STATE OF GUJARAT & ORS.

AMBALAL HAIDERBHAI ETC.

April 14, 1976

[A. N. RAY, C.J., M. H. BEG AND JASWANT SINGH, JJ.J

Land Acquisition (Cotnpanies) Rules 1963-Enquiry under R. 4 whether compliance with principles of 11atural jusrice required.

The appellant initiated proreedings ul'Jder the Land ,\cquisition . .<\ct, 1894. for acquiring the lands of the respondents for the Sardarnagar Co-operative Industrial Sociey Ltd., in order to establish an industrial estate for small scale industries.

A notification was issued under s. 4 of the . .<\ct after following the provisiohs of- Part VIl of the Act, and in <lue course the final notification under s. 6 of the Act was issued.

The respondents challenged both the nofifications before the High Court, under Art. 226 of the Constitution on the ground that at the enquiry held by the Special Land Acquisition Officer, Baroda, under R~ 4 of t-he Land Acquisition (Companies) Rules 1963, they had not been heard in accordance with the principles of natural justice.

The }ligh court allowed the writ petitions.

The question for decision before this Court \Vas whether the enquiry under Rule 4 requires compliance with the rules of natural justice.

Dismissing the. appeals, •he Court,

HELD: Jn conducting the enquiry, the Collector ha<;, in the interest of fair play, to observe the principles of natural justice by afford\ng the persons interested in the 1and a reasonable opportunity of being heard an\l of adducing materifll before the Collector to refute the allegations of the company.

[37 C-D]

State of Guj<lrot ond Anr. v. Patel Chaturbhai Narsibhui & Ors. I !C.:"751 3 SCR 284, followed.

Suresh Koshy George v .. The University of Kerala .and Ors. [1969_11 SCR 317 and A. K. Kraipak & Ors. v. Union of India and Ors. [1970]1 SCR 457 refer red lo.

C!vIL APPELLATE JURISDICTION : Civil Appeals Nos. 967 to 969 of 1971.

Appeals by Special Leave from the Judgment and Order dated April 17/18, 1970 o~ the Gujarat High Court in Special Civil Applicions Nos. 116,, 1621 and 1622 of 1967. . (;

D. V. Patel, M. C. Bhandare, M. N. Shroff for the Appellants in all the appeals. , . ; . : 'ti . . . ;.,

I. N. Shroff for Respondents Rr. 1 and 2 in 967 and R l in CAs. 968-969.

P. H. Parekh and Miss Manju Jelley for Respondent 3 in 967, R. 2 in 968, 969.

5-833SCI/7 6

34 '

SUPREI\1E COURT REPORTS

(1976] SUPPLEMENTARY

... . .- . - . .· . ' ' -- The Judgment of the Court was delivered by

JASWANT SINGH, J.-, Thse , three appeals Nos. 967 to 969 of 1971 by special leave which are directed against the co=on judgment of the High Court of Gujarat dated April 17/18, 1970 in Special Civil Application Nos. 116 of 1967, 1621 of 1967 and 1622 of 1967 arise thus : - ·

Proceedings under the Land Acquisition Act, 1894, (hereinafter . referred to -as 'the Act') for acquisition of certain lands in villages Sayajipuri, Bapow and Savad, District Baroda, Taluka Baroda were initiated by the Gove=ent of Gujarat at the instance of Sardarnagar Co-operative Industrial Society Limited registered under the Gujarat Co-operative _Societies Act 1961 (hereinafter referred to as 'the Company') for the purpose of establishing an industrial estate for small scale industries. The acquisition being for the Company a notification was issued tinder. section 4 of the Act on July 2, 1964 after following the provisions of Part VII of the Act.

An agreement under section 41 of the Act between the State Government and the Company was entered into on April 2, 1965 and was published on October 15, 1966. The final notification under section 6 of the Act was issued on October 18, 1966. The owners of the afornsaid lands who are contesting respondents herein challenged the aforesaid notifications issued under section 4 and 6 of the Act by filing petitions under Article 226 of the Constitution of India inter alia on the ground that the provisions of the. Rule 4 of the Land Acquisition (Companies) Rules, 1963 (hereinafter referred to as 'the Rules') made by the Central Gove=ent in exercise of the powers conferred under section .55 of the Act, which by virtue of RU!e 1 (2) of the Rules apply to acquisition of land for all companies under Part VII of the Act, have not been complied with particularly as they had not been given a right to be heard in accordance with the princiJ?les of natural justice at the enquiry held by Special Land Acquisition Officer, Baroda, appellant No. 2 herein. The plea raised by the owners of land found favour with tthe High Court which allowed the petitions, set aside the notification un<ler section 6 of the Act, and issued a mandamus commanding appellant No. 2 to complete the statutory . enquiry under Rule 4 of the Rules in accordance with the principles of natural justice.

The short but important' question which we are called upon to decide in these appeals. is , whether the enquiry under Rule 4 of the Rules requires compliance with the rules of natural justice., ·

As observed by this Court in Suresh Koshy George v. The University of Kerala & Ors.( 1) and reiterated in A. K. Kraipak & Ors. v.

Union of India & Ors. ( 2) rules of.natural justice are not rules embodied

. (!) (t969] I S. C.R. 317.

(2) [1970] I S. C.R. 457.

. '

,_ •

GUJARAT STATE v. AMBALAL (laswant Singh, J.) 35

always expressly in a statute or in rules framed thereunder.

They may be imJ!lied from the nature of the duty to be performed under a statute. What particular rule of natural justice should be implied and what its content should be for a given case must depend to a great extent on the facts and circumstances of that case, the frame-work of the law under which the enquiry is held, and the constitution and nature of duties of the Tribunal or the body of persons appointed for that purpose. Let us, therefore,_advert to the provisions of Rule 4 of the Rules which requires the appropriate Government to be satisfied• with regard to certain matters before initiating acquisition proceedings.

The rule is in these terms :-

"4. Appropriate Government to be satisfied with regard to certain matters before initiating acquisition proceedings.-

( 1) Whenever a Company makes an application to the appropriate Government for acquisition of any land, that <Government shall direct the Collector to submit a report to it on the following matters, namely :-

(i) that the Company has made its best endeavour to find out lands in the locality suitable for the purpose of the acquisition;

(ii) that. the Company has made all reasonable efforts to get such lands by negotiation with the persons interested therein on payment of reasonable price and such efforts have failed;

{iii) that the land proposed to be acquired is suitable for the purpose;

(iv) that the area of land proposed to be acquired is not excessive;

( v) that the Company is in a position to utilise the land expeditiously; and

{vi) where the land proposed to be acquired is good agricultural land, that no alternative suitable site can be found so as to avoid acquisition of that land.

(2) The Collector shall, after giving the company a Teasonable opportunity to make any representation in this behalf, hold an enquiry into the matters referred to in subrule (1) and while holding such enquiry he shall,-

(i) in any case where the land proposed to be acquired is agricultural land, consult the Senior Agricultural H Officer of the district whether or not such land is good agricultural land;

(ii) determine, having regard to the provisions of sections 23 and 24 of the Act, the approximate amount of compensation likely to be payable in respect of the land which, in the opinion of the Collector, should be acquired for the Company; and

(iii) ascertain whether the Cornpany offeied a reasonable price (not being less than the compensation so determined), to the persons interested in the land proposed to be acquired.

Explanation.--For the purpose of this rule "good agricultural land" means any land which, considering the level of agricultural production and the crop pattern of the area in which it is situated, is of average or above average productivity and includes a garden or grove land.

(3) As soon as may be after holding the enquiry under sub-rule ( 2), the Collector shall submit a report to the appropriate Government and a copy of the same shall be forward- D ed by that Government to the Committee.

( 4) No declaration shall be made by the appropriate Government under section 6 of the Act unless-

( i) the appropriate Government has consulted the Committee and has considered the report submitted under this rule and the report, if •any, submitted under section 5A of the Act; and

(ii) the agreement under section 41 of the Act has been

executed by the Company".

To sum up, sub-rule ( l) of the above quoted rule requires the appropriate Government to which an application is made by a Company for acquisition of land to direct the Collector to submit a report on six matters set out therein.

Sub-rule (2) of the said rule re-emphasizes ~t. is contained in sub-rule ( 1) by making it obligatory for the Collector to hold an enqui'ry into six matters referred to in sub-rule ( 1). It also makes it obligatory for the Collector while holding the enquiry (1) to consnit the Senior Agricultural Officer of the District in case the land is agricultural land, (2) to determine the approximate amount of compensation likely to be payable in respect , of the land in question keeping in view the provisions of sections 23 and 24 of the Act and (3) to ascertain whether the Company offered a reasonable price (which is not less than the compensation so determined) to the persons interested in the land which is proposed to be acquired.

A conjoint reading of sub-rules (1) and (2) leaves no room for donbt that the enquiry by the Collector, which is meant inter aliti to

• •

GUJARAT STATE v. AMBALAL (Jaswant Singh, l.) 37

find out whether all reasonable efforts have been made by the Company to get the land by negotiation on payment of reasonable price and such efforts have not fructified and to determine the approximate amount of compensation lik<>IY to be payable in respect of the land keeping in view the provisions of sections 23 and 24 of the Act, is of vital importance to the persons inlerested in the land.

