, the High Court, which was not hearing an appeal, could not be expected to take a different view in exercising jurisdidtion under Arts. 226 and 227 of the Constitution and there was no reason shown to this Court to interfere with the order of the High Court. [975 A]

(iii) The appellant could have set up the first Gazette publication as the one fixing the period of limitation in \vhich ca!'ie the trial Judge would have been required to go into the matter. But the appellant had precluded himself from doing so by his unconditional acceotance of the statement in the petition that the result was published on 15th June, 1967.

There was no error apparent on the face of the record before the qigh Court and consequently the jurisdiction under Art. 226 of the Constitution could not have heen exercised on the facts of the dase by the issue o'f a writ of certiorari. Neither could the High Court set aside the order of the trial court under Art. 227 of the Constitution under which the High Court's power of superintendence is confined to seeing that the. trial court had not transgressed the limits imposed by the Act.

On the facts of the case the Hih Court was not called upon to go into this question. f974 C-DJ

(iv) It could. not be concluded that because of the want of preciseness in the issues framed the whole trial was vitiated.

The appellant knew the points he had to meet.

Although the evidenc~ about the distribution of the pamphlets was not beyond reproach, it was not for the High Court to take the view that the order ought to be quashed on the ground that there was no evidence. [974 Fl

(v) The allegations of corrupt practices against the appellant were of a serious nature and if he was found guilty, the period of five years' disqualification could not be considered inapprop'riate.

CivIL APPELLATE JURISDICTION : Civil Appeal No. 2322 of . 1968.

Appeal by special leave from the order dated October 4, 1968 of the Bombay High Court in Special Civil Application, No. 2053 of 1968.

N. N. Keswani, for the appellant.

R. B. Datar and S. N. Prasad, for respondent No. l,

S. P. Nayar, for respondents Nos. 2 to 4.

The Judgment of the Court was delivered by Mitter, J. This is an appeal by special leave from an order of the Bombay High Court dismissing in limine an application under Arts; 226 and 227 of the Constitution and refusing to quash the Judgment and order of the Assistant Judge at Sang!i rendered in Election Petition No. 10 of 1967. The facts are as follows.

\>~ Ju_ne 3, 1967 election of councillors to the Sangli City Mumc1pahty was held under the Maharashtra Municipalities Act, 1965 (hereinafter referred to as the 'Act'). The countin~

SUPREME COURT REPORTS

 of votes took place with regard to Ward No. 25 on June 4, l967.

According to the election petition, the results were published in

the Official Gazette on June 15, 1967 and the petition was filed on June 24, 1967. The petitioner who was himself a candidate for election from the said ward challenged the election of the appellant before us on several grounds setforth in paragraph 3 of the petition. The first of these was to the effect that the app.l Iant had, with the help of his supporters, published an undated pamphlet and circulated the same on a large scale among the voters in \Yard No. 25 and that the said pamphlet contained untrue, false and defamatory statements about the petitioner thereby prejudicing the voters generally against him and in particular instigating the Muslim voters to vote against him by arousing their religious sentiments.

Another similar ground based on a defamatory pamphlet dated 30th May 1967 was urged in the petition .. Charges of terrorising voters and securing _votes by false personation were also levelled therein.

Statements were made

in the petition that the appellant's name as councillor had been declared in the Official Gazette on June 15, 1967 and the peti- . tioner's cause of action had arisen on that date. The first of these - D was expressly accepted as correct in the written statement of the appellant and the second remained unchallenged.

The appellant however repelled the charges mentioned above and denied that he was responsible for the publication of any of the impugned pamphlets.

Of the four issues framed at the hearing of the petition, the first was : ·

''whether the petitioner proved that opponent No. 1 wlio was elected as Municipal Councillor for Ward No. 25 had used malpractices at the time at the election by arousing religious sentiments of the voters and making defamatory statements against the petitioner by publishing pamphlets?".

The petitioner gave evidence himself about the allegations in the . petition fo substantiate the charges raised by him.

The appeJ-. !ant examined himself to contradict the said evidence.

It appears that the petitioner had in the list of witnesses filed bv him, G mentioned the name of two persons, Hakim Abdul Rahiman Shaikh and Gopal Chintaman Ghugare and that these two persons had attended the court on certain days when they were not examined.

On August 21, 1968 the petitioner made an application b.efore the Judge for issuing summons on these two persons as his witnesses, but the learned Judge rejected that appli- H cation.

The appellant's case was closed on the same day and tbe arguments started on August 22, 1968. On that date the court adjoqmed the hearing of the case to August ~4, 1968 for

UMAR SAHEB v. KARJMSAB (Mitter,).) 969

recording the evidence of these two witnesses in respect of whom an application had been made by the election petitioner on the previous day.

The order Ex. 36 dated August 22, 1968 tends to show that the learned Judge was persuaded to do so by the mere fact that they were Government servants. He however recorded that the ends of justice required that these witnesses should be examined.

He fixed August 24, 1968 for further hearing of the matter and directed the issue of summonses to these two persons.

These two persons were examined on the 24th August as court witnesses and thereafter the argent of counsel was resumed and concluded.

By judgment delivered on August 30, 1968 the learned Judge allowed the election petition holding in favour of the petitioner on the first issue.

The ippellant before us presented an application . to the High Court under Arts. 226 and 227 of the Constitution for quashing the order of the Judge; but the High Court dismissed the writ petition in limine on October 4, 1968 and the appellant .has now come up before this Court by special leave.

Learned counsel for the appellant raised five points before us.

The first point was that the procedure adopted by the trial court was wrong in that the two witnesses who were examined as court witnesses had been cited by the election petitioner earlier and the learned Jµdge had in the exercise of jurisdiction vested in him refused to issue summonses to them when he w&s asked to do so on August 21, 1968. It was urged that having rejected this application, it was not open to the Judge to examine these two persons as court witnesses and this was a serious irregularity which the High Court should have set right by quashing the order of the Judge based on the evidence of these witnesses.

The second point was that the election petition was filed beyond the period prescribed by the Act and as such it was not maintainable. The third point was that the first issue which was decided against the appellant was so confusing and misleading that there was no fair trial of the petition to the prejudice of the appellant.

The fourth point was that in any event there was no evidence of corruot practice of which the appellant could be found guilty.

The fifth point was that the order of the Judge disqualifying the appellant for a period of five year.s was unduly harsh and ought to be set aside.

With regard to the first point it is to be noted that the case of the election petitioner was that the appellant was guilty of publication of two pamphlets which cast serious aspersions on his character and conduct and prejudiced him materially in the eyes of the voters as a result whereof he lost the election and that the first of these also aroused the religious sentiments of the Muslim voters to his detriment. The appellant was found guilty of publication of tbe first pamphlet onl:r.

