UNION OF INDIA v.

OM PARKASH

April 2, 1976

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

Arbitration Act, 1940-Secs. 8, 20, 30, 32, 33-Whether court appointing an , urbitrator can further make an order referring disputes to arbitrator-/llvard can be set aside on the ground of invalidity of reference--Whether "otherwise in~ valid' includes invalid reference.

The respondent, a contractor, entered into 7 agreements with the Union of India for the construction of a hospital. some buildings and tubewells. In each one of these agreements there was a clause providing that any dispute arising between the parties would be referred to an arbitrator. The designations of the arbitrators were also mentioned in 4 agreements as Director of Farms, in two agreements as the Officer Commanding, Lucknow. and in one agreement as the Quartermaster General at Delhi. The offices by reference to which the arbitrators were mentioned in the agreement were abolished. The respondent, therefore, made 7 applications in the court of Civil Judge at Meerut under section 8(2) of the Aribtration Act, 1940, praying for appointment of an arbitrator. The Trial Court appointed Col. Ranbir Singh to act as an arbitrator in all the 7 cases and further directed the papers to be sent to him asking him to give his award within 2 months from that date.

With the consent of both the parties the arbitrator made some progress.

However, the Government counsel submitted before the arbitrator that he should not proceed further since he was not competent to deal with the questions of law arising for decision. Thereafter the, District Judge Meerut transferred the cases to the Judge of the Small Causes Court at Meen1t presumably on the assumption that the respondent's application for the appointment of arbitrator were pending.

The learned Judge of Small Causes Court appointed Director of Farms, General Headquarters, to act as arbitrator in all the' 7 cases and he was further directed to file his award within one month of the said order. The papers were then sent to Brig. Bhandari assuming that he was the Director of Farms. Later on, the respondent applied to the court for review of its order alleging that the office of the Director of Farms was abolished and, therefore, Brig. Bhandari could not be the officer mentioned in the order. The respondent did not take part in the arbitration proceedings but before the respondent could obtain a stay the arbitrator filed his award in the Court.

The respondent made 7 applications for setting aside the award before the Small Causes Court, Meerut, which were rejected. Against that. the respond ent preferred 7 appeals to the Allahabad High Courf. The High Court allowed the appeals accepting the contention of the respondents that the court was functus officio after appointing the arbitrator under section 8(2) and had no jurisdiction to refer the cases to the arbitrator. The High Court held that it was for the parties to refer the disputes to the arbitrator after he was appointed

by the court and the reference by the court being without jurisdiction the awards were invalid. The High Court also held that when the court made the order of. reference there was no post of Director of Farms and as such, Brig.

Bhandari was not competent to act as an arbitrator on the basis of the order of the Court.

In these appeals by certificate, the appellants challenged the findings of the High Court.

H Dismissing the appeals,

HELD : An agreement to submit differences to arbitration implies an agreement to. refer the differences to the arbitrator. Section 8 only empowers the

Court to appoint an arbitrator where the parties do not concur in the appointment.

Section 20 contains provisions for arbitration with the intervention of a Court where there is no suit pending. This section confers lJOWer on the court to order the agreement to be filed and further to make an order of reference to_ the arbitrator appointed by the parties or where the parties cannot agree upon an appointment, to an arbitrator appointed by the court. On the other band, section 8 does not contain any provision empowering th~ court to make a reference to the arbitrator as one finds in section 20.

Therefore. the Small Causes Court at Meerut had no jurisdiction after appointing an arbitratorunder section 8 (2) to proceed further to make an order referring the disputes to the arbitrator. [1002DE, IOOJC.E]

2. Section 30 of the Act sets out the grounds for setting aside an award.

Section 30(c) provides that an award shall not be set aside except when it has been improperly procured or is otherwise invalid.

The decision of the Privy Council in the case of Chhabbe Lal v. Kallu Lal and Others holding that an objection to the validity of a reference to the arbitration did not come within the provisions of para 15 of the second schedule to the Code of Civil Proce~ dure which provided that no award was to be set aside except on the specific . groundsmentioned therein or the award being otherwise invalid cannot apply to the present case because in the second schedule to the Code of Civil Procedure which was repealed bv Arbitration Act of 1940. there was no provision like section 32 or 33 of the Act.

Section 32 bars the institution of suits concerning arbitration agreements or awards and provides that no arbitration agreement or award shall be set aside. amended, modified or in any way affected otherwise than as provided in the Act.

Section 33 provides that a party to an arbitration agreement seeking to challenge the agreement or the award must do so by making an application to the court. When the second schedule to the Civil Procedure Code was in force an a\vard made on an invalid reference could be set aside by filing a suit which was then the appropriate proceeding but no\v the appropriate proceeding is the filing of an application to the court as has been made in the present case.

The words 'of is otherwise invalid' in clause (c) in section 30 are wide enough to cover all forms of invalidity including invalidity of the reference.

[1003E, H, 1004A-F]

C1v1L APPHLATE JURISDICTION : Civil Appeal Nos. 1284 to 1290 of 1968.

Appeals from ,'.he Judgments and Decrees dated the 30th July 1962 of the Allahabad High Court in F.A.F.O's Nos. 220 to 226 of 1952.

L. N. Sinha, Solicitor General, G. L. Sanghi, (In CA 1284/68) and Girish Chandra, for the Appellants.

S. L. Bhatia and N. K. Puri, for the Respondent.

The Judgment of the Court was delivered by

GUPTA, J.