Sub-rule (3) of the rule requires the Collector to submit his report to the concerned Government which in turn is required before making a declaration under section 6 of the Acno consider that report as well as the report, if any, submitted by it under section SA of the Act after ascertaining the view of the Committee constituted under Rule 3 of the Hules in regard to the Co!lector's report under Rule 4 of the Rules.

Although the above mentioned rule is silent regarding the mode and method of the enquiry to be held by the Collector and the report of the Collector is of a recommendatory character, yet regard being had to the legislative history and purpose of the rule, and the mischief sought to be prevented, we have no hesitation in holding that, in conducting the enquiry, the Collector has, in the interest of fair play, to observe the principles of natural justice by affording the persons interested in the land a reasonable opportunity of being heard and of adducing material before the Collector to refute the allegations of the Company. The concept of natural justice which as evident from the observations made in A. K. Kraipak's case (supra), has undergone a great deal of change in recent years.

The dividing line between an administrative and quasi-judicial function is often blurred.

Our view is reinforced by the following illuminating observations made by the learned Chief Justice in State of Gujarat & A nr. v. Patel Chaturbhai Narsibhai & Ors.( 1).

"The contention of the State that the enquiry under rule 4 is administrative and that the owner of the land is not en!llled to be given an opportu.nity to be heard at the enquiry cannot be accepted for these reasons.

The enquiry under rule 4 shows that the Collector is to submit a report among other matters that the Company has made all reasonable efforts to get such lands by negotiation with the persons interested therein on payment of reasonable price and such efforts have failed.

The persons interested therein are the owners of tile land which is proposed to be acquired. The company at such an enquiry has to show that the company made negotiations with the owners of the land. The owners of the land are, therefore, entitled to be beard at such an enquiry for the purpose of proving or disproving the reasonable efforts of the company to get such land by negotiation.

The contention on behalf of the State that the owners of the land will get an opportunity when an enquiry is made under section 5-A of the Act is equally unsound.

Section 17 of the Act Jlrovides that the appropriate Government may

(I) [1975] 3 S. C.R. 284

direct that the provisions of section 5-A shall not apply, and if it does so direct a declaration may be made under section 6 _at any time after the pubHcqJion of the notification under section 4 of the Act.

Therefore, the enquiry under section 5A may not be held."

For the fore, going reasons', ihe question is answered in the affirmative and the appeals are dismissed.

The parties are left to bear and pay their own costs in these appeals.

M.R.

Appeals dismissed; -

STATE OF GUJARAT & ORS

AMBALAL HAIDERBHAI ETC

A. N. RAY, C.J.

M. H. BEG

JASWANT SINGH, JJ

s. 4

Part VIl of the Act

s. 6

Art. 226

Societies Act 1961

section 4

Part VII of the Act

section 41

section 6

section 4 and 6

Article 226

Constitution of India

section 6

sections 23 and 24

section 6

section 5A

section 41

sections 23 and 24

sections 23 and 24

section 6

section 5

Section 17

[1975] 3 S. C.R. 284

section 5

section 6

section 4

section 5A


H. C. SARIN

UNION OF INDIA

April 14, 1976

[Y. V. CHANDRACHUD, V. R. KRISHNA IYER AND N. L. UNTWALIA, JJ.]

Adn1ini, trative Law-DPpartn1ental enquiry-Principles of natural iustice.

l11dian Railways Establishment Code, Vol. I r. 1730.-Right of delinquent officer to services of CNl advocate .or anothtr Railway official.

The appellant was a railway official of the Indian Railways, in London. In connection with the purchase of stock from a West German fim three charges were framed against him that he obtained illegal gratification from the proprietor of that firm and Jhat he had used official influence for personal advancement.

A board ()f e.nqµiry was set up by the Government of India and the enquiry was held in London and West Germany. The board held that two of the charges were proved and the appellant was dismissed from service. He filed a writ peti~ tion in the High Court which was dismissed.

Jn qppeal to this Court, it was contended that the enquiry was held in grOS6 violation of the principles of natural justice 8nd requirements of Art. 311 of the Constitution; that the proprietor of the German firm made the false accusation against him ih order to escape paymentl of damages:; that the chairman of the board of enquiry was biased against him, and that the appellant was denied the services o±.' ~L professional lawyer or a rail\vay official of his choice from India for conduc:ing his defence and for cross-examining the proprietor of the German Firm.

Dismis~:ng the appeal,

HEW : t 1) The correspondence that wassed between the board and the E appellant .:.hows tha~ there. was no violation of any principle of natural justice, that the appellant waS given inspection of all necessary documents; that he was given adequate and asona.ble opportunity to dei'end himself und that the allegation that the chirman of the board was biased against the appellant was totally false.

[46 B-C;]

(2) No principle of natural justice was violated in not making available to the appeUant the services of a profsional lawyer or of another railway official from India.

[51 BJ

(a) The enquiry was conducted in accordance with r. 1730 of the Indian Ratlways .Establishment Code, Vo1. I, which

1prescribes the procedure for hold ing a departmental .enquiry.

There is nothing in •he rule about engagement of a lawyer but the note appended to the 1 rlile provides that in. a departmental enquiry the accmed may, if he so desires, be accompanied by another railway officer, provided he is approved by the competent authority, and provided that the perSon so nominated shall not be a professional lawyer. [50 F-Gl

(b) The notes are promulgated with the rules. Their function is to provide procedure, to control discretion, and to fill up gaps when rules are silent. Under •he rule, the appellant was not entitled to the services of a professional lawyer.

[51 F.G]

TarQ Singh etc. etc. v. State of Raiasthan and ors., [1975] 3. SCR 1002, fol~ Jowed.

(c) E\en if the note is treated as an executive instr_uction at)d not part of H the rule itself, there i• ru:i. reason why the authority should not follow tho note.

The authority \vould still have a discretion in the matter.

Tn the present case, the question involved, v.; as a simple' one whether he had -taken money from the

proprietor. of the German firm. No prejudice was caused to the appellant, because the propnetor was onlya lawyer in name but was actively in business and the services of a professional lawyer were not necessary to cros'Y-e--xaminc. him.

[51 BJ

(d) The appel1ant v/anted an officer from India to assist him in the conduc.'l of his defence.

Under the rule, he was not entitled, as a matter of righ~, to have the services of any railway officer stationed in India.

He was in fact giyen B a choice to choose either on~ stationed in London or on the Cohtinent.

[51 G~H]

C. L. Sabro111ania1n v. Collector of Customs, Cochin. [19721 3 SCH. 485, explained and distinguished.

R. v. Secretary of State for the Honie Deparlfnent ex parte Mughal [1973] All England Law Reports, 796, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1097 of 1970.

Appeal from the Judgment and order dated the 25th April 1967 of the Delhi High Court in Letters Patent Appeal No. 106-D of 1964

M. N. Phadke, S. Balakrishnan and N. M. Ghatate, for the Appellant.

L. N. Sinha, Sol. General, P. P. Rao and Girish Chandru, for Respondents.

The Judgment of the Court was delivered by

UNTWALIA, J.-This appeal is by certificate granted by the High Court of Delhi under Article 133 (1) (a) & (b) of the Constitution of India as it stood prior to the 30th Constitution Amendment Act.

No substantial question of law is involved in this appeal. It is to be decided mostly on facts.

And since we are in agreement with the judgment of the Division Bench of the High Court given in the Letters Patent appeal, we shall advert only to the necessary facts and the main points argued before us.

Shri H. C. Sarin-the appellant was employed in foe Indian Railways as Senior Railway Inspector attached to the Office of the India Stores Department at London.

He was in that job fro)ll the 6th August, 1954. The Government of India placed orders with various firms in the United Kingdom and the continent for supply of rolling stock and other materials for the Indian Railways.

In December, 1956 the appellant was deputed to the Essen Area of West Germany as Senior Railway Inspector in which capacity he had to inspect and pass the goods In the first instance at the site.

Although this work of inspection in West Germany was entrusted to the German Federal Railway In January 1958, the appellant remained there associated with the work till Apn1 or May, 1958. In July, 1956 orders were placed with M/s Leo Gottwald and Company for supply of several breakdown cranes-both for meter gauge and broad gauge railway tracks in India.

This was a family concern of one Dr. Hans lllieter Gottwald.

Prior to the appellant's going to the Essen Area

- '

.of West Germany, there were other Senior Railway Inspectors doing the work o! inspection including one S. N. Hussain (since deceased) immediately preceding the appellant. One of _the clauses m _th~ contract with Gottwald . was that he would be hable to pay hqmdated damages in the specified sums if he made delay in the .delivery of the cranes.

Eventually there being delay, the amount of such damages was quantified at a figure in the neighbourhood of £ 45,000/-.

Dr. Gottwald carried on business of his firm at Dusseldotf in West Germany.

