MAINA SINGH

STATE OF RAJASTHAN

March 17, 1976

[R. S. SARKARIA AND P. N. SHJNGHAL, JJ.]

Penal Code-Murder-Co-iiccused acquitted-Appellant alone co11victeds. 149 or s. 34-lf applicable.

'The appellant and 'tour others Were charged 'vith offences under S<i. 302/149 I.P.C., the appellant with having shot at the deceased and the other accused with giving blows to the deceased with a sharp-edged weapon. The trial co1ni acquitted the four accused but convicted the appellant under s. 302 read with s. 34, I.P.C-.

The High Court dismissed the appeal of the State against acquit- C tal as also lhe appellant's appeal against conviction.

In appeal to this Court, it was contended for the appellant that it was not permissible to take the view that a criminal act was done by the appellant in furtherance of the common intention of the other accued when those accused who had been named had all been acquitted and that all that was permissible for the High Court was to convict the appellant of an offence \vhich he might have committed in his individual capacity.

D • 'Allowing the appeal in part,

HELD : It was not permissible for the High Court to invoke s. 149 or s. 34.

J.P.C.

[659D-E]

( 1) In a given case even if the charge disclosed only the named persons as co-accused and the prosecution witnesses confined their testimony to them. it would be permissible to conclude that others, hamed or unnamed, acted con- E jointly with one of the charged accused if there was other evidence to lead to that conclusion, but not otherwise.

[657D]

The charge in the present case related to the commission of the offence of unlawful assembly by the appellant along with four named co-accused, and with no other person. The trial in fact went on that basis throughout.

There was also no direct or circumstantial evidence to show that the offence was committed by the appellant along with any other unnamed person.

So when the other four co-accused had been given the benefit of doubt and acquitted, it would not be permissible to take the view that there must have been some other person along with the appellant in causing injuries to the deceased.

The appellant would accordingly be responsible for the offence, if any, which could be shown to have been committed by him without regard to the participation of others.

[659C-E]

Dharam Pal v. The Stale of U.P., A.l.R. 1975 S.C. 1917 explained and fol lowed.

The Ki11g v. Plummer, [1902] 2 K.B. 339; Topandas v. The State of Bombay, [1955] 2 S.C.R. 881; Mohan Singh v. State of Punjab, [1962] Supp. 3 S.C.R. -'. 848; Krishna Guvind Patil v. State of Maharashtra, [1964] 1 S.C.R. 678; Ram Bilas Singh v. State tYf Bihar, [1964] I S.C.R. 775 and Yeswa11t v. State of Maharashtra, [1973] I S.C.R. 291 referred to.

(2) The appellant was guilty of voluntarily causing grievous hurt to the deceased by means of an instrument for shooting and was. therefore, guilty H of an offence under s. 326 I.P.C. From the medical evidence, it is not possible to say that the death of the deceased was caused by gun shot or by blunt weapon injuries. It however proved that the appellant inflicted gun shot injuries on the deceased, one of the injuries being grievous.

[659H]

A CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 242

of 1971.

Appeal by Special Leave from the Judgment and Order dated 21-4-1971 of the Rajasthan High Court at Jodhpur in D. B. Criminal Appeal No. 343 of 1969.

Harbans Singh for the Appellant.

S. M. lain for Respondent.

The Judgment of the Court was delivered by

SHINGHAL, J.-This appeal of Maina Singh arises out of the judgment of the Rajasthan High Court date<! April 21, 1971 upholding the trial court's judgment convicting him of an offence under s. 302 read with s. 34 I.P.C. for causing the death of Amar Singh and of an offence under s. 326 I.P.C. for causing grievous injuries to Amar Singh's son Ajeet Singh (P.W. 2), and sentencing him to imprisonment for life for the offence of murder and to rigorous imprisonment for three years and a fine of Rs. 100 /- for the other offence.

The deceased Amar Singh and accused Maina Singh and his three sons Hardeep Singh, Jee! Singh and Puran Singh used to live in 'chak' No. 77 GB, in Ganganagar district of Rajasthan while Narain Singh used to live in another 'chak'. It was alleged that the relatic>ns between Amar Singh and Maina Singh were strained, as Maina Singh suspected that Amar Singh was giving information about his smuggling activities. Amar Singh was having some construction work done in his house and had engaged Isar Ram (P.W. 3) as a mason.

On June 29, 1967, at about sun set, the deceased Amar Singh, his son Ajeet Singh (P.W. 2) and Isar Ram (P.W. 3) went to the 'diggi' in 'murabba' 35 for bath. Ajeet Singh took his bath, and was changing his clothes and Isar Ram was nearby. Amar Singh was cleaning his 'Iota' after attending the call of nature. It is alleged that at that time Maina Singh and his three sons Hardeep Singh, Jeet Singh and Puran Singh came to the 'diggi' along with Narain Singh. Maina Singh was armed with a .12 bore gun, Puran Singh with a 'takua' and the other three with 'gandasis'.

Maina Singh fired at Amar Singh, but could not hit him. The gun shots however hit Ajeet Singh (P.W. 2) on his legs and he jumped into a dry water course which was nearby to take cover.

Maina Singh fired again, but without success.

Amar Singh ran towards the sugarcane field crying for help but was chased by the accused. Ajeet Singh thereupon ran towards 'chak' No. 78 GB and ultimately went and lodged a report at Police Station Anoopgarh at 10 p.m. after covering a distance of about six miles.

The five accused however followed Amar Singh. Maina Singh fired his gun at Amar Singh and he fell down. The other accused went near him and gave 'gandasi' blows, and Maina Singh gave a blow or two with the butt end of his guu which broke and the broken pieces fell down.

Amar Singh sue cum bed to his injuries on the spot, and the accused ran away.

On the report of Ajeet Singh about the incident which took place by the time he left for the police station, the police registered a case

?-··

MA!NA SINGH v. RAJASTHAN (Shinghal, !.) 653

for an offence under s. 307 read with s. 149 I.P.C. and started investigation. The body of Amar Singh was sent for post-mortem examination.

The report Ex. P. 9 of Dr. Shanker Lal (P.W. 5) is on the ·record. The injuries of Ajeet Singh (P.W. 2) were also examined by Dr. Shanker Lal and his report in that connection is Ex. P .10. It was found that there were several gun shot injuries, incised wounds and lacerated wounds on the body of the deceased, and there were as many as 12 gun shot wounds on the person of Ajeet Singh (P.W. 2). All the li\ c accused were found absconding and could be taken into custody after proceedings were started against them under ss. 8 7 and 88 Cr. P. C.

Maina Singh held a licence for gun Ex. 23 and led to its recovery during the course of the investigation vide memorandum Ex. P.43. At that time, its butt was found to be missing. Its broken . pieces had however been recovered by the investigating officer earlier, along with the empty cartridges.

The prosecution examined Ajeet Singh (P.W. 2), Isar Ram (P.W.

3) and Smt. Jangir Kaur (P.W. 7) the wife of the deceased as eye witnesses of the incident. The accused denied the allegation of the prosecution altogether, but Maina Singh admitted that the gun belonged to him and he held a licence for it. The Sessions Judge disbelieved the evidence of Sm!. Jangir Kaur (P.W. 7) mainly for the reason that her name had not been mentioned in the first information report. He took the view that the statements of Ajeet Singh (P.W. 2) and Isar Ram (P.W. 3) were inconsistent regarding the part played by Hardeep Singh, Jeet Singh, Narain Singh and Puran Singh accused, and although he held that one or more of the accused persons, besides Maina Singh, might be responsible for causing injuries to the deceased, along with Maina Singh, he held further that it could not be ascertained which one of the accused was with him.

He also took the view that "some one else might have been with him" and he therefore gave the benefit of doubt to accused Hardeep Singh, Jeet Singh, Puran Singh and Narain Singh and acquitted them. As the statements of Ajeet Singh (P.W. 2)

and Isar Ram (P.W. 3) were fonnd to be consistent against appellant Maina Singh, and as there was circumstantial evidence in the shape of the recovery of empty cartridges near the dead body, and gun Ex. 23. as well as the medical evidence, and the fact that the accused had absconded, the learned Sessions Judge .convicted and sentenced him as aforesaid.

An appeal was preferred by the, State against the acqnittal of the remaining four accused; and Maina Singh also filed an appeal against

his conviction. The High Court dismissed both the appeals and main- G tained the conviction and sentence of Maina Singh as aforesaid.

Mr. Harbans Singh appearing on behalf of appellant Maina Singh has not been able to challenge the evidence on which appellant Maina Singh has been convicted, but he has raised the substantial argument that he could not have been convicted of the offence of murder under s. 302 read with s. 34 I.P .C. when the four co-accused had been acqnitted and the Sessions Judge had found that it was not possible to record a conviction under s. 302 read with s. 149 I.P.C. or s. 148 I.P.-C. It has been argued that when the other four accused were given

the benefit of doubt and were acquitted, it could not be held, in law, that they formed an unlawful assembly or that any offence was committed by appellant Maina Singh in prosecution of the common object of that assembly. It has been argued further that, a fortiori, it was not permissible for the Court of Sessions or the High Court to take the view that a criminal act was done .by appellant Maina Singh in furtherance of the common intention of the "other accused" when those accused had been named to be no other than Hardeep Singh, Puran Singh, Jeet Singh and Narain Singh who had all been acquitted. It has therefore been argued that all that was permissible for the High Court was to convict appellant Maina Singh of any offence which he might have committed in his individual capacity, without reference to the participation of any other person in the crime. /On the other hand, it has been argued by Mr. S. M. Jain that as the learned Sessions Judge had acquitted the remaining four accused by giving them the benefit of doubt, and had recorded the finding that one or more of the accused persons or some other person might have participated in the crime along with Maina Singh, the High Court was quite justified in upholding the conviction of the appellant Maina Singh of an offence under s. 302/34 l.P.C.

The relevant portion of the judgment of the trial court, which bears on the controversy and has been extracted with approval in the impunged judgment of the High Court, is as follows,-

"The injuries found on the person of the deceased Amar Singh were with fire arm, blunt as well as sharp weapon. fire arm injuries and the blunt weapon injuries have been assigned to Maina Singh and so there must have been other person also along with Maina Singh in causing injuries to the deceased. It can be so inferred from the statements of Isar Ram and Ajeet Singh also. These facts could no doubt create a strong suspicion that one or more of the accused persons might be responsible along with Maina Singh in caus" ing injuries to the deceased. In view of the statement of Isar Ram and A jeet Singh it cannot however be ascertained which one of the accused was with Maina Singh and it was also possible that some one else might have been with him.

In such a case the prosecution version against these four accused persons are not proved beyond doubt.