These seven appeals by certificate have bee,1 preferred by the Union of India against a common judgment of the Allahabad H~ Curt disposing of seven appeals under section 39(1)(vi) of the Arbitration Act, 1940. The appeals turn on the true meaning and scope of sections 8 and 30 of the Act. Section 8 is in these terms :

Power of Court to appoint arbitrator or umpire

"8. ( 1) In any of the following cases- ( a) where an arbitration agreement provides tlmt the reference shall be to one or more arbitrators to be appointed by consent of the parties, and all the partes do not, after differences have arisen concur in the appointment or appointments; or "

(b) if any appointed arbitrator or umpir1: neglects or refuses to act, or is incapable of acting, or dies, and the arbitration agreement does not show that it was intended that the vacancy should not be supplied, and the parties or the arbitrators, as the case may be, do not supply the vacancy; or

B ·(c) . where the parties or the arbitrators are required to appoil:It an umpire and do not oappoint him;

ally party may serve the other parties or the arbitrators, as the case may be, with a written notice to concur in the appointment or appointments or in supplying the vacancy.

(2) lf the appointment is not made within fifteen clear days after the service of the said 'notice, the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, appoint an arbitrator or arbitrators or umpire, as the case may be, who shall have like power to act in the reference and to make an award as if he or they had been appointed by consent of all parties."

The question that arises for consideration is whether the court !raving appointed an arbitrator under sub-section (2) of section 8 can proceed further to make an order of reference to the arbitrator. According to the respondent the court becomes functus officio after appointing an arbitrator and has no jurisdiction to refer the matter to him.

The facts leading to the appeals are these. During the last world war the respondent, a contractor, entered into seven agreements with the military department of the {ioverament of India for the construction of a hospital,. three other buildings and three tubewells. In each of these agreements there was a clause providing that any dispute arising between the parties would be referred to an arbitrator. In four cases the agreements provided for arbitration by the Director of Farms, General Headquarters, Simla, in two cases the' Officer Commanding, Luck'now, was to be the arbitrator, and in the. remaining other case, a Quarter-Master at Delhi was chosen as the arbitrator. Disputes having arisen between the parties, the respondent made seven applications in the court of the First Civil Judge, Meerut, under section 8(2) of the Act stating that the offices by reference to which the arbitrators were selected in the agreements had been abolished and it was therefore necessary to appoint new arbitrators. In the applications the respondent named several officers praying that ono of them be appointed . to act an arbitrator "who shall have like power to act in the reference and to make an award as if he has been appointed by the consent of the parties". It will be noticed that the prayer repeats the material portion of sub-section (2) of section 8.

On February 13, 1950 the court appointed Col. Ranbir Singh whose name was not in the respondent's list, to act as arbitrator in all the seven cases oand further directed the papers to be sent to him, asking; him to give his award within

UNION V. OM PARKASH (<!_up~, J.)

I OIH

two months from that date. If the respondel11t's contention in. these appeals is correct that after appointffig an arbitrator under section 8 ( 2) the court ceases to have jurisdiction and cannot make an order of reference, the further directions given in the order of February 13, 1950 were invalid. However, the question did •not assume importance at that singe because both sides agreed to submit the disputes to Col.

Ranbir Singh for arbitration.

After the arbitration had made some progress, Col. Ranbir Singh rtiturned the papers to the court on being asked not to proceed further by the Government CO)lnsel who thought that the arbitrator was not competent to deal with the questions of law arising for decision. After this the District Judge, Meerut, transferred the cases to the Judge of the Small Cause Court, Meerut, presumably on the assumption that the respondent's applications for the appointment of an arbitrator were pending. If the respondents contention is right, this was an erroneous assumption, but no objection was raised at the time and the Judge of the Small Cause Court by his order dated February 13, 1951 appointed Director of Farms, General Headquarters, Simla, to act as arbitrator in all the seven cases. In that order the conrt further directed as follows :

"All these cases should be referred to him for arbitration.

He must file his award within one month of this order." D

The papers were then sent to Brigadier H. L. Bhandari who was said to be the officer concerned. The respondent applied to the court on March 8, 1951 for review of the order alleging tha, t the office of the Director of Farms, General Headquarters, Simla, had been abolished and as such Brig. H. L. Bhandari could not be the officer mentioned E in the order. The respondent did. not take part in the proceedings before Brig. Bhandari, but before he moved the court on May 4, 1951 for stay of the proceedings before the arbitrator, the latter had made his awards which were filed. in court on that very day.

The review application was ultimately dismissed on May 12, 1951.

The respondent made seven applications urging several grounds for setting aside the awards, but the Judge of the Small Canse Court, Meerut, overruled all objections and confirmed the awards, and a decree in terms of the award in each C'ase was passed on May 26, 1952.

Agail1st that order the respondent preferred seven appeals to the Allahabad High Court. The High Court allowed the appeals accepting the contention that the court was functus officio after appointing the arbitrator nnder section 8 (2) and had rio jurisqiction to refer the cases to the arbitrator. The High Court was of the view that it was for the parties to refer their disputes to the arbitrator after he was appointed by the court, and the reference by the court beinµ: without jurisdiction the awards were invalid. The High Court further held that when the court below made the order of reference there was no post of Director of Farms, General Headquarters, .Simla in existence and, as such, Brig. Bhandari was not competent to act as' arbitrator on the basis of the order dated February 13, 1951. The Union of India questions the correctness of the High Court's decision in .these appeals.

The validity of the order of reference depends upon the scope of section 8 which deals with the power of the court to appoint an arbitrator or umpi_re.

Sulrsecticin (1) of section 8, so far as it is relevant for the present purpose, provides that if any appointed arbitrator is incapable of acting, and the arbitration agreement does not show that it was intended that the vacancy should not be supplied, any party to the agreement may serve the other parties with a writtei,1 notice to concur in sullplying the vacancy. Sub-seeition (2) of section 8 lays down that if no appointment is made within 15 days after the service of the said notice the court may, on the application of the party who gave the notice and after giving the o!her parties an. opportunity of b'eing heard,, appoint an arbitrator or arbitrators "who shall have like powers to act in the reference and to make an award as if he or they had been appointed by consent of all parties".