He came to London on July 30, 1958 to discuss with Shri L. T. l"vladn<cni, Railway Advisor cerla, n technical aspects of the cranes contract.

A meeting took place in the morning wherein were present other officers including one Mr. Bayross.

In the afternoon, Gottwald saw S. N. Hussain at the India Stores Department when the latter told the former that delay had occurred in the supplies of cranes and consequently the firm of contractors may have to pay liquidated damages.

Upon this, Gottwald disclosed that Sarin was responsible for the delay, he had t;:.kcn money by way of bribes from the firm and in such a situation the firm was not liable to pay any damages.

Since the allegation made by Gottwald against Sarin was a serious one S. N. Hussain advised him to inform Madnani about it.

He did accordingly.

After some preliminary steps Gottwald's statement was recorded on September 8, 1958 at India Stores Department where he gave a detailed account of the allegedly corrupt practices of the appellant.

Shri Shukla was the Director General of the India Stores Department at the relevant time.

He directed Gottwald to furnish some tentative pfoof in support of his accusation against Sarin.

Gottwald's seconi:I'' statement was recorded on October 21, 1958.

One Shri M, A. Hussain, I. C .. S. was the Deputy High Commissioner for India stationed in U. K. at the relevant time.

On examining the papers and the statements of Dr.

Gottwald given before the various officers of the India Stores Department the Deputy High Commissioner formed an opinion that prima facie the accusations against the appellant were such that required to be investigated in a departmental enquiry.

He accordingly made a recommendation to that effect to the Government of India.

The Government, however, directed a preliminary enquiry to be made by Shri N. S. Pandey, Financial Advisor to the Indian High Commission and then to start a departmental enquiry, if necesary.

Accordingly, Pandey went to Gottwald's place in West Germany, made preliminary investigations and submitted a report dated January 19, 1959 finding a prima facic case made out against the delinqnent government servant.

At the instance of the Government of India, inistry of Works, Housing and Supply, charges were served upon the appellant on April 7, 1959 along with two Annexures containing various details of the accusations made by Gottwald against him.

The appellant was asked to indicate by April 15 the papers which he wanted to inspect and the papers the copies of which he required to enable him to enter his defence.

He was ask, ed to submit his written explanation by 30th of April, 1959. fa the meantime he was placed under suspension.

Shorn of d1tails which were to be found in the Annexures the Charge-Sheet served on the appellant contained the following three ~~: -

"CHARGE I.

That Shri H. C. Sarin, while functioning as the Senior B Railway Inspecting Officer in the India Stores Department, London, during the period between December, 1956 and May, 1958, demanded and obtained illegal gratification from the firm of Mes_srs.

Leo Gottwald of Dussaldorf.

:t •..

CHARGE II.

That durin~ the aforesaid period and while' functioning as aforesaid, the said Shri H. e. Sarin violat\:4, Rute' 10 of the Railway Services '(Conduct) Rµles, 19515 in that he accepted an Opel Car from Messrs: Talbots of Achen as a gift.

CHARGE Ill.

That during the aforesaid period and while functioning as aforesaid, the said Shri Sarin nsed his official influence for personal advancement."

Time for filing the written defence by the appellant was extended.

It was filed on May 27, 1959. The appellant denied all the charges against him.

The Board .. of Enquiry set up by the Government of India consisted of the {ol!Owing :

( 1) Shri M. A. Hussain, ICS, Deputy High Commis- . sioner, Chairman.

(2) Col. Hendricks, Deputy Director General (Inspection), I. S. D., London, Member.

( 3) Shri ff. M. Duraiswamy, peputy Director General, I. S. D., London, Memtier~

The correspondence which passed between the appellant and the Board in connection with the departmental enquiry instituted against him is too voluminous to be referred to in this judgment.

No useful return will be achieved by referring to the correspondence in any detail.

Suffice it to say at this stage that the correspondence does indicate a calculated design and planned attempt on !hi: part of the appellant to non-cooperate with the enquiry and an anxiety and earnestness on the part of the Board to proceed in the matter as fairly as possible in the circumstances of the case. The Board was obliged to go to Du55eldrof. bold an enquiry at the spot by examining as many as 21 witnesses there, some of whom had been cited by the appellant as his defence witnesses and to examine the relevantpapers, documents and account books of the contractor's firm.

All this proceeded ex-parte between July 14 to July 17, 1959.

The Board

\. .

...

returned to London on July 19 and examined some witnesses there A. who had bce11 cited as defence witnesses by the appellant.

Almost the entire departmental enquiry had to be conducted ex-parte as the appellant would not participate in it even with a pair of tongs.

The appella11t had named S/Shri Bhalla, Sharma, Johri and Sen, Railway officers in India as his defence witnesses.

He was asked to examine them by questionnaries as it was not possible to call them to London for the purpose of the enquiry. Nor was their evidence so material as to necessitate their examination viva-voca before the Board.

The appellant refused to cooperate and did not sulimit any questionnaire.

The Board, thereupon, sent to all the. four officers aforesaid copies of the charges levelled against the appellant and asked them to state if they had anything to say in relation to them.

Bayross was .examined by the .Board in London on September 29, 1959 after copies of the .earlier statements of the witnesses and other papers had been supplied to the appellant on September 21, 1959.

The appellant was present on September 29 but did not actively participate i:t the enquiry, in that he did not take any part in it by crossexamining Byn:ss.

The Board submitted its report to the Government of India on November 2, 1959 holding that charges I and III had been proved against the appellant and charge II had neither been proved nor disproved. .The Government gave a show-cause notice on November 4, 1960 to the appellant asking him to show cause against his removal.

He filed his reply on January 31, 1961. Later, however, the Go\ernment gave another show cause notice dated September 20, 1961 to the appellant to show cause as to why he should not be dismissed from service. In October/November, 1961 the appellant filed fr.ree show cause explanations in writing.

He made another representation to the Government on March 4, 1962 for holding a fresh enquiry which naturally was not acceded to.

Eventq, ally the appellant was dismissed from service by an order of the Government of India dated September 10, 1962. He filed a writ petition in the High Court on December 6, 1962 to challenge the order of dismis- . sal on several grounds, in nut shell, on the ground of violation

of principles of natural justicein the conduct of the enquiry.

A learned single Judge of the High Court by his judgment and order dated August 3, 1964 allowed the writ petition and quashed the order of dismissal without any further or consequential order. A Letters Patent appeal was filed by the Government which was disposed of by a Bench of the Delhi High Court on April 25, 1967. The judgment of' the single Judge was set aside and the order of dismissal passed against the appellant by the Government was maintained holding that, there was no violation of the principles of natural justice in any . manner.

Since the amount of salary payabfo to.the appellant if the dismissal order could be found to be .bad would, indisputably. have. been man•

than Rs. 20,000/- certificate was granted under Article !33(1)(a) & (b), strictly speaking, nnder sub,.clause (b). Thus comes this appeal in this Court.

. B

.A Mr. M. N. Phadke, learned counsel for the appellant pressed only the following points iu support of the appeal.

(1) That the appellant was not allowed to go to Germany to examine and assess various matters which \Vere necessary for submission and conduct of his defence.

It was done so in gross violation of the principles of natural justice and requirement of Article 311 of the Constitution.

(2) That copies and inspection of certain relevant and necessary documents were not allowed to the appellant by the Board. It was not possible for him to cooperate and participate in the enquiry without them.

( 3) That no adequate and reasonable opportunity was given to the appellant to defend himself at the enquiry.

( 4) That the accusation made by Gottwald against the appellant was maliciously false as it was made with the ulterior motive of saving his firm from the liability of liquidated damages. As a matter of fact the firm was not made to pay any damages in view of Gottwald's success in his false accusation against the appellant.

( 5) That Shri M. A. Hussain. Chairman of the Board of Enquiry was highly biased against the appellant and the enquiry conducted under his stewardship was a farce.

(6) That Shri S. N. Hussain was inimically disposed towards and adversely interested against the appellant.

(7) That the services of a professional lawyer for crossexamining Gottwald and a Railway officer of his • choice from India were not made available to the appellant for conducting his defence.

Learned Solicitor General appearing for the Union of India-the respondent-refuted all the submissions made on behalf of the appellant. In particular he focussed his submissions on point nos. 1, 5 and 7 as the other four points, counsel submitted, did not require any detailed reply.

Point No. L

When the appellant was placed under suspension, in accordance with the relevant service rules he was asked not to leave London without permission of the Board.

As soon as tho Charge Sheet was se!:Yed on_ hi'!' )'Y his lt!er dated the l?th .April, 1959 the appeUan.~ . wanted perm1ss1on to v1S1t Germany statmg m para 6 : ,

"'In order for me to prepare my defence I would request permission to visit Germany to collect essential information

- '

H. c. SARIN v. UNION ( Urltwalia. !.)

required when submitting my written defence, especially as the charges refer to periods two to three years ago."

