LONANKUTTY

THOMMAN & ANOTHER

April 15, 1976

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

Civil Procedure Code, s. 11, Res judicata, scope of-Co'mmon iudg111ent in cross appeals from two suits on identical questions-Second appelll from only one suit, whether barred by res judicata.

Practice and procedure-Remanding judgment not appealed against, whether challen1reab/e in appeal from final decision. ,

Two suits were filed in the trial court, one by the respondents, claiming a prescriptive eament OVeil." the appellant's land for the ingress and egress of water, -for agriculture and prawn fishing, and the other by the appellant, seeking to restrain the respondents from using his land for the above purposes.

Due to the time-lag between their respective institution, the two suits, although involving common questions, were tried and disposed of separately.

The respondents' easementary right was upheld in regard to agricultural user but not for prawn fishing.

Cross appeals were filed by the parties against both the decrees, ; i.nd the Subordinate~ Judge dismissed all the appeals confirming the decrees by a common judgment. Neither side challenged the decrees in appeals arising from the respondents' suit, but the respondents moved the High Court against the decree in appeals arising from the appellant's suit. The second appeal was contested on the ground that it ¥.ras barred by res ; udicata, as the qu"6tion in it had already been finally decided by the unchallenged decrees in the appeals arising out of the other suit. This contention was rejected and the appeal was remanded for a fresh hearing. The matter was thereafter disposed of on merits by the Subordinate Judge, and the pre-remand view stood confirmed. The High Court a11owed a second appeal by the respondents, up holding their easementary right both for agriculture and prawn fishing.

In appeal therefrom the plea of res iudicata Was raised before this Court, and was contested on the ground that the remanding judgment had not been appealed against, and the contention was, therefore, barred by res iudicata.

F Allowing the appeal, the Court

HELD : ( 1) The appeals filed in the District Court arose out of two different suits, one by the appeliant and the other by the respondents. The failure of the respondents to chaUenge the decision of the District Court in so far as it pertained to their suit, attracts the application of section 11, ExpJanatio!1 I, Civil Procedure Code, because to the extent to which the District Court decided issues arising in the respondents' suit against them, that decision \VOU]d operale

as res judicata since it v; ras not appealed against.

[81A-B]

Sheodan Singh v. Smt. Daryao Kunwar [1966] 3 S.C.R. 300; Badri '!•larayan SinRh v. Kamdeo Prasad Singh & Anr. [1962] 2 SCR 759, referred to.

Narhari v. Shanker [1950] SCR 754, distinguished.

(2) The circumstance that the remanding judgment of the High Court was not appealed against, assuming that an appeal lay therefrom. cannot preclude the appellant from cha1lenging the correctness of the view taken by the High Court in that judgment. [81 DE]

' ..

' ,.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1283 of A 1973

(Appeal by special leave from the judgment and order dated the 8.4.1971 of the Kerala High Court in S. A. No. 1190/65)

D. V. Patel and A. S. Nambiar, for the appellant.

T. C. Raghavan and S. Balakrishnan, for respondents.

The Judgment of the Court was delivered by

CHANDRACHUD, J.-This 22-year old litigation concerns the right of two adjacent owners to catch prawns on their respective lands .

Survey No. 673 of Kadamkudi, District Ernakulam, measuring about 11 acres originally belonged to the Cochin Government but by C diverse transfers the title thereto is now vested in the appellant, Lonankutty.

The land is bounded on the West and South by a river.

A portion of the land on the North-East can be put to agricultural use for a part of the year but the land, by and large, is water-logged and can profitably be used for prawn-fishing.

In order to make fishing feasible, the appellant has constructed a bund on the western side of the land for arresting the flow of the river water.

The contrivance D is calculated to permit collection of water on the land, almost to the point of submerging it.

The prawns enter the land with the high tide, they breed and multiply on the land, and the water while receding leaves the prawns behind.

The appellant then catches them, presumably under a licence from the Government of Kerala.

Survey Nos. 672, 677, 655/4 and 670 which sprawl on all sides E of survey No. 673 belong to the respondents : T'homman and his mother Annam.

We are concerned with the prescriptive rights claimed by them in respect of survey No. 672 which is situated towards the north-east of survey No. 673.

Survey No. 672 is almost landlocked and between it and the river on the south stands the vast expanse of survey No. 673 belonging to the appellant.

Prawns have an export value and catching them is so much more profitable than growing food-crops.

But the respondent's land being land-locked, they have no direct access to the river on the west or the south.

They cannot therefore do any fishing operations becaus~, for prawn-fishing it is necessary that the rrver-water must enter their land, and collect on it so that after the prawns have bred, the water can be released back to the river.

For achieving this result, respondents constructed a bund with sluice-gates on the border between their land and survey No. 673.

Their case is that they have a prescriptive easement to take water from the appellant's land and to divert it back through the same land, both for fishing and agriculture.

The appellant has grave objection to permitting the respondents to engage thus in prawn-:fiShing because along with the water which would pass from his land (survey No. 673) to the respondents' land (survey No. 672), prawns also would pass.

And when the water would be released back from survey No. 672 through the sluice gates, survey No. 673 would get flooded, carrying back the prawns left on his land,

to the river on the south. the parties.

This is the genesis of the dispute between

The appellant filed Civil Suit No. 666 of 1954 against the respondents for a perpetual injunction restraining them from !Clking wr from survey No. 673, from discharging the water back through survey No. 673 and for a mandatory injunction directing them to demolish the bund and olose the sluice gates. The appellant disputed the right claimed by the respondents in its entirety, contending that they had no right to the flow of water either way for either purpose-fishing or agriculture.

The respondents filed Civil Suit No. 5 of 1957 for an injunction restraining the appellant from trespassing on the bund constructed by them and for preventing the appellant from interfering with their right to take water from Survey No. 673 and to discharge the water back through that land: Respondents claimed this prescriptive 1ight for fishing as well as for agricultural purposes.

Both the suits were instituted in the court of the Munsiff of Cochin but in view of the time-lag between their respective institution, they were tried and disposed of separately.

By a judgment dated September 20, 1957 the learned Munsiff decreed the appellant's suit (No. 666 of 1954) partly, granting an injunction against the respondents to the effect that they had no right to take water from the appellant's land nor to discharge the water back t!hrough that land for the purposes of prawn-fishing. The learned judge, however, expressly upheld the respondents' easementary right to the two-way flow of water from and through the appellants land for agricultural operations during the agricultural season.

The suit filed by !he respondents (No. 5 of 1957) was disposed of by the learned Munsiff by a judgment dated October 11, 1958.

Consistently with the decree passed in the appellant's suit, he dismbsed

the respondent's suit in so far as it related to the fishing rights claimed by them but decreed it to the extent of the right claimed by them in regard to agricultural user. Briefly, the result of the decrees passed in the two suits was that the respondents could take water from the appellant's land and discharge water back through that land for agricultural purposes only and during the agricultural season which begins on the 15th Meenam and ends pn 15th Vrischigam of each year.

From the decree passed in the appellant's suit, two cross-appeals werll filed in the court of the learned Subordinate Judge, Ernakulam, the appeal filed by the appellant being A. S. 64 of 1956 while that filed by the respondents being A. S. 66 of 1958.

Similarly, two cross-appeals were filed by the parties as against the decree paBsed by the trial court in the suit filed by the respondents, A. S. 1 of 1959 being the one filed by the respondents while A. S. 17 of 1959 being the one filed by the appellant. Since these four appeals involved common questions for decision the learned Subordinate Judge heard them together and disposed them of by a common judgment dated January 28, 1960.

The learned Judge dismissed all the appeals and confirmed the decrees passed by the Trial Court.

' '

No further appeal was filed by either side fro mthe decrees passed by the learned Subordinate Judge in Appeal~ Ns. 1 of 1959 and 17 -0f 1959, which arose out of the respondents. smt.

But respondents filed a Second appeal in the High Court agamst the decree assed by the learned Subordinate Judge in appeal No. 66 of 1958 which arose out of the decree passed by the trial court in the suit filed by the appellant.

That was Second Appeal Noc 1149 of 1960.