Tiiis was signed by

(1969] 3 S.C.R.

six persons.

There was no evidence as to where it was printed or who got it printed.

The evidence adduced by the election petitioner was that the appellant had published all the phmphlets mentioned in the petition and distributed the same amongst the voters and the petitioner had come across the first pamphlet during the process of distribution. There can be no two opinions about the contents of the pamphlet being defamatory of the election petitio:ier's character.

The pamphlet read : "H. K. Kadlaskar, who contests tne zlection from Ward No. 25 is an independent cand'.d.tte, has been ostracized from the Muslim community and he has no support of the Muslim community and therefore nobody should vote for him."

While Kadlaskar was in charge of the management of the Kabarasthan, he was extracting Rs. 12 for allowing the members of Muslim community to bury their dead and had prohibited the burial of the dead bodies of dancing girls and had extracted hundreds of rupees from the persons whose dead were buried there.

He turned the Kabarasthan into a brothel and was trading in illicit liquor for which he was convicted. Recently he got published a pamphlet in the name of his mistress Noorjahan Bapulal Kavathekar to defame Mohamad Umar Shaikh and he is making some imputations against the private. character of Mohmad Umar and Moulana Innan and nobody should vote for this mean-minded and anti-social person.

In a meetinl! of the Muslim workers held on 29-4-1967 in _the Madina Masjid HaU under the presidentship of M. G. Shaikh it was resolved unanimously that in the place of Shaikh Usman Abdul Bidiwale the Congress ticket should be given to Umar Shaikh, who had the backing of Muslim community and that he did great public service in the past. So all the voters should cast vote in favour of Mohammad Umar Shaikh whose symbol is a pair of buUocks.

(I) Ramjan Mohiddin Jamadar (Hundekari), Chairman Idgah Committee.

(2) Shaik Abdul Sattar Rahimanbhai Bidi wale, Treasurer; Idgah Fund Committee. (3) Moulana Hannn. manager of Madrasa-e, Hidayatul Islam. and member of Madma Masjid ( 4) Kamalsaheb Babasaheb Shiledar, Chairman of Madina Masjid and member of Idgah Committee (5) Sayyed Amin, member of Madrasa-e-Hidayatul Islam and ldgah Committee. ( 6) Jalaloddin Allabus Sayyad. B.A.LLB., member of Madrasa-e-Hidayatul Islam." The appeUant who led evidence on hi~ on J; iehalf . denie~ the publication of the pamphlet and the d1stnbut10n of 1t by rm. as

aUeged by the petitioner. Nothing came out in cross-examma11on of the appeUant to substantiate the election petitioner's averment

UMAR SAHEB v. KAR!MSAB (Mitter, /.) 971

that he was responsible for its distribution. Of the two witnesses who were examined as court witnesses by the Judge, the witness Gopal Chintaman Ghugare did not say anything material on the point of distribution by the appellant.

He merely said that he had seen people reading the pamphlet but h.~ did not know who had distributed it.

The other witness Hakim Abdul Rahiman Shaikh stated categorically that he had received a copy of the pamphlet on the day previous to the municipal election, that is to say, on June 2, 1967 and he gave full particulars as to bow he came to receive it.

He stated that he had attended a prayer meeting at a mosque on the 2nd June and after the Namaj was over the appellllflt had read over the pamphlet and one Moulana Hannan lent support to the appellant.

In cross-examination it was elicited from him that although he had occasion to see the distribution of other pamphlets, he could give no details thereof i.e. either about the person who distributed them or the dates when that was done. In cross-examination of this witness serious accusations were made against bis character and probably no exception could have been taken if the Judge bearing the matter had refused to believe him.

However that may be, the learned Judge accepted his testimony and came to the conclusion that the appellant had been personally responsible for the distribution of the first pamphlet and as such found him guilty of a corrupt practice and made an order disqualifying him under the Act from taking part in municipal elections for the next five years.

It was strenuously argued by learned counsel for the appellant that the recepition of evidence of the two witnesses called as court witnesses vitiated the whole trial and therefore the High Court was not right in refusing to quash the order.

Ou~ attention was drawn to the provisions of 0. XVI r. 14 of the Code of Civil Procedure and particularly to the conditions under which the court may examine any person other than a party to the suit and not called as a witness by a party to the suit but of its own motion to give evidence therein. It was argued that after having turned down the application of the election petitioner on the 21st Auirnst for issue of summons to these two persons, the learned Judge clearly went wrong in allowing them to be called as court witnesses. In this connection we may note the provisions of s. 21 sub-s. 7 of the Maharashtra Municipalities Act, 1965.

It provides as follows :

1 (7) For the trial of such petition, the Judge shall have all the powers of a civil court including power in respect of the following matters :-

(a) discovery and inspection;

SUPREME COURT.REPORTS

(1969] 3 S.C.R.

(b) enforcing the attendance of witnesses and requiring the deposit of their expenses;

(c) compelling the production. of documents; ( d) examining witnesses on oath; ( e) granting adjournments; ( f) reception of evidence on affidavit; and \g) issuing commissions for the examination of witnesses; and the Judge may summon suo motu any person whose evidence appears to him to be material.

The Judge

shall be deemed to be a Civil Court, within the meanc ing of sections 480 and 482 of the Code of Criminal Procedure, 1898." It appears that under this section, the Judge is given powers wider than those given by the Code of Civil Procedure undr

0. 16 r. 14 inasmuch as the section does not prescribe any prerequisite to the examination of a person as court witness as en- D visaged by the Code of Civil Procedure. In our view, the learned Jud)!e had iurisdiction to call these two persons as witnesses under the provisions of the Act. We may note that even under the Representation of the People Act, 1951 which does not contain a similar provision it has been held by this Court that :

"although. . . . . . . . the trial court should be at E arms length and the court should not really enter into the dispute as a third party, but it is not to be understood that the Court never has the power to summon a witness or to call for a document which would throw light upon the matter. particularly of corrupt practice which is alleged and is being sought to be proved. If F the Court was satisfied that a corrupt practice has in act.been perpetrated, may be by one side or the other, it was absolutely necessary to find out who was the author of thftt corruot practice." (see R. M. Seshadri v. G.

Vasanta ai(l).

In that case, the corrupt practice with which the appellant was G charged was having used a large number of motor vehicles for the free co11veyance of vnters ai an election.

The trial Judge examined two witnesses as court witnesses and it is quite clear that but for the evidence of these two oersons, it would have been verv difficult. if not imoossible for the Judge to have come to the conclmion he did and find the aopellant j!Uilty of corrupt H nractice.