The Chairman of the Board of Enquiry in his reply dated the 15 April, 1959 stated in para 3 thus :

"In regard to your request to be permitted to visit Germany, the Board would like to 'have in writing before B April 20, 1959, the purpose for which you wish to visit Germany and the names and addresses of person/persons you wish to contact and the paper /papers you may wish to examine."

The appellant sent his letter dated April 20, 1959 stating in para 4 ilim: C

"Regarding the visit to Germany and the persons and documents to be interviewed and seen, I thought it was plain that this depended on the inspection of documents referred to in paras 4 and 5 of your letter under reply.

Consequently until I have done this properly, I shall not be in a position to know what items or facts I require to investigate or check in Germany.

I shall therefore be glad if you will postpone this application of mine so that I may in due course specify the visits, persons and papers."

The Chairman, thereupon, by this letter dated April 21, 1959 asked the appellant to supply the information in respect of his visit to Germany by April 30, 1959. In his letter dated April 30, 1959 the appellant stated in para 3 thus : E

"I submit in view of the grave charges, false allegations, it is necessary for me to examine in detail Leo Gottwald's system of accounting, storekeeping, procedure for telephone accounting, mailing letters etc.

Likewise the system of telephone connecting, booking, mailing lettern etc. at other firms mentioned by Dr. Gottwald.

This is absolutely imperative and my defence would be incomplete without this.

In the absence of full information, examination of all documents studying systems of working mentioned above, I am not in a position to submit names of persons.

I would request early arrangements may please be made for me to study the systems of working mentioned above at the respective firms in Germany."

The Chairman in para 4 of his letter dated May 1, 1959 informed the appellant :

"In regard to your request for visiting Germany in order to examine the Leo Gottwald's system of acconnting,

store-keeping, mailing letters etc., it is felt that it is not H necessary for you to visit Germany for the purpose because witnesses pertaining to all these matters wm be called by the Board for examination and you "'ill be given full

opportunity to elicit all relevant information required by you."

Further correspondence followed in the matter and the appellant was not given permission to visit Germany prior to the visit of the Board of Enquiry.

In the light of the relevant correspondence which passed between the appellant and the Chairman of the Board of Enquiry we have come to the conclusion that it was not at all necessary for the appellant to visit Germany for preparing his defence.

The Board committed no m.istke and violated no principles of natural justice in refusing the perm1ss10n. No useful purpose would have been served by such a visit in the interest of the appellant's defence, if any.

On the other hand his insistence to visit Germany at the earliest opportunity smacks of some ulterior design on his part in r~Qard to his defence. -

When the Board decided to visit Germany for holding the enquiry, it gave ample opportunity to the appellant to proceed to Germany to take part in it.

The main part of the enquiry, rather, the only substratum of the materials was to be done and collected at Dusseldorf in Germany.

Yet on one excuse or the other the appellant, it appears, was advised to adopt an attitude of noncooperation which was likely to forge a ground of attack on the departnal enquiry, tjiinkµig that participation in it would, perhaps, worsen his case.

It is found more often than not that Government servants who have no real defence to take against the accusations are advised, and sometimes not without success, to non-cooperate with the enquiry.

It seems to us this was one such case.

The Chairman by his letter dated June 18, 1959 asked the appellant Whether he proposed to be present at the enquiry at Dusseldorf and such other places as the Board may determine on the dates to be intimated to him. . The appellant was specifically asked this question because he cast some baseless aspertions against the Board in his letter dated the 4th June, 59.

The appellant in his letter dated the 14th June had stated in para 14 :

"In the circumstances that I have put into, and hardly been left any choice, I feel no useful purpose can be served by my attending such an enquiry or having anything further to do with such as enquiry."

The appellant's reply dated June 20, 1959 clearly demonstrates the unjustifiably non-cooperative attitude of the appelant He was running from pillar to post to find out some excuse to 1ustify his noncooperation at the enquiry.

He insisted that Dr. Gottwald's statement recorded in September, 1958 should be got signed by lum wht:h the Board rightly did not consider it necessary to do.

Another w1'.d stand which the appellant had taken was that the contents of his written defence submitted on May 27 were made known to S. N.

Hussain by some member of the Board of Enquiry-an al!egation

which was strongly refuted by the Board.

Lastly in the 10th para- A graph of his letter dated June 20 the appellant said : "What can I do Mr. Chairman in the position you have placed me, you may proceed in any way you consider reasonable, just and fair."

In spite of the unreasonable and unsustainable stand of the appellant, the Board of Enquiry, constituted as it was of high officials of the Government of India headed by the Deputy High Commissioner B stationed in London, time and again expressed their anxiety to make the appellant participate in the enquiry.

But the appellant under a wrong advice played a game of hide and seek, at times adopted a tantalizing attitude showing his willingness to cooperate, but backed out at the eleventh hour.

To justify this comment we just mention

ome of the letters viz. letter of the Board dated June 22, appellant's reply dated June 23, Board's letter dated June 26, appellant's sticking C to his previous stand in his letter dated June 29, Board asking the appellant to proceed to Germany in their letter date.d, July 2 and the appellant's reiterating his previous stand in his letter dated July 8.

From the report of the Bc1ard it would appear that Sarin did not give a categorical answer as to whether or not he would go to. Dusseldorf on July 13.

On fue 10th July, he agreed to go and came to India Stores Department to collect his advance of T. A.

But on the D evening of July 11, he informed the Secretary to the Board that he would not proceed to Dusseldorf to be present at the oral enquiry.

Mr. Phadke drew our attention to Sarin's show cause reply dated January 31, 1961 in which he stated that the Board permitted him to go to Dusseldorf only if he agreed to participate in the oral proceedings there, otherwise not.

He therefore, cancelled his reservations to proceed to Dusseldorf. He also referred to the photostat copy E of the appellant's letter dated July 24, 1959 and the addendum to this letter.

Nothing new; the same stand was taken by the appellant.

This, to our mind, makes patent the latent factor in the mental attitude of the appellant.

Did he want to go to Dusseldorf without agreeing to take part in the enquiry ? Or did he want to go there to participate in it? • ·

Having appreciated all that has been said for the appellant in support of his first point we have come to the conclusion that ifi.e

appellant was not denied any reasonable opportunity of visiting Germany at the proper time to participate in the enquiry.

He ha• to thank himself for deciding not to go.

Point No. 2.

It is not necessary to enter into any detailed discussion of this point.

In agreement with the Bench of the High Court we hold that aH .relevant documents were made available to the appellant either for inspection or for copies.

Some file containing the field inspection papers was not traceable.

The suspicion of the Board was

that the Prosecutor at the departmental enquiry was not to gain H anything by making the file untraceable.

On the other hand it was the appellant wh0 was to gain by it.

The very same letters exchanged between the appellant and the Board in June and July, 1959 dealt

A with this aspect also.

The High Court has extracted passages from the relevant letters in this connection and has rightly held :

"It appears to us to be clear from this correspondence that all legitimate demands of the respondent for the inspection of papers which were available in the ISD office in London were fulfilled, but the respondent went on making unfounded claims in this behalf without specifying the documents. \Ve therefore, 'hold that all documents which were available in the ISD office in London were made avail-· able to the respondent."

Point No. 3.

In support of the third point arguments were advanced with reference to letters dated July 18, August 6 and October 6, 1959.

Notes were handed over to us referring to the other pieces of correspondence.

We have studied them but think it unnecessary to increase the bulk of our judgment by referring to the correspondence in any detail.

It merely shows that on one ground or the other the appe- Hant was adopting delaying tactics, shifting stands and excuses for not presenting himself at the enquiry either to cross-examine the prosecution witnesses or to examine his defence witnesses. All the time he was reiterating his stand taken in his letters dated June 14, and June 20. 1959.

The detailed report of the Board of Enquiry, apart from the correspondence which preceded it. is a clear proof of the anxiety ol' the Board to conduct the enquiry as fairly and fully as they could 111 the circumstances of the case.

The submission of the appellant is rejected asbeing devoid of substance.

In view of the attitude taken by the appellant of complete noncooperation in his letters dated June 14 and June 20, 19 59 no useful purpose would have been served by associating him 'With the examination of the witnesses in London.

Madnani and S. N. Hussain were examined in July and August.

The appellant never expressed hi:> willingness to cooperate and be present at the examination of the witnesses in London.

His presence at the time of the examination of Bayross was a make-believe more of cooperation to colour and cloud his real attitude of non-cooperation. The Board committed no irregularity or illegality in sending a general questionnaire to SI Shri Bhalla, Sharma, .lohri and Sen in India as the appellant had refused to submit a questionnaire.

Copies of all the relevant statements and papers given lo the Board at Dusseldorf were given to the appellant in September, 1959.

Although there was some delay in supply of these papers, that did not cause any prejudice lo the appellant.

H Point No. 4

This point mainly concerns the merits of the findings of the + Board of Enquiry and their final acceptance by the Government of

- t

India.

Whether a charge levelled against the appellant was true or false had to be and has been judged in the light of the appellant's stand that Gottwald had a motive to accuse falsely the appellant of having ta-ken bribe from him in order to establish that he was not at fault in the delay which was mad.e in the delivery of the contracted cranes.