Before the High Court it was contended on .bealf of the espoi: dents that the subordinate Judge had faded to consider the entire evidence in the case and therefore his judgment Was vitiated. On the other hand, the appellants, w)lo were defendii:g the.judgments of the Subordinate Judge, contended. that the quest10n raised by the respondents in their Second Appeal was barred by res-judicata as the decrees passed by the Subordinate Judge in appeals arising out of the respondents' suit had become final, not having been appealed against. A learned single judge of the High Court, by his judgment dated July 8, 1964 accepted the first of these contentions, set aside "the judgment and decree of the Subordinate Judge which was under appeal" and remanded the appeal for a fresh hearing. The appellant's contention of res judica/a was rejected by the learned Judge on the ground that since in the four appeals the Subordinate Judge had passed only one judgment aud one decree, it was enough for the _respondents to file one appeal in which they could challenge every one of the findings recorded against them.

On remand, the appeals were heard by another Subordinate Judge before whom the appellant, once again and with some impropriety,

pleaded the bar of res judicata. Impropriety, because the High Court having rejected that plea by its remanding judgment, the court of remand-the Subordinate Judge-was bound by the High Court's decision on the question of res judicata.

Apparently, the learned Subordinate Judge was in a doubting disposition and he expressed his reaction favourably by observing that the appellant's contention of res judicata was plausible, But very rightly, he proceeded to dispose of the matter on merits as directed by the High Court. By his judgment dated December 22, 1964 he dismissed A. S. 66 of 1958 which was filed by the respondents against the decree passed by the Trial Court in the appellant's suit.

Thus the view taken in the judgment before remand stood confirmed after remand on a further consideration of evidence in the case.

Respondents filed Second Appeal No. 1I90 of I 965 against the Subordinate Judge's judgment, which was allowed by a Division Bench of the Kerala High Court on April 8, 1971.

The High Court held that the respondents had a right to the flow of water through the appellant's land not only for the purposes of agriculture but for the purposes of prawn-fishing also.

Appellant raised once again the plea of res judicata but it was rejected on the ground, rightly, that the plea was concluded by its remanding judgment.

In the result, the High Court dismissed the appellant's suit (No. 666 of 1964), giving rise to this appeal by special leave.

Learned_ counsel appearing on behalf of the appellant contends that the High Court exceeded its jurisdiction in interfering with the findings of fact recorded by the Subordinate Judge and that it had overlooked certain fundamental principles of law while adjudicating upon t!he prescriptive claim made by the respondents.

It is unnecessary to go into these questions because another submission made on behalf of the appellant goes to the root of the matter and if that submission is accepted, the High Court's judgment would be impossible to sustain. The contention is that the issue as regards the respondents" right to the flow of water through the appellant's land for fishing purposes is barred by res judicata, and t!herefore, the High Court could not try and decide that issue in the Second Appeal which came before it.

This contention is well-founded and must be accepted. By section 11, Code of Civil Procedure, in so far as relevant, no court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties and has been heard and finally decided.

Explanation I to the section provides that the expression "former suit" shall denote a suit which has been decided prior to the suit in question whether or not it was instituted prior thereto.

The only other aspect of the rule of res judicata which on the facts before us must be borne in mind is that it is not enough to constitute a matter res judicata that it was in issue in the former suit.

It is further ne.cessary that it must have been in issue directly and substantially.

And a matter cannot be said to have been "directly and substantially" in issue in a suit unless it was alleged by one party and denied or admitted, either expressly or by necessary implication, by the ot!her.

In the instant case, two suits were filed in the trial court : one by the appellant and the other by the respondents.

The plaintiff in the first suit was the defendant in the second suit while the defendants in the first suit were plaintiffs in the second.

To particularize in the interests of clarity, appellant who was plaintiff in the earlier suit (No. 666 of 1954 was the defendant in the later suit (No. 5 of 1957).

Respondents who were plaintiff in suit No. 5 of 1957 were defendants in suit No. 666 of 1954.

In the appellant's suit, the trial Court framed the following issues for decision in so far as relevant :

"1. Whether the defendants have trespassed into the north-eastern boundary of the plaint schednle property and have begun construction of a bund there as alleged in para 3 of the plaint ?

2. How long has the bund on the western boundary of S. No. 672 been in existence?

3. Whetlher defendants 1 to 3 have acquired any right of ea11ement over the plaint schedule properties as contended for in paras 4 and 5 of the written statement?

4. Whether the defendants enjoyed such a right against

schedule properties as owners and occupiers of S. Nos.

f -

...

672 and 667 openly as of right and continuously A and for the prescribed period?

5. Whether defendants 1 to 3 have no out-let for water from S. Nos. 667, 672, 655, 670 and 671 other than through the plaint schedule properties?

6. Whether the right to let in and let out water for purpose of prawn-fishing operation is a right of easement B capable of being acquired in law?

7. Whether the plaintiff is entitled to the injunction prayed for?"

In the respondents' suit the following issues were framed :

"1. Whether the plillltiffs have got any easement right

to let in and let out water from the plaint A schedule properties through B schedule property?

2. Whether the defendant can obstruct that right if any, by putting up a bund?

3. Whether the plaintiffs are entitled to the iniunction prayed for?" D

The trial court decreed the appellant's suit partly by holding that the respondents had not acquired any right of easement over the appellant's land for the ingress and egress of water for fishing purposes but they had established such a right for agricultural purposes during the agricultural season.

The trial court issued an injunction restraining the respondents from taking or letting out water from or E through the appellant's land for fishing purposes. In the respondents' suit, the trial court recorded similar findings and issued an injunction against the appellant restraining him from interfering with the respondent's easement right limited to agricultural purposes during the agricultural season.

Each party being partly aggrieved by both the decrees, each filed F an appeal in the District Court against the two decrees.

The learned - Subordinate Judge, sitting in appeal, had thns 4 appeals before him, 2 arising from each suit.

He confirmed the decrees under appeal and • dismissed all 11he appeals. ).

Respondents did not file any further appeal against the decree passed by the District Court in the appeals arising out of their suit.

G They filed a Second Appeal in the High Court, only as against the decree passed by the District Court in A. S. 66 of 1958 which arose out of the decree passed by the trial court in the appellant's suit.

Thus, the decision of the District Court rendered in t:he appeal arising out of the respondents' suit became final and conclusive.

That decision, not having been appealed' against, could not be re-opened in the Second Appeal arising out of the appellant's suit.

The issue H whether respondents had the easementary right to the flow of water through the appellant's land for fislhing purposes was directly and substantially .in issue in the respondent's suit.

That issue was heard and

finally decided by the District Court in a proceeding between the same parties and the decision was rendered before the High Court decided the Second Appeal.

The decision of the District Court "as given in an appeal arising out of a suit, which though instituted subsquently,

stood finally decided before the High Court disposed of the Second Appeal. The decision was therefore one in a "former suit" within the meaning of section 11, Explanation 1, Civil Procedure Code. Accordingly, the High Court was in error in deciding an issue which was heard and finally decided in a "former suit" and was therefore barred by res judicata.

The High Court in its judgment dated April 8, 1971 assumed wrongly that suit No. 666 of 1954 filed by the appellant and suit No. 5 of 1954 filed by the respondents were "originally disposed of. by a common judgment".

They were not.

The appellant's suit was disposed of by a judgment dated September 20, 1957 while the respondents' suit was disposed of by a judgment dated October 11. 1958.

Naturally, 2 separate decrees were drawn in the 2 suits and those decrees gave rise to 4 cross-appeals, 2 from each suit.

In its remanding judgment dated July 8, 1964 by which the plea of res judicata was repelled, the High Court relied principally on the decision of this Court in Narhari v. Shanker('). That decision is in our opinion distinguishable because in that case only one suit was filed giving rise to 2 appeals.

A filed a suit against B and C which was decreed.

B and C preferred separate appeals which were allowed by a common judgment, but the appellate court drew 2 separate decrees.

A preferred an appeal against one of the decrees only and after the period of limitation was over, he preferred an appeal against the other decree on insufficient conrt-fee.

The High Court held that A should have filed 2 separate appeals and since one of the appeals was timebarrcd, the appeal filed within time was barred by res judicata.

This Court held that "there is no question of the application of the principle of res judicata", because "When there is only one suit, the question of res judicata does not arise at all".

This was put on the ground that "where there has been one trial; one finding, and one decision, there need not be two appeals even though two decrees may have been drawn up." In our case, here were 2 suits and since the appellate decree in one of the suits had become final, the issues decided therein could not be re-opened in the Second Appeal filed against the decree passed in an appeal arising out of another suit.

This precisely is the ground on which Narhari's case was distinguished by this Court in Sheodan Singh v. Smt. Daryao Kunwar( 2 ). It was held therein that where the trial court has decided 2 suits having common issues on the merits and there are two appeals therefrom the decision in one appeal will operate as res judicata in the other appeal.