They are therefore not guilty of the offence with which they have been charged." It would thus appear that the view which has found favour with the High Court is that as there were in.iuries with fire arm and with blunt and sharp-edged weapons, and as the fire arm and the blunt weapon injuries had been ascribed to Maina Singh, there must have been one other person with him in causing the injuries to the deceased. At the same time, it has been held further that these facts could only cr3ate a strong suspicion "that one or more of the accused persons might be responsible along with Maina Singh in causing the injuries to the deceased", but it could not be ascertained which one of the accused was with him and that it was also possible that "some one else might have been with him." The finding therefore is that the other person

• •

.. •

might have been one of the other accused or some one else, and not that the other associate in the crime was a person other than the accused.

Thus the finding is not categorical and does not exdude the possibility of infliction of the injuries in furtherance of the common intention of one of the acquitted accused and the appellant.

Another significant fact which bears on the argument of Mr.

Harbans Singh is that while in the original charge sheet the Sessions Judge specifically foamed appellant Mairni Singh and the other accused Hardeep Singh, Puran Singh, Jeet Singh and Narain Singh as forming an unlawful assembly and for causing the death of Amar Singh in furtherance of the common object of that assembly, he altered that charge but retained, at the same time, the charge that Maiua Singh formed an unlawful assembly along with the "other accused" with the common object of murdering Amar Singh and intentionally caused injuries to him along with the "other accused" in prosecution of that common object.

In this case therefore Maina Singh and the other four accused were alleged, all along, to have participated in the crime and were named in the charge sheet as the perpetrators of the crime without there being an allegation that some other person (besides the accused) took part in it in any manner whatsoever. It was in fact the case from the very beginning, including the first information report, that the offence was committed by all the five named accused, and. even the evidence of the prosecution was confined to them all through and to no other person. The question is whether the High Court was right in upholding the conviction of the appellant with reference to .s. 34 l.P.C. in these circumstances ?

Such a question came up for consideration in this Court on earlier occasions, and we shall refer to some of those decisions in order to appreciate the argument of Mr. Jain that the decision in Dharam Pal v. The State of U.P. ( 1) expresses the latest view of this Court and would justify the appellant's conviction by invoking s. 34 I.P.C.

We may start by making a reference to The King v. Plummer(') which, as we shall show, has been cited with approval by this Court in some of its decisions. That was a case where there was a trial of an indictment charging three persons jointly with conspiring together.

One of them pleaded guilty, and a judgment was passed against him, and the other two were acquitted. It was alleged that the judgment passed against the one who pleaded guilty was bad and could not stand. Lord Justice Wright held that there was much authority to the effect that if there was acquittal of the only alleged co-conspirators, no judgment could have been passed on the appellant, if he had not pleaded guilty, because the verdict must have been regarded as repugnant in finding that there was a criminal agreement between the apoellant and the others and none between them and him. In taking that view he made a reference to Harrison v. Errison( 3) where noon an indictment of three for riot two were found not guilty and one guiltv. and upon error brought it was held a "void verdict". Bruce J., who was the other judge in the case made a reference to the following

fl) A.I.R. 1975 S.C. 1917.

(2) [1902] 2. K.B. 339. (3l [1365] Popham 202.

statement in Chitty's Crimina:l Law while agreeing with the view taken by Wright J.,-

"And it is holden that if all the defendants mentioned in the indictment, except one, are acquitted, and it is not stated as a conspiracy with certain persons unknown, the conviction of the single defendant will be invalid, and no judgment can be passed upon him."

This Court approved Plummer's case (supra)' in its decision in To pandas v. The State of Bombay( 1). That was a case where four named individuals were charged with having committed an offence under s. 120-B I.P.C. and three out of those four were acquitted. This Court held that the remaining accused conld not be convicted of tl1e offence as his alleged co-participators had been acquitted, for that would be clearly illegal. ·

A similar point came up for consideration in Mohan Singh v. State of Punjab('). There two of the five persons who were tried together were acquitted while two were convicted under s. 302 read with s. 149 and s. 147 I.P.C. In the charge those five accused persons and none others were mentioned as forming the unlawful assembly and the evidence led in the case was confined to them. The proved facts showed that the two appellants and the other convicted person, who inflicted the fatal blow, were actuated by common intention of fatally assaulting the deceased.

While examining the question of their liability, it was observed as follows,-

"Cases may also arise where in the charge, the prosecution names five or more persons and alleges that they constituted an unlawful assembly. In such cases, if both the charge and the .evidence are confined to the person< n.amed in the charge and out of the persons so named two or more are acquitted leaving before the court less than five persons to be tried, then s. 149 cannot be invoked. Even in such cases, it is possible that though the charge names five or more persons as composing an unlawful assembly, evidence may nevertheless show that the unlawful assembly consisted of some other persons as well who were not identified and so not named.

In such cases, either the trial court or even the High Court in appeal may be able to come to the conclusion that the acquittal of some of the persons named in the charge and tried will not necessarily displace the charge under section 149 because along with the two or three persons convicted were others who composed the unlawful assembly but who have not been identified and so have not been named.

In such cases, the acquittal of one or more persons named in the charge does not affect the validity of the charge under section 149 because on the evidence the court of facts is liable to reach the conclusion that the persons composing the unlawful assembly nevertheless were five or more than five."

(2) [1962j Supp 3 S.C.R. 848.

In taking this view this Court took note of its earlier decisions in A Dalip Singh v. State of Punjab('), Bharwad Mena Dana v. State of Bombay(') and Kartar Singh v. State of Punjab( 3 ).

The other case to which we may make a reference is Krishna Govind Patil v. State of Maharashtra('). It noticed and npheld the earlier decision in Mohan Singh's case (supra) and after referring to the portion which we have extracted, it was held as follows,- B

"It may be that the charge discloses only named persons; it may also be that the prosecution witnesses named only the said accused; but there may be other evidence, such as that given by the court witnesses, defence witnesses or circumstantial pieces of evidence, which may disclose the existence of named or unnamed persons, other than those charged or deposed to. by the prosecution witnesses, and the court, on the basis of the said evidence, may come to the conclusion that others, named or unnamed, acted conjointly along with one of the accused charged. But such a conclusion is really based on evidence."

It would thus appear that even if, in a given case, the charge discloses only the named persons as co-accused and the prosecution witnesses confine their testimony to them, even then it would be permissible to come to. the conclusion that others named or unnamed, besides those mentioned in the charge or the evidence of the prosecution witnesses, arted conjointly with one of the charged accused if there was other evidence to lead to that conclusion, but not otherwise.

The decision in Krishna Govind Patil's case (supra) was followed by the decision in Ram Bilas Singh v. State of Bihar('). After noticing and approving the view taken in Plummer's case (supra) and the decisions in Mohan Singh's case (supra) and Krishna Govind Patil's case (supra) this Court stated the law once again as follows,-

"The decisions of this Court quoted above thus make it clear that where the prosecution case as set out in the charge and as supported by the evidence is to the effect that the alleged nnlawful assembly consists of five or more' named persons and no others, and there is no question of any participation by other persons not identified or identifiable it is not open to the court to hold that there was an nnlawful assembly unless it comes to the definite conolusion that five or more of the named persons were members thereof.

Where, however, the case of the prosecution and the evidence adduced indicates that a number in excess of five persons participated in the incident and some of them could not be identified, it would be open to the court to convict less than five of the offence of being members of the unlawful assembly or convict them of the offence committed by the unlawful assembly with the aid of s. 149 I.P.C. provided it comes to

(I) [1954] S.C. R. 145.

(2) (1960) 2. S.C.R. 172.

(5) 1964 I S.C.R. 775

A the conclusion that five or more persons participated in the incident."

The other decision to which our attention has been invited i& Yeswant v. State of Maharashtra(!). The decision in Krishna Govind Patil (supra) was cited there on behalf of the appellant and, while referring to the view expressed there, it was observed that in the case before the court there was evidence that the man who used the axe on Sukal was a man who looked like appellant Brahmanand Tiwari, and could be that accused himself.

But as the Court was not satisfied that the identify of the person who used the axe on Sukal was satisfactorily established as that of Brahmanand Tiwari, it took the view that the remaining accused could be convicted with the aid of s. 34 for the offences committed by them. This Court did not therefore disagree with the view taken in Krishna Govind Patil's case (supra) but purported to follow it in its decision and took the aforesaid view in regard to the identity of Brahmanand Tiwari for the purpose of distinguishing it from the case of Krishna Govind Patil (supra) where there was not a single observation in the judgment to indicate that persons other than the named accused participated in the offence and there was no evidence also in that regard.

The matter once again came up for consideration in Sukh Ram

v. State of U.P. (') The Court referred to its earlier decisions including those in Mohan Singh's case (supra) and Krishna Govind Patil's case (supra) and, while distinguishing them on facts, it observed that as the prosecution did not put forward a case of the commission of crime by one known person and one or two unknown persons as in Sukh Ram's case (supra), and there was no evidence to the effect that the named accused bad committed the crime with one or more other persons, the acquittal of the other two accused raised no bar to the conviction of the appellant under s. 302 read with s. 34 I. P. C.

The decision in Sukh Ram's case (supra) cannot therefore be said to lay down a contrary view for it has upheld the view taken in the earlier decisions of this Court.

That Iea.ves the case of Dharam Pal v. State of V.P. (supra) for consideration.

In that case four accused were tried with fourteen others for rioting.

The trial court gave benefit of doubt to eleven of them and acquitted them.

The remaining seven were convicted for the offence under s. 302/149 I.P.C. and other offences.

The High Court gave benefit of doubt to four of them, and held that at least four of the accused participated in the crime because of their admission and the injuries.

On appeal this Court found that the attacking party could not conceivably have been of less than five because that was the number of the other party; and it was in that connection that it held that there was no doubt about the number of the participants being not less than five.

It was also held that as eighteen accused participated in the crime, and the Court gave the benefit of doubl to be on the side of safety. as a matter of abundant caution, reducing the number to less than five, it may not be difficult lei reach the conclnsion, having regard to undeniable facts, that t'he number of the

(2) [1974] 2S.C.R. 518.

participants could not be less than five.

That was therefore a case A which was decided on its own facts but, even so, it was observed as follows.-

"It may be that a definite conclusion that the number of participants was at least five may be very difficult to reach where the allegation of participation is confined to five known persons and there is no, doubt about the identity of even one."

It cannot therefore be said that the decision in Dharam Pal's case

(supra) is any different from the earlier decisions of this Court, or that it goes to support the view which has been taken by the High Court in the case before us.

The view which has prevailed with this Court all along will therefore apply to the case before us.

As has been stated, the charge in the present case related to the commission of the offence of unlawful assembly by the appellant along with the other named four co-accused, and with no other person. The trial in fact went on that basis throughout. There was also no direct or circumstantial evidence to show that the offence was committed by the appellant along with any other unnamed person.