Without much elaboration we reject this argument. Gottwald was to gain by merely throwing the blame on the shoulders of Sarin.

He had nothing to gain and only to lose by making an accusation of having paid bribe to Sarin under his pressure.

No person would like to involve himself in the deal of payment of bribe to a Government servant merely for the purpose of explaining the delay caused in effecting the deliveries.

Ordinarily bribe could be paid so that there may not be any delay in inspection.

But here was a case where it is said delay was caused in the inspection because there was delay in the payment of the bribe.

It is not for us to examine in any detail the correctness of the findings recorded against the appellant at the departmental enquiry; but in passing, we may just observe that it could not have been possible for Gottwald to make a false accusation ag11inst

Sarin, and then support it before the Board by examining his father, the bank records, vouchers, account books and a large number of persons working in his firm.

There was nothing in the records of this case to show that the claim of liquidated damages against the contractor was given up in view of the finding of guilt of the appellant.

We were informed at the Bar by the Solicitor General that the claim was settled and not given up.

Be that as it may, we find the fourth submission made on behalf of the appellant unsustainable.

Points 5 and 6

These points may be dealt with together as they have got some inter-connection. It could not be substantiated on behalf of the appellant that S. N. Hussain had any animus against him or was adversely interested against him in the matter.

Some letters with reference

to the work of S. N. Hussain at Bafmingham with comments of the appellant thereon were placed before us.

Mr. Phadke could not F substantiate the point with reference to them.

Time and again he laid stress on the fact that Gottwald made this complaint to Madnani on July 30, 1958 on being asked to do so by S. N. Hussain because

he had his own axe to grind against Sarin. This argument has been stated merely to be rejected.

It was just in the natural course of events that when S. N. Hussain was finding fault with Gottwald for the delay in the execution of the contract the latter became forced G by circumstances to blurt out the truth.

The accusation against Sarin was too serious to be taken note of by S. N. Hussain alone.

Naturally, therefore, he advised him to go and make this complaint to the higher officer Madnani.

No connection between M. A. Hussainthe Chairman of the Board and S. N. Hussain-a Senior Inspector who was in Essen Area of We.st Germany immediately before the appellant, was established.

It is, an argument of desperation to sug- B gest that M. A. Husain was biased against the appellant to protect or help S. N. Hussain.

The char£e of being communal levelled against the Chairman by the appellant in his letter dated October

6-833SCI/76

5, 1959 written to the Government of India was obviously made with an ulterior motive after conclusion of the enquiry and sensing that it had gone against the appellant.

Great stress was led in court to show M. A. Hussain's bias on the ground that at the earlier stage in the later half of 1958 he had formed his opinion against the appellant and recommended and insisted for the starting of a departmental enquiry against him without any further preliminary enquiry.

Mr.

Phadke Sl!bmitted that the Government turned down the proposal of M. A. Hussain and directed a preliminary enquiry to be made by Pandey.

We do not appreciate the force of this argument.

It would appear from the enquiry report that M. A. Hussain did not want, as he had no time, to be the Chairman of the Board of Enquiry.

Being a Deputy High Commissioner he was too busy in other affairs of the State.

But since the matter to be enquired into was against a high official of the Government, M. A. Hussain was appointed as the Chairman of the Board. The appellant never objected to his being on the Board, until after the conclusion of the enquiry.

We are distressed to find that the appellant was ill-advised to invent at a. late stage a crudse and false story that on the 5th October, 1959 Dorais-. wamy-a member of the Board of Enquiry had shown th.e secret file to the appellant which showed the bias of M. A. Hussain as he had dealt with the matter in the latter half of 1958.

Although according to the statement in the Writ Petition (vide para 28) he had written his letter dated October 5, 1959 after the alleged showing of the confidential file by Doraiswamy to him, not a word is to be found in the said letter to this effect.

Such a story was put forward in the written explanations which the appellant filed in answer to the. punishment show cause notices.

We reject points 5 and 6 of the appellant.

Point no. 7

The enquiry was being conducted in accordance with Rule 1730 of the Indian Railway Establishment Code, Volume I.

In the main body of the rule where a procedure for holding a departmental enquiry has been provided for, there is nothing said in relation to the engagement of a lawyer.

Certain notes are appended to the rule.

They seem to have been appended not on the basis of the executive instructions hut as parts of the rule itself.

One such note was appended as note 4, which subsequently became note 3, on September 25, 1956 by the President of India who had framed Rule 1730.

This note reads as follows

G "In a departmental enquiry, the accused railway officer may, if he so desires, be accompanied by another railway officer provided that the officer so nominated as the defence counsel is approved by the competent authority to act as such, and provided also that the person so nominated shall not be a professional lawyer.

The term 'professional lawyer includes those persons who are competent to practice H m a court of law.'

In face of the above note, treating it as a part of the rule, the appellant was not entitled to the services of a professional lawyer. Gottwald,

• •

as it appears, was a lawyer in name but actively in business.

The services of a professional lawyer were not necessary to cross-examine him.

The fact was a simple one as to whether he had paid money to the tune of about 24,000 D.1\1. to the appellant from time to time.

Even if we treat the note aforesaid as one based merely on the execu- . tive instructions and not a part of the rule itself, we see no reason to say that the authority was obliged not to follow the note but to go against it.

At the most it had a discretion in the matter.

The question is whether the discretion was rightly exercised or was it exercised so arbitrarily as to lead to the onc!usion that principles of natural justice were violated when the services of a professional lawyer were not made available to the appellant.

We give the answers against the appellant.

Great reliance was placed for the appellant on a decision of this Court in C. L. Subramaniam v. Collector of Customs, Cochin( 1).

In this case the argument that, rule or no rule, the services of a professional lawyer should be made available at a departmental enquiry when asked for was uot accepted.

What was held in that case was that the disciplinary authority brushed aside the request of the appellant before the Surpreme Court on a wrong ground completely ignoring the circumstances which were relevant.

It . was, therefore, said at page 490 :

"Therefore that authority clearly failed to exercise the power conferred on it under the rule.

It is not unlikely that the Disciplinary Authority's refusal to permit the appellant to engage a legal practitioner in the circumstances mentioned arlier had caused serious prejudice to the appellant and had amounted to a denial of reasonable opportunity to defend himself."

In Tara Singh etc. etc. v. State of Rajasthan and Ors.(') the importance which is to be attached to the note appended the rule has been emphasized by Ray, C. J. delivering the judgment on behalf of the Division Bench of this Court to which one of us (Krishna Iyer, J) is a party, in these terms :

"The notes are promulgated with the rules in exercise of legislative power.

The notes are made contemporaneously with the rules.

The function of the notes is to provide procedure and to control discretion.

The real purpose of the notes is that when rules are silent the notes will fill up gaps."

The appellant was not entitled as a matter of right to have the services of any railway officer stationed in India to assist him in the conduct of his defence.

He wanted an officer from India especially Shri Bhalla.

It was not possible to make available the services of an officer from India.

The appellant was given a wide field of choice either to choose any railway official stationed in London or in the continent or some other personnel of the Indian High Commission in London.

The accusations made against the appellant were not ·--------

(!) [1972] 3 S. C.R. 485.

(2) [1975] 3 S. C.R. 1002.

such that required any expert or special skill.

The question was a simple one whether he had taken money from Gottwald iIJ, dischaige of his official duties.

Having appreciated all the facts and circumstances of the case we have come to the conclusion that no principle of natural justice was violated in not making available to the appellant the services of Shri Bhalla or any other railway officer stationed in India for the conduct of his defence.

In the entire background of this case we find a passage occuring at page 803 in the Judgment ol Lord Denning, Master of the Rolls in the case of R v. Secretary of State for the Home Department ex parte Mugha/( 1) quite apposite to be quoted.

The passage run& h • t us : '.'°l!

C "The rules of natural justice must not be stretched too far.

Only too often the people who have done wrong seek to invoke 'the rules of natural justice' so as to avoid the consequences." ·

In the result we find no merit in this appeal and dismiss it with costs.

V.P.S.

Appeal dismissed.

(!) (1973] 3 All England Law Reports, 796. ·

H. C. SARIN

UNION OF INDIA

Y. V. CHANDRACHUD

V. R. KRISHNA IYER

N. L. UNTWALIA, JJ.

Railways Establishment Code

Art. 311

Article 133

Constitution of India

Constitution Amendment Act

Article 311

[1972] 3 S. C.R. 485

[1975] 3 S. C.R. 1002


COMMR. OF WEALTH TAX, MADRAS & ORS.

LATE R. SRIDHARAN BY L.Rs.

April 29. 1976

, B . [A. N. RAY. C.J .• 1\1. H. BEG, R. s. SARKARlA, P. N. SIIJSGAL Atf[)

JASWANT SINGH, JJ.l

Special 11.14rr1ag6.A.ct, 1954, Sec. 21-.Marriage betweell llindu assesue !I."'cl Cl1ristian female-Whether issue is a Hindu governed by Hindu Law .