The circumstance that the District Court disposed of the 4 appeals by a common judgment cannot affect the application of section 11 because as observed in Badri Narayan Singh v. Kamdeo Prasad Singh

(1) [1950] S. C. R. 754.

(2) [1966] 3 S. C. R. 300,

and Anr.,(1) even where 2 appeals arise out of one proceeding and even if the appeals are disposed of by a common judgment, the decision in that judgment may amount to 2 decisions and not to one if the subject-matter of each appeal is different.

The case before us is stronger sti11 for the application of section 11 because the appeals filed in the District Court arose not out of one proceeding but out of 2 different suits, one by the appellant and the other by the respondents.

The failure of the respondents to challenge the decision of the District Court in so far as it pertained to their suit attracts the application of section 11 because to the extent to which the District Court decided issues arising in the respondents' suit against them, that decision would operate as res judicata since it was not appealed against.

It is necessary to add that the decision rendered by the High Court by its judgment of remand dated July 8, 1964 in Second Appeal No. 1149 of 1960 that the contention raised by the respondents is not barred by res judicata can be re-opened in this appeal against the final judgment of the High Court.

The decision of this Court in Satyadhyan Ghosal and Ors. v. Smt. Deorajin Debi and Anr.,(') is directly in point on this question.

Relying upon certain decisions of the Privy Council it was held by this Court that an interlocutory order which had not been appealed from either because no appea:l lay or even though an appeal lay an appeal was not taken, could be challenged in an appeal from the final decree or order.

Accordingly, the circumstance that the remanding judgment of the High Court was not appealed against, assuming that an appeal lay therefrom, cannot preclude the appellant from challenging the correctness of the view taken by the High Court in that judgment.

In view of our decision that the contention raised by the respondents is ban-ed by res judicata, it must be held that the High Court was in en-or in allowing the respondents' appeal and acceptin~ his contention. Accordingly, we allow this appeal, set aside the judgment of the High Court and restore that of the District Court. In the circumstances, there will be no order as to costs.

- We would like to state by way of clarification that our judgment will not affect the respondents' right to the flow of water through the appellant's land for agricultural purposes from 15th Meenam to I 5th _;.

Vrischigam every year.

M.R.

(1) [!9621 3 S. C. R. 759.

\1) \1%1){ 1 S. C.R. 590.

8-833 SCI/76

Appeal allowed.

LONANKUTTY

THOMMAN & ANOTHER

Y. V. CHANDRACHUD

V. R. KRISHNA IYER

N. L. UNTWALIA, JJ.

Civil Procedure Code

s. 11

section 11

Civil Procedure Code

[1966] 3 S.C.R. 300

[1962] 2 SCR 759

S. 64

S. 66

S. 1

S. 17

S. 66

section 11

Code of Civil Procedure

S. 66

section 11

Civil Procedure Code

section 11

[1966] 3 S. C. R. 300

section 11

section 11


HIRALAL THAKORLAL DALAL v.

IlROACH MUNICIPALITY & ORS.

April 15. 1976

[A. N. RAY, C.J., M. H. BEG, R. S. SARKARIA, P. N. SJIINGHAL AND

JASWANT SINGH, JJ.]

Bombay Municipal Boroughs Ac1 1925 S. 73(i) (iv)-Scope-of-Octroi July -If could be le\lit!d-on-"through consignments".

Section 73(i)(iv) of the Bombay Municipal Boroughs Act 192.S empowers a municipal borough to impose octroi on animals or goods or both brought wit.hilt the octroi limits for consumption, use of sale therein. The appellant imported certain consignments of goods within the octroi Ii1nits of the municipality and exported them, the consignments being termed as "through consignments" or .. goods in transit" or .. goods for export'".

Octroi duty was imposed on the goods and the appellant f.led a petition befo:re the High Court challening the levy. The High Court held that the expression 'sale' used in the definition of "through consignments" in the rules had the same connotation as in the Sale of Goods Act and, lhe-refore, if a consignment was brought within the octroi limits and if the municipal authorities were satisfied that the consignment bad been brought in for the purpose of sale, then the consignment did not becom• a through consignment.

Allowing the appeal to this Court.

HELD : The law on the subject has been clearly laid down in Burmali Shell Oil Storage and Distributing Company (India) Ltd. v.

The Belgaum Borough AJunicipality and the present case is governed by that decision. lt was held in that case that the company was liable to pay octroi on .goods brought into the local area. if t.he Roods are :

(a) to be consumed by the Compan)I itself or sold by it to consumers direct and (b) for sale to dealers who in their turn sold the goods to consumers within the municipal area and irrespective .of \\o-hetlrer such consumer boush, t

them for use in the area or outs de it; but it was not liable to octroi in respect of goods l'.-hich were brouRhl into tf.e _tocal area and were re-exported. [86 C-D]

Bunwh Shell O:I Stdrc.+ge and Distributing Co. India Ltd. v. The Be/gaurn Borou:xh 1\.funicipality [1963] Supp]. 2 S.C.R. 216, explained and 2pp1kd.

CIVIL APPELLATG JURISDICTION : Civil Appeal No. 1823 of 1969.

Apeal by Special Leave from the Judgment 11nd Order dated the 27th/28th/30th January, 1967 of the Gujarat High Court in Special G Civil Application No. 163 of 1962. ·

B. R. Agarwa/a for the Appellant.

I. N. Shroff for the Respondent•.

Dr. L. M. Singhvi. Advocate Gmeral, Rajasthan, V. S. Da1•e . and S. M. Jain for Intervener, Mtt.licipal Council, Jodhpur.

H The Judgment o( the Court was delivered by

SmNGHAL, J.-This appeal by special ju0[Jnent o~ the Gujarat High Court &ted

le:ivc uise. from the

January 27, 28 .and 30,

1967. The two petitioners before the High Court were firms trad- A ing in certain commodities within the limits of the Municipal Borough of Broach. The grievance in one of the petitions was that the Municipality had collected certain amounts wrongfully, and the grievance in the other petition was that the Municipality had refused some amounts even though they were refundable under its byelaws.

Both the petitions concerned goods which were "imported" within the octroi limits of the Municipality but came to be "exported" B therefrom. The first petition was in respect of a consignment which was designated as a through consignment, and the second petition concerned goods in transit and goods for export other thari those which could be called goods in transit.

The amounts in dispute related to the levy of octroi under section 73(i) of the Bombay Municipal Boroughs Act, 1923, hereinafter called the Act, which provides as follows : C

"73 (i) Subject to any general or special orders which the State Government may make in this behalf and to the provisions of sections 75 and 76, a Municipality may impose for the purposes of this Act any of the following taxes, namely :-

• • • •

(iv) an octroi on animals or goods or both, brought, within the octroi limits for consumption, use or sale therein;."

The word "sale" was included within the ambit .of octroi when the Act was amended in 1954. The High Court took note of the rules and the bye-laws and held that it was not possible to take the view

that the rules contemplated that no refund was payable in case the goods had undergone a sale during the course of their stay in octroi F limits.

It accordingly came to the conclusion that in regard to goods meant for export in the sense defined in the rules, refund was claimable even if a sale transaction in the larger sense (i.e. in a sense other than a sale to a consumer or with the intention that the goods must pass into bands of the ultimate consumer) took place in regard thereto, provided that the other conditions were satisfied.

The High Court then examined the correct interpretation of the word G "sale" in clause (iv) of section 73(i) of the Act and after considering this Court's judgment in Burmah Shell Oil Storage and Distributing Co. India Ld. v. The Belgaum Borough Municipality,(') it held that the word "sale" could not be given the narrow meaning of a sale for consumption to the ultimate consumer because, in that

ense, the Legislature would be guilty of having introduced a word which it was not necessary for it to introduce.

The High Court H made a reference to the definition of "sale" in section 4 of the Sale of

--·-....:..--'---

(1) [1963) S1ppl. 2. S. C. IL 216.

Goods Act and held that the expression "sale" as used in the definition of 'through consignments" in the rules had the same connotation as in the Sale of Goods Act and therefore "if a consignment is brought within the octroi limits and if the municipal authorities are satisfied that the consignment has been brought in for the purpose of effecting a sale in the aforesaid sense, then the consignment does not become a through consignment." According to the High Court, it was not enough merely to prove that the consignment left the octroi limits within six hours after the goods were imported and that it was necessary to show that the goods were intended only to pass through in the sense that they were not meant for consumption, use or sale, and that in regard to such goods there was no intention of changing hands by way of sale or that there was no intention of breaking their bulk or detaining them beyond six hours or unloading them.