The question is whether, having made the aJ:>poinlment, the court acting sub-section (2) can also make an order oCreference to the arbitrator.

The Act contemplates three kinds of •arbitration: (i) arbitration without intervention of a court, dealt with in chapter II of the Act which includes section 3 to sectio,1 19; (ii) arbitration with interventon of a court where there is no suit pending, dealt with in chapter III which consists of only . one section, viz. section 20; and \iii) arbitration in suits, which is covered by chapter IV. It is clear from the provisions of chapter II that after the appointment of arbitrator, the proceedings are to be outside court, and up to the stage of filing. the award intervention. of court is nOtt contemplated unless any oc.casion arises requiring the court to remove the arbitrator under section 11. An agreement to submit differences to arbitration implies an agreement to refer the differences to the arbitrator.

Section 8 only empowers the court to appoint an arbitrator where the parties do not concur in the appointment. Section 20 occurring in chapter III _contains provisions for arbitration with the intervention of a court where there is no suit pending. Sectioln 20 reads: ·

Application to file in Court arbitration agreement.

"20 (1) Where any persons have entered into an arbitration agreement before the institution of any suit with respect to the subject-matter of the agreement or any part of it, and where a differeru:e has arisen to which the agreement apPlies, they or any of them, instead of proceeding under Chapter II, may apply to a Court having jurisdiction in the matter to which the agreement relates, that the agreement be filed in court.

(2) The application shall be in writing and shall be numbered and registered as a suit between one or more of the parties interested or claiming to be interested as plaintiff or plaintiffs and the remainder as defendant or defendants, if the application has been presented by all the parties, or, if otherwise, between the applicant as plaintiff and the other parties as defendants.

• \

(3) On such application being made, the Court shall direct notice thereof to be given to all parties to the agreement other than the applicants, requiring them to show cause within the time specified in the notice why the agreement should not be filed.

( 4) Where no sufficient cause is shown, ihe Court s!iall order the agreement to be filed, and shall make an order of B reference to the arbitrator appointed by the parties, whether in the agreement or otherwise, or, where the parties cannot . agree upon an arbitrator, to an arbitrator appointed by the Court.

(5) Thereafter the arbitration shall proceed in accordance with, and shall be governed by, the other provisions of this Act, so far as they can be made applicable." C

This section confers power on the court to order the agreement to be filed and, further, to make an order of reference to the arbitrator appointed by the parties, or, where the parties cannot agree upon an appointment, to an arbitrator appointed by the court.

Sub-section ( 1) of section 20 makes it plain that the provisions of the section can be availed of only if no proceeding under chapter II has been initia:'.-

ed. Section 8 does not contain any provision empowering the court to make an order of reference to the arbitrator as one finds in subsection ( 4) of section 20.

Thus it seems clear that the court in the instant cases had no jurisdiction, after appointing an arbitrator under section 8(2), to proceed further to make an order referring the disputes to the arbitrator.

The question which now arises is whether the awards could be set aside as invalid because the reference was incompetent.

Section 30 of the Act which sets out the grounds for setting aside an award is in these terms:-

Grounds for setting aside award.

"30. An award shall not be set aside except on one or F more of the following grounds, namely :

(a) that an arbitrator or umpire has misconducted him-

. self or the proceedings;

(b) that an award has been made after his issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid G under section 35;

( c) that an award has been improperly procured or is otherwise invalid."

According to the respondent an award obtained on an invalid reference is also invalid and is covered by clause ( c) of section 30.

It was argued on behalf of the appellent, on the authority of the H Privy Council in Chhabbe La~ v. Kallu Lal and others('), that the

(I) 73 I.A. 52.

words "otherwise invalid" in section 30(c) did not cover a case where the award was challenged on the gronnd of some invalidity attaching to anything ontside the award itself. In Chhabbe Lat's case the Privy Council held that an objection to the validity of a reference to arbitration did not come within the provisions of paragraph 15 of the 2nd schedule t<;> the Code of Civil Procedure, 1908, which provided that no award was to be set aside except on the specific grounds men- B tioned therein, or the award "being otherwise invalid". This view which affirms that of Iqbal Ahmed J. in his dissenting judgment in a Full Bench decision of the Allahabad Hii:h Court, Mt. Mariam v.

Ml. Amisa(') was taken in relation o an award on a reference .made in a suit.

Their Lordships observed :

" ...... all the powers conferred on the court in relac tion to an award on a reference made in a suit presuppose a valid reference on which an award has been made which may be open to question. If there is no valid reference, the purported award is a nullity, and can be challenged in any appropriate proceeding."

There was no provision in the 2nd schedule to the Code of Civil Procedure, which was repealed by the Arbitralion Act, 1940, like section 32 or section 33 of the Act.

Section 32 bars the institution of suits concerning arbitration agreements or awards and provides that no arbitration agreement or award shall bet set aside,, amended, modified or in anyway affected otherwise than as provided in this Act; section 33 says that a party to an arbitration agreement seeking to challenge the agreement or the award must do so by making an application to the court. When the 2nd schedule to the Code of Civil Procedure was in force, an award made on an invalid reference could be set aside only by filing a sui, t which was then the "appropriate proceeding", but now the proceeding appropriate for the same purpose is an application to the court as the respondent in these cases has done.

Also, these are cases of arbitration without the intervention of court, and the observation from the judgment in Chhabe Lal' s case, quoted above, that a reference in a suit should be presumed to be a valid reference, does not apply to these cases.

The words "or is otherwise invalid" in clause ( c) of section 30 are wide enough to cover all forms of invalidity including invalidity of the reference. We do not find any reason why the general and unqualified language of clause ( c) should not include l!n award on an invalid reference which is a nullity.

The cases cited at the Bar show that all the High Courts with only one or two exceptions have taken this view.

We hold therefore that the awards challenged in~ these appeals are nnllities and have been rightly set aside by the High Court. In the view we have taken it is not necessary to consider the other quetion, whether Brig.