. The late' R. Sridharan married Rosa Maria. Steinbichler, a christi:tn of Austrian descent. under the Special M:.rriage Act. 1954 and a son Nicolu Sundaram was born out of the . wedlock. In the assessment proceedin.gs in

respect of income tax, wealth ta:t and expenditure tax. Sridharan claimed t<> be assessed in the status of a member of Hindu Undivided F; unily consisting

of himself and his son, contending that n.c prop<:rty held by him wa.~ ancestral and Nicolas Sundaram was a Hindu. The officers dealing with these taxes rejected the contention and assessed him as :m "individual" on the ground that succession to the property of a person married under the Special Marriage

Act, 1954, is governed by the Indian Succession. Act, 1925 and not by ordin:u-y Hindu Law and Nicolas Sundaram could not become a member of Hindu Undivided Family with his father. These orders were affirmed by the Appellate Assistant Commission·• rJ the Appellate Tribunal in appeals by Sridiur:m against the assessmen<:;.

On further app!ications made by Sridharan, !he Income Tax Appellate Tnounal referred the matter to the Hi~=:h Court which decided in favour of Srldharan but Jrr<Ultcd a certificate of fitness. Meanwhile,

Sridharan died, and his widow filed wealth tax returns, claiming the s::ttw of a member of Hindu Undivided Family. The Revenue authorities followed

th-eir earlier decisions, and ultimately the matter was referred to the High Cowt which decided in favour of respondent Mrs. Sridharan, but granted leave to appeal to this Court. ·

 Dismissing the appeals, the Court,

HELD : {l) Under the codifying Acts, the orthodox concept of the crm "Hindu" has undergone a radie3l change , and it has been given an extended meanin.e;. The Acts not only apply to Hindus but also to a lare number liilf ·

other persons. Any child legitimate or illegitimate, one of whose parents is

a Hindu by religion and who is brought up as a Hindu, is a Hindu. [478D-EI

(2) Section 21 of the special Marriage Act has no bearing on the present case. The section does not in any ow'ay impair or alter the joint family sructure between an assessee and his son. Nor docs it affect the discretion vested in a Hindu asessee to treat his properties as joint family properti<!s by taking into his fo1d his Hindu sons so as to constitute: joint family prbpertics .. [H9A-C]

Slrasiri Yagnapurushdasii & ors. v. Muldas Bhundardas Vaislzya and A"r.,.

AIR 1966 S.C. J119; Blzagwan Koa v. J. C. Bose & Ors. (1904) ILR 31 C::.l.

11; Lint:appa v. Emdasan (1904) 27 MaJ. 13;1\.fotlrey Anja Ratna Raja Kumar

v. Koney Narayana Rao & Ors. AIR 1953 SC 433 and Ananthaya v. Vi_, rr"u 17 Mad. 160, referrrJ to.

\Yebstc"rs' 3rd New Jnternat:onal Dictionary cf the Enyli-; h Lnnc::, gc; Encyclopaedia Britannica (15th Edn.): Gitarahasya by n. G. Ti!~, k l'ri::ctpks of Hindu Law (14th Edn.) pp. 671 and chap. I para 6 by. :\f:rlla, and lii::h Law & Usage (ltth"EJa.) pp. 2_90 by 1\Iayne, rcfrred to.·

CML APPELLATE JURisnrcno:-l': Civil Appeal Nos. 1399 to 14.03 of 1970. ·

. ~

.....

~ ·

I '

C.W.T. v. R. SRIDHARAN (Jaswant Singh, 1.) 479

Appeal from the Judgment and Order dated 20th December f96S A of the Madras High Court in Tax Case No. 314/64 (Reference No. 82 .of 1964) and

Civil Appeal No. 301 of 1974

Appeal from the Judgment and order dated 3rd April1972 of the 'Madras .f!igh Coun in Tax Case No. 328 of 1966 (Reference No.

~88/66) .

S. T. Desai, 1. Ram.amurthi; for the appellant (In CA 1399-1403 ;. .of 1910). j

$. Swcuninmhan, Mrs. S. Gopalakrislman for the Respondent in all .the appeals. c The Judgment of the Court was delivered by

IASWANT SINGH, J.

These apls Nos. 1399 to 1403 of 1970 .and 301 of 1974 by certificates granted by the High Court of Madras

shall be diSposed of together by this judgment as they raise common question of law and fat.

The circumstances giving rise to thes'< appeals are : The late R.

Sridharan along with his father a!J.d brothers constituted a Hindu undivided family governed by Mitakshara law. On June 28, 1952, while

he was still unmarried, a partition took place between him, his brothers and his father.

As a result of this partition, a block of shares in T. V.

Sundaram Iyengar and Sons Private Limited and three other limited companies fell to his share.

On June 14, 1956, Sridharan married Rosa Maria Steinbchler, a Christian woman of Austrian descent, under the Special Marriage Act, 1954. On November 29, 1957, a son named Nicolas Sundaram was born out of this wedlock. For the assessment years 1957-58, and 1958-59, Sridharan was assessed to income tax and wealth tax in the status of an 'individual' on his own declaration to that effect. In the assessment proceedings in respect of income tax and wealth tax for the assessment years 1959-60, 1960-61 .and 1961-62 and in the assessment proceedings under the Expenditure Tax Act for the year 1961-62, he claimed to be assessed in the status of a member of Hindu undivided family consisting of himself and his son, Nicolas Sundaram, contending that the property held by him was ancestral and Nicolas Sundaram was a Hindu. The Income Tax Officer; Wealth Tax Officer and Expenditure Tax Officer refused to

accede to the contention of Sridharan and assessed him in the status of an 'individual' as in the previous years on the grounds lhat the value of the shares and other investments standing in his name being his

exclusive properties and by virtue of section 21 of the Special Marriage.

Act, 1954, succession to tl}e property of a person whose marriage has

been solemnized under that Act being governed by the Indian Succession Act, 1925, and not by the ordinary Hindu law, Nicolas Sundaram could not become a member of Hindu undivided family with his father.

Sridharan thereupon went up-in appeal to the Appellate Assistant Com- .missioner but remained tmsuccessful.

The orders-passed by the Tncome

r.:

SUPREME COURT REPORTS

[1976] SUPPLEMENTARY

Ta~/Wealt~ ax/Expenditure Tax Oftiers and the Appellate Assis- tant CommiSSIOner were also affirmed m appeals against the . assessments respectively made under the Income-tax Acf, Wealth Tax Act and the Expenditure Tax Act by the Appellate Tribunal. In the course of its consolidated order rejecting the appeals, the oappellate Tribunal observed that although section 21 of the Special Marriage Act preserved some of the rights in the family property of the children born out of marriage solemnized under that Act, it did not clothe such offspring with the character of Hindus and therefore, there wa..c: rio Hindu undivided family of Sridharan and his son which could claim to be taxed as Hindu undivided family.

Thereafter on the applications made by Sridharan under section 27(1) of the Wealth Tax ct, section 66(1) of the Income-tax Act and section 25 ( 1) of the Expenditure Tax Act, the Income-tax Appellate Tribunal referred the following common question of law 'arising

from its aforesaid decision for the opi!nion of the High CouJ1 :-

"Whether, on the facts and in the circumstances of the case, the assessee and his son constituted a Hindu undivided family for purposes of assessment under the Income-tax, Wealth-tax and Expenditure-tax Acts?"

The High Court following the decision of this Court in Gowli Buddanna v. Commissioner of Income-tax(!) held that Sridbaran's claim to be reckoned as Hindu undivided family was well merited and the Tribunal was in error in holding that there was no Hindu undivided family of Sridharan and his son which could claim to be assessed and taxed as such either under the Income-tax Act, or Wealth Tax. Act ot the Expenditure Tax Act.

The High Court accordingly answered the question in the affirmative but granted certificate of fitness for appeal to this Court.

Sridharan died on April 9, 1962. A few days after the valuation date relevant for the assessmentyear 1963-64, his widow Mrs. Rosa Maria Steinbchler filed a wealthtax return claiming that the assessment for the assessment year 1962-63 should be made in the status of Hindu undivided family.

The Wealth Tax Officer following hi<; earlier decision in the assessment proceedings in respect of . the previous years rejected the claim of Rosa Maria Steinbchler holding that sbe was not a Hindu and in any case since her marriag_e with Sridharan was under the Special Marriage Act, 1954, Nicolas Sundaram had no right by birth in the properties obtained by the assessee on partition. He further held that Nicolas Sundaram could claim Sridharans property only under the Indian Succession Act, 1925 and not under the Hindu Jaw.

On appeal, the Appellate Assistant Commissioner affirmed the order of the Wealth Tax Officer. A further appeal was preferred to the Appellate Tribunal but that to9 proved abortive,_ The Tribunal, hower. referred the following question of Jaw for the opimon of the High Court:- H

(l) [1966] 60 I.T.R. 293.

C.W.T. v. R. SRIDHARAN (JaswanrSingl~, l.) -48!