A !though one of the two witnesses so examined had been cited earlier as a witness, by one of the parties, he was not

(1) [1969]2 S, C.R. 1019.

L'MAR MHEB \'. KARIMSAB (Mitter, J.) 973

examined but during the course of the evidence led before the trial court, it became quite clear that the two persons who were called as court witnesses were fully conversant with the engagement of the motor vehicles and the court therefore examined them as court witnesses and on the basis of their evidence, found the appellant guilty of a corrupt practice. There, this Court had to deal with the provisions of O. 16 r. 14 and the quotation from that judgment shows that the powers of the court in this respect are of wide amplitude, specially when investigation is being made into allegations about the commission of a corrupt practice. It may be that in the instant case. if the two persons had not been examined, the Judge might well have decided the issue the other way.

But the Act certninly gave him the power to do so and no exception can be taken to the course adopted by the Judge although it must be recorded that his earlier order refusing to issue summonses to them in the first instance when asked to do so on the 21st August was hardly justifiable. Probably the learned Judge realised that his order of the 21st August needed recalling.

The appellant would have had a real cam'e for grievance if he had asked for an opportunitv to rebut the evidence of these two witnesses and had been denied the same but this has nowhere been alleged.

On the evidence no exception can be taken to the course adopt.d by the Judge in deciding the issue against the aopellant on the facts and circumstances of this case.

It mav be that the evidence which was adduced was not so immaculate that another learned Judge deciding the petition might not have taken a different view. But it cannot be said that there was no evidence on which the Judge could have come to the conclusion he did. The first point therefore fails.

With regard to the second point. the learned counsel argued by reference to two publications in the Maharashtra Gazette, the one of .Tune 8. 1967 and the other of June 15, 1967 that the first publication havino taken place on the 8th June the time-limit of ten davs fixed under s. 21 sub-s. (I) of the Act began to run from

thnt clnte ""d the oetition which was filed on the 24th June was bevonrl time and should not have been entertained.

It is difficult for us to see whv two Gazette notifications had become necessary.

One seems to be the verbatim reprint of the other.

The first nublic8tion dated Rth June is he8de<l "Maharnshtra Government Ga7ette-F, trnordinarv-Official Publication" wliile the other is headed "Maharashtra Government Gazette-Official Publication". The first bears the date 8th June and the second bears the date 15th .Tune and both start with the sentence "in accordance with s. 19(1) of the Maharashtra Municipalities Act. 1965 it is declarerl that in respect of the Sanli Municil'al Council General Elections held on 3rd June 1967, the below mentionM candidates are elected from the below mentioned

SUPREME COU&T &EPO&TS

wards for the seats mentioned as against their names".

As a matter of fact, it does not appear that there is any difI.erence between the two Gazettes with regard to the names of the successful councillors.

The appellant might have, if so minded, set up the first Gazette publication as the one fixing the period of limitation in which case the trial Judg.e would have been required to go into the matter.

But the appellant precluded himself from doing so by his unconditional acceptance of the statements in paragraphs 1 and 2 of the petition. If the point had been canvassed before the learned trial Judge, he would certainly have gone into the matter and found out why there were two Gazette Publications and which was the publication to be taken into account for computation of the period of limitation prescribed by s. 21 (I ) of the Act. There was no error apparent on the face of the record before the High Court and consequently the jurisdiction under Art. 226 of the Constitution could not have been exercised on the facts of the case by the issue of a writ of certiorari. Neither could the High Court have set aside the order of the trial court under Art. 227 of the Constitution under which the High Court's power of superintendence is confined to seeing that the trial court had not transgressed the limits imposed by the Act. On the facts of the case the High Court was not called upon to go into this question.

There is certainly some substance in the grievance raised on behalf of the appellant that the first issue was rather confusing and misleading. Instead of framing a separate issue with regard to each charge of corrupt practice raised in the petition, the learned Judge framed the issue in a manner which leaves much t() be desired. For instance he should have framed separate issue with regard to each of the pamphlets. The issues should further have specified the different heads of corrupt practice .committed in respect of each of the pamphlets. We cannot, however, come to the conclusion that because of the unsatisfactory nature of the issues framed, the whole trial is vitiated.

The appellant knew exactly what points he had to meet. Evidence was adduced about the publication and distribution of the pamphlets by the election petitioner and contradicted by the appellant.

As we have already stated, although the evidence about the distribution of the pamphlet was meagre and not beyond reproach. it was not for the High Court to take the view that the order ought to be quashed on the ground that there was no evidence. It was urged by learned counsel for the appellant that there was enough material for the court to come to the conclusion that Hakim Abdul Rahiman Shaik was not a person whose veracity could not be depended upon. There is much that can be said aiminst him but this does not mean that everything deposed to by him should be rejected and when the trial Judge accepted the evidence with regard to the distribution of the pamphlet by the appellant the }iigh Court

UMAR SAHEB v. KARIMSAB (Mitter, J.) 975

which was not hearing an appeal could not be expected to take a different view in exercising jurisdiction umler Arts. 226 and 227 of the Constitution and for ourselves, we see no reason to interfere with the order of the High Court.

The fourth point too is not one of substance. 1f the distribution of the pamphlet be accepted, there can be no doubt that the appellant was guilty of trying to arouse religious sentiments of the voters of the particular ward a majority of whom were Muslims. The pamphlet starts off by describing the election petitioner as a person ostracised from the Muslim community. If this statement was true, naturally any right-thinking Muslim would think twice before casting his vote in favour of such a person.

There was also a charge in that pamphlet that he had turned the Kabarasthan into a brothel and was trading in illicit liquor for which was alleged to have been convicted.

In our view, there is no merit in this point raised by the learned counsel.

As regards the last point, it was for the learned Judge to have come to his own conclusion as to the period of disqualification.

The maximum penalty which the Act allowed him to impose was disqualification for six years and we see no reason to take any exception to the disqualification actually imposed.

As noted above, the allegations of corrupt practice were of a serious nature and if the appellant was found guilty of the commission thereof, the period of five years' disqualification would certainly not be inappropriate.

In the result, therefore, the appeal fails; but in the circumstances of this case, we make no order as to costs.

R.K.P.S.

Appeal dismissed.