Bhandari who made tbe awards was the officer answering the description of Director of Farms, General Headquarters, Simla, to whom the court had referred the disputes.

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

One set of hearing fee.

P.H.P.

Appeals dismissed.

(!} A.LR. 1937 All. 65.

UNION OF INDIA

OM PARKASH

April 2, 1976

A. C. GUPTA

JASWANT SINGH, JJ.

Arbitration Act, 1940

Lucknow

Delhi

Civil Judge at Meerut

section 8(2)

Aribtration Act, 1940

Ranbir Singh

Meerut

Small Causes Court at Meen1

Bhandari

Small Causes Court, Meerut

Allahabad High Courf

section 8(2)

Bhandari

Section 8

Section 20

section 8

section 20

Small Causes Court at Meerut

section 8

Section 30

Section 30(c)

section 32

Section 32

Section 33

section 30

Girish Chandra

S. L. Bhatia

N. K. Puri

GUPTA

Union of India

Allahabad

section 39(1)(vi)

Arbitration Act, 1940

sections 8 and 30

Section 8

section 8

Simla

Luck'now

First Civil Judge, Meerut

section 8(2)

section 8

February 13, 1950

UNION V. OM PARKASH

section 8

Ranbir Singh

District Judge, Meerut

Small Cause Court, Meerut

February 13, 1951

H. L. Bhandari

March 8, 1951

May 4, 1951

May 12, 1951

Small Canse Court, Meerut

May 26, 1952

Allahabad High Court

section 8

section 8

section 8

section 8

section 3

section 20

section 11

Section 8

Section 20

section 20

Section 8

section 20

section 8(2)

Section 30

section 35

section 30

section 30(c)

Chhabbe Lat

Code of Civil Procedure, 1908

Iqbal Ahmed

Allahabad Hii:h Court

the Code of Civil Procedure

Arbitralion Act, 1940

section 32

section 33

Section 32

section 33

the Code of Civil Procedure

Chhabe Lal

section 30


SRIDRAR SUAR & ANR.

SHRI JAGAN NATH TEMPLE & OTHERS

April 21, 1976

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

Transfer of Property Act, l.882-Sec. 105-lndian Easenzent Acr, 1882, Sec. 52-Distinction between lease and licence Lis Pendens-Puri Shri Jagan .. .... • not.It Ten1ple (Administration) Act 1952--Sec. 2(d)~.eaning of.

Hindu Law-Whether i.\1ohant of a Hindu Te1nple can grant a Vl!.*!id pcnnanent lease. ,

The appellant's great grandfather was granted a Sanad in respect Of 2 rooms in the J agannath temple by the Superintendent of temple at the annual rent of Rs. 7 /-. The Sanad provided that the grantee wo1d be entitled to enjoy the said 2 rooms from generation to generation and iu case a permanent structure was constructed thereon the rent \vould be enhanced to Rs. 14/- per year.

After the death of great-grand-father of the appellant the grand father and thereafter the father of the appellant continued storing and selling dry 'lvfahaprasad' in the said property and continued to pay Rs. 14/- per year.

The respondents who have the management of Jagannath temple at present under the Puri Jagannath Temple (Administration) Act, 1952, called upon the appellants' father to close and to hand over the possession of the two rooms to the management on the ground . that the storage and sale of Mahaprasad in the Bihar Bedha of the temple affected adversely the discipline and dignity of the temple. The appellant's father was threatened with imposition of a penalty of Rs. 100/- per day in case he did not vacate the premises in question. The appellant's father, therefore, filed the suit in the CiVil Court which after his death has been continued by the present appellant for permanent injunction restraining the respondents fron1 interfering with his right of storing and selling dry Mahaprasad in the suit premises. According to the plaintiff the permanent lease was grahted to him by the Raja DibyaSingba and tnat since he was continuing to pay the rent regularly he was entitled to continue in the suit premises from generation to generation. The respondents contested the suit o~

the ground that it was beyond the eompetence' of Raja of Puri as, Manager ot the temple to grant a permanent lease and that, therefore, the Sanad was ineffectual, invalid and inoperative. and conferred no rights on the appellant and his ancestors which W<Juld bind the present respohdents.

Secondly, since the act of storing and selling Mahaprasad at the suit premises constitute a breach of order and discipline, the respondents under the above statute had right to ask the appellant to vacate. Thirdly what was granted by the Sanad was a licence and not a lease.

The triai court dismissed the suit. However, an appeal was allowed.

The High Court accepted the second appeal and dismissed the suit.

In an appeal by special leave it was contended by the appellants :-

(!) The suit property did not form part of the temple.

(2) The Sanad granted a permanent lease of the suit property and not merely a licence, and therefore the _appellant had an indefeasible right of storing and selling Mahaprasad.

Dismissing the appeal,

HELD : (1) Section 2(d) of the Puri Sri Jagannath Temple (Administra tion) Act, 1952, defines temple as including the temple of Lord Jagannath of Puri, other temples within its premises and all other appurtenants and subordinate shrines, other sacred places and tanks and any additions which may be •

made thereto after commencement of the Act. Records of ri&hi! prepared under the said Act also include the suit premises within the meaning of temple.

[!04 HJ

(~) .It is ow ':"ell settle<:\. by a ctea of decisions of the Supre111e Court that 1t is the creation of an interest 1n immovable property that distinguishes a lease from a licence. The intention of the parties is the real test for ascertaining the character of a document. At one time it was thought that the test of exclusive possession was infallible and if a person \Vas given exclusive possession of a premises it would conclusively establish that he was a lessee.

However, the result of the subsequent cases is that although a person who is let into exclusive possession in prima facie to be considered to be a tenant. nevertheless he will not be held to be so if the circumstances negative anv intention to create a tenancy. To ascertaih whether a document creates a. licenc.e or lease the substance of the document must be preferred to the form (Entire English and Indian case. Law reviewed).