So when the other four co-accused have been given the benefit of doubt and have been acquitted, it would not be permissible to take the view that there must have been some other person along with the appellant Maina Singh in causing the injuries to the deceased. It was as such not permissible to invoke s. 149 or s. 34 I. P. C.

Maina Singh would accordingly be responsible for the offence, if any, which could be shown to have been committed by him without regard to the participation of others.

The High Court has held that there could be no room for doubt that the fire arm and the blunt weapon injuries which were found on Vhe person of Amar Singh were caused by appellant Maina Singh, and that finding has not been chaUenged before us by Mr. Harbans Singh.

Dr. Shanker Lal (P. W. 5) who performed the post-mortem examination stated that while all those injuries were collectively sufficient in the ordinary course of nature to cause death, he could not say whether any of them was individually sufficient to cause death in the ordinary course of nature. It is not therefore possible to hold that the death of Amar Singh was caused by the gun shot or the blunt weapon injuries which were inflicted by appellant Maina Singh.

Dr. Shanker Lal has stated that the fracture of the frontal bone of the deceased could have been caused by external injuries Nos. 8, 10 and 12, and that he could die of that injury also but, of those three injuries injury No. 12 was inflicted by a sharp-edged weapon and could not possibly be imputed to the appellant. The evidence on record therefore does not go to show that he was responsible for any such injury as could have resulted in Amar Singh's death.

The evidence however proves that he inflicted gun shot injuries on the deceased, and Dr.

Shanker Lal has stated that one of those injuries (injury No. 26) was grievous. ' Maina Singh was 1:herefore guilty of voluntarily causing grievous hurt to the deceased by means of an instrument for shooting, and was guilty of an offence under s. 326 I. P. C.

In the circumstances of the case, we think it proper to sentence him to rigorous

imprisonment for 10 years for that offence.

As has been stated, he has been held gnilty of a similar offence for the injuries inflicted on Ajeet Singh (P. W. 2) and his conviction and sentence for that other offence nnder s. 326 I. P. C. has not been challenged before us.

The appeal is therefore allowed to the extent that the conviction of Maina Singh under s. 302/34 I. P. C. is altered to one under s. 326 I. P. C. and the sentence is reduced to rigorous imprisonment for ten years thereunder.

The conviction under s. 326 for causing injuries to Ajeet Singh, and the sentence of rigorous imprisonment for three years and a fine of Rs. 100 /- call for no interference and are confirmed.

Both the sentences will run concurrently.

P.B.R.

Appeal allowed.

MAINA SINGH

STATE OF RAJASTHAN

March 17, 1976

R. S. SARKARIA

Penal Code

s. 34

I.P.C

s. 302

s. 34

I.P.C

s. 149

s. 34

[1955] 2 S.C.R. 881

[1964] 1 S.C.R. 678

s. 326

I.P.C

Harbans Singh

S. M. lain

SHINGHAL

Maina Singh

s. 302

s. 34

I.P.C

Amar Singh

s. 326

I.P.C

Ajeet Singh

Maina Singh

Hardeep Singh

Jee! Singh

Puran Singh

Ganganagar district

Rajasthan

Narain Singh

Isar Ram

June 29, 1967

Ajeet Singh

Isar Ram

Jeet Singh

Police Station Anoopgarh

s. 307

s. 149

I.P.C

Shanker Lal

Shanker Lal

ss. 8

Jangir Kaur

Maina Singh

Maina Singh

Harbans Singh

s. 302

s. 34

s. 302

s. 149

I.P.C

s. 148

S. M. Jain

s. 302

A jeet Singh

Mairni Singh

Maiua Singh

s. 34

Jain

s. 34

I.P.C

Wright

Bruce

Chitty

Wright

Plummer

s. 120

I.P.C

s. 302

s. 149

s. 147

I.P.C

s. 149

section 149

section 149

Mohan Singh

Krishna Govind Patil

s. 149

I.P.C

Sukal

Brahmanand Tiwari

Brahmanand Tiwari

s. 34

Sukh Ram

s. 302

s. 34

s. 302

I.P.C

Dharam Pal

s. 149

s. 34

s. 326

s. 326

s. 302

s. 326

s. 326


BOARD OF REVENUE ETC.

A. M. ANSARI ETC.

March 17, 1976

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

Indian Stamp (Andhra Pradesh Extension and Amendment) Act XIX of 1959-Arts. 31(c) and 35(c)--Scope of-Lease and licence-Distinction.

Sales Tax-JVhether payabh on annual auction Sales.

Under the terms and conditions of sale th'e respondents, who were the high- C est bidders at an auction of forest produce, were called upon to pay stamp duty on the agreements to be executed by them as if they were leases of immovable property falling under Art. 31(c) and on the deposits of security as mortgages under art. 35(c) of the ll!ldian Stamp Act, 1899 as also sales tax on the bid amounts. In a petition under art. 226, the respondents contended that the right to pluck, collect and take away the forest produce v.-as not a right or interest in immovable property within the meaning of art. 31(c) of the Stamp Act, the security deposits were not mortgages nor did the Government carry on any business of sale and, as such. they were not liable to pay the amounts D demanded. The High Court allowed the petitions.

Dismissing the State's appeal,

HELD : The acquisition by the respondents not being an interest in the soil but merely a right to cut 1he fructus narurales, the agreements possessed the characteristics of licences and did not amount to leases so as to attract the applicability of art. 31 ( c) of the Stamp Act. [667D]

Firm Chhotabhai Jethabai Patel & Co. & Or9. v. The State of Madhya Pradesh. [1953] S.C.R. 476 and Mahadeo v. State of Bombay 1959 S.C.J. 1021 : A.I.R. 1959 S.C. 735 referred 10.

(1) A study of the definitions of immovable property occurring in the

 Transfer of Property Act, the Jtegistration Act and the General Clauses Act shows that it is the creation of an interest in immovable property or a right to possess it that distinguishes a f.ase from a licence. A licence does not create an interest in the property to which it relates while a lease does. In the case F of a lease there is transfer of a right to enjoy the property. For the purpose of deciding whether a particular grant amounts to a lease or a licence, it is essential to look to the substance and essence of the agreement and not to its form.

[665F-G]

Associated Hotels of lndia Lid. v. R. N. Kapoor A.l.R. 1959 S.C. 1262; Kauri Timber Company Litnited v. The Commissioner of Taxes, [1913] A.C. 771 (776) Marsliall v. Green (1875) L.R.l.C.P.l.D. 35 and Firm Chhotabhili G Jethabai Patel & Co. & Ors. v. The State of Madhya Pradesh [1953] S.C.R. 576 referred to.

Mahadeo v. State of Bombay :t959 S.C.J. 1021 : AIR 1959 S.C. 735 distinguished.

In the instant case the salient. features emerging from the agreements are

(i) that they were made for a short duration of 9 to 10 months; (ii) they did not create any estate or interest in the land and (iii) the respondents were not granted exclusive possession and control of the land but were merely granted H the right to pluck, cut, carry awa:1 and appropriate the forest produce, present or future. The right to go on tbt: land was only ancillary to the real purpose of the contract.

[667C-DJ

(2) The respondent could not be called upon to pay stamp duty under Art. 35(c) of the_ Stamp Act.

For an instrument to fall within the definition of mortgage deed contained in s. 2 ( 17) of the Stamp Act it is necessary that it should satisfy the essential conditions by creating a right over or in rspect of a specified property in favour of another person. [6710; 670G]

In the instant case there is nothing in the relevant clause of the sale notice to indicate that any right over or in the security deposits was created in favour of the State Government.

[67JA]

Reference under Stan1p Act, Section 46 15 l.L.R. Mad. 134 nnd Rishidev Sondhi v. Dhampur Sugar Mills A.I.R. 1947 All. 190 F.B. approved.

(3) (a) The respondents were not liable to pay sales lax. It cannot be said that the Government, by holding auction of forest produce, carried on business in the sale of that class of goods, which is an essential condition to make the respondents liable to pay sales tax.

[670D] State of Gujarat v. Raipur Manufacturing Co. Ltd. (1967) 19 S.T.C. l(S.C.) followed.

(b) The consideration of profit motive cannot be regarded as an essential ingredient of the term 'business in view of the amendment in the definition of 1 'dealer' in 1966. The auctions were carried on only annually and not at fre- .......,_ quent intervals. The important element of frequency being lacking it cannot be held that the Government was carrying on the business of sale of "lorest produce.

[669D-EJ

P.T.C.C.S. Merchants Union v. State of A.P., (1958) 2 An. W.R. JOO:

(1958) 9 S.T.C. 723; Raja Bhairabendra v. Superintendent of Taxes (1958) 9 S.T.C. 60; Orient Paper Mills Ltd. v. The State of Madhya Pradesh and Ors.

(1971) 28 S.T.C. 532; Deputy Commissioner of Agricultural Income-Tax and Sales Tax, Qui/on v. Travancore Rubber and Tea Co. ( 1967) 20 S.T.C. 520

(S.C.); Deputy Commissioner of Agricultural Income-tax and Sales Tax, Qui/on

v. Midland Rubber anlt Produce Co. Ltd. [1970] 25 S.T.C. 57 (S.C.) Ramakrishna Dea v. The Collector of Sales Tax, Orissa (1955) 6 S.T.C. 674 referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 67 to 122 and 238 of 1969.

From the Judgment and Decree dated the 21-8-67 of the Andhra Pradesh High Court in Writ Petitions Nos. 489, 491, 537, 538, 539, 540, 541, 561, 635, 636, 638, 639, 677, 684, 686, 688, 695, 710, F

711, 71Z 713, 714, 715,716, 71~718, 719, 811, 81Z 813, 83~ 831, 832, 853, 854, 855, 867, 870, 1146, 1216, 1219, 1260, 1261, 1265, 1284, 1285, 1292, 1293, 1294, 1309, 1310, 1340, 1446, 1447, 1697 and 687 of 1967 respectively.

P. Ram Reddy, B. Parthasarthi for the Appellants.

K. J. John and J. B. Dadaclumji for Respondent in CAs. 67, 78, 79, 100, 101, and 103 of 1969.

G. Narayana Rao for Respondent in CAs. 69-73/69.

H. K. Puri and R. V. Pillai for Respondents in CAs Nos. 77, 83, 89, 90, 93, 95, 96, 102 and 120/69.

The Judgment of the Court was delivered by

JASWANT SINGH, J.-This bunch of Civil Appeals Nos. 67-122 238 of 1969 by certificate granted under Article 133(1) (b) of the Constitution by the High Court of Judicature of Andhra Pradesh at

Hyderabad by its order dated June, 28, 1968 against its common judgment and order dated August 21, 1967, passed in Writ Petition

Nos. 489, 491, 537 to 541, 635, 684, 685, 687, 688, 830 to 832, 561, 1219, 715 to 719, 812, 813, 1216, 677, 638, 639, 695, 853 to 856, 636, 867, 870, 1146, 1285, 1260, 1261, 1284, 1292, 1293, 1294, 1309, 1310, 1340, 1447, 1697 and 1265 of 1967 which raise interesting questions of law relating to the interpretation of some of the provisions of the Indian Stamp Act, 1899 and the Andhra Pradesh General Sales Tax Act, 1957 shall be disposed of by this judgment.