In the view it took, the High Court issued some directions for compliance by the authorities concerned.

The writ petitioners felt dissatisfied with the view taken by the High Court and applied for a certificate under articles 132(1) and J33(1)(c) of the Constitution.

The High Court held that no question arose under article 132, aud no .certificate could be granted under article 133 as there was no final order.

The petitioners however applied to this Court for special leave on the ground, inter alia, that the High Court put a wrong interpretation on the expression "sale" in section 73(i) (iv) of the Act inspite of the decision of this Court in Burmah Shell's case (supra).

As has been stated, they succeeded in obtaining special leave from this Conrt.

When the case came up for hearing before a Division Bench, it noticed the decision in Burmah Shell's case (supra) and felt that there were "blurred areas" of sale within the territory which may attract a tax under entry 52 (List II of Seventh Schedule) left uncertain by the aforesaid decision of this Court so that the matter deserved consideration by a larger Bench.

This is how the case has come up before us for. hearing.

We have allowed Municipal Council, Jodhpur, to intervene in the hearing at its request.

The short question before us is whether this Court's decision in the Burmah Shell's case (supra) squarely covers the present controversy or whether that decision requires reconsiderat:on.

The learned counsel have in fact confined their arguments to this narrow field.

In order to appreciate the controversy, it will be desirable to refer to the basic facts of the Burmah Shell's case (supra).

The Burmah Shell Oil Storage and Distribution Co. India Ltd., hereinafter referred to as the Company, was a dealer in petrol and other petroleum products which it manufactured in its refineries situated out- H side the octroi limits of Belgaum Municipality.

It brought these products inside that area either for use or consumption by itself or for sale generally to its dealers and licensees who in their turn sold them to others.

According to the Company, the goods brought by

it within the octroi limits could be divided into follows:

1. Goods consumed by the Company;

four categories as

.!~I

2. Goods sold by the Company through its dealers or by itself and consumed within the octroi limits by persons other than the Company;

3. Goods sold by the Company through its dealers or by itself inside the octroi limits to other persons but consumed by them outside the octroi limits; an.d

4. Goods sent by the Company from its Depot inside the octroi limits to extra-municipal points where they are

bought and consumed by persons other than the c company.

This Court examined the scheme of taxation under the Act and the rules and the bye-laws made by the Municipality for the levy of octroi.

It also took note of the fact that the words ''use or sale" were substitnted for the words "or use" by Bombay Act 35 of 1954, which are the subject matter of a fresh controversy before us, and made a reference to the Legislative Lists in the Government of India Act, 1935 and the Constitution.

After examining the history of octrois and terminal taxes, this Court held that "octrois were taxes on goods brought into the local area for consumption, nse or sale", and that

"they were leviable in respect of goods put to some use or other in the area but only if they were meant for such user." It was specilically clarified that the word "sale" was included only in 1954 in order to bring the description of octroi in the Act in line with the Constitntion, and that the expression "consumption" and "use" together "connote the bringing in of goods and animals not with a view to taking them out aguin but with a view to their retention either for use without using them up or for consumption in a manner which destroys, wastes or uses them up."

Looking to the trade of the Company, this Court held that sale by it directly to consumers or to dealers was "merely the means for putting the goods in the way of use or consumption" and that the word "therein" does not mean that all the act of consumption must take place in the area of the municipality.

The Court therefore went to hold as follows.-

"In other words, a sale of the goods brought inside, even though not expressly mentioned in the description of octroi as it stood formerly, was implicit, provided the goods were not re-exported out of the area but were brought inside for use or consumption by buyers inside the area. In this sense the amplification of the description both in the Government of India Act, 1935 and the Constitution did not make any addition to the true concept of 'octroi' as explained above.

That concept included the bringing in of goods in a local area so that the goods come to a repose there.

When the Government of India Act, 1935 was enacted, the word

'octroi' was deliberately avoided and a description added to forestall any dispute of the nature which has been raised in this case.

In other words, even without the description the tax was on goods brought for 'consumption, use or sale'. The word 'octroi' was also avoided because terminal taxes arc also a kind of octroi and the two were to be allocated to different legislatures.

In our opinion, even without the word 'sale' in the Boroughs Act the position was the same provided the goods were sold in the local area to a consumer who bought them for the purpose of use or consumption or even for resale to othei; s for the purpose of use or consumption by them in the area.

It was only when the goods were re-exported out of the area that the tax could not legitimately be levied ..... "

This Court categorically held that the Company was liable to pay octroi on goods brought into the local area (a) to be consumed by itself or sold by it to consumers direct, and (b) for sale to dealers who in their turn sold the goods to consumers within the municipal area irrespective of whether such consumers bought them for use in the area or outside it, but it was "not liable to octroi in respect of goods which it brought into the local area and which were re-exported."

The law on the subject matter of the present controversy has thus been laid down quite clearly in the Burmah Shell's case (supra) and the present case squarely falls to be governed by it. We are also in agreement with that interpretation of the law. It may be mentioned E that the learne_d counsel have not been able to advance any new argument justifying a reconsideration of the decision.

The appeal is allowed, the impugned judgment of the High Court is set aside and the respondents are directed to examine and determine the claims of the appellant in accordance with the above decision. The appellant will be entitled to costs from the respondents.

P.B.R.

Appeal allowed.

,_ '

HIRALAL THAKORLAL DALAL

IlROACH MUNICIPALITY & ORS

A. N. RAY, C.J.

M. H. BEG

R. S. SARKARIA

JASWANT SINGH, JJ.

S. 73(i)

Section 73(i)(iv)

Sale of Goods Act

section 73(i)

Bombay Municipal Boroughs Act, 1923

sections 75 and 76

section 73(i)

section 4

Sale of Goods Act

articles 132(1)

article 132

article 133

section 73(i)

Seventh Schedule

When the Government of India Act, 1935


NEW DELHI MUNICIPAL COMMITTEE 87

KALU RAM & ANR.

April 20. 1976

[A. C. GUPTA AND JASWANT SINGH, JJ.]

Public Premises (EvictUna of Unauthorised Occupants) Act, 1958, S. 7, whtt her creates new right or merely provides special procedure, whether subject to limitation.

fn 1950, the appellant allotted small pre-fabricated stalls to several displaced persons including the respondent, at the Iicen~ fee of rupee thirty payable per month .. Later, the~ allottees applied for a fixation of standard rent but ultimately lost in the Punjab High Court at Delhi. MP.anwhile, the reapondent fell in arrears in paying the licence fee.

In Decembr. 1960, the appellant demanded from him the entire amount in arrears from May 1950 to April 1957 but he failed ro pay. In September 1961, the Estate Officer ordered tho respondent under section 7 ( 1) of the Act, to pay the sum, overruling his objection that the claim was barred by limitation. The respondent's appeal to the Additional District Judge was rejected, but the Punjab High Court at Delhi a11owed bis writ petition on the ground that section 7 could not be availed in case of time barred claims.

The appellant contended before this Court that the Limitation Act only barred the remedy by way of suit and did not extinguish the right which could still be exercised through section 7 of the Act. Section 7 did not put a time limit for taking action under it, and was, therefore, not subject to the limitation prescribed for a suit to recover the amount.

Dismissing the appeal, the Court,

HELD : Section 7 only provides a special procedure for the realisation of rent in arrears and does not constitute a source or foundation of a right to da:m a debt otherwise time-barred. The word "payable" in Section 7 in the context in which it occurs, means "legally recoverable". [90 B & D]

Hans Raj Gupta and other3 v. Ofiicial Liquidator of the Dehradun Mrissoorie Electric Tramway Co. Ltd. 60 I.A. 13, followed.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 988 of 1968 .

(From the Judgment and order dated the 8-4-1965 of th~ Punjab High Court, Circuit Bench Delhi-now the High Court of Delhi in Civil Writ No. 228---G of 1962).

Hardyal Hardy, B. P. Maheshwari, Suresh Sethi and Bikaramfit Nayar; for the appellant.

A. K. Sen, D. P. Bhandare, Mrs. Laxmi Arvind Mathur and S. S.

Khanduja; for the respondents.

The Judgment of the Court was delivered by

GUPTA, J.-Respondent Kalu Ram was pavement vendor in Connaught place, New Delhi. In 1950 the appellant.

New Delhi Municipal Committee, provided a number of displaced persons with small pre-fabricated stalls to enable them to do their business.