[105 D.H, 106.A, D]

(3) A careful perusal of the recital in the Sanad, which does not reveal the identity of the plot with precision~ would show that the Sanad did not create any interest in the rooms in question in favour of the grantee.

The Sanad also did not confer the right of exclusive possession of the premises. It is also evident from the right of "Oak.hale Khas" of the respondents in the suit property as also from the proved facts that the Sarghara was not kept open by the temple authorities from midnight to 6 a.m. during which interval the

plaintiff could in no case occupy it nor could he have access to it. It is proved that the employees of the Raja of Puri used to clean the refuse etc., which got accumulated in the suit premises.

The Sanad, therefore, created a licence and not a lease. [107 E-Hl

( 4) Even if it i<; assumed that the Sanad created a lease it could not be a valid lease since the Mohant or manager of a Hindu temple is prohibited from grantinp-, a p.:rmanent lease except far legal necessity or benefit of the, estate.

In the present case ho such legal necessity or benefit of estte has been: proved.

[108 B-E]

ClV!L APPELLATE JURISDICTION : Civil Appeal No. 491 of 1975.

, v

Appeal by Special Leave from the Judgment and Order dated the 1 24th June 1974 of the Orissa High Court in Second Appeal No. 8 of 1971.

Gobind Das and B. Parthasarthi, for the Appellant.

Santosh Chatterjee and G. S. Chatterjee, for the Responde!Jit.

The Judgment of the Court was delivered by

JASWANT SINGH, J.-'-This appeal by special leave which is directed against the judgment and decre~ dated June 24, 1974, of the High Court of Orissa at Cuttack reversing the judgment ane decree dated September 23, 1970, of the first appellate court which in turn reversed the judgment and decree dated April 10, 1970, of the Trial Court relates to the controversy regarding the appellants' right to store and sell dry 'Mahaprasad' in the suit premises consisting of two pucca rooms standing on plot No. 167 in 'Bihar Bedha' (outer compound) of the Hoary Holy public temple of Lord Jagannath Ji in Puri (hereinafter referred to as 'the Temple'), which to use the ianguagc of the illum; nating and instructive preamble of Shri Jagannath Temple Act, 1954 (Orissa Act No. 11 of 1955) (hereinafter referred to as 'the Act') has ever since its inception been an institution of unique national importance, in which millions of Hindu devotees from regions far and

wide have reposed their faith and belief and have regarded it as the A epitome of their tradition and culture.

The facts giving rise to this appeal are : On August 7, 1969, one Gopal Suar, since deceased, who was the father and predecessor-ininterest of the present appellants describing himself as sevak of the Temple brought a suit in the C?u!'.1 of. the Mush!, Puri, being suit No. 160 of 1969, for permanent m1unctlon restrammg the respondents herein from interfering with his nght of storing and selling dry 'Mahaprnsad' in the suit premises.

The case of the original plaintiff was that by means of 'Sanand' (Exhibit I) Raja Sri Dibyasingha Deb, the then Superintendent of the Temple, granted to his great grandfather, Gangadhar Suar, a permament lease of the site on which the two suit rooms stuod on an annual rent of Rs. 7 /-; that it was provided in the 'Sanand' that the grantee or lessee would be entitled to enjoy the site from generation to generation and in case a permanent structure was constructed thereon, the rent would be enhanced to Rs. 14/- per year; that as a result of the

dea:th of his great grandfuther, Gangadhar Suar, of his grandfather,.

Bela Suar, and of bis father, Chakhi Suar, he had become the sole owner of the property; that a few days after the commencement of the lease, two permanent pucca rooms for storing and selling 'Mahaprasad' were constructed by his great grandfather, Gangadhar Suar, who according to the stipulation contained in the aforesaid 'Sanand' became liable to pay an annual rent of Rs. 14/-; that since the commencement of the lease, his ancestors had from generation to generation been using the suit property as a store room and as a shop ior selling dry 'Mahaprasad' in their capacity as tenants of the Raja of Puri who was the Superir; tendent of the Temple and the said right of his had been acknowledged and duly recorded in the record of rights; that ever since the taking over of the management of the Temple by the Government, he had been paying annual rent as per terms of the lease to the resrondents who had accepted him as a tenant; that he had been occupying and enjoying the suit property as before without any Jet or hinderence either by the respondents or by their predecessor-in-interest; that on August 1, 1969, his son intimated to him that respondent No. 2 had, by means of notice dated July 31, 1969, called upon him to close the shop on pain of daily fine of Rs. 100/-, as in tbc opinion of the respondent, he had been using the land in inner Bedha of the Temple for storage and sale of 'Mahaprasad' which adversely affected the discipline and dignity of the Temple; that on being so informed, he personally approached respondent No. 2 and represented to him that he was the permanent lessee of the suit property and had acquired indefeasible right of storing and selling 'Mahaprasad' thereon and the respondents could not interfere with that right but his representation fell /lat and respondent No. 2 threatened to close his shop forcibly, to impose penalty on him, and to dismiss him from the 'seva'; that after sometime, respondent No. 2 served him with another notice iJnposing an accumulated penalty of Rs. 4.600/- at the rate of Rs. 100/-

per diem and that there being no provision in the Act empowering the respondents to do any of the aforesaid things, '.he<r action was arbitrary, illegal and without jurisdiction.