SHAIK MOHAMMAD UMAR SAHEB

KALASKAR BASHAM KARIMSAB & ORS

M. HIDAYATULLAH, C.J.

G. K. MITTER, J.J

s. 21(1)

Constitution of India

Arts. 226 and 221

Maharashtra Municipalities Act, 1965

Arts. 226 and 227

s. 21(7)

Maharashtra Municipalities Act, 1965

the Code of Civil Procedure

Order 16, Rule 14

the Code of Civil Procedure

[1969] 2 S.C.R. 1019

Arts. 226 and 227

15th June, 1967

Art. 226

Art. 227

R. B. Datar

S. N. Prasad

S. P. Nayar

Mitter

Bombay High Court

Maharashtra Municipalities Act, 1965

June 4, l967

30th May 1967

Hakim Abdul Rahiman Shaikh

Gopal Chintaman Ghugare

August 21, 1968

August 22, 1968

August 24, 1968

August 30, 1968

Arts. 226 and 227

October 4, 1968

H. K. Kadlaskar

Kadlaskar

Noorjahan Bapulal Kavathekar

Mohamad Umar Shaikh

Mohmad Umar

Moulana Innan

M. G. Shaikh

Shaikh Usman Abdul Bidiwale

Umar Shaikh

Mohammad Umar Shaikh

Ramjan Mohiddin Jamadar

Shaik Abdul Sattar Rahimanbhai Bidi

Moulana Hannn

Kamalsaheb Babasaheb Shiledar

Sayyed Amin

Jalaloddin Allabus Sayyad

Gopal Chintaman Ghugare

Hakim Abdul Rahiman Shaikh

June 2, 1967

Moulana Hannan

the Code of Civil Procedure

s. 21

s. 7

Maharashtra Municipalities Act, 1965

sections 480 and 482

Code of Criminal Procedure, 1898

the Code of Civil Procedure

the Code of Civil Procedure

L'MAR MHEB

KARIMSAB

.Tune 8. 1967

June 15, 1967

s. 21

s. 19(1)

Sanli Municil'al Council

s. 21

Art. 226

Art. 227

Hakim Abdul Rahiman Shaik

Arts. 226 and 227


SWARAN LATA GHOSH

H. K. BANERJEE AND ANR.

March 12, 1969

(J. C. SHAH AND A. N. GROVER, JJ.)

Practice and Procedure-Chartered High Court-Judgment-Duty to give reasons.

After the death of the appellant's husband who was an attorney-atlaw, the first respondent filed a suit on the original side of the Calcutta High Court against the appellant and her minor son, for a decree for Rs. 15,000 and interest claiming that the amount was deposited with the appellant's husband for the purpose of investing it and that the appellant's husband agreed to pay interest at certain rates.

The appellant filed a written statement denying the claim in its entirety. The first respondent produced extracts of bank accpunts to show that the money had passed but there was no documentary evidence supporting the case relating to the agreement between him and the appellant's husband.

To prove his case and the terms of the deposit which according to him were orally agreed upon, the first respondent examined himself and three other wit~ nesses.

The appellant appeared by counsel and the cross-examination on behalf of the appellant was elaborate and showed that the claim wa, s contested fully and that the defence was not confined to the extent of the appellant's liability.

The trial Judge gave a pe'rsonal decree against the appellant but did not frame any issues or record any reasons in support of his conclusion.

In appeal under the Letters Patent, thou2h several grounds on the merits were raised in the memorandum of appeal, the appellate Bench also did not give any reasons but merely modified the decree by limiting it to the estate inherited by the appellant.

In appeal to this Court,

HELD: Under 0. XLIX, r. 3(5), Civil Procedure Code, rr. 1 to' 8 of O. XX do not apply to a Chartered High Court in the exercise of its ordinary or extraordinary original jurisdiction, and hence, a Judge of a Chartered High Court is not obliged to record a judgment giving reasons in accordance withthe provisions of 0. XX, rr. 4(2) and s.· But the High Court must exercise judicial discretion in exercising that powe'r, be

cause, the recording of reasons is intended to ensure that the decision was not the result of a whim or fancy but of a judicjal approach, that the adjudication was according to law and procedure established by law, and that when the judgment is subject to appeal, the .Appellate Court may have adequate material on which it may determine whethe~ the fac~ \~:ee properly ascertained and te law has been corectly apphd esulting ID a just decision.

The privilege of not recording reasons IS mtended to apply where the action is undefended, wher~ the parties are not at isse on any substantial auer.~ in a summary trial were. leav~ to efend is not granted, in making interlocutory orders or m disposing of formal proceedings. [979 F-H; 980 F-Hl

In the present case, since there \Vas a contes~ _on m.erits, in the absenef of any documentary evidence in the hand-wntmg of the appellants husband, the burden of proving hi• claim lay on the J!rst respondent, and the oral testimony adduced by him had to be exammed m the context

SWARAN LATA V, H. K. BANERJEE (Shah, J,) 977

of : (a) absence of correspondence relating to the transactions between the first respondent and the appellant's husband; (b) absence of books of account in support of the transaction; (c) improbability of such a transaction between an attorney and his tjlient; (d) absence of previous business o:r professional relationship between the first respondent and appellant's husband; (e) absence of vouchers supporting the alleged payment of interest, and similar weighty circumstances. In reaching his con clusion, the trial Judge had to consider the probabilities and circumstances of the case and hence, there should have been a full record of the reasons for his conclusion.[980 A-E; 981 D-G)

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 662 of 1966.

Appeal by special leave from the judgment and order date<.!

August 4, 1964 of the Calcutta High Court in Appeal from Original Order No. 99 of 1963.

D. N. Mukherjee, for the appellant.

S. C. Majumdar, for the respondents.

The Judgment of the Court was delivered by Shah, J.

Birendra Krishna Ghosh-hereinafter called "Ghosh-was practising as an attorney-at-law in the High Court of Calcutta. He died in August 1950. H. K. Banerje~

the first respondent herein-commenced in 1951 an action in 'he High Court of Calcutta on the original side against Swaran

.ata and Arun Kumar-widow and minor son respectively of Jhosh-for a decree for Rs. 15,000 claiming that it was the balance of "capital deposits" due to him from Ghosh and Rs. 1,535 interest due thereon.

The plaintiff claimed that he had deposited with Ghosh Rs. 6,000 on December 10, 1946 for the "specific purpose of investing the amount" and the latter agreed to pay interest at the rate o.f 6% per annum and to repay the same or any portion thereof when demanded; that on or about February 17, 1948, he had deposited Rs. 10,000 with Ghosh also for "the specific purpose of investing" that sum, and the latter had agreed to pay interest at the rate of 7 % per annum and to repay the same or part thereof when demanded; that under the agreement Ghosh paid diverse sums of money as interest, and on July 3, 1947 Ghosh repaid Rs. 1,000 out of Rs. 6,000 deposited; and that the balance of Rs. 15,000 and Rs. 1,535 interest due thereon were repayable by the defendants to the plaintiff.