Kalu

SUPREME COURT REPORTS

[1976] SUPPLEMENTARY

Ram who was also a displaced person was allotted one such stall on Irwm Road. Rupees thirty was the licencee fee payable per month by the allottees of these Slalls. Later, the allottees, including the respondent, applied to the Rent Controller for reducing the rent. It is not necessary to refer to the various proceedings arising from these applications for

fixacion of standard rent which were ultuna, ely dismissed by the Circuit Bench ol the Punjab High Court at Delhi as not maintainable.

In the meantime, many of the allottees fell in arrears in paying the licence fees.

So far as the respondent is concerned, the appellant took no steps to recover the dues till December 1960 when it demanded the entire amount in arrears from May 1950 to April 1957, The respondent not having paid, the appellant asked the Estate Officer, appointed under section 3 of the Public Premises (Eviction of U nauthorised Occupants) Act, 1958, to take steps to recover the amount in arrears under section 7 of that Act.

The Estate Officer, who is the second respondent herein, made an order on September 28, 1961 Ul).der section 7 ( 1) of the Act asking the respondent to pay the sum overruling his objection that the claim was barred by limitation. The respondent's appeal to the Additional District Judge from the Estate Officer's order was disallowed.

The respondent then filed a writ petition before the Circuit Bench of the Punjab High Court at Delhi challenging the order against him.

One of the grounds of challenge was that section 7 could not be resorted to for recovery of the sum as the claim was time-barred. The High Court accepted the contention a!ild allowed the petition. In this appeal by certificate, the appellant, New Delhi Municipal Committee, questions the correctness of the High Court's decision.

The only contention raised before us by Mr. Hardy appearing for the appellant is that the High Court was wrong in holdin~ that the amount in question could not be recovered under section 7 because the time for instituting a suit to recover the sum had expired. Admittedly, any suit instituted on the date when the Estate Officer made his order under section 7 (I) would have been barred by time.

Mr.

Hardy argued that the Limitation Act only barred the remedy by way of suit and did not extinguish the right, and section 7 of the Public Premises (Eviction of Unauthorised Occupants) Act providin~ a different and special mode of recovery was therefore available to recover rent in arrears beyond three years. Section 7 as it stood at the relevant time reads :

Power to recover rent or damages in respect of public premises as arrears of land revenue.

"7. (1) Where any person is in arrears of rent payable in respect of ny public premises, the estate officer may, by order, reqmre that person to pay the same within such time and in such instalments as may be specified in the order.

(2) Where any person is, or has at any time been in unauthorised occupation of any public premises, the

...

N.D.M.C. v. KALU RAM (Gupta, !.) 89

estate officer may, having regard to such principles of assessment of damages as may be prescribed, assess the damages on account of the use and occupation of such premises and may, by order, require that person to pay the damages witnin such time and in such instalments as may be specified m the order :

Provided that no such order shall be made until after the issue of a notice in writing to the person calling upon him to show cause within such time as may be specified in the notice why such order should not be made, and until his objections, if any, and any evidence he may produce in support of the same, have been considered by the estate officer.

(3) If any person refuses or fails to pay the arrears of rent or any instalments thereof payable under sub-section ( 1) or the damages or any instalment thereof payable under sub-section (2) within the time specified in the order relating thereto the estate officer may issue a certificate for the amount due to the Collector who shall proceed to recover the same as an arrear of land revenue."

As would appear from the terms of the section, it provides a summary procedure for the recovery of arrears of rent.

It was argued

that since section 7 did not put a time limit for taking steps under that section and as the limitation prescribed for a suit to recover the amount did not apply to a proceeding under this section, the High Court was in error in upholding the respondent's objection.

In sup- E port of his contention that a debt remained due though barred by limitation, Mr. Hardy relied on a number of authorities, both Indian and English.

We do not consider it necessary to refer to these decisions because the proposition is not disputed that the statute of limitation bars the remedy without touching the right.

Section 28 of the Indian Limitation Act, 1908 which was in force at the relevant time however provided that the right to any property was extimm; shed on F the expiry of the period prescribed by the Act for institntin• a suit for possession of the property.

But on the facts of this case no question of a suit for possession of any property arises and section 28 has no application.

It is not questioned that a creditor whose suit is barred by limitation. if he has any other le.al reme<ly permittin~ him to enforce his claim, would be free to avail of it.

But the question in every such case is whe•her the narticular statute permits such G a course.

Does section 7 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1958 create a right to realise arrears of rent without any limitation of time ? Under section 7 the Estate Officer may order any person who is in arrears of rent 'payable' in resoect of any oublic premises to pay the same within such time and in such instalments as he may soecify in the order.

Before how•ver the order is made, a notice must issue caltinq uoon the d•fonlter to show H

ause way such order should not he made and, if he raised any obiectton, the Estate Officer must consider the same and the evidence oroduced in support of it.

Thus the Estate Officer has to determine

SUPREME COURT REPORTS [1976) SUPPl, EMENTARY

upon hearing the objection the mount of rent in arrears which is 'payable.' The word 'payable' is somewhat mdefinite in import and its meaning must he gathered frol!l the context in which it occurs. 'Payable' generally means that which should be paid. If the person in arrears raises a dispute as to the amount, the Estate Officer in determining the amount payable cannot igaore the existing laws, If the recovery of any amount is barred by the law of limitation, it is difficult to hold that the Estate Officer could still insist that the said amount was payable, When a duty is cast on an authority to determine the arrears of rent, the determination must be in accordance with law.

Section 7 only provides a special procedure for the realisation of rent in arrears and does not constitute a &ource or foundation m a right to claim a debt otherwise time-barred.

Construing the expression "any money due" in section 186 of the Indian Companies Act, 1913 the Privy Council held in Hans Raj Gupta and others v.

Official Liquidators of the Dehradun Mussorie Electric Tramway

Company Ltd. ( t) that this meant moneys due and recoverable in a auit by the company, and observed : "it is a section which creates a 11pecial procedure for obtaining payment of moneys; it is not a section which purports to create a foundation upon which to base a claim for riyment.

It creates 110 new rights.'' We are clear that the word payable" in section 7, in the context in which its occurs, means "legally recoverable.'' Admittedly a suit to recover the arrears instituted on the day the order under section 7 was made would have been barred by limitation.

The amount in question was therefore irrecoverable.

This being the position, the appeal fails and is dismi£sed with costs,

M.R Appeal dismissed.

(I) 60 I.A. 13.

' '

NEW DELHI MUNICIPAL COMMITTEE

87

KALU RAM & ANR

A. C. GUPTA

JASWANT SINGH, JJ.

S. 7

section 7

section 7

Limitation Act

section 7

Section 7

Section 7

Section 7

section 3

section 7

section 7

section 7

section 7

section 7

Hardy argued that the Limitation Act

section 7

Section 7

section 7

Section 28

Indian Limitation Act, 1908

section 28

section 7

section 7

Section 7

section 186

Indian Companies Act, 1913

section 7

section 7


ANIRUDH PRASAD

RAJESHW ARI SAROJ DAS & OTHERS

April 20, 1976

[Y. V. CliANDRACHUD, V. R. KRISHNA !YER AND A. C. GUPTA, JJ.J B

Election-Representation of People Act, 1951-Sec. 91-Recriminatory peti tw,..,..Nature and scope of-Conduct of Election Rule1 196l--R11le 73(2)(d)- _,) Ballot paper1 containing identification marks.

..... I

19 persons contested biennial elections to the Bihar -Legislative Council for filling 11 vacancies. The appellant and respondents No. 1 to IO were declared as the successful candidates. Election was held by the system of proportional representation by a single transferable vote. The votes were counted in accordance with the procedure prescribed in para 7 of the Conduct of Election Rulet 1961, read with the relevant provisions of the Representation of the People Act, 1951. The Returning Officer rejected 9 ballot papers and accepted 306.

Th-e Returning Officer by application of rule 6 fixed the minimum quota of votes sufficient to secure the return of a candidate at 2551.

In first three rounds respondents 1 to 7 were declared elected. None of the candidates could be declared successful in the fourth round. In the fifth and 6th rounds res~ pendents 8 and 9 were declared elected.

In the seventh round, respondeht No. 18 (Election Petitioner) was eliminated and in the last round, i.e. the 8th round, the appellant and respondent No. 10 were declared as the successful candidates.