The rnit was_ vigorously contested by the respondents. While denying the grant of the open site to the plaintiff's ancestor, Gangadhar Suar, as alleged, as also the construction of two pucca rooms by the latter and the storage and sale thereon of 'Mahaprasad' by the plaintiffs' ancestors, the respondents averred inter alia that the Raja of Puri bcmg merely a Superintendent or a Manager of the Temple, it was beyond his competynce to transfer a portion of the Temple permanently in favour of any individual and the 'Sanand' set up by the plaintiff was ns such ineffectual, invalid and inoperative and did not confer any right, title or interest on him or his ancestors ana was not binding on the respondents; that according to the established custom and

usae oi the Temple, 'Mahaprasad' could not be stored and sold in a 'Saraghara' but was to be sold in Anand Bazar--thc place specifically set apart for the purpose, and that since the plaintiff had been committing a breach of discipline and violating the orders of the respondents by storing and selling 'Mahaprasad' in the 'Saragharn' standing on plot No. 167 (which had been recorded in the record of rights as 'khas dakhali' land of the respondents and was never intended for storage and sale of 'Mahaprasad') and was thus acting in a manner derogatory to the dignity of the Temple, the respondents in whom the governance and administration of the Temple and its endowments vested under section 5 of the Act were competent to take action under sections 21 (A) and 30(A) of the Act.

After framing the necessary issues and recording the evidence adduced by the parties, the Trial Court dismissed the suit holding that as sections 15 and 30(A) of the Act cast statntory obligation on the respondents to ensure maintenance of order and discipline and proper hygienic conditions in the Temple and proper standard of cleanliness and purity of the offerings made therein, they could not be restrained by a permanent injunction from stopping the plaintiff to sell 'Mahaprasad' at a place other than the one specified for the purpose.

On appeal, however, the Sub-Judge (Additional District Magistrate) Puri, decreed the suit. Aggrieved by this decision, the respondents preferred an appeal to the High Court which accepted the same and dismissed the suit

Connsel for the awellants has nrged before us that the suit property did not form part of the Temple; that the transactions evidenced by 'Sannnds' (Exhibits I & II) issued by the Raja of Puri as Superintendent of the Temple in exercise of his right of superintendence and management of the Temple amounted to a permanent lease of the suit property and not merely to a licence, a•nd that the appellants had an indefeasible right of storing and selling Mahaprasad in the suit Sarag11ara.

We shall deal with these contentions seriatim.

Regarding the first contention raised on behalf of the appellants, we may observe that according to section 2(d) of Act No. XIV of 1952 called the Puri Shri Jagannath Temple (Administration) Act,

• ..

H 1952, 'Temple' means "the Temple of Lord Jagannath of Puri, other temples within its premises, all their appurtenant and subordinate .,,.~ shrines, other sacred places and tanks and any additions which may be made thereto after the commencement of the Act". It may also be

} '

mentioned that pursuant to section 3 of that . .\ct, a Special Officer A with prescribed qualifications was appointed by the State Government for preparation of the consolidated record of rights nd duties of different sevaks and pujaries and other persons connected with the seva, puja or management of the Temple as also for preparation of a list of the immovable properties endowed to Lord Jagannath Temple and the extent of the premises of the Temple and what it comprises.

In the report prepared by the said Officer which was published in the B Orissa Gazette (Extraordinary) and is final and entries whereof cannot be questioned except in the manner provided in section 5 of that Act, it is recorded that the Temple of Lord Jagannath occupies an area of

10 acres and its premises include all appurtenant and subordinate shrines and the outer and inner compounds and that the suit plot No. 167 lies in the 'Baisi Pahacha' area in between the inner and outer compounds of the Temple and that access to it is through the main C gate i.e. 'Singhadawara' (lion's gate) of the Temple. It is, therefore, clear beyond any manner of doubt that the suit premises form part of the Temple.

The first contention of counsel for the appellants is, therefore, repelled.

For a proper appreciation of the second contention, it is necessary to bear in mind the essential difference between a lease and a licence.

It is now well settled by a catena of decisions of this Court that it is the creation of an interest in immovable property tbat distinguishes a lease from a licence. Reference in this connectiot1 may be made with advantage to 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 as follows :-

"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 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, bis 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 thought 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 sa

(1) A. I. R. 1959 S. C. 1262

A if the circumstances negative any intention to create a tenancy".

"The Court of Appeal again in Cobb v. Lane 1952-1 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, as one would expect, that it must depend on the intention of the par.ties".

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

"The question in all these eases 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 personal privilege with no interest in the land?"

The following propositions may, therefore, be taken as •veil-established : (I) To ascertain whether a document creates a licence or lease, the substance of the document must be preferred to the forms; (2) the real test is the intention of tlie parties-whether they intended to create a lease m a licence; ( 3) if the document creates an interest 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, 'pnma facie' he is considered to be a tenant but circumstances may be established which negative the intention to create a lease".

Again in Qudrat Ullah v.

Municipal Board, Bareiliy(') this Court observed :-

"There is no simple litmus test to distinguish a lease as defined in s. 1 05, Transfer of Property Act from a licence as defined in s. 52, Easements Act, but the character of the transaction turns on the operative intent of the parties.

To put it pithily, if an interest is immovable property; entitling the transferees to enjoyment, is created, it is a lease; if permission to use land without right to exclusive possession is alone granted, a licence is the legal result."

Then again in Board of Revenue v. A. M. Ansari(') this very Bench while approving the observations made by Lord Shaw while delivering the judgment of the Board in Kauri Timber Company Limited v. The Commissioner of Taxes(') held that in order that an

(1) [197412 S. C.R. 5.10.

(2) [1976] 3 S. C. R. 661.

(3) [1913] A. C. 771 (776).

SRIDHAR v . . TAGAN NATH TEMPLE (Jaswant Singh,!.)

I 0 7

aoreement can be said to partake of tjle character of lease, it is necess; ry that the grantee should have obtained an interest in and possession of land. The following observations made therein are apposite :-

"A lience does not create an interest iu the property to which it relate.s while a lease does. There is in other words

tral!lsfer 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 i~ essential, therefore, to look to the substance and essence of the agreement and not to its form."