Swaran Lata filed a written statement denying the claim of the plaintiff. She denied that the sums of Rs. 6,000 and Rs. 10,000 were entrusted to or deposited with her husband as alleged by the plintiff; she denied that her husband repaid any amounts towards mterest or part payment of principal; and she

978 ,

SUPREME COURT REPORTS

[ 1969] 3 S.C.R. i submitted that the suit was in any event barred by the law of A limitation.

The trial of the suit commenced before Law, J., on July 12,

1962. In support of the plaintiffs case four witnesses were examined. The plaintiff tendered in evidence extracts from certain Bank accounts and correspondence. He produced no documentary evidence in support of his case that any amount was deposited with Ghosh, on terms set out in the plaint. Apparently he relied upon the entries in the extracts from the statements of account with the United Bank of India Ltd., the Imperial Bank of India, the Hooghly Bank Ltd. and correspondence between him and Swaran Lata. The learned Judge by order dated August 17, 1962, passed the following order :

"There will be a decree for Rs. 15,000 with interest on judgment on Rs. 15,000 at 6% per annum and costs.

No interim inrerest allowed."

Pursuant to that order a decree was drawn up.

Against the decree Swaran Lata appealed to the High Court under cl. 15 of the Letters Patent, and raised several grounds in the memo of appeal on -the merits. The High Court disposed of the appeal by a short judgment observing :

"We think that the plaintiff sufficiently proved the case made in the plaint. On the 10th December, 1946 the plaintiff entrusted and deposited with Birendra Krishna Ghosh a sum of Rs. 6,000 for the express and specific purpose. of investing the sum to yield interest at the rate of 6% per annum. He also entrusted and deposited with Bircndra Krishna Ghose on the 17th February 1948 a sum of Rs. 10,000 for 'the express and specific purpose of investing the sum to yield interest at the rate of 7% per annum.'" The Court observed that the amounts paid to Ghosh were deposits, within the meaning of Art. 60 of the Indian Limitation Act,

1908, and since interest was paid in respect of both the deposits within three years of the institution of the suit, no question of limitat.ion arose, and the Trial Court had "rightly decreed the suit.'' The High Court, however, modified the decree passed by the Trial Court and declared that the liability of the defendants was not persona] and was limited only to "the assets and properties" of Ghosh received by them.

With special leave, Swaran Lata Ghosh has appealed to this Court.

The defendants had filed a written statement denying the avernments in the plaint and had contested the claim of the plaintiff.

The learned Judg.o apparently raised no issues.

We have found in the printed paper book no record of any issues raised.

SWARAN LATA V. 11. K. BANERJ.l!E (Shah, J,) 979

On behalf of the plaintiff, witnesses were examined to prove the two deposits and the terms of the deposit which it was claimed were orally agreed upon. Th=re was no documentary evidence supporting the case of the plaintiff relating to the agreements between him and Ghosh.

There was also no documentary evidence supporting the case of payment of interest on the amounts deposited, or of re-payment of a part of the principal.

Indisputably the pleadings of the parties raised substantial issues of fact for trial, and a lengthy trial was held. But the kamed Trial Judge delivered no judgment. He merely decreed the claim.

The decree was on the face of it erroneous, because it directed

Swaran Lala and her minor son Arun Kumar personally to pay the amount decreed; Trial of a civil dispute in Court is intended to achieve, according to Jaw and the procedure of the Court, a judicial deterntination between the contesting parties of the matter in controversy.

Opportunity to the parties interested in the dispute to present their respective cases on questions of Jaw as well as fact, ascertainment of facts by means of evidence tendered by the parties, and adjudication by a reasoned judgment of the dispute upon a finding on the facts in controversy and application of the Jaw to the facts found, are essential attributes of a judicial trial. In a judicial trial the Judge not only must reach a conclusion which he regards as just, but, unless otherwise permitted, by the practice of the Court or by law, he must record the ultimate mental process leading from the dispute to its solution. - A judicial determination of a disputed claim where substantial questions of law or fact arise is satisfactorily reached, only if it be supported by the most cogent reasons that suggest themselves to the Judge : a mere order deciding the matter in dispute noi supported by reasons is no judgment at all. Recording of reasons in support of a decision of a disputed claim serves more purposes than one.

It is intended to ensure that the decision is not the result of whim or fancy, but of a judicial approach to the matter in contest : it is also intended to ensure adiudication of the matter according to Jaw and the procedure established by Jaw. A party to the dispute is ordinarily entitled to know the grounds on which the Court has decided against him, and more so, when the judgment is subject to appeal. The Appellate Court will then have adequate material on which it may determine whether the facts are properly ascertained, the Jaw has been correctly applied and the resultant decision is just. It is unfortunate that the learned Trial- Judge has recorded no reasons in support of his conclusion, and the High Court in appeal merely recorded that they thought that the plaintiff had sufficiently proved the case in the plaint.

The defendants it is true Jed no oral evidence and produced no documentary evidence: But the defendants -had apparently LU Sup CJ/69-13

~80

SUPREME COURT REPORTS (I 969) 3 s.C.R

no personal knowledge about the transactions and there is no clear evidence on the record that the first defendant Swaran Lata had in her possession any books of account of the deceased which she could have produced and had withheld. The burden of proving the claim in all its details lay upon the plaintiff. Absence of documentary evidence in support of the case. made the burden more onerous.

We are unable to agree with counsel for the plaintiff that "for all practical purposes" the action was undefended and that the Trial Judge recorded merely formal evidence in proof of the plaintiff's case.

The defendants had filed a written statement denying the plaintiff's claim, had appeared by counsel at the trial, and had challenged the plaintiff's evidence by intensive cross-examination.

The plaintiff who was the principal witness was asked as many as 31 7 questions and his examination appears to have. taken the better part of a day.

In the course of the examination in attempting to elicit the truth the learned Judge took no mean or insignificant part. Three more witnesses were also examined.

We are also unable to agree that the only plea raised at the trial and in the Court of appeal was about the personal liability of the defendants. The evidence led at the trial and the crossexamination amply establish that the defendants defended the claim on the merits.