The facts giving rise to these appeals are : The Forest Department of the Government of Andhra Pradesh after giving a sale notice held, in accordance with the terms and conditions thereof, an auction in 1967 in respect of various items of forest produce viz. timber, fuel, bamboos, minor foref.t produce, beedi leaves, tanning barks, parks mohwa etc.

Clause 23 of the notice inter alia required the contractors to pay within 10 days of the receipt of the confirmation f orders of the competent authority: (a) the balance of the !st instalment amount, as might be fixed by the Divisional Forest Officer,

(b) 6t% of the bid amount as security deposit; (c) sales tax on the bid amount at the rates current at the time of the sale.

Clause 60 of the notice provided that the contractors would at all times comply with the provisions of the Indian Stamp (Andhra Pradesh Extension and Amendment) Act XIX of 1959, and the Andhra Pradesh Court Fees and Suits Valuation Act, 1956, and all the rules that might, from time to time, be in force ther1under.

The respondents herein being the highest bidders in respect of some items of the forest prnduce were called upon to pay in terms of the above noted conditions the stamp duty on the agreements to be executed by them as if they were leases of immovable property falling under Article 3!(c) of the Indian Stamp Act, 1899.

They were also called upon to pay sales tax on the bid amount in terms of clause (23) of the sale notice.

They were further called upon to pay stamp duty on the deposits made by them by way of security as mortgages, falling within Article 35(c) of the Stamp Act. Aggrieved by the said notices, the respondents filed the aforesaid petitions under Article 226 of the Constitution for issue of appropriate writs etc. declaring the aforesaid demand notices as illegal and void and restraining the appellants from enforcing or taking any proceeding for the levy and recovery of the amounts mentoned therein.

The respondents contended before the High Court that as the right to pluck, collect and take away beedi leaves and to cut and carry away bamboos, standing timber etc. was not a right or interest in immovable property so as to attract Article 31 ( c) of the Stamp Act, there could be no question of payment by them of the stamp duty.

The . respondents also challenged the demand made from them for payment of sales tax on the bid amount on the ground that as the Government did not carry on any business of sale, the demand was illegal.

They further challenged the demand of stamp duty under Article 3 5 ( c) of the Stamp Act pleading that the securify deposits were not mortgages so as to attract the provisions of the said Article of the Stamp Act.

The petitions were contested by the appellants herein who contended inter alia that pursuant to clause ((JU) of the terms and conditions of. the sale nonce, the respondents were bound to pay the stamp dunes that were chargeable in view of the extension ol the Indian Stamp Act to the whole of the State of Andhra Pradesh by the Indian Stamp (Andhra Pradesh Extension and Amendment) Act XIX of 1959 with effect from April 1, 1959, and repeal ot the Hyderabad Stamp Act, and the rules, notifications, instructio!lS etc. made or issued thereunder: that the right acquired by the respondents was not merely a right to collect, appropriate and sell beedi leaves that had already grown but also the right to collect, use and sell beedi leaves that would subsequently grow on the standing trees and their branches taking nourishment from the land during the period of lease which showed that the respondents obtained under the agreement an interest in immovable property.

The appellants further contended that the respondents were, according to the sale notice, liable to pay sales tax on the bid amount as a!So the stamp duty on security deposits which fell within the definition of mortgages as contemplated by the Stamp Act.

On a careful consideration of the respective stands of the parties, the High Court negatived the contentions of the appellants and allowed the petitions.

Aggrieved by the Judgment and order of the J; Iigh Court, the appellants applied for certificate under Article 133(l)(b) of the Constitution which, as already stated, was granted to them.

This is how the appeals are before us.

Three questions fall for consideration in these appeals.

The first question that we are called upon to determine is whether the agreements Which the respondents were called upon to execute in respect of the aforesaid rights relating to forest produce were in the nature of leases or licences.

It is necessary in this connection to notice at the outset the distinction between a lease and a licence by reference to the relevant Acts.

Section 2 (16) of the Stamp Act defines the lease as meaning a lease of immovable property but this definition, it would be noted, is neither exhaustive nor self-explanatory.

We are, therefore, driven to find out the true meaning of the term by turning to the Transfer of Property Act. Section 105 of the said Act defines 'lease' as follows :- .

"A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity in consideration of a price paid or promised, or of money."

'Licence' is defined in section 52 of the Easement Act, 1882 as under:-

"Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something whic~ would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence".

...

The expression 'immovable property' is not defined in the Stamp Act but is defined in section 3 of the Transfer of Property Act, section 2(6) of the Registration Act and section 3(26) of the General Clauses Act.

An idea as to the meaning of the expression can also be gleaned from section 2 ('7) of the Sales of Goods Act.

According to learned counsel for the appellants, it is the definition of 'immm- able property as given in section 3 (26) of the General Clauses Act that has to be applied in determining. whether the agreements in question fall within the definition of 'lease' or not. It would be useful at this stage to set out in juxtaposition the definitions of 'immovable property' as contained in the aforesaid Acts, as also the definition of goods as given in the Sale of Goods Act:-

Section 3(26) of General Clauses Act Section 3 of Trans- Section 2(6) of Scciion 2(7) of

Sale of Goods Act fer of Property Registration Act

"Imm'.Jvable prooerty" sh:i.ll include land, benefits to arise out of land, and things attached to the earth, or prm1nently fastened to anything attached to the earth.

t\ct.

In this J'"ct, unless there is ~1omething repugnant in the subject or context

"immovable property" does not include standing timber, growing crops or grass.

"Immovable pro- In this Act, perty'' includes unless there is land, buildings, anything repugnhereditary allowant in the subances, rights to ject or context, ways, lights, ferries "goods" means or any other beneevery kind of fit to arise out of movable proland, and things perty other than attached to the actionable claims earth or permamoney; and innently fastened to eludes stock and anything which shares, growing is attached to the crops, grass and earth, but not things attached to standing timber or forming part growing crops nor of the land which grass. are agreed to be severed before or under the contract or sale.

A close study of the above definitions shows that it is the creation of an interest in immovable property or right to possess it that distinguishes a lease from a licence.

A licence does not create an interest in the property to which it relates while a lease does. There is in other words transfer of a right to enjoy the property in case of a lease.

As to whether a particular transaction creates a lease or a licence is always a question of intention of the parties which is to be inferred from the circumstances of each case.

For the purpose of deciding whether a particular grant amounts to a lease or a licence, it is essential, therefore, to look to the substance and essence of the agreement and not to its form. We are fortified in this view by the decision of this Court in Associated Hotels of India Ltd. v. R. N. Kapoor where Subba Rao, J. (with whom Das, J. agreed) observed:

"If a document gives only a right to use the property in a particular way or under certain terms while it remains in possession and control of the owner thereof, it will be a licence.

The legal possession, therefore, continues to be

(1) A.LR. 1959 S.C. 1262.

10-608SCI/76

with the owner of the property, but the licensee is permitted to make use of the premises for a particular purpose.

But for the permission, his occupation would be unlawful.

It does not create in his favour any estate or interest in the property.

There is therefore, clear distinction between the two concepts. , The dividing line is clear though sometimes it becomes very thin or even blurred. At one time it was thonght that the test of exclusive possession was infallible and if a person was given exclusive possession of a premises, it would conclusively establish that he was a lessee.

But there was a change and the recent trend of judicial

opinion is reflected in Errington v. Errington [1952] 1 All ER 149, wherein Lord Denning reviewing the case law on the subject summarizes the result of his discussion thus at p. 155:

"The result of all these cases is that, although a person who is let into exclusive possession is, prima facie, to be considered to be tenant, nevertheless he will not be held to be so if the circumstances negative any intention to create a tenancy." The Court of Appea'1 again in Cobb v. Lane [1952] I All ER 1199, considered the legal position and laid down that the intention of the parties was the real test for ascertaining the character of a document At p, 1201, Somervell L.J., stated:

" ........ The solution that would seem to have been found is, one would expect, that it must depend on the intention of the parties".

Denning L.J, said much to the same effect at p. 1202 :

"The question in all these cases is one of intention: Did the circumstances and the conduct of the parties show that all that was intended was that the occupier should have a F personal privilege with no interest in the land?"

The following propositions may, therefore, be taken as well-established : ( 1) To ascertain whether a document creates a licence or lease,, the substance of the document must be preferred to the form : (2) the real test is the intention of the parties-whether they intended to create a lease or a licence; (3) if the document creates an interest G in the property, it is a lease; but, if it only permits another to make use of the property, of which the legal possession continues with the owner, it is a licence; and ( 4) if under the document a party gets exclusive possession of the property, 'prima facie' he is considered. to be a tenant, but circumstances may be established which negative the intention to create a lease." H The crucial tests to be employed in cases of the present nature can be gathered from the observations made by Lord Shaw while delivering the judgment of the Board in Kauri Timber Company Limited v.

' " ;-

. ....

The Commissioner of Taxes('). According to those observations, in order, an agreement can be said to partake of the character of lease, it is necessary that the grantee should have obtained an interest in and possession of land.

If the rnntract does not create an interest in land then to use the words of Lord Coleridge, C.J. in Marshall v. Green(')

the land would be considered as a mere warehouse of the thing sold and the contract would be a contract for goods.

For the purpose, therefore, of ascertaining the intention of the parties and finding out the character of the agreements in question, it is necessary to notice the ~:alien! features of the agreements.

The first salient feature of the agreements is that they were for a shor.t duration of nine to ten months.

The second important feature of the agreements is that they did not create any estate or interest in land.

The third salient feature of the agreements is that the respondents were not gramcd exclusive possession and control of the land but were merely granted the right to pluck, cut, carry away and appropriate the forest produce that might have been existing at the time of the contract or which might have come into existence during the short period of the currency of the agreements.

The right to go on the land was only ancillary to the real purpose of the contract.

Thus the acqnisition by the respondents not being an interest in the soil but merely a right to cut the fructus naturales, we arc clearly of the view that the agreements in question possessed the characteristics of licences and did not amount to leases so as to attract the applicability of Article 31 ( c) of the Sta"1p Act.

The conclusion arrived at by us gains strength from the judgment

of this Court in Firm Chhotabhai Jethahai Patel and Co. & Ors. v.