"Whether the assessee~ Sridhanin and his son constituted ' in law a Hindu undivided fariilly' fo!" the. P!lrpose of assess 4 ment under the Weathtax ~.; t~. 1957 ?", - ·· .. ' '

. The High Cort awered the question in the affirmative i.e. against the Revenue observing that the decision in the previous reference directly governed the facts ofthe fresh reference. ·· ·

Aggrieved by. this order _of -the High Court, the appellant .. applied and obtained leave to appeal to this Court under section ~29(1) of the Wealth-tax Act, 1957 and Article 133(1) (c) of the ' Constitution of India. 'This is how the appeals are befor~ us. . .

Counsel appearing for the appellants and respondents have repeated before us. the contentions respectively advanced on behalf of the parties before the _High Court. ·

' _ It cannot be d_isputed that a joint Hindu family consists of all perc

sons lineally descended from a common ancestor and includes their wives and unmarried daughters, It cannot also be dispuled that property obtained .by Sridharan on partition between ' his father - and D brothers could become ancestral property so far as his sons, grandsons .

and great grandsons were concerned. who could according to Mitakshara law acquire an interest therein by birth.

 The sole question' which, however, falls for our consideration in these appeals is whether Nicolas Sundaran is a lfmdu governed by Hindu law. It is a matter of common knowledge that Hinduism E embraces within itself so many diverse f()rms of beliefs, faiths, practices and worship that it is difficult to define. the term 'Hindu' with precision. . . ·

The historical and etymological genesis of the word "Hindu" has been succinctly explained by Gajendragadkar, C.J.' in Shastri Yagnapurushdasji & Ors. v. Muldas Bhundardas Vaishya & Anr.(1 ).

' ' In Unabridged Edition of Webster's Third New _.International Dic 4 tionary of the English language, the term 'Hinduism' has been defined as meaning ''a :complex body , of social, cultural, and religious beliefs and practices evolved in and lagely confined to the Indian subcontinent and marked by a caste system, an outlook tending to view all forms and theories as aspects of one eternal being and truth, a belief in G ahimsa, karma, dharma, sansara, and moksha, and the practice of the way of works, the way of knowledge, or the way of devotion as the means of release from the bound of rebirths;-the wayof fife and form of thought of a Hindu". ·

In Encylopaedia Britannica (lSth Edition): .th~ terni 'Hinduism' has been defined as meaning '.'the civilization of Hindus. (originally, the inhabitants of the land of the Indus , River) ... It properly denotes the Indian civilization of approximately the last 2,000 years, which ! .

(1) A.l.R.1966S.C.1119.

33-833 SCI/76

[1976] SUPPLEMENTARY

gradually evolved from Vedism, the religion of the ancient Indo-European peoples who settled in India in the last centuries of the 2nd

milleD.I).ium BC. Because it integrates a large variety of heterogeneous elements, Hinduism constitutes a vecy COJDplex but largely continuous whole, and since it covers the whole of life, it has religious, social, economic, literacy, and artistic aspects.

As a religion, Hinduism is an utterly diverse conglomerate of doctrines, cults, and way of lite

• • . . In principle, Hinduism incorporates all fo~ of belief and worship without necessitating the selection or elimination of any. The Hindu is inclined to revere the divine in every manifestation, whatever it may be, and is doctrinally tolerant, leaving others-including both Hindus and non-Hindus-whatever creed and worship practices suit them best.

A Hindu may embrace a non-Hindu religion without ceasing to be a Hindu, and since the Hindu is disposed to think synthetically and to regard other forms of worship, strange gods, and divergent doctrines as inadequate rather than wrong or objectionable, he tends to believe that the highest divine powers complement each other for the well-being of the world oand mankind. Few religious ideas are considered to be finally irreconcilable. The core of religion does not even depend on the existence or non-existence of God or on whether there is one god or many. Since religious truth is said to transcend all verbal definition, it is not conceived in dogm<dc terms.

Hinduism is, then both a civilization and a conglomerate o{ religions, with neither a beginning, a founder, nor a central authority, hierarchy, or organization. Every attempt at a specific definition of Hinduism bas proved unsatisfactory in one way or another, the more so because the finest Indian scholars of Hinduism, including Hindus themselves, _ have emphasized different aspects. of the whole". •

In his celebrated treatise "Gitarahasaya", B.G. Tilak has given the r following broad description of the Hindu relgion :-

"Acceptance of the Vedas with reverence; recognition of the fact that the means or ways of salvation are diverse; and realisation of the truth that the number of gods to be worshipped is large, that indeed is the distinguishing feature of Hindu religion".

In Bhagwan Koer v. 1. C. Bose & Ors.(J) it was held that Hindu religion is marvellously catholic and lastic_. . Its theology is m3!1ced by eclecticism and tolerance and almost unhmtted freedom of prtvate worship.

Its social code is much more stringent, but mongst its different castes and sections, exhibits wide diversity of practice. No trait is more marked of Hindu society in general than its herror of using the meat of the cow.

This being the scope and nature of the religion, if is not strange that it holds within its fold men of divergent vie~ and traditions who have very little in common except a vague faith in what may be called the fundamentals of the Hindu religion. ..

(1) [1904) I.L.R. 31 Cal. 11.

~ -

C.W.T. V. R. SRIDHARAN (Jaswant Singh, 1.) 483

'. ·-...

It will be advantageous at this stage to refer to page 671 of Mulla's A Principles of Hindu Law (Fourteenth Edition), where the position is stated thus :-

"The word 'Hindu' does not denoe any particular religion or community. During the last hundrd years and more it has been a nomenclature used to . refer comprehensively to various categories of people for purposes of personal law.

It has been applied to dissenters and non-comformists and even to those who have entirely repudiated Drahminism. It has been applied to various religious sects and bodies which at various periods and in circumstances develop_ed out of or split off from, the Hindu system but whose members have nevertheless continued to live under the Hindu law and the Courts have generally put a liberal construction upon enactments relating to the personal laws applicable to Hindus". . .

In paragraph 6 of Chapter I of Mulla's aforesaid Treatise, the following have been enumerated as persons to whom Hindu law applies:-

"(i) not only to Hindu by birth, but also to !findus by.

D religion, i.e. converts to Hinduism;

(ii) to illegitimate children where both parents are Hindus;

(iii) to 'illegitimate children where the father is a Christian and the mother is a Hindu .. and the children are brought up as Hindus. But tbe Hindu law of coparcenary, which contemplates the father as the head of the family and the sons as coparceners by birth with rights of survivorship, cannot from the very nature of the case apply to such children;

(iv) to Jains, :Buddhists in India, Sikhs and Nambudri Brahmins except so far as such law is varied by cus:.. tom and to Lingayatwhoare considered Sudras;

=~· + - - - - "'"· .... , .. : (v) to a Hindu by birth who, having renounced Hinduism,

 bas reverted to it after performing the religious rites of expiation and repentence. Or even without a formal ritual of reconversion when lie was recognised as a Hindu by his community;

(vi) to sons of Hindu dancing girls of the Naik ·caste

converted to Mahomedanism, where the sons are taken into the family of the Hindu grandparents and are brought up as Hindus;· , ...

, . . . .- I . . {vii) to Brahmos; to Arya Samajists; arid to Santhals of Chota Nagpur and also to Santhals of Manbhum except so far as it is not varied by cuLtom; and

...

[1976] SUPPLEMENTARY

(viii) to Hindus who made a declaration that they were not Hindus for the purpose of the Special Marriage Act, 1872."

This enumeration is based upon dcisions of various courts relatin(T to old uncodified Hindu law. "'

B In Lingappa v. Esudasen(l) which related to maintenance, it was held that Hmdu law does not apply to the illegitimate children of a Hit; tdu f~er ?Y Christian mother who are rought up as Christians. Thts dectston mdtrectly leads to the conclusion that legitimate children ~. } of a Hindu father by a Christian mother who are brought up as Hindus would be governed by Hindu law.

C In Mothey Anja Ratna Raja Kumar v. Koney Narayana Rao & Ors. (1) whole approving the observations made in Ananthaya v.

Vishnu(S) this Court inter alia held that under the Mitakshara law, an illegitimate son is e)ltitled to manitenance as long as he, lives, in recognition of his status as a member of his father's family.

Under the codifying Acts namely the Hindu Marriage Act, 1955, the Hindu Succession Act, 1956, the Hindu Minority and Guardianship Act, 1956 and the Hindu Adoption and Maintenance Act, 1956, the orthodox concept of the term 'Hindu' has undergone a radical change and it has been given an extended meaning.

The aforesaid codifying Acts not only apply to Hindus by birth or religion i.e. to converts to Hinduism but also to a large number of other persons.

According to explanation (b) to section 2 ( 1) of the Hindu Succession Act, 1956, Hindu Adoption and Maintenance Act, 1956 and Hindu lVfarriage Act, 1955 as also according to explanation (ii) to section 3 ( 1) of the Hindu Minority and Guardianship Act, 1956, any child legitimate or illegitimate, one of whose parents is a Hindu by religion and who is brought up as a Hindu is a Hindu.