The High Court in appeal modified the decree and restricted it to the estate inherited by the defendants from Ghosh. But there is no reason to hold that the only point argued before the Trial Court related to the extent of liability of the defendants. The grounds in the memorandum of appeal belie that submission. ·

It is true that rr. I to 8 of 0. 20 of the Code of Civil Procedure are, by the express provision contained in 0. 49 r. 3 cl. ( 5) inapplicable to a Chartered High Court in the exercise of its ordinary or extraordinary original civil jurisdiction. A Judge of a Chartered High Court is not obliged to record a judgment strictly according to the provisions contained in rules 4 (2) and 5 of 0. 20 Code of Civil Procedure. But the privilege of not recording a judgment is intended normally to apply where the action is undefended, where the parties are not at issue on anv substantial matter, in a summary trial of an action where leave to defend is not granted, in making interlocutory orders or in disposing of formal proceedings and the like. Order 49 r. 3 of the Code of Civil Procedure undoubtedly applies. to the trial of suits; but the question is not one merely of power but of exercise of judicial discretion in the exercise of that power. The function of a judicial trial is tu hear and decide a matter in contest between the parties in open court in the presence of parties

G •

SWARAN LATA v. a 1:. BANELJEE (Shah, I.) 981

according to the procedure prescribed for investigation of the dispute, and the rules of evidence. The conclusion of the Court ought normally to be supported by reasons duly recorded. This

requirement transcends all technical rules of procedwe.

We may assume that the learned Trial Iudge was satisfied that the claim of the plaintiff deserved to be decreed. But the judgment of the learned Trial Judge was not final : it was subject to appeal and unkss there was a reasoned judgment recorded by the Trial Judge, an appeal against the judgment may turn out to be an empty formality. A CoUit of appeal generally attaches great value to the views formed by the Judge of First Instance who had seen the witnesses and noted their demeanour. How the Judge who tried the suit reacted to the evidence of a witness may not always be found from the printed record.

The plaintiff's case was founded upon extracts of Bank accounts : the extracts however do not evidence the agreement under which the money passed from the plaintiff to Ghosh. The plaintiff had to prove not only that money passed from him to Ghosh; he had to prove that money passed under the agreement pleaded by him. Oral testimony of the plaintiff had to be examined in the context of several weighty circumstances e.g. complete absence of documentary evidence in the handwriting of Ghosh; absence of correspondence relating to the transactio.as between Ghosh and the plaintiff; absence of books of account in support of the transactions; improbability of a transaction of the nature pleaded between an attorney and the plaintiff; absence of any previous business or professional relationship between Ghosh and the pla'1!tiff; absence of vouchers supporting the alleged payment of interest and repayment of part of the principal and other important circumstances. In reaching a conclusion the Court had to consider the probabilities and the circumstances in which the plaintiff alleged that he had deposited the two sums of money with Ghosh. It was essentially a case in which there should have been a full record of the reasons which persuaded the learned Trial Judge to reach the conclusion he did. A mere order directing payment of the money, not supported by reasons, does not do duty for a judgment according to law.

We are, therefore, constrained to come to the conclusion that there has been no real trial of the defendants' case. It is a very unfortunate state of affairs that eighteen years after the date on which the suit was instituted, we have to remand the suit for trial according to law. But we sec no other satisfactory alternative.

The decree passed by the High Court is set aside. The suit stands remanded to the Court of First Instance for trial according to law. It will be open to the learned Judge who tries the suit io proceed on tke evidence already on the record.

H the

!182

SUPREME COURT REPORTS ( i969] 3 S.CJl.

parties desire to lead any additional evidence, he will give them opportunity in that behalf. If the learned Judge is of the opinion that the witnesses should be examined over again before him, he may adopt that course.

As costs till now incurred are thrown away on account of circumstances for which the parties may not be held responsible, we direct that there will be no order as to costs till this date.

We may state that the observations made by us in the course of this judgment are not intended to express any opinion by this C0urt on the merits of the dispute.

V.P.S.

Case remanded.

' •

SWARAN LATA GHOSH

H. K. BANERJEE AND ANR

March 12, 1969

C. SHAH

A. N. GROVER, JJ.

Civil Procedure Code

SWARAN LATA V

Shah

D. N. Mukherjee

S. C. Majumdar

Birendra Krishna Ghosh

High Court of Calcutta

H. K. Banerje~

Swaran

Arun Kumar

Jhosh

Ghosh

December 10, 1946

February 17, 1948

July 3, 1947

Swaran Lata

July 12,

1962

United Bank of India Ltd.

Imperial Bank of India

Hooghly Bank Ltd.

August 17, 1962

cl. 15

10th December, 1946

Birendra Krishna Ghosh

Bircndra Krishna Ghose

17th February 1948

Art. 60

Indian Limitation Act

Swaran Lata Ghosh

Swaran

Arun Kumar

Jaw

Swaran Lata

the Code of Civil Procedure

Code of Civil Procedure

the Code of Civil Procedure

SWARAN LATA


98~

COMMISSIONER OF INCOME-TAX, BIHAR & ORISSA,

PATNA

MIS. KIRKEND COAJ, COMPANY

March 12, 1969

[J. C. SHAH A~D A. N. GROVER, JJ.)

Indian Jnrome-tax Act, 1922, ss. 26, 28, 44 and 66-Pena/ty leviah/e on firn: for assess1nent year 194849-Firin reconstituted in later years but business not discontinued-Penalt, v in respect of 1948-49 whether /eviable on reconstituted firm-Sect.ion 44 not apjJlicable to such Clllls- Applicahility of ss. 26 and 28-Question not rc.ised before Tribunal cannot he raised in reference under s. 66.

The respondent was a firm on which penalty under s. 28(1)(c) ot the Indian Income-tax Act, 1922 was imposed by the Income-tax Officer in respect of the assessment year 1948-49. At the time when the penalty was imposed the cpnstitution of the firm had changed though the same business was continued by the reconstituted firm.

The appeals filed by the respondent before the Appellate Assistant Commissioner and the Tribunal were rejected. In reference the High Court held that penalty could be legally imposed upon the original firm constituted in the account year relevant to the assessment year 194849 and not upon the new firm constituted in 1952.

In coming to their conclusions the Tribunal as well a! the. High Court proceeded on the assumption that the source and power of the Income-tax Officer to impose a penalty was in s. 44 of the Indian Income-tax Act, 1922.

In appeal by the Revenue to this Court,

HELD : (i) Section 44 only applies to those <ases in which there has been discontinuance of the business and not to cases in which the business continues after the reconstitution of the firm, or there is succession to the business. Cases of reconstitution df the firm or succeso; ion to the business are covered by ss. 26(1) and (2~. The Tribun•l and the High Court were therefore in ctr.or in relying on s. 44 of the Act. [988 A;

985 D-E]

(ii) Assessment in Ch. IV of the Income-tax Act 1922 includes a proceeding for imposition of penalty and the expression 'peron' includes for the purpose of s. 28 a firm registered or unregistered. If there is recbnstitution of the firm by virtue of s. 26, the Income-tax Officer will in imposing the penalty proceed against the firm. lf there is discontinuance of the business penalty will be imposed against the partners of the firm.