E The State of Madhya Prade<h(') where contracts and agreements enter0d into by person with th'' previous proprietors of certain estates and mahals in the State under which they acquired the rights to pluck. coJlect and carry away tendu leaves, to cultivate, culture and acquire lac, and to cut and carry away teak and timber and miscellaneous species of trees called hardwood and bamboos were held in essence and effect to be licences.

There is, of course a judgment of this Court in M ahadeo v. State of Bombay(') where seemingly a somewhat different view was expressed but the facts of that case were quite distinguishable.

In that case apart from the bare right to take the leaves (}f tendu trees, there were further benefits including the right to occupy the land, to erect buildmgs and to take away other forest produce not necessarily standing G timber, growing crop or grass and the rights were spread over many years.

For the foreging reasons, the first question has to be decided in favour of the respondents.

The second question that falls for consideration is whether the respondents could be validly called upon to pay the sales tax.

For

(I) [19!3] A.C. 771, 776.

(3) [1953] S.C.R. 476.

(2) [1875] L.R.I.C.P.I.D. 35.

(4) [1959] S.C.J. 1021=A.T.R.1959 S.C. 7)5.

the decision of this question, it is necessary to examine a few provisions of the Andhra Pradesh General Sales Tax Act 1957.

The charging section is section 5 which in so far as it is relevant for the puq; iose of these appeals runs thus :-

"5. Levy of tax on Sales or Purchases of Goods :-

(1) Every dealer (other than a casual trader and an agent of a non-resident dealer) whose total turnover for a year is not less than Rs. 25,000 and every agent of a nonresident dealer whatever be his turnover for the year, shall pay a tax for each year, at the rate of four paise on every rupee of his turnover:

"Every casual trader shall pay a tax at the rate of four paise on every rupee of his turnover :

Provided that a dealer in jaggery shall pay a tax at the rate of two paise on every rupee upto the 31st March 1966 and at the rate of three paise on every rupee on and from the 1st April 1966, of his tutn-over irrespective of the quantum of turnover".

The term 'dealer'has been defined in section 2(e) of the Act as follows:- "dealer" means any person who_ carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash, or for deferred payment, or for commission, remuneration or other valuable consideration, and includes (i) the Central Government, a State Government, local authority, a company, a Hindu undivided family or any society (including a co-operative society), club, firm or association which carries on such business ..... "

The term 'business' has been defined in section 2 (bbb) of the Act as follows :- F "'business' includes-(i) any trade, commerce, or manufacture or any adventure or concern in the nature of trade, commerce or manufacturing whether or not with trade, commerce, manufacture, adventure concern is carried on or undertaken with a motive to make gain or profit and whether or not any gain or profit accrues therefrom; and

(ii) any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adven~ ture or concern".

'Sale' is defined in section 2(n) thus :

'Sale' with all its grammatical variations and cognate expressions means every transfer of t!he property in goods by one person to another in the course of trade or business, for cash, or for deferred payment, or for any other valuable consideration, and includes any transfer of materials for money consideration in the execution of a

works contract provided that the contract for the transfer of such materials can be separated from the contract for the services and the work done, although the two conracts are embodied in a single document or in the supply or distribution of goods by a society (including a co-operative society), club, firm or association to its members, but does not include a mortgage, hypothecation or pledge of, or a charge on, goods".

In order that the sales tax should be payable by the respondents in accordance with the obligation imposed on them by clause (23) of the sale notice, it is necessary that the Government of Andhra Pradesh should have been carrying on the business of selling the forest produce. In State of Gujarat v.

Raipur Manufacturing Co.

Ltd.( 1), this court while examining the term 'business' in another context observed that 'whether a person carries on business in a particular commodity must depend upon the volume, frequency, continuity and regularity of transactions of purchase and sale in a 1class of goods and the transactions must ordinarily be entered into with a profit motive.

The Court further went on to observe that when a subsidiary product is turned out in the factory of the assessee regularly and continuously and it is being sold from time to time, an intention to carry on business in such product may be reasonably attributed to the assessee.

As the consideration of profit motive cannot be regarded an essential constituent of the term 'business' in view of the amendment introduced in the definition of the term 'dealer' in 1966, what we are left to consider is whether the other ingredients of the term 'business' viz. volume, frequency, continuity and regularity of transactions of sale and purchase are satisfied in the instant cases.

The auctions of the forest produce by the Government of Andhra Pradesh are adntittedly carried on only annually and not at frequent intervals. Thus the important element of frequency being lacking in the instant cases, it cannot be held that the said Government was carrying on the business of sale of forest produce.

In P. T. C. C. S.

Merchants Union v.

State of A.P.('). where a person who grew agricultural products and incidentally sold the same, it was held that no sales tax was payable as it could not be said that the person carried on business.

A similar view was expressed in Raja Bhairabendra v.

Superintendent of Taxes(') where standing sal trees grown spontaneously in his Zamindari were sold by the Zamindar by auction and the purchasers were permitted to fell the trees and sell them after sawing and other processes.

In Orient Paper Mills Ltd. v. The State of Madhya Pradesh & Ors.(•) it was held that the State Government or the forest department could not, merely by selling the forest produce grown on their land, be regarded as carrying on any business of buying, selling, supplying or distributing goods and therefore in respect of mere sales of forest produce, neither the State Government nor the forest department was a dealer within the meaning of the definition in section 2( d) of the M.P. General Sales Aax Act, 1958. In Deputy Commissioner

(!) (1967) 19 S.T.C. 1 (SC.)

(3) (1958) 9 S.T.C. 60.

(2) (1958) 9 S.T.C. 723.

(4) (1971) 28 S.T.C. 532.

of Agricultural liu; ome-tax and Sales Tax, Qui/on v.

Travancore Rubber and Tea Co.( 1) and Deputy Commissioner of Agricultural Income-tax and Sales Tax, Qui/on v. Midland Rubber and Produce Co.(') Lt. where the only facts established were that the assessee converted the latex tapped from its rubber trees into sheets and effected a sale of those sheets to its customers and the conversion of latex into sheets was a process essential for the transport and marketing of the produce, it was held that the department had not been able to discharge the onus of proving that the assessee was carrying on business and was, therefore, a dealer within the meaning of section 2(b) of the Central Sales Tax Act, 1956. In Ramakrishna Deo v.

The Collector of Sales Tax, Orissa(') where Maharaja of Jeypore had sold the sal trees from his forest for preparing sleepers, it was held that he was not a dealer within the meaning of the Orissa Act because he was not carrying on the business of selling or supplying the goods for the reason that the element of purchase, one of the necessary ingredients of the business was absent.

In view of the foregoing discussion, we find ourselves unable to hold that the Government of Andhra Pradesh by holding auction of forest produce carried on business in the sale of that class of goods.

As such, the respondents could not be made liable to pay the sales tax.

There now remains for consideration only the last question as to whether the security deposits made by the respondents were in the nature of mortgages so as to make the respondents liable to pay the stamp duty under Article 35(c) of the Stamp Act.

For the determination of this question, it is necessary to scrutinize the definition of 'mortgage deed' as contained in section 2 ( 17) of the Stamp Act which runs thus:-

"2(17). Mortgage-deed includes every instrument whereby, for the purpose of securing money advanced, or to be advanced, by way of loan, or an existing or future debt, or the performance of an engagement, one person transfers, or creates to, or in favour of, another, a right over or in respect of specified property".

A bare perusal of the above definition makes it clear that in order that an instrument should fall within the above definition, it is neces' sary that the instrument should satisfy the essential conditions by creating a right over or in respect of a specified property in favour of another person.

Bearing in mind the above mentioned essential requisites of a deed of mortgage let us examine clause (17) of the sale notice to which alone our attention has been invited.

Clause ( 17) runs thus :-

"Earnest money deposit to be returned-The earnest money deposits of all bidders except those of the successful bidders collected at the time of sale according to condition 5 above, will be returned to the depositors, on the conclusion

(1) (1967) 20 S.T.C. 520 (SC.)

(2) (1970) 25 S.T.C. 57 (S.C.).

(J) (1955) 6 S.T.C. 674.

J.,

of the sales provided that the officer conducting the sale, may A if he considers it advisable, retain the deposits of any bidders".

There is nothing in the above clause to indicate that any right over or in the security deposits was created in favour of the State Government.

In Reference under Stamp Act, section 46(1) where a licence issued to an arrack renter expressly required as one of its conditions B that the licensee should deposit a sum equal to three months' rental as a security for the due performance of the contract and the licensee executed a muchalka stating that he agreed to all the terms and conditions mentioned in the licence, it was held that neither the licence nor the muchalka taken separately or together fulfilled the conditions of a mortgage as defined in the Stamp Act i.e., neither thereby actually created an interest in the deposit in favour of the Government.

In Rishidev Sondhi v. Dhampur Sugar Mills(') it was held that an instrument in which specific sums have been offered as security is not a mortgage deed within the meaning of section 2(17) as money is not 'specified property'.

In view of the above we have no manner of doubt that the res- D • pondents could not be called upon to pay the stamp duty under Article 35(c) of the Stamp Act.

In the result the appeals fail and are hereby dismissed with costs.

P.B.R.

Appeals dismissed.

(1) 151.L.R. Mad.134.

(2) A.LR. 1947 All. 190 (F.B.)

BOARD OF REVENUE ETC

A. M. ANSARI ETC

March 17, 1976

A. N. RAY, C.J.

M.. H. BEG

JASWANT SINGH, JJ.

Arts. 31(c) and 35(c)

Art. 31(c)

art. 35(c)

Stamp Act, 1899

art. 226

art. 31(c)

art. 31

Transfer of Property Act

General Clauses Act

Art. 35(c)

s. 2

Section 46

CIVIL APPELLATE JURISDICTION

P. Ram Reddy

B. Parthasarthi

K. J. John

J. B. Dadaclumji

G. Narayana Rao

H. K. Puri

R. V. Pillai

Article 133(1)

Indian Stamp Act, 1899

Clause 23

Clause 60

Article 3

Indian Stamp Act, 1899

Article 35(c)

Article 226

Article 31

Article 3

Indian Stamp Act

Article 133(l)(b)

Section 2

Transfer of Property Act

Section 105

section 52

Easement Act, 1882

section 3

Transfer of Property Act

section 2(6)

Registration Act

section 3(26)

General Clauses Act

section 2

section 3

General Clauses Act

Sale of Goods Act

Section 3(26)

General Clauses Act

Section 3

Section 2(6)

Immovable pro- In this Act

Subba Rao

Das

Denning

Somervell L.J.