Respondent No. 18 filed an Election Petition in the High Court challenging the election of the successful candidates on the ground that the rejection of 3 ballot papers having first preference votes in its favour, the rejection of 2 ballot papers having first preference votes in favour of respondent No. 9 the illegal acceptance of one ballot paper having first preference vote in favour of res..r pondent No. 8 and wrong counting of votes in the fourth round of counting had materially affected the result of the election. The Returning Officer had rejected one ballot paper on the ground that it contained merely a horizontal line, another on the ground that it had a faint mark and the third on the ground that the voter had scored through the fourth preference vote in favour of one candidate and had assigned it to another.

Respondent No. 8 and some other respondents did not enter appearance in the High Court.

Resrondent No. 9 filed a written statement as well as recriminatory petition. He con ...

tended that the Returning Officer had wrongly rejected 2 ballot papers which contained first preference votes in his favour and one other ballot paper having a second preference vote in his favour. The appellant! who was respondent No. 10 in the High Court contested the petition. The High Court with the consent of parties decided as preliminary issue whether the election petition was maintainable and whether the Returning Officer wrongly and illegally rejected the ballot papers and, if so, whether the result of the election had been materiallv affected. The High Court also held that the three disputed ballot papers did not contain anv identification marks within the meaning of rule 73(2)(d) of Conduct of Election Rules, 1961 and, therefore, the Returning Officer was in error in rejecting those ballot papers as invalid. It was not disputed before the High Court that if the 3 ballot papers that were \HOngly rejected were not eliminated respondent No. t 8 would have been declared elected. Consequently, the High Court recorded the finding that the election of the Election Petitioner was materially affected by the rejection of the 3 ballot papers. The High Court also held that as a result of the i!legaJ rejection of the three votes respondent No. 9 was reQuired to trial behind until the sixth round and that but for the wrongful rejection resnondent No_ 9 would have been declared elected in the very first round. Special leave Petition filed by the Election Petition filed by the Election Petitioner in thi<; Court against the findings of the High Court on issues No. 1, 2 and 3 \Vas dismissed.

F -

Thereafter, th~ Hi&h Court proceeded with the election petition and tried the retp-aining issues.

The votes were recounted by an Officer appOinted by the court 1n the presence of parties and their counsel. A fair copy of the result sheet was thereafter prepared signed by all concerned in token of its correct--

ness. 1 e Hig~. Court consequently allo~'ed the election petition, declared the election peuuoner as elected an'tl set aside the election of th~ appellant who -had secured the smallest number of votes on recounting.

It was contended Qy the appellants beiore this Court; ·

Since respor,, dent No. 8 had not filed the recriminatory petition he had discntided himself from claiming any benefit, under lb~ ballot papers which were initially rejected by the Returning Officer but which were accepted by the High Court as valid.

Dismissing the appeal,

IIELD: Sccfioh 97 of the Reprcsentationlof People Act, 1951 PrOVides that when in election petition a declaration is sought that any candidate other than the returned candid_ate bas been duly elected the returned candidate or any other party may give evidence to prove that the election of such candidate wou!d have been void if be bad been the returned cr:.ndidcte and a petition had been presented calling in qtreslion his election. The proviso to t.i.e said section provides that the returned cand"-<Iate or uch oth~~·- _party sh~n not be entitled to give such evidence unless he has with:n 40 days from th~ date of commencement of the trial given notice to the I-Iigh Court of hh intention to do so.

Section 97 applies if a composite claim challenging tte election of the returned candidate and for a declaration that some other candidate should be declared elected is made. The returned candidate in that case recriminate,,

againt the person in whose favour the declaration is claimed. The recrimi natory plea of defence in one's ov1n election is in. truth and substance not so much a p, lea though that be its ultimate purpcse and. effect, as a plea of attack by \vhich a successfu, l candidate assume! the role of counterretitioner and contends that the election of the candidate in whose favour the declaration is claimed would have been void if be had been the_ returned candidate and a

tit; on had been pre9ented caUihg his elect:on in question.

Sinc.e the election petitioner had asked for a compo'iite reliefthe conditions necessary for attract ing section 97 were undoubtedly present.

The contention of the appellut was, ho•Never, altogether of a different kind. It \Vas argued that respondent No. 8 cannot take advantage of the first preferenee votes cast in his favour without a recriminatory petition. This. contention is outside the scope of s. 97, because in claiming the first preference vote respondent No. 8 is not in any manner challenging the validity of any of the votes cast .and counted in favour of the election petitioner or any step taken by or on behalf of the electioh petitioocr in fur'herance of hi! e1ectio11.

Respondent No. 8 made no contention and . wahted t.o make none in regard to the claim of the election petitioner that hehould be declared elected. There was no conflict of interest between the election petitioner and re:i; pondent No. 8 on the question whether the particnla.- vo•e hDufd be counted in favour of the latter. If the 3 ballot oapers in question were valid they must be treated a! valid for all pu~ and, therefore. vote~ cast in favour of respondent No. 8 under those ballot papers must be counted in his favour.

[97 C, 98 A, D-F, 99-DJ

Jabar Singh v. GeMa Lal (19641 6 S.C.R~ ,4, di!.t.inQ'!lished.

ClvrL APPELLATE JURISDICTION: Civil Appeal No. 714 ot 1975.

From the Judgment and Order dated 18th April 1975 of the Patna High Court in Election Petition No. 2i74.

Pfamod Swarup and K. K. Chaudhury; for the Appellant~.'

K. P. Verma, B. B. Sinha and S. C. Patel; tor Respondents No•. 8 and 9. ·

" >

--,

AN!RUDH v. RAJESHWARI (Chandrachud, l.)

J. P. Goyal and M. P. Mukerjee; for Respondent No. 18.

Shree Pal Singh; for Respondents Nos. 10, 12 and 17.

The Judgment of the Court was delivered by-

CHANDRACHUD, J.-Nineteen persons contested the biennial elections to the Bihar Legislative Council which were held on March 29, 19:74 for filling 11 vacancies.

The appellant, Anirudh B Prasad, and respondents 1 to 10 were declared as the successful candidates.

The elections having been held by the system of proporfional representation by a single transferable vote, votes were counted in accordance with the procedure prescribed in Part VII of the Conduct of Election Rules, 1961 (hereinafter called the Rules), read with the relevant provisions of the Representation of the People Act, 1951 (hereinafter called the Act).

The Secretary of the Bihar Legislative Assembly who acted as the Returning Officer rejected 9 ballot papers and accepted the remaining 306 ballot papers as valid.

Considering that 11 seats were to be filled on the basis of votes cast in 306 ballot jJ'apers, the Returning Officer, by the application of Rule 76, fixed the minimum quota of votes sufficient to secure the return of a candidate at 2551. The technical arithmetical formulae were applied during counting from time to time, votes were likewise added and subtracted from one round to another of counting and the result of the none, too-simple procedure was entered by the Returning Officer in a form prescribed by the rules for that purpose.

In the first round of counting, respondents 1 to 5 were declared elected as they secured more votes than the fixed quota of 2551.

In the second and third rounds of counting, respondent 6 (since deceased) and respondent 7 were declared su,>:cessful on the basis of transfer of surplus votes. None of the candidates could be declared successful in the fourth round but in the fifth round, respondents 8 and 9 and in the sixth round, respondent 9, were declared elected. In the seventh round of counting respondent 18 (Indra Kumar) was eliminated and in the eighth round, which was the last round of counting, the appellant Anirudh Prasad and respondent 10 were declared as the successful candidates.

• Respondent 18 filed an election petition in the Patna High Court challenging the election of the successful candidates on the ground that the rejection of 3 ballot papers having First Preferenre votes in his favour, the rejection of 2 ballot papers having First Preference votes in favour of respondent 9, the illegal acceptance of one ballot paper

havin~ a First Preference vote in favour of respondent 8 and a wrong counting of votes in the fourth round of counting had materially affected the result of the election. Out of the 3 ballot papers which occording, to respondent 18 were wrongly rejected by the Returning Officer, one was reiected on the ground that it contained a small horizontal line, another on the ground that it contained a faint mark and the third on the ground that the elector had scored through the Fourth Preference vote cast in favour of one candidate and had assigned it to

- -

another. The rejection of these 3 ballot papers which contained First Preference votes in favour of respondent 18 was partly based on ti.e view that while casting their votes, the voters connected with the particular ballot papers had resorted to devices by which their identity could be established. Respondent 18 prayed that the election of successful candidates or of the candidate receiving the smallest number of votes on recount he declared as void and that he himself be declared as duly elected. The rest of the 18 contestant;; were impleaded as respondents to the .Election Petition.

Respondents 1 to 6, 8 and 11 to 17 did not enter appearance in the High Court. Respondents 7 and 10 appeared in the election petition and filed their written statements.· But they took no further part in the roceedings. .