In the present case, Sridharan is a Hindu by birth and was lawfully married to Rosa Maria Steinbchler. Even after his marriage, he did not renounce Hinduism but continued to profess that religion.

Having been begotten out of the aforesaid valid and lawful wedlock.

Nicolas Sundaram is a legitimate child and lineal descendant of Sridha~ ran.

There is no material on the record to show that Nicolas Sundaram was not brought up as a Hindu or that he did not conform to the habits and usages of Hinduism or that he was not recognised as a Hindu by the society surrounding him or that he became a convert to another faith.

Sridharan has also unequivocally acknowledged and expressly declared that he and his son, Nicolas Sundaram formed a Hindu undivided family.

This declaration in the circumstances is sufficient, as also found by the High Court, to establish that Nicolas Sundaram was brought up as a Hindu member of the family to wlJich his father belonged.

At page 290 of his Treatise on Hindu Law, and Usage (Eleventh Edition), Mayne says that a child i!l Indi~, under ordinary circumstances, must be presumed to have hrs father s

(1) [19041 27 Mad. 13. (2) A.I.R. 1953 S.C. 433.

(3) 17 Mad. 160.

.. •

...

I..._

.~ < )

...

C.W.T. v. R. SRIDHARAN (Jaswant Singh, !.) 485

religion, and his correspondin.g civil and social status.

He, there- A fore, have no hesitation in holding that Nicolas Sundaram is a Hindu and he could validly be a member of the Hindu undivided family headed by his father and be governed by Hindu law.

Section 21 of the Special Marriage Act which has been heavily relied upon by the Revenue has, in our opinion, no bearing on the present case.

That section provides that succession to the property B of a person whose marriage has been solemnized under the Special Marriage Act, 1954 and the property of the issue of such marriage shall be governed by the provisions of the Indian Succession Act (XXXIX of 1925). In other words, the section guarantees inter alia to the issue of the person whose marrioage has been solemnized under the Special Marriage Act a collateral statutory right of succession to the estate of the latter in case he dies intestate. It does not c in any way impair or alter the joint family structure between an assessee and his son.

Nor does it effect, as observed by the High Court, the discretion vested in a Hindu assessee to treat his properties as joint family properties by taking into his fold his Hindu sons so as to constitute joint family properties.

For the foregoing reasons, we are of the opinion that th~ a(o;:esaid question referred to the High Court was rightly answered by it on both the occasions. In the result, we find no merit in these appals which are dismissed with costs.

M.R .

Appeals dismissed.

COMMR. OF WEALTH TAX, MADRAS & ORS

R. SRIDHARAN BY L.Rs

A. N. RAY

1\1. H. BEG

JASWANT SINGH, JJ

Sec. 21

Act, 1954

Section 21

special Marriage Act

AIR 1953 SC 433

Special Marriage Act, 1954

section 21

section 21

Special Marriage Act

section 27(1)

section 66(1)

Income-tax Act

section 25

Wealth-tax and Expenditure-tax Act

Income-tax Act

Act ot the Expenditure Tax Act

Indian Succession Act, 1925

Wealth-tax Act, 1957

Article 133(1)

Constitution of India

Special Marriage Act

Hindu Succession Act, 1956

section 2

Hindu Succession Act, 1956

Hindu lVfarriage Act, 1955

section 3

Section 21

Special Marriage Act

Special Marriage Act, 1954

Indian Succession Act

Special Marriage Act


S. NARAYAN IYER v.

UNION OF INDIA & ANR.

April 30, 1976

B [A. N. RAY, C.J., M. H. BEG, R. S. SARKARIA, P. N. Stt!NGHAL AND

JASWANT SINGH, JJ.J

Jurisdiction of courts under Art. 226 of the Constitution in matters of fiscal planning-Legi'slative judgments are outside the scope of /udicjgl deterniination -Reasonableness of telephone rates is a matter for legislative judgment.-lndian Telegrqph Act-Section 7(2) read with Indian Telegraph Amendment Rules, 1966.

The appellant challenged under Art. 226 the reasonableness of the increase in the telephone rental and call charges brought about by the Indian Telegraph Amendment Rules, 1966 on the ground that (I) The telephone system is a public utility service and the charges can be only in the nature of a fee which must be commensurate with the cost of renderin.g the service; and (2) The loss incurred by the Government in another establishment service is not a legitimate ground for raisin& the rates.

I >

D The writ petition was accepted and on appeal the judgment was reversed "' holding that (I) the High Court could not interfere with the tariff. and (2) • the principle upon which the public utility rates regulation as developed in the United States is not applica\Jle in our country.

Dismissing the appeal by certificate, the Court,

HELD : ( 1) The courts have no jurisdiction under Article 226 to go into E the reasonableness of rates. These rates are decided as policy matters in fiscal planning. There is legislative prescription of rates. Rates are a matter for legislative judgment and not for judicial determination.

[488A]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 325 of 1970.

From the Judgment and Order dated 28th March 1969 of the F Madras High Court in Writ Appeal No. 490/68.

K. S. Ramamurthy, K. Jayaram and R. Chandrashekhar for the Appellant.

L. N. Sinha, Solicitor General of India, S. N. Prasad and Girish Chandra for the Respondents.

The Judgment of the Court was delivered by

RAY C. J.

This appeal is by certificate from the judgment dated 28 March 1969 of the High Court of Madras.

The question in this appeal is whether the appellant in a writ petition can challenge the telephone rates and charges and obtain any relief in that behalf.

• ..

H The appellant is a retired District Manager (Telephones), Madras. . '\ He filed a writ petitin in the High Court for a writ of prohibition, directing the General Manager (Telephooos), Madras to forbear from

S. NARAYAN IYER V. UNION (Ray, C.J.) 487

enforcing the revised Telephone Tarifi as per the Indian Telegraph A Amendment Rules, 1966.

Under the rules, the rental and call "· charges were increased by 50 per cent and Trunk call charges by about 30 to 35 per cent.

The petitioner alleged that the telephone system is

' J

1-.

a public utility service and not a Revenue earning establishment and the charges can be only in the nature of a fee which must be commensurate with the cost of rendering the service.

The petitioner further alleged that the loss incurred by the Government in another establish- B ment service is not a legitimate ground for raising telephone rates.

The Trial Court held that Telephone Tariff was unjust and unreasonable.

The Trial Court allowed the writ petition.

The High Court on appeal held that the High Court could not interfere with the Tariff. The High Court said that the principal upon which public utility rates regulation as has developed in the United States is not applicable here in our country. ·

It should be said at the outset that there was some discussion in the judgment on Article 19 but counsel for the appellant properly abandoned any reference to Article 19.

The appellant's contentions are three.

First, the expression. "rates" in section 7 (2) of the Indian Telegraph Act means rates whiclh are to be determined should be fair, just and reasonable from the point of view of both the consumer and the producer.

Second, the Court has jurisdiction to determine whether the rates fixed by the Government are reasonable.

Third, the rates are increased expressly for the purpose of off-setting the losses in the Post and Telegraph Services. If a proper allocation is made according to proper commercial accounting it will be found that there is a wrongful deduction of crores of rupees as revenue expense and unla\\ful debit.

These errors in the accounting have resulted in reducing the profits earned by the Telephones.

There are three principal reasons why the writ petition is incompetent and not maintainable and the appeal should fail. First, when any subscriber to a telephone enters into a contract with the State, the subscriber has the option to enter into a contract or not.

If he does so, he has to pay the rates which are charged by the State for installation.

A subscriber cannot say that the rates are not fair.

No one is compelling one to subscribe.

Second, Telephone Tariff G is subordinate legislation and a legislative process.

Under Indian Telegraph Act, section 7 empowers the Central Government to make rules inter alia for rates.

These rules are laid before each House of Parliament.

The rules take effect when they are passed by the Parliament.

Third, the question of rates is first gone into by the Tariff Enquiry Committee.

The Committee is headed by nonofficials.

The Tariff rates are plaoed before the House in the shape H of Budget proposals.

The Parliament goes into all the Budget proposals.

The rates are sanctioned by the Parliament.

The rates. t'herefore, become a legislative policy as well as a legislative process.

48 8

SUPREM.E COURT REPORTS

(1976] SUPPLEMENTARY

The Courts have no jurisdiction under Article 226 to go into reasonableness of rates. These rates are decided as policy matter in fiscal planning. There is legislative prescription of rates. Rates are a matter for legislative judgment and not for judical determination.

The appeal is dismissed.

There will be no order as to costs.

S.R.

Appeal dismissed.

... \ ,

S. NARAYAN IYER

UNION OF INDIA & ANR

A. N. RAY, C.J.

M. H. BEG

R. S. SARKARIA

JASWANT SINGH, JJ

Art. 226

Section 7(2)

Indian Telegraph Amendment Rules, 1966

Art. 226

Indian Telegraph Amendment Rules, 1966

Article 226

Article 19

Article 19

section 7

Indian Telegraph Act

Indian Telegraph Act

section 7

Article 226