Denning L.J

Shaw

Coleridge

Article 31

section 5

1st April 1966

section 2(e)

Central Government

section 2

section 2(n)

Government of Andhra Pradesh

section 2( d)

General Sales Aax Act, 1958

section 2(b)

Central Sales Tax Act, 1956

Article 35(c)

section 2

section 46(1)

section 2(17)

Article 35(c)


VEERA IBRAHIM

STATE OF MAHARASHTRA March 18, 1976

[R. S. SARKARIA AND N. L. UNTWALIA, JJ.]

Constitution of India, Art. 20(3), conditions for applicabilitv of, whether enquiry is 'accusation' lvithin the meaning of-Evidence Act, S. 24, when attracted-What amounts to 'confession' under S. 24.

A truck was seized with its contents of contraband goods for foreign make~ on which no duty had been paid.

The appellant who was in charge of the goods, was arrested while escaping from the truck and Rs. 2000/- were seized from him. His statement was recorded under S. 108, Customs Act. 1962.

The appellant and the driver of the truck. were convicted by the Trial Court. under Ss. 135 (a) and 135 (b) of the Customs Act, 1962, and S. 5 of the Imports & Exports (Control) Act, 1947. The High Court upheld their con viction under S. 135 (a) of the Customs Act, and acquitted ihem of the other charges.

In appeal by leave granted under Art. 134(1) (c) of the Constitution, the appellant contended before this Court that his statement taken under S. 108, Customs Act, could not be used against him; firstly, as it was hit by Art. 20(3) of the Constitution on account of .its havin2 been taken while he was already an 'accused' under S. 124, Bombay Police Act, and secondly. it was barred under S. 24, Evidence Act, the same being a confession obtained under compulsion of law.

It was also contended that in the absence of the requisite notification under S. 123(2), Customs Act, the statutory presumption under S. 123 could not be invoked by the prosecution, and without the same. the facts of the case were insufficient to establish an offence a2ainst the appellant under S. 135, Customs Act.

Dismissing the appeal, the Court,

HELD : ( 1 ) To claim the benefit of the guarantee against testimonial compulsion embodied in clause (3) of Art. 20, it must be shown, firstly, that the person wn.o made the statement was 'accused of any offence', secondly, that he made this statement under compulsion.

Only a person against whom a formal accusation relating to the commission of an offence bas been levelled would fall within its ambit. [674C-D]

R. C. Mehta v. State of West Bengal, [1969] 2 S.C.R. 461, applied.

(2) To attract the prohibition enacted in S. 24 Evidence Act, these facts must be established.

(i) that the statement in question is a confession;

(ii) that such confession has been made by an accused person;

(iii)

(iv)

that it has been made to a person in authority;

that the confession has been obtained by reason of any inducement threat or promise proceeding from a person in authority.

(v) Such inducement, threat or promise, must have reference to the charge against the accused person;

(vi) The inducement, threat or promise must in the opinion of the Court be sufficient to give the accused person ground, which would appear to him reasonable, for supposing that by making it he would gain any advantage or avoid any evil of temporal nature in reference to the proceedings against him.

[676F-H, 677 A]

\ ..

(3) A tatrucnt in order to amount to a 'confession'. must either admit in A terms the offence, or at any rate substantially all the facts which constitute the offence.

An admission of an incriminating fact. howwover grave, is not I by itself a confessiop_.

A statement which contains an exculpatory assertion of some fact, which if true, would negative the offence alleged, cannot amount • to a 'confession'. [677 A-Cl

Pekala Naraya11a v. R. 66 I. A. 66 Palvinder Kaur v. State of Punjab [19531 S.C.R. 94, Om Prakash v. State, A.I.R. 1960 S.C. 409, referred to.

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 234 of 1971.

From the Judgment and Order dated the 26-3-71 of the Bombay High Court at Bombay in Criminal Appeal No. 1434 of 1970.

K. R. Chaudhury and K. Rajendra Chaudhury for the Appellant.

H. R. Khanna and M. N. Shroff for Respondent.

The Judgment of the Court was delivered by

SARKARIA, J.-Veera Ibrahim, appellant was accused No. 2 in the complaint filed by Assistant Collector of Customs, Preventive Department, Bombay before the Chief Presidency Magistrate for his prosecution aJong with one Abdul Umrao Rauf, accused No. 1, in respect of offences under ss. 135(a) and 135(b) of the Customs Act, 1962 and s. 5 of the Imports and Exports (Control) Act 194 7.

The trial Magistrate convicted both the accused on all the three charges and sentenced them to two years rigorous imprisonment on each count with a direction that the sentences wouJd run concurrently.

Against that judgment, two separate appeaJs were filed by the convicts in the Bombay High Court which acquitted both the accused of the offences under s. 5 of the Imports and Exports (Control) Act, 1947 and under s. 135 (b) of the Customs Act, but maintained their conviction ou the charge under s. 135(a) of that Act reducing the sentence to one year's rigorous imprisonment.

The High Court, however, granted a certificate under Article 134(1) (c) of the Constitution, on the basis of which, this appeal has been filed.

The main question with reference to which the certificate was granted by the High Court, was : whether s. 108 of the Customs Act, 1962 is ultra vires the provisions of cl. (3) of Article 20 of the Constitution ? But Mr. Chaudhry, appearing for the appdlant, does not press this question now before us.

The first contention canvassed by the Counsel is that on the facts G and circumstances of the case, the appellant's statement recorded under s. 108 of the Customs Act 1962, on the foot of which the appellant has been convicted, was hit by clause (3) of Article 20 because at the time of making that statement, the appellant was "accused of any offence" under s. 1_24 of the Bombay Police Act, and the statement was obtained under compuJsion of law.

Stress has been placed on the fact that the appellant was, in fact, arrested by the H police on a charge under s. 124 of the Bombay Police Act and the goods were seized under a Panchnama, prepared by them in the course of investigation.

In this connection, reference has been made to

A M. P. Sharma and Ors. v. Satish Chandra, District Magistrate, Delhi and Ors. (1)

On the other hand, Mr. H. R. Khanna, appearing for the respon- . dent submits that the words "accused of any offence" occurring in Art. 20 ( 3) take in only that person against whom a formal accusation of an offence has been levelled.

Two other conditions for the applicability of this Clause, according to the Counsel, are : (a) that the testimony in question had been obtained under compulsion, and (b) it relates to the offence of which he stands formally accused.

These conditions, it is maintained, were not fulfilled in the present case.

Clause ( 3) of Article 20 provides :

"No person accused of any offence shall be compclkd c to be a witness against himself".

From an analysis of this clause, it is apparent that in order to claim the benefit of the guarantee against testimonial compulsion embodied in this clause, it must be shown, firstly, that the person who made the statement was "accused of any offence" secondly, that he made this statement under compulsion.

The phrase "accused of any offence" has been the subject of several decisions of this Court so that by now it is well settled that only a person against whom a formal accusation relating to the commission of an offence has been levelled which in the normal course may result in his prosecution, would fall within its ambit.

In R. C. Mehta v. State of West Bengal,(') this point came up for consideration in the context of a statement recorded by an officer of E Customs in an enquiry under s. 171-A of the Sea Customs Act. One of the contentions raised was, that a person against whom such an enquiry is made is a 'person accused of an offence', and on that account, he cannot be compelled to be a witness against himself and the statement obtained or evidence collected under the aforesaid provision by the Officer of Customs is inadmissible. This contention was repelled. Shah J., speaking for the Court, made these apposite observa- F tions :

"Under s. 171-A of the Sea Customs Act, a Customs Officer has power in an enquiry in connection with the smuggling of goods to sµmmon any person whose attendance he considers necessary, to give evidence or to produce a document or any other thing, and by cl. ( 3) the person so summoned is bound to state the truth upon any subject respecting which he is examined or makes statements and to produce such documents and other things as may be required.

The expression "any person" includes a person who is suspected or believed to be concerned in the smuggling of goods.

But a person arrested by a Customs Officer because he is found in possession of smuggled goods or on suspicion that he is concerned in smuggling is not when called upon by the Customs Officer to make a statement or to produce a document or thing, a person accused of an

(I) [1954] S.C.R.1077.

(2) [1969J 2 S.C.R. 461.

offence within the meaning of Art. 20(3) of the Constitu- A tion.

The steps taken by the Customs Officer are for the

I purpose of holding an enquiry under the Sea Customs Act 'md for adjudging confiscation of goods dutiable or prohibit- • ed and imposing penalties.

The Customs Officer does not at that stage accuse the person suspected of infringing the provisions of the Sea Customs Act with the commission of any offence.

His primary duty is to prevent smuggling and B • to recover duties of customs when collecting evidence in respect of smuggling against a person suspected of infringin.g the provisions of the Sea Customs Act he is not accusing t'he person of any offence punishable at a trial before a magistrate". ·

After a survey of case law, the Court pointed out the cirCUID6lances, the existence of which is ordinarily necessary to clothe a person with the character of a "person accused of an offence" : c

t "Normally a person stands in the character of an accused when a First Information Report is lodged against him in respect of an offence before an Officer competent to investigate it, or when a complaint is made relating to the commission of an offence before a Magistrate competent D • to try or end to another Magistrate for trial the offence.

Where a Customs Officer arrests a person and informs that person of the grounds of his arrest (which he is bound to do r under Art. 221) of the Constitution for the purpose of bolding an enquiry into the infringement of the provisions of the Sea Customs Act which he has reason to believe has taken place, there is no formal accusation of an offence.

In the E case of an offence by infringement of the Sea Customs Act and punishable at the trial before a Magistrate, there is an accusation when a complaint is lodged by an officer competent in that behalf before the Magistrate".

The above-quoted observations are a complete answer to the contention of the appellant.

In the light of these principles, it is clear that when the statement of the appellant was recorded by the Customs Officer under s. 108, the appellant was not a person "accused of any offence" under the Customs Act, 1962.

An accusation which would stamp him with the character of such a person was levelled only when the complaint was filed against him, by the Assistant Collector of Customs complaining of the commission of offences under s. 135(a) and s. 135(b) of the Customs Act.

G True, that the appellant was arrested by the police on December 12, 1967 on suspicion of having committed an offence under s. 124, of the Bombay Police Act and a Panchnama of the packaees in the truck was also prepared. But the factual ingredients of that offence are materially different from those of an offence under the Customs Act. This will be apparent from a bare reading of s. 124 of the Bombay Police Act, which provides : H

.> "Whoever has in his possession or conveys in any manner, or offers for sale or pawn, anything which there is

A reason to believe is stolen property or property fraudulently obtained shall, if he fails to account for such possession or to act to the satisfaction of the Magistrate, on c0nviction, \ be phed with imprisonment for a term (which may extend to one year but shall not, except for reasons to be • recorded in writing, be less than one month and shall also

B be liable to the fine which may extend to five hundred rupees).

Even in respect of that offence, the police did not register any case or enter any F .I.R. which normaJ.Iy furnishes a foundation for

commencing a police investigation.