[988 B-0]

In the present case, however, this Court could not go into the question \vhether penalty on the respondent firm was leviahle under the terms of ss. 26 and 28 even though the question raised by the Tribunal was irt terms sufficiently comprehensive to embrace the enquiry.

In a refetence under s. 66 of the Indian Income-tax Act. 1922, only the question which was either raised or argued before the Tribunal may be answered, even if the language of the question framed by the Tribunal may apparently include an enquiry into other matters which could have been but were not. raised or argued. [988 D-Fl

Shivr.m Poddar v. lncom•-tax Officer, Central Circle ll, Calcutta Anr., 51 I.T.R. 823, C. A. Abraham v, Jncom•-tax Officer, Kottav•m qnd

98.& Sl!PUM• OOUllT llPOlln

[1909] 3 S.C.L

Anr., 41 I.T.R. 425 and Comml1Sloner of lnco-.t=, Madr01 A Anr. v.

S. V. Angidl Chtttlar, 44. I.T.R. 739, applied,

S. M. S. Karuppl•h Pillai Y. Comml'11oner qf lncom<t= Madr01, 9 I.T.R. 1, approved.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2456 of 1966.

Appeal from the judgment and order dated January 27, 1964 of the Patna High Court in Misc. Judicial Case No. 299 of 1958.

D. Narsaraju, S. K. A.iyar, R. N. Sachthey .and B. D. Sharma, for the appellant.

C. K. Daphtary, Narain Rao, V. D. Narayan and D. Goburdhun, for the respondent.

The Judgment of the Court was delivered by

Shah, J. In determining the taxable income of the respon dent firm for the assessment year ~948-49 the Income-tax Officer

added to the income returned a sum of Rs. 1,60,000 as 'undis closed rcc.ipts'. The order was confirmed in appeal by the D Appellate Assistant Commissioner, and by the Tribunal. The Income-tax Officer had in the meantime commenced a proceeding for the levy of penalty and in exercise of the power under s. 28 ( 1 )( c) of the Indian Income-tax Act, 1922 he directed the res pendent firm to pay Rs. 60,000 as penalty. The Appellate Assistant Commissioner in appeal confirmed the order. The Incomez tax AJ)pellate Tribunal rejected the contention of the respondent that the order imposing penalty upon the firm after the original firm was dissolved was without jurisdiction. '

The Tribunal referred at the instance of the respondent firm the following question to the High Court of Patna for opinion;

"Whether on the facts and in the circumstances of F the case the imposition of penalty under s. 28 ( 1 )( c) of the Indian Income-tax Act, upon the petitioner firm

(respondent) as constituted at the time of levy of penalty was legal and, valid?" The High Court called for a supplementary statement of the case and pursuant thereto the Tribunal submitted a statement on G the specified points raised by the order of the High Court that : ( 1) The firm which carried on the business during the calendar year 1947 was dissolved on July 7, 1951 when Butta Kristo Roy, one of the partners, died.

(2) During the previous year 1947 there was no ff instrument of partnership in existence, but the terms of the oral partnership were the same as set out in the. partnership deed dated October 17, 1949.

........... A

( B

C, I.T. V. KIRKEND COAL CO. (Shah, J.)

( 3) The business of the firm was continued with effect from July 8, 1951 by the new firm as successor to the business of the old firm. l:he terms of the partnership were the same as set out in the deed dated October .17, 1949 and the partners and their shares were also the same except that Baidyanath Roy took the place of Butto Kristo Roy.

(4) With effect from April 28, 1952, the business was carried on by a partnership constituted by Baidyanath Roy and Bijali Kanti Roy under an instrument dated August 27, 1952. There was no dissolution of the firm, which was carrying on the business; there was only a change in the constitution of the old firm from April 28, 1952.

The High Court held that penalty could be legally levied only upon the original firm constituted in the account year relevant to the assessment year 1948-49 and not upon the new firm constituted under the deed dated April 27, 1952.

The Tribunal and the High Court approached the problem before th.em on the assumption that the source of the power .of the Income-tax Officer to impose a penalty was in section 44 of the Indian Income-tax Act, 1922. In so assuming, in our judgment, they were in error. Section 44 of the Indian Income-tax Act, 1922, as it stood at the relevant date, in so far as it is material provided :

"Where any business, profession or vocation carried on by a firm . . . . has been discontinued . . . every person who was at th.e time of such discontinuance . . . . . a partner of such firm . . . . . shall, in respect of the income, profits and gains of the firm . . . . . be jointly and severally liable to assessment under Chapter IV and for ihe amount of tax payable and all the provisions of Chapter IV shall, so far as may be, apply to any such assessment".

The section is fairly plain : it applies to cases of discontinuance of the business of a firm and not wh.ere there is dissolution of the firm but not discontinuance of.its business.

In S. M. S. Karuppiah Pillai v. Commissioner of Income-tax, Madras( 1 ), in dealing with the effect of s. 44 ol' the Indian Income-tax Act, 1922, before if was amended by Act 7 of 1939, a Full Bench of the Madras High Court observed : ·

"This section (s.44) only applies when there has been discontinuance of the business, ... , The section

(I) 9,~.T.R, 1.

986 SUPREME COU..T RllPOJ.TS

(1969] 3 S.C.R.

mys that if a business is discontinued the partners shall nevertheless be jointly and severally liable for the proli cs which had been earned".

In Shivram Poddar v. Income-tax Officer, Central Circle II, Calcuca oni Anr. (1) this Court examined the scheme of s. 44 (bfore it was amended by the Finance Act of 1958) and B its inter-relation with the provisions of ss. 25 (I), (2), 26( 1),

(2) anJ 28(l)(c) in some detail.

The Court observed :

"Section 44 operates in two classes of cases; where there is discontinuance of business, profession or voca. ticin carried on by a firm or association, and where there is dissolution of an association. It follows that mere dissolution of a finn without discontinuance of the business will not attract the application of s.44 of the Act .

The reason for this distinction appears from the scheme of the Income-tax Act in its relation to assessment of the income of a finn.

A finn whether registered or unregistered is recognised under the Act as a m.it of assessment (sections 3 and 2(2) ), and its income is computed under clauses (3) and

(4) of section 23 as the income of any other unit. Section 25 ( 1) relates to assessment in cases of a discontinued business-whether the business is carried on by a firm or by any other person. . . . . . Then there is the special provision relating to assessment when at the time of making an assessment it is found that a change has occurred in the constitution of a firm, or a firm has been newly constituted : section 26 ( 1). The date on which the change has occurred is immaterial; it may

be in the year of account, in the year of assessment or even after the close of the year of assessment. The Income-far.: Officer has under section 26(1) to assess the !inn as constituted at the time of making the assessment, but the income. profits and gains of the previous year have. for the purpose of inclusion in the total in- COIT'.e of the partners, to be apportioned between the nartners who were entitled to receive the same.