Respondent 9, Nathuni Ram, filed a written statement as well a• a recriminatory petition. He contended that the Returning Officer had wrongly rejected 2 ballot papers which contained Firs_! Preference votes in his favour and one other ballot paper having a Second Preference vote in his favour.

According to respondent 9, even if the grievance made by respondent 18 in the election petition was to be accepted as valid, that would not affect his election as, in any view of the matter, he would he entitled to additional votes which were wrongly rejected by the Returning Officer.

. Tile appellant Anirudh Prasad, who was respondent 10 in the High Courf, appeared in the case and filed his written statement. The High Court accepted his written statement subject to the condition that he paid costs of respondent 18 who had filed the election petition and of respondent 9 who was the sole contesting respondent. This condition was imposed by the High Court on the ground that the appellant had filed his written statement much beyond the time fixed for that purpo•e.

The appellant did not pay the costs as directed by the j-ligh Court and since. the payment of costs was a condition precedent to the acceptance of his written sll.ltement, the High Court passed orders declin-· ing to take the written statement on record. The High Court, !"1wever, allowed the appellant's counsel to cross-examine the witnesses examined bv the electicn-petitio11er and by. resooll(/ent 9. limitin~ the crossexamination to the statements made by the witnesses in their examination-in-chief.

The appellant was further permitted by the High Court to lead evidence by way of rebuttal and to submit argurn<lats on the evidence in the case. ·

On the basis of the averments contained in the election petition ' filed by respondent 18 and those contained in the written statement and the recriminatory petition filed by repondent 9, the High Court framed 5 issues for determination :

"1. Is the election petition, as framed, maintainah1e ?

2. Did the Returning Offieer at the time of counting of votes illegally and wrongly reject three, with first prefe; ence, votes validly polled in favour of the petitioner ? If so, has the result of election been materially affected on that account7

! <

• ,

3. Did the Returning Officer at the time of counting of votes illegally and wrongly reject two votes wit!' first pre1e.rence and one vote with second preference validly polled m favour of respondent No. 9 '? lf so. has the result of the election been materially affected thereby ?

4. Whether the petitioner has received majority of the valid votes and is entitled to be declared elected; as claimed ?

5. To what relief, if any, is the petitioner entitled in this election petition?"

Since the decision of issues 4 and 5 depended upon the answers to issues 1 to 3, the High CoUrt, by cousent of the contestm g p1rties, took up issues 1 to 3 for considration in the first instance. By its judgment dated February 28, 1975 it rejected the contention that the election petition was defective and held on issue No. 1 that the petition was maintainable. It held on issue No. 2 that th~ 3 disputed ballot papers (Exhibits 4, 4/a and 4/b) did not contain any identifying marks within the meaning of rule 73(2) (d) and therefore the Return- . ing Officer was iii error in reiectine those ballot paoers as invalid.

It was not disputed before the High Court at that stage that the election petitioner (respondent 18) was eliminated in the seventh round of counting because of his failure to receive the required quota of 2551 votes and that if the 3 First Preference votes contained in Exhibits 4, 4ia a<0ti 4/b had been counted in his favour, he would have been declared as duly elected. Consequently, the High Court recorded the finding that the election of the election-petitioner was mater.ally affected by the rejection of the 3 ballot papers.

On the 3rd issue, the question for consideration of the High Court was "hether 3 other ballot papers (Exhibits B, B/l and B/2) were rightly rejected by the Returning Officer.

The High Court held that the Returning Officer had rejected the 3 ballot papers wrongly and that the votes cast therein in favour of respondent 9 had to be takon into account.

Th£. wrong rejection of these 3 ballot papers had materially affected the result <'t the election qua respo:Jrk'm 9 in the sense that if the votes cast in his favour in the 3 ballot papers were taken inro account, he would have been declared elected in the very first round of counting and would not have been required to trail behind until the sixtlround.

The High Court recorded its finding on issue No. 3 accordingly.

The appellant filed a petition for special leave in this Court agaiiist the aforesaid judgment of the High Court dated February 28, 1975 but that petition was rejected.

Thereafter the High Court proceeded with the election petition and tried the remruning issues, 4 and 5. By consent of parties it appointed Shri R. N. Thacore, Ex-Deputy Secretary of the Bihar Legislative Council, to recount the votes on the basis of the findings recorded <>n issues Nos. 2 and 3. .Shri ThaC<'re was expertly conversant with the complicated mechanism of counting votes under the system of pro- H portional representation by single transferable vote.

Learned cmmsel who appeared in the High COurt for the election petitioner and for respondent 10 would appear to have been familiar with the particUlar

A procedure and they agreed to assist Shri Thacore.

Respondent 9 agreed that counsel for the election petitioner may deimttse for him.

Accordingly, the votes were recounted by Shri Thacore m the presence -

of the parties and their counsel. A fair copy 01 the result si<eet was thereafter prepared by Shri Thacore in the presence of counsel for the parties who affixed their signature thereon in token of its correctness.

The Returning Officer had declared the result of the election on the basis that only 306 ballot papers were valid.

The High Court by its judgment of February 28, 1975 held that six ballot papers were wrongly rejected by the Returning Officer with the result that the number of valid ballot papers rose from 306 to 312. The minimum quota consequently rose from 2551 to 2601. On the basis of the recounting of vmes done by Shri Thacore, the High Court allowed the election petition and declared respondents 1 to 10 and respondent 18 (the . election petitioner) as the successful candidates.

The appellant, Anirudh Prasad, who was respondent 10 in the High Court and who had been declared elected by the Returning Officer was found, on a recount of the votes, to have secured 2500 votes as against 2579 votes secured by respondent 18. The High Court set aside the election of the appellant who had secured the smallest number of votes.

This appeal by special leave is directed against the judgment of the High Court dated April 18, 1975.

After the preliminary finding of the High Court that the six ballot papers were wrongly rejected by the Returning Officer and that. those ballot papers were valid, the appellant made an application in the High E Court that since respondent 8, Janardan Prasad Varma, had not filed any recrimination, the I st preference vote cast iu his favour under the ballot paper Ex. B/2 and the 7th preference cast in his favour under Exhibits B and B/l should not be counted in his farnur. By an order rlnied April 14, 1975 the High Couri rejected that application and directed that all the votes contained in and cast under the ballot papers wh; ch were held to be valid should be counted in favour of the F candidates concerned according to the relevant rules.

Mr. Pramod Swaroop, who appears on behalf of the appellant, ma(:C a fervent plea that since respondent 8 had not filed a recriminatory petition, he had disentitled himself from claiming any benefit unrer the ballot papers which were initiallv rejected by the Returning Officer but which were accepted by the High Court as valid. It may be recalled that_ _the election-petitioner had asked for the scrutiny and acceptance of three ballot papers only (Ex. 4, 4/a and 4/b), wherein he had secured !st oreference votes. Respondent 9 filed a 1ecrimination under section 97 of the Act asking that two other ballot papers, Exhibits B and B/l, wherein he had secured !st preference votes and the bafl, t paper, Ex. B/2, whernin he had secured a 2nd preference vote should be re-scrutinised and accepted.

These six ballot papers which were rejected by the Returning Officer were accepted by the Hiuh Court as valid.

Apart from the emphasis on the failure of xcspondent 8 to file a recrimination, the grievance of the appellant is this : Ex. B/2 which contains a 1st preference v9te for((fspondent

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, J ,.

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8 was not even considered for counting the votes secured by respondent 9 who had filed his recrimination and at whose instance Ex, B/2 was held valid; because, in order to get elected it was enough for respondent 9 to rely on the 1st preference votes cast in bis favour under Exhibits B and B/L The second preference vote cast in his favour under Ex, B/2 was superfluous for bis election, According to the appellant, it is anomalous that respondent 8 who had taken no part in the proceedings before the High Court should get the benefit of the !st preference vote cast in his favour under Ex, B/2 when be asked for no such relief, especially when respondent 9 at whose instance the particular ballot paper was treated as valid did not require for his election the addition of the 2nd preference vote cast in his favour thereunder,

This argument is founded on the provisions contained in section 97 of the Act, which has been the subject-matter of several decisions of this Court That section provides :

"97, Recrimination when seat claimed,-(!) When in an election petition a declaration that any candidate other than the returned candidate )las been duly elected is claimed, the returned candidate or any other party may give evidence to prove that the election of such candidate would have been void if he had been the returned candidate and a petition had been presented calling in question his election.