The police did not open the packages or prepare inventories of the goods packed therein. Indeed, the police appear to have dropped further proceedings. They did c not take any steps for prosecuting the appellant even for an offence under the Bombay Police Act, 1951. They informed the Customs

authorities, who opened the packages, inspected the goods and on -t finding them contraband goods, -seized them under a Panchnama.

The Customs authorities called the appellant and his companion to the Customs House, took them into custody, and after due com-

D pliance with the requirements of law, the Inspector of Customs questioned the appellant and recorded his statement under s. 108 of the Customs Act.

Under the circumstances it was manifest that at the ' time when the Custosm Officer recorded the statement of the appel- !ant, the latter was not formally "accused of any offence." The High Court was therefore right in holding that the statement recorded by the Inspector of Cnstoms was not hit by Article 20(3) of the Constitution.

E The next question to be considered is, whether this statement was hit by s. 24 of the Evidence Act.

The contention is that this statemen! was obtained under compulsion of law inasmuch as he was required to state the truth under threat of prosecution for perjury.

For reasons that follow, we are unable to sustain this contention.

F To attract the prohibition enacted in s. 24, Evidence Act, these facts must be established :

(i) that the statement in question is a confession;

(ii) that such confession has been made by an accused person;

(iii) that it has been made to a person in authority;

(iv) that the confession has been obtained by reason of any inducement, threat or promise a person in authority; proceeding from

(v) such inducement, threat or promise, must have re-

H ference to the charge against the accused person;

(vi) the inducement, threat or promise must in the opinion of the Court be sufficient to give the accused person grounds, which would appear to him reasonable, for •

.supposing that by making it he would gain any A advantage or avoid any evil of a temporal nature in reference to the proceedings against him.

In the present case, facts (i), (iv) and (vi) have not been established.

Firstly, the statement in question is not a "confession' within the contemplation of s. 24.

It is now well-settled that a statement in order to amount to a "confession" must either admit in terms the offence, or at any rate substantially all the facts which constitute the offence. An admission of an incriminating fact, howsoever grave, is not by itself a confession.

A statement which contains an exculpatory assertion of some fact, which if true, woulrl negative the offence

allep, ed, cannot amount to a confession (see Pakala Narayana v.

R, ( ) ; Plavinder Kaur v. State of Punjab; ( 2) Om Prakash v.State(').

A perusal of the statement Ex, I made by the appellant before the Inspector of Customs would show that it contained exculpatory matter.

Therein, the deponent claimed that he was not aware that the packages which were loaded in the truck were contraband goods, and alleged that the goods were not loaded under his instructions.

The deponent claimed to be an innocent traveller in the truck when he said : "I did not ask Mullaji (driver) what goods were being loaded in his Jorry.

Mullaji was only my friend and I was not aware of any of his mala fide activities".

Moreover, the incriminating facts admitted in this statement, do not, even if taken cumulatively amount to admission of all the facts which constitute any offence, To bring home an offence under s. 135 of the Customs Act, in addition to the facts admitted in Ex. I, it had to be established further that these goods were contraband goods, E

For these reasons, it could be said beyond doubt, that the statement Ex. 1 was not a "confession" within the meaning of s. 24, Evidence Act.

Secondly, it has not been shown that the Customs Officer-thongb. a person in authority-had offered any inducement or held out any F threat or promise to the appellant.

Christopher Soares, the Inspector of Cnstoms (P, W. 4) testified that no threats, coercion or inducements were used and that the statement Ex. 1 was made by the appellant, voluntarily,

While it may be conceded that a person summoned by an Officer of Cnstoms to make a statement nnder s. 108 of the Customs Act, is G under compulsion of Jaw to state the truth, the compulsion thereunder, assuming it amounts to a threat, does not proceed "from a person in authority" within the contemplation of s. 24, but emanates from law.

Thirdly, the mere fact that the Inspector of Cnstoms had, before recording the statement, warned the deponent of the possibility of his H

(I) 66 I.A. 66.

(2) [1953] S.C.R. 94.

(3) A.I.R. 1960 S.C. 409,

A prosecution for perjury in case he did not make the statement truthfully, cannot be construed as a threat held out by the officer whicli could have reasonably caused the person making the statement to

suppose that he would . by making that statement, gain any advantage \ or avoid any evil of a temporal nature in reference to the proceedl ings against him for smuggling.

In view of what has been said above, we have no hesitation in holding that the statement Ex. 1, was not barred under s. 24, Evidence Act.

The statement Ex. P-1 was clearly admissible under s. 21, Evidence Act as an admission of incriminating facts.

C Lastly, Mr. Chaudhry tried to contend that the incnmmating facts admitted in Ex. 1 taken along with the other facts appearing in the evidence of prosecution witnesses, were insufficient to establish an offence under s. 135, Customs Act against the appellant because no notification under sub-s. (2) of s. 123, of the Customs Act had been issued in respect of the import of the goods of the o kind seized, and the aid of the statutory presumption under that section was not available to the prosecution.

We are unable to accept this contention.

While it is true that in the absence of the requisite notification, the statutory presumption under s. 123 could not be invoked by the prosecution, the cir- E cumstances established unerringly raise an inference with regard to all the factual ingredients of an offence nuder s. 135(b) read with s. 135(ii) of the Customs Act. In Ex. l which was proved by P.W. 4, it is admitted that these packages which were later found to contain contraband goods by the Customs authorities, were surreptitiously loaded in the truck under cover of darkness at Reti Bunder (sea shore) F from the side of sea-side wall, in the presence of the appellant, and thereafter the first accused took the wheel, while the appellant sat by his side in the truck, and drove towards Sandhurst Station. It is further admitted that some Bania paid Rs. 2,000/- to the appellant which was meant to be given to the driver of the truck. Unfortunately, the truck skidded near the Dongri Police Station and came to a G stop.

On hearing the impact of the accident, the police came out, took both the accused into the Police Station and seized the truck and the goods.

In short, the appellant had clearly admitted that these packages containing the contraband goods were imported surreptitiously from Reti Bunder under cover of darkness. It was further established de-hors the statement of the appellant, that these pack- H ages, on opening by the Customs Officer, were found to contain contraband goods of foreign make.

They were brand uew articles packed.

The circumstances of the arrest of the appellant while escaping

I •

,,}

from the truck, the seizure of the truck and the goods, the contraband natnre of the goods, the fact that at the time of the seizure, the goods, were in the charge of the appellant, the fact that no duty on these goods had been paid, the seizure of Rs. 2,000/· as cash from the appellant etc. were proved by evidence aliwuie rendered by P. Ws. I and 2.

To some extent, the hostile witness, P.W. 5, also, supported the prosecution.

The circumstances established unmistakably and irresistibly pointed to the conclusion that the appellant was knowingly concerned in a fraudulent attempt at evasion, if not, fraudulent evasion, of duty chargeable on those contraband goods.

In the result, the appeal fails and is dismissed.

M.R.

Appeal dismissed.

VEERA IBRAHIM

STATE OF MAHARASHTRA

March 18, 1976

R. S. SARKARIA

N. L. UNTWALIA, JJ.

Constitution of India

Art. 20(3)

S. 24

S. 24

S. 108

Customs Act

Ss. 135

Customs Act, 1962

S. 5

S. 135

Customs Act

Art. 134(1)

S. 108

Customs Act

Art. 20(3)

S. 124

Bombay Police Act

S. 24

S. 123(2)

Customs Act

S. 123

S. 135

Customs Act

Art. 20

[1969] 2 S.C.R. 461

S. 24

K. R. Chaudhury

K. Rajendra Chaudhury

H. R. Khanna

M. N. Shroff

SARKARIA

Chief Presidency Magistrate

Abdul Umrao Rauf

ss. 135(a) and 135(b)

Customs Act, 1962

s. 5

Bombay High Court

s. 5

s. 135

Customs Act

s. 135(a)

Article 134(1)

s. 108

Customs Act, 1962

Article 20

Chaudhry

s. 108

Customs Act 1962

Article 20

s. 1

Police Act

s. 124

Police Act

H. R. Khanna

Art. 20

Article 20

s. 171

Customs Act

Shah

s. 171

Customs Act

Art. 20(3)

Customs Act

Customs Act

Customs Act

Art. 221

Customs Act

Customs Act

s. 108

Customs Act, 1962

s. 135(a)

s. 135(b)

Customs Act

December 12, 1967

s. 124

Police Act

Customs Act

s. 124

Police Act

Police Act

s. 108

Customs Act

Article 20(3)

s. 24

s. 24

s. 24

Mullaji

s. 135

Customs Act

s. 24

Christopher Soares

s. 108

Customs Act

s. 24

s. 24

s. 21

s. 135

Customs Act

s. 123

Customs Act

s. 123

s. 135(b)

s. 135(ii)

Customs Act

Bania

Dongri Police Station

Reti Bunder


ESO

KULCHHINDER SINGH & ORS.

HARDAYAL SINGH BRAR & ORS.

March 18, 1976

[Y. V. CHANDRACHUD AND V. R. KRISHNA IYER, JJ.)

Constitution of India-Article 226 and 221-Whether a contractual obligation can be enforced by writ jurisdiction.

The appellants are permanent servants of the Punjab State Co-operative Land Mortgage Bank and were working as Assistants since the year 1968.

The grievance of the appellants is that the contesting respondents were directly recruited to the higher post of In.pecting Officers, Junior Accountants and Accountants in violation of Service Rules.

What the appellants call Service Rules is nothing but a contract arrived at as a result of the collecrive bargain-

' '

ing with the management.

The writ petition filed by the appellants was dis missed by the learned single Judge as well as the Division Bench of High Court on the ground that no writ petition was maintainable against a Col operative Society under Article 226 of the Constitution. On appeal by special l leave the appellants contended :

(I) The co-operative Bank in question is "other authority" within the meaning of Article 12 of the Constitution and, therefore. falls within the definition of State.

(2) The Co-operative Bank is a public authority.

(3) Co-operative Societies registered under the Co-operative Societies

Act are subject to the jurisdiction of High Courts under Article 226 of the Constitution, since this provision is widely worded wrib: may be issued for any purpose against any person.

Respcndents contended :

(1) that the Co-operative Bank is not other authority or a public autho- "" rity and no writ can lie against it. ,.

(2) The appellants are trying to enforce the contractual obligation for which no writ can lie.

Dismissing the appeal,

HELD : ( 1) The Court did not decide the question whether a Co-operative Society is other authority or public authority because it is clear from a close perusal of the writ petition that essentially the appellants are seeking merely to ensure an agreement entered into between the employees and the Cooperative Bank. At its best, the writ petition seeks enforcement of a binding contract but the neat and necessary repel'lant is that the remedy of Art. 226 is unavailable to enforce a contract qua contract. We are aware of the wide amplitude of Article 226 and its potent use to correct manifest injustice but cannot agree that contractual obligations in the ordinary course without even statutory complexion can be enforced under Atricle 226. [683F--1{, 684C-D]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 747 of 1975.