Subsection (2) of section 26 relates to assessment in the case of succession to a person (which expression includes a fi•m) carrying on a business by another person in such capacity. . . . . . Discontinuance of business has the same connotation in section 44 as it has in section 2 5 of the Act; it does not

11) ~11.T.R. 823.

C.l.T. v. K!J.DND C.OA.L eo. (Shah, J.)

cover mere change in ownership or in the constitution of the unit of assessment.

Section 44 is, therefore, attracted only when the business of a firm is discontinued, i.e. when there is complete cessation of the business and not when there is a change in the ownership of the firm, or in its constitution, because by reconstitution of the firm, no change is brought in the personality of the firm, and succession to the business and not discontinuance of the business results. . . . .

But the Income-tax Act recognises a firm for purposes of assessment as a unit independent of the partners constituting it; it invests the firm with a personality which survives reconstitution.

A firm discontinuing its business may be assessed in the manner provided by section 25 ( 1) in the year of account in which it discontinues its business; it may also be assessed in the year of assessment.

In either case it is the assessment of the income of the firm. Where the firm is dissolved, but the business is not discontinued, there being change in the constitution of the firm. assessment has to be made under section 26

(I ) , and if there be succession to the business assessment has to be made under section 26(2). The provisions rehting to assessment on reconstituted or newly c0wtituted firms. and on succession to the business are obligatorv.

Therefore, even when there is change in the ownershio of the business carried on by a firm on reconstitution or because of a new constitution, assessment mmt still be made upon the firm.

When there is succession, the successor and the oerson succeeded have to be assessed each in respect of his actual share.

This scheme of assessment furnishes the reason for omitting reference to dissolution of a firm from section 44 when such dissolution is not accompanied by discontinuance of the business".

Two other cases decided by this Court mav be briefly noticed.

In C. A. Abrah'1m "Income-tax Officer, Kotrayam and Another(') there was discontinuance of the business of the firm consequent upon dis<olution of the firm. s. 44 was held applicable, and it wns Jield that imnosition or penaltv beimt a nrc>cess of assessment the Tncnme-tax Officer was not incnmnetent to levv penaltv after discontinuance of the business.

In Commis•ioner of Tnrnm~-tn~. M11dra• an-I Anmher v. S. V. AnviJ; Ch•t•iar(')

this Court held tht the Income-tax Officer coulcl exercise under s. 44 read with s. 28 power to impose penalty uoon the firm which discontinued its business on dissolution caused by the death of one of the partners.

Ill 41 T.T.lt 42~. :l) .. J.T.R. 739.

SUPREME COURT REPORTS

[!969] 3 S.C.R

Section 44 therefore only applied to those cases in which there had been discontinuance of the business and not to cases in which the business continued after reconstitution of the firm, or there was succession to the business.

Cases of reconstitution of the firm or succession to the business of the firm are covered by ss. 26(1) and (2).

"Assessment'' in Chapter IV of the Income-ta-,: Act, 1922, includes a proceeding for imposition of penalty.

Section 28 of the Act authorises the Income-tax Officer, if satisfied, in the course of any proceeding under the Act that any person has, inter a/ia, concealed the particulars of his income or deliberately furnished inaccurate particulars of such income, to direct that such person shall py by way of penalty, a sum of money not exceeding the amount specified therein in addition to the income tax and super-tax payable by such person. The expression "person" includes for the purpose of s. 28, a firm registered or unregistered. If there is reconstitution of the firm, by virtue of s. 26, the Income-tax Officer will in imposing the penalty proceed against the firm.

Tf there is discontinuance of the business penalty will be imposed against the partners of the firm.

Before the Tribunal and the Higi\ Court the case was argued on the footing that s. 44 alone was applicable. Whether under the terms of s. 26 read with s. 28, penalty may be imposed upon the new partners for the failure of the partners of the firm constituted in the year of account relating to the assessment 1948-49 was never investigated.

The question raised by the Tribunal is in terms sufficiently comprehensive to embrace an enquiry whether partners of the firm in existence on July 30, 1954, were liable to be assessed to penalty as successors in interest of the partners of the original firm in existence in the year of account relating to the assessment year 1948-49. But in a reference under s. 66 of the Indian Income-tax Act, 1922, only the question which was either raised or argued before the Tribunal may be answered, even if the language of the question framed by the Tribunal may apparently include an enquiry into other matters which could have been, but were not, raised or argued.

The aopeal fails and is dismissed.

In the circumstances of the case there will he no order as to costs in this Court.

CT.C.

Appeal di.nnissetl,

MIS. KIRKEND COAJ, COMPANY

C. SHAH A~D A. N. GROVER, JJ.

Indian Jnrome-tax Act, 1922

ss. 26, 28, 44 and 66

ss. 26 and 28

s. 66

s. 28(1)(c)

Indian Income-tax Act, 1922

s. 44

Indian Income-tax Act, 1922

Section 44

ss. 26(1)

s. 44

IV of the Income-tax Act 1922

s. 28

s. 26

ss. 26 and 28

s. 66

Income-tax Act

S. M. S. Karuppl•h Pillai

CIVIL APPELLATE JURISDICTION

D. Narsaraju

S. K. A.iyar

R. N. Sachthey

B. D. Sharma

C. K. Daphtary

Narain Rao

V. D. Narayan

D. Goburdhun

Shah

s. 28

Indian Income-tax Act, 1922

High Court of Patna

s. 28

Income-tax Act

July 7, 1951

Butta Kristo Roy

October 17, 1949

I.T. V. KIRKEND COAL CO

July 8, 1951

October .17, 1949

Baidyanath Roy

Butto Kristo Roy

April 28, 1952

Bijali Kanti Roy

August 27, 1952

April 27, 1952

section 44

Indian Income-tax Act, 1922

Section 44

Indian Income-tax Act, 1922

s. 44

Indian Income-tax Act, 1922

Madras High Court

s. 44

ss. 25

Section 44

Income-tax Act

sections 3 and 2(2)

section 23

Section 25

section 26

section 26(1)

section 26

section 44

section 2

Section 44

Income-tax Act

section 25

section 26

section 26(2)

section 44

C. A. Abrah'1

s. 44

s. 44

s. 28

Section 44

ss. 26(1)

Section 28

s. 28

s. 26

s. 44

s. 26

s. 28

July 30, 1954

s. 66

Indian Income-tax Act, 1922