Bearing in mind the above observations, let us now scrutinize the terms of Sanand (Exhibit-I) which reads thus :-

"Order hereby is issued to the Parichims Karjees ( Officers) of the temple as follows :-

One Gangadhara Suar of Kundhaibenta Sahi has filed an application before the Raja for opening a 'Sera Ghara' t store room of Mahaprasad) at the top step of twenty two steps adjoining the inner compound of the temple and the Eastern Gate Way having space of 10 cubits of length toward.s south and width of '10 cubits.

It is ordered that he is permitted to open the said store room with hereditary right on payment of one gold Mohara as Salami and rupees seven as annual rent. If he at any time constructs a pucca house, he shall P<ll' rupees fourteen as annual rent."

A carefu1 persual of the recitals in the Sanand (which does not reveal the identity of the plot with precision) would show that the Sarranu did not create any interest i'1 the sLe in question in favour of the plaintiff's great grandfather. It -merely permitted him to open a

'Sarnghara' which meant a room for storing articles for the sole purpose of preparing Bhog for the three presiding deities.

The Sanand did not also con.fer the right of exclusive possession of the suit property on the grantee. This is evident from the right of 'dakhale khas' of the respondents in the suit property as also from the proved fact that 'Saraghara' was not kept open by the Temple authorities from midnight to 6.00 A.M. during which interval, the plaintiff could in no case occupy it nor could he have access to it. ft has also been found to have been established from the plaintiff's evidence itself that the employees of th.e Raja of Puri used to clean the refuse etc. which got accumulated before the suit 'Saraghara'.

Thus none of the elements of lease can .be said to be present in the instant case.

In M. N.

Chubwala v. Eide Hussain Sahib(') this Court rejected the claim of holdern of certain stalls in a nmrket that they were lessees and not

(I) A. I. R. 1965 S. C. 610.

licencees thereof on the ground that they had no right to us them after the closure of the market at night and the responsibility of cleaing and disinfecting the stalls and closing the market at night lay on the landlord and not on the stall holders.

No help can be derived by the appellants from Exhibit-II which relates to a quarrel in 'Kotha Bhog Nities' and is not relevant for the purpose with which we are concerned at the present stage.

Now assuming without holding that the Sanand amounted to a lease, it cannot even then be held to be valid as permanent alienation of the temple debutter property is prohibited.

The position is stated thus at page 489 of Mulla's Treatise on Principles of Hindu Law (11th Edition) :-

"The Rower of a shebait or a mohunt (..) alienate debulter property is analogous to that of a manager for an infant heir as defined by the Judicial Committee in Hunooman

Pershad v. Mussamat Babooee 6 M.I.A. 393.

As held in tba t case, he has no power to alienate debutter property except in a case of need or for the benefit of the estate. He is not entitled to sell the property for the purpose of investing the price of it so as to bring in an incoine larger than that derived from the property itself.

Nor can he, except for legal necessity grant a permanent lease of debutter property, though he may create proper deri\ative tenures and estates conformable to usage."

Jn the present case, the position of the Raja of Puri who granted the Sanand (Exhibit-I) was merely that of a shebait.

He could not. have granted a permanent lease of the property in question to the great grandfather of the plaintiff without necessity or without benefit to the estate which have not at all been made out in this case.

Again th(> lease being a permanent one for a fixed rent cou!d not have been grant.ed at all by the Raja of Puri. Reference in this connection may usefully be made to page 931 of Mayne\ Treatise on Hindu Law (1 lth Edition), where the position 1s stated a< follows

"It is beyond the powers of a manager to grant a pcrmanrnl lease at a fixed rent in the absence of unavoidable necessi•y; for, to fix tbe rent, though adequate at the time, in oerpetuity in lieu of giving the endowment the benefit o[ an augn~.entation of a variable rent fro1n time to time \Vould be a breach of duty on the part of the manager.

In Pala11iappa Chetty v. Streemath Deivasikamony (1917) 44 I.A. 147.

Lord Atkinson observed: "Three authorities have been cited which establish that it is a breach of duty on the part of a shebait, unless constrained thereto by unavoidable necessity, lo grant a lease in perpetuity of debutter lands at a fixed rent. however adequate that rent inay be at the time of granting, by reason of the fact that, by this means, the debutter estate

Cl) 44 I. A. 147.

' '

, - '' ', <

' •

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) -

is deprived of the chance it would have, if the rent were A variable, of deriving benefit from the enhancement in value in the future of the lands leased."

In Palaniappa Chetty & Anr. v.

Deivasikamony Pandara(') alluded to in the above quoted passage, it was also held :-

'A permanent lease of temple lands at a fixed rent, or rent free for a premium, whether the lanc!s are agricultural !ands or a building site, is valid only if made for a necessity of the institution. It is not justified by a local custom, or by a practice of the institution, to grant lands in that manner .

The phrase "benefit of the estate'', as used in the decisions with regard to the circumstances justifying an aliena- C tinn by the manager for an infant heir or by the trustee of a reiigious endowment cannot be precisely defined. but includes the preservation of the estate from extinction, its defence against hostile litigation, its protection from inundation, and similar circumstances."

The present case is, in our opinion, fully covered by the decision D in Shibessouree Debia v. Mothooranath Acharjo( 2 ) where it was laid down a~ a general rule that apart from unavoidable necessity to create a new and fixed rent for all time,. though adequate at the time, in lieu of giving the endowment the benefit of an augmentation of a variable rent from time to time would be a breach of duty in the mohunt.

Thus viewed from any angle the 'Sanand' could not be held to be E any more than a licence and could not clothe the ancestors of the jllaintiff or the plaintiff with the status of a lessee.

This takes us to the last contention .raised before us by counsel for the appellants which is also devoid of substance. A bare perusal of Exhibit-I is enough to show that it does not confer any right of selling 'Maha; irasad' on the plaintiff or on his legal representatives. Exhibit- F II cannot also be usefully pressed into service by the appellants as it relates to the sale of 'Rahani Bhog', and not of 'dry Mahaprasad'.