Appeal by Special Leave from the Judgment and Order dated the 5-12-7 4 of the Punjab and Haryana High Court in Civil Writ Petition No. 6344/74.

M. K. Ramamurthi, J. Ramamurthi and Ramesh C. Pathak for the appellants. ·

KULCHHINDER v. H. s. BRAR (Krishna lyer, /.) 681

J. L. Gupta, Janendra Lal and B. R. Agarwala for Respondents A Nos. 5 to 22/75.

The Judgment of the Court was delivered by

KRISHNA IYER, J.-This Civil Appeal, by special leave under Art. 136, raises a common question of great moment, the decision of which may have a wider litigative fall-out than may appear on the surface.

The first question expressed, manu brevi, is as to whether a writ may issue, under Art. 226, agairut a Society registered under the Punjab

Cooperative Societies Act (Act XXV of 1961) setting aside a selection list at the instance of the aggrieved appellants who were not included therein.

The High Court (both tl:ie learned Single J udgc and the Division Bench) following an earlier judgment of that Court in Dharam Pal v. State of Punjab(') held the writ petition to be incompetent, directed as it was against a Cooperative Society.

Shri M. K. Ramamurthy challenges the holding of the High Court on the score that the Punjab State Cooperative Land Mortgage Bank Ltd., (State Banlc, for short) is 'other authority' within the meaning of Art. 12 of the Constitution and, therefore, falls within the definition of State.

Consequently, a writ inay issue against it.

Secondly, he contends that the State Bank is a public authority and, therefore, falls within the writ jurisdiction of the High Court. His third plea is much wider in its sweep, for he urges that Cooperative Societies registered under the Cooperative Societies Act are subject to the jurisdiction of High Courts under Art. 226 of the onstitution, since this provision is widely worded and writs may be issued for any purpose against any person.

Foremost among his three points is the first one which he expressed with force, backed by decisions of this Court spanning a period ending with the recent decision in Sukhdev Singh v.

Bhagatram(') According to his submission, the State Bank is more than a cerc Cooperative Society, but has statutory powers and duties, exercises sovereign functions and must be assessed in its status with reference to the Punjab Land Mortgage Bank Act, 1957 (for short, the Mortl; agc Bank Act). Chronologically we may mention that there was a Cooperative Societies Act, 1954 in the Punjab under which the present Society was registered, but that Act was repealed by the Punjab Cooperati1e Societies Act of 1961 (hereinafter referred to as the Cooperative Societies Act).

The present Society, though registered under the 1954 Act continues as a Society under the Cooperative Societies Act, J 96 ! and is a State Bank, as defined ins. 2(h) of the Mortgage Bank Ac, t. A study of the two statutes, the trappings attaching to the Society, the other features of and powers vested in the Society, have all to be studied in their totality before testing the contention of the appellant in the light of the ruling of the Court.

Although great argument has been addressed in the soecial circumstances of the case, there is no ne_ed to investigate these questions apart from briefey adverting to them.

Maybe, in a different case,

"(1) 19 rJ 2 S.L.R. 845.

11-608SC!/76

(2) 1975 (3) SCll.610.

where these issues directly and inescapably arise, this Court may have to pronounce on them, but where as here, the lis lends itself to disposal on a short point, to launch on a long debate about other arguments of importance may not be appropriate.

Of course, 'if you were to make little fishes talk, they would talk like whales', as Dr.

Johnson put it.

The whales of legal dispute do not challenge us here since the appellant is seeking relief which, on the face of it, cannot be granted for a different 'little fish' reason.

A finger-nail sketch of the facts is enough to bring out the crucial issues and the broad point on which we propose to dispose of this appeal.

The appellant is a permanent servant of the Punjab State Cooperative Land Mortgage Bank hereinafter referred as the Cooperative Bank) since 1964 and promoted in 1968 as an Assistant.

According to him, the Cooperative Bank is a statutory body established in pursuance of the Land Mortgage Bank Act, 1957, with power to frame subordinate legislation and thereby enjoying sovereign power.

Sections 11, 12, 15, 22 and 40 have been invoked to substantiate this thesis.

The purpose of this branch of the appellant's submission is to make out that the Cooperative Bank is 'State' within the meaning of Art. 12 of the Constitution and, therefore, subject to ArL 16 of the Constitution and the writ jurisdiction under Art. 226.

A further aq1, ument has been built on the edifice of the statutory provisions contamed in the Punjab Cooperative Societies, Act, 1961. Section 84A of this Act empowers apex societies under certain circumtances, to frame rules for their employees and such rules, it is contended, have been framed, having the force of law.. The Cooperative Bank is therefore a public authority which, in any view, is vulnerable to the writ of the High Court uuder its extra-ordinary constitutional power.

Of course, Shri M. K. Ramamurthy has contended that even apart from all these considerations, any cooperative society, in view of its constitution under statutory provisious, may be amenable to the writ jurisdiction of the High Court.

His specific grievance in the present case is that promotions to three categories of higher posts, viz., Assistant Inspecting Officers, Junior Accountants and Accountants were made by direct recruitment contrary to what he contends are service rules but, in substance, are the result of collective bargaining with the management, as the rit petition itself reveals.

These triple categories of new posts have been filled, admittedly, without reference to the quota set apart for promotees, the defence of the respondent being that these new cadres arc not covered by the agreement referred to in the writ petition. -

The High Court was approached when a real apprelfension of direct recruitment arose, praying for a writ, order or direction in the nature of mandamus requiring the respondent not to proceed with the processes resulting in filling up the posts of Accountants, Junior Accountants and Assistant Inspecting Officers in violation of the quota of 7 5 % claimed by the appellant, under the agreement alleged to be binding on the Cooperative Bank and the employees.

Of Course, the recruitment went on and the new appointees are also arrayed as respondents in th• writ petition.

However, the High Court dismissed

;--

....

KULCHHINDER v. H. s. BRAR (Krishna Iyer.!.) 683

:the writ petition on the preliminary ground that the writ was, in fact, A directed against a Cooperative Bank registered under the Cooperative Societies Act and no writ would lie against such a body in the circumstances set out in the writ petition.

Indeed, the distinction between a body with a personality created by and owing its existence solely to a statute and an entity which is recognised by and is registered under a statute is real, dramatic and makes for a world of difference in jural impact.

Considerable argument was addressed before B us based on the rulings reported as Mohan/al( 1); l'ewory('), SukhdevC); and Praga Tools('}, apart from the ruling of this Court in Lakshmi Narain(').

The question as to whether a Cooperative Society is a public authority has fallen for judicial notice and Amir Jamia( 6 ) contains an elaborate discussion of the controversal topic covering decisions, C English and Indian.

It is also true that at least Madhya Pradesh (Dukhooram-1961 v. M. P. 269) and Calcutta (Madan Mohan- 1966 Cal. 23) have considered whether a writ will issue against a Cooperative Society, simpliciter, Kumkum Khanna(') deals with a private .college governed by a University Ordinance.

Many other rulings have also been brought to our notice, but we do not think it necessary elaborately to investigate these issues notwithstanding the fact that Shri Gupta, appearing for the contesting respondent, challenged each one of the grounds stabilising his submissions on rulings of the Court, of the High Courts and the English Courts.

The reason why we are not inclined to add to the enormous erudition on the point already accumulated in case-law is that a close perusal of the writ petition will disclose that essentially the appellant is seeking merely to enforce an agreement entered into between the ernplo) ees and the Cooperative Bank.

There is no doubt that some of the legal problems argued by Sri Ramamurthy deserve in an appropriate case jurisprudential study in depth, although much of it is covered by authority.

Bnt assuming, F for argument's sake, that what he urges has validity, the present case meets with its instant funeral from one fatal circumstance.

The writ petition, stripped of embroidery and legalistics, stands naked as a simple contract between the staff and the Society, agreeing upon a certain percentage of promotions to various posts or an omnibus, all-embracing promise to give a quota to foe existing employees.

At its best, the writ petition seeks enforcement of a binding contract G but the neat and necessary repellant is that the remedy of Art. 226 is unavailable to enforce a contract qua contract.

We fail to see how a supplier of chalk to a government school or cheese to a government hospital can ask for a constitutional remedy under Art. 226 in the event of a breach of a contract, hypassing the normal channels

(1) [1967] 3 S.C.R. 377.

(!) [1~76) 2 S.C.R. 1006.

(6) I.LR. [1969] Delhi 202 .

(7) l.L.R. 11976] 1 Delhi 31.

of civil litigation.

We are not convinced that a mere contract agreeing to a quota of promotions can be exalted into a service rule or statutory duty.

What is immediately relevant is not whether the respondent is State or public authority but whether what is enforced is a statutory duty or sovereign obligation or public function of a public authority.

Private Jaw may involve a State, a statutory body, or a public body in contractual or tortious actions.

But they cannot be siphoned off into the writ jurisdiction.

The controversy before us in substance will turn on the construction and scope of the agreement when the claim to a quota as founded cannot be decided in writ jurisdiction without going back on wellsettled guidelines and even subverting the normal processual lawexcept perhaps in extreme cases which shock the conscience of the Court or other extra-ordinary situation, an aspect we are not called upon to explore here.

We are aware of the wide amplitude of Art. 226 and its potent use to correct manifest injustice but cannot agree that contractual obligations in the ordinary course, without even statutory complexion, can be enforced by this short, though, wrong cut.

On this short ground the appeal must fail and be dismissed. We do so, but without costs.

P.H.P.

Appeal dismissed.

.. '

ESO

KULCHHINDER SINGH & ORS

HARDAYAL SINGH BRAR & ORS

March 18, 1976

Y. V. CHANDRACHUD

V. R. KRISHNA IYER, JJ.

Constitution of India

Article 226 and 221

What the appellants call Service Rules

Article 226

Article 12

Act

Article 226

Co-operative Bank

Art. 226

Article 226

M. K. Ramamurthi

J. Ramamurthi

Ramesh C. Pathak

J. L. Gupta

Janendra Lal

B. R. Agarwala

KRISHNA IYER

Art. 136

Art. 226

Cooperative Societies Act

M. K. Ramamurthy

Art. 12

Art. 226

State Bank

Punjab Land Mortgage Bank Act, 1957

Punjab

Johnson

Sections 11, 12, 15, 22 and 40

Art. 12

Art. 226

Section 84A

Cooperative Bank

Praga Tools

Lakshmi Narain

Amir Jamia

Gupta

Ramamurthy

Art. 226

Art. 226

[1967] 3 S.C.R. 377

Art. 226