Provided that the returned candidate or such other party, as aforesaid shall not be entitled to give such evidence unless he has, within fourteen days from the date of commencement of the trial, given notice to the High Court of his intention to do so and has also given th, e security and the further security referred to in section 117 and 118 respectively,

(2) Every notice referred to in sub-section (l) shall be accompanied by the statement and particulars required by section 83 in the case of an election petition and shall be signed and verified in like manner,''

An election-petitioner may either ask for the rehef under section 100 of the Act that the election of the returned candidate be declared void or he may ask for the additional relief under section 101 that he

or any other candidate may be declared as elected, It is only if such a composite claim is made that section 97 is attracted, The returned candidate can then recriminate against the person in whose favour a G declaration is claimed 1mder section 101, The recriminatory plea is in trutb and substance not so much a plea in defence of one's own election, though tbat be its ultimate purpose and effect, as a plea of attack by which tbe successful candidate assumes the role of a , counterpetitioner and contends that the election of the candidate in whose favour the declaration is claimed would have been void if he had been the returned candidate and a petition had been presented calling his ff election in question, Since respondent 18 who filed the election petition had asked for a composite relief that. the election of the successful candidates 'r of that candidate who was fonnd to have secured the

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SUPREME COURJ REPORTS

(1976) SUPPLEMENTARY

least number of votes should be set aside and that he himself should be declared as a successful candidate, the conditions necessary for attracting section 97 were µndoubtedly present.

But that does not mean that every contention made by any of the successful candidates or other parties is barred unless a recriminatory petition is filed. The plea of recrimination goes under section 97 to the claim of the electionpetitioner that he or any person other than the successful candidate may be declared elected, the plea of the recriminator being that the election of the person in whose favour the declaration is claimed would have been void if he had been the returned candidate and a petition were filed to challenge his election. For example, any of the successful candidates can contend by a recriminatory petition that the election of the election-petitioner, were he successful, suffered frmu defects by reason of which it would be void. Such a challenge can be made only by a recriminatory petition and unless such a petition is filed in compliance with section 97, it is not open to the successful candidate or any other party to challenge the additional claim made by the election petitioner.

The contention of the appellant before us is altogether of a different kind. It is argued that respondent 8 cannot take advactage of the 1st preference vote cast in his favour under Ex. B/2 without a recriminatory petition. This contention is outside the scope of section 97 bei'ause, in claiming the 1st preference vote under Ex. B/2, respondent 8 is not in any manner clrallenging the validity of any of the votes cast and counted in favour of the election-petitioner or any step taken by or on behalf of the election-petitioner in furtherance of his election.

In fact, respondent 8 made no contention and wanted to make none in regard to the claim of the election-petitioner that he should be declared elected.

The election involved a contest to 11 seats and the claim of respondent 8 to the 1st preference vote in Ex.

B/2 was not in derogation of any of the rights of the election-petitioner who claimed the composite relief.

The very fact that the electionpetitioner succeeded in the High Court despite the counting of the 1st preference vote in favour of respondent 8 shows that there was no conflict of interest between the election-petitioner and respondent 8 on the question whether the particular vote should be. counted in favour of the latter.

Respondent 8's claim to the 1st preference vote contained in Ex. B/2 did not have the effect, directly or indirectly. of imalidating any of the votes counted originally in favour of the election-petitioner. It may bear repetition that respondent 8, like the appellant, was one of the successful candidates and it is respondent 18 who was declared unsuccessful in the election, who filed the election petition. The appellant's contention comes to this that one successful candidate must file a recrimination against another successful candidate if an unsuccessful candidate files an election-petition asking for a composite relief.

We see no justification for this contention on the language and intendment of section 97.

It is also necessary to bear in mind that the election to the legislative Council was held by the system of proportional revresentalioo by a single transferable vote.

Nineteen candidates contested

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the election for 11 seats.

Rules 76 to 85 of the Conduct of Election Rules, 1961 provide an elaborate procedure for counting of votes when more than one seat is to be filled.

By rule 76, every valid ballot paper is deemed to be of the value of 100 and putting it simply, the quota sufficient to secure the return of a candidate is determined by multiplying the number of valid baHot papers by 100, dividing the total by one more than the number of vacancies to be filled and adding one to the quotient.

Initially, 306 ballot papers were accepted as valid by the Returning Officer.

The minimum quota was accordingly fixed at 2551 : (306Xl00=30600711+1=2550+1=2551). The High Court held that 6 ballot papers were wrongly rejected by the Returning

Officer as a result of which the number of valid ballot papers rose to 312.

The minimum quota correspondingly rose to 2601 : (312Xl00=31200712=2600+1=2601).

The minimum quota which is fixed primarily on the basis of valid ballot papers is the key-point of counting and transfer of surplus votes. 'Surplus votes' means votes in excess of the minimum quota and it is such surplus votes that are transferred to other candidates left in the field.

The various rules and their working as illustrated in the Schedule to the Rules show that the system of proportional representation by a single transferable vote involves a progressive inter-linked method of counting votes. It is therefore difficult to accept the appellant's argument that a ballot paper may be treated as valid for fixation of the minimum quota but should be ruled out for purposes of counting the votes cast therein iµ favour of any candidate. If the ballot paper Ex. B/2 is valid, it must be treated as valid for al]. purposes and therefore the 1st preference vote contained therein in favour of respondent 8 must be counted in his favour.

This would be so especially when the process can involve no recrimination between respondent 8 and the appellant, both of whom were successful candidates.

Nor indeed does such counting involve any recrimination between respondent 8 and the election-petitioner who, as stated earlier, was declared successful by the High Court despite the counting of the 1st preference vote in favour of respondent 8.

On the facts of the case it is clear that originally, respondent 8 had F secured 2611 votes as against 2500 votes secured by the appellant.

That was without counting the 1st preference vote cast in favour of respondent 8 under Ex. B/2. On that footing also the appellant cannot claim priority over respondent 8 and his grievance that he, instead of respondent 8, should be declared elected is without any substance .

Great reliance was placed by counsel for the appellant on the G decisidn. of this Court in Jabar Singh v. Genda Lal('), in support of the contention that respondent 8 cannot claim the benefit of the 1st preference vote cast in his favour under Ex. B/2 without a recriminatorv petition. '

That was a typical case in which the contention sought to be raised by the successful candidate could not have been raised without a H ,,_, recriminatory petition under section 97 of the Act.

The respondent

(l) [1964] 6 S. C.R. 54.

therein challenged the election of the appellant on the grouad of improper reception of votes in favour of the appellant and improper rejection of votes in regard to himself.

The respondent prayed that the appellant's election should be declared void and he himself should be declared to have been duly elected.

The appellant urged before the tribunal that there had beeu improper rejection of the voles aud improper acceptance of the votes in favour of this respondent. The respondent objected to this course and that objection was upheld by this Court on the ground that in the absence of recriminations it was not open to the appellant to take up the particular plea.

As we have shown earlier respondent 8 did not contend that there was any improper reception of votes in favour of the election petitioner or for the matter of that in favour of any other candidate. There was therefore no question of his filing a recrimination under section 97.

Secondly, the voting in that case was not by the system of proportional representation by a single transferable vote and the complications which arise by reason of the peculiar system of counting which is required to be adopted in the instant case had no place in the scheme of counting in that case.

In view of this position it seems unnecessary to discuss the other decisions cited on behalf of the appellant which are reported in Dhara Singh v. District Judge, Meerut & Anr.(1); P. Malaichami v.

M. Andi Ambalam & Ors.(') and the decision in Civil Appeal No. 83 of 1975 decided Jnly 31, 1975.

These decisions are distinguishable for the same reason for which Jabar Singh's case boas no application to the facts of the instant case.

For these reasons we dismiss the appeal and confirm the judgment of the High Court but there will be no order as to costs.

P.H.P.

(1) [1968J 1 S. C. R. 213.

(2) (1973! 3 S. C. R. 1616.

Appeal dismissed.

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ANIRUDH PRASAD

RAJESHW ARI SAROJ DAS & OTHERS

A. C. GUPTA, JJ

Sec. 91

Representation of the People Act, 1951

Conduct of Election Rules, 1961

Reprcsentationlof People Act, 1951

Section 97

section 97

s. 97

Representation of the People Act, 1951

section 97

section 97

section 117 and 118

section 83

section 100

section 101

section 97

section 101

section 97

section 97

section 97

section 97

section 97

Conduct of Election Rules, 1961

section 97

[1964] 6 S. C.R. 54

section 97