Tims all the contentions raised by counsel for the appellants fail.

For the foregoing reasons, we affirm the judgment of the High Court and dismiss the appeal with costs.

The appellants are, however, as mutualy agreed to between the parties, given one month's time to vacate the premises.

The cumulative penalty of Rs. 4,600/· to which the appellants have been subjected also being excessive is reduced to Rs. 500/·.

P.H.P.

Appeal dismissed.

(I) 44 I. A. 147

(2) 13 M. I. A. 270.

SRIDRAR SUAR & ANR

JAGAN NATH TEMPLE & OTHERS

A. N. RAY, C.J.

M. H. BEG

JASWANT SINGH, JJ.

Transfer of Property Act

Sec. 105

Sec. 52

Sec. 2(d)

Section 2(d)

Shri Jagannath Temple Act, 1954

section 5

sections 21

sections 15 and 30(A)

section 2(d)

section 3

section 5

s. 1

Transfer of Property Act

s. 52

[1976] 3 S. C. R. 661


I I 0

RAM KANAI JAMIN! RANJAN PAL PVT. LTD. v.

MEMBER BOARD OF REVENUE, WEST BENGAL

April 23. 1976

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

Bengal Finance (Sales Tax) Act, 1941-S. 20(3)-Scope o/-Adt!itio!!al Commissioner reassessed turnover taking into consideration 111ateriaf not a1•ailable to assessing authority-if co1npetent.

Section 20(3) of the Bengal Finance (Sales Tax) Act, 1941 provide' that the Commissioner, upon application or of his own motion, may revise ahy assessment made or order passed under the Act or the Rules thereunder by a person appqinted under s. 3 to assist him and the Board of Revenue may, in like manner, revise any order passed by the Commissioner.

At the time of asses_smcnt of the. appellant's sales tax return, the OJ.mn1tT~ cial Tax Officer enhanced the gross turnover and charged the enhanced amount to tax and in addition impod a penalty. On appeal under s. 20(1) or the Act, the Assistant Commissioner reduced the enhancement of gross turnover as well as the penalty. The appellant filed a revision application before the Comn1issioner of Comn1ercial Taxes.

Before the filing of revision application, under orders of the Additional Commissioner, an enquiry was conducted by a Commercial Tax Officer who detected numerous discrepancies of a serious nature in the accounts. On the basis of this report, the Additional Commissioner enhanced the assessment by a huge sum and charged the entire enhanced amount to tax.

On further revision to the Board of Revenue, the appellant contended that while exercising his power of revision under s. 20(3) of the Act, the Commissioner had to confine himself to an examination of the material before the assessing officer and could not take additional facts into consideration which plea was rejected by the Board.

The High Court held that ( i) under s. 20 ( 3) the Additional Commissioner was competent to reassess the gross turnover by taking into consideration additional material which had not been made available to the assessing officer and

(ii) the Additional Commissioner was vested with authority under s. 20(3) read with r. 80A to rely on the report under s. 14(1) initiated long before the filing of the revision petition.

Dismissing the appeal,

HELD : The Commissioner or Additional Commissioner can. in exercise of his revisional power, re-asSess the turnover a'hd while doing &o, rope in the escaped items of turnover ah<l thereby enhance the gross turnove-r. [l 16 Cr]

(1) The word "Revise", the dictionary meaning of which is "to re-examine, to review, to correct or to amend the fault", is not hedged or qualified by any condition or limitation.

The controlling expressions like "for the purpose of satisfying himself as to the legality or propriety of the order passed" or "regularity of the proceedings'' which. are susceptible of being construed a~ restricting the revisional power to rectification of an illegality or impropriety of the order or or irregularity in the prdilJlgs are also not to be found. therein.

There is alsq nothing in the Bengal Sales Tax Rules. 1941 to circumscribe or limit the p0¥/er.

It is not, therefore, unreasonable to infer that the amplitude of the power conferred on the Commissioner or the Additional Con1missioner is more extensive than the power exerciseable by the High Court under s. 115 of the Code of Civil Procedure. It can be ea:\i1y equated with tli..e power exercise.able by the appellate authority in an appea'. under sub. s. 2 ol s. 20 of the Act.

[IJ5 F-HJ

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RAM KANAI v. BOARD OF REVENUE (Jaswant Singh, J.) 111

Indira Solianlal v. Custodian of Evacuee Property Delhi and Otliers A,.I.R.

A 1956 S.C. 77 : East Asiatic Co. (India) Ltd. v. The State Qf Ml!dra, 7 S.T.C. 299, State of Kerala v. K. M. Cheria Abdulla & Co. [1965] 16 S.T.C. 875, Saastik Oil Mil~ Ltd. v. H. B. Munshi Deputy Cornniissioner of Sc•!es Tax, Bombay [i968] 2 S.C.R. 492, State of Madras v. The A1adura K11itti12g Co. Ltd.

(1959) JO S.T.C. 155, referred to.

Deputy Co1nmissioner of Agricultural I1u:pnzetax and Sales Tax, Qui/011 and Anr. v. Dhanalakshmi Vilas Cashew Co. (1969) 24 S.T.C. 491, The State B of Kera/Av. M. Appukutty (1963) 14 S.T.C. 242 and Commi."ioncr of lncomctax, Bombay v. Shapoorji Pallonji Mistry (1962) 44 I.T.R. 891, distinguished.

(2) On a combined reading of s. 20(3) and rule 80A of the Rules it is immaterial whether the Commissioner proceeds to make the enquiry before or after tire filing of a revision petition so Jonras he affords to tho pefiOn li.kel Y to bei advenely affected by his actio'n an opportunity of beingi heani. [l 19 H]

Jn the instant case, the Commercial Tax Officer called upon to make an enquiry, gave adequate opportunity to the appellant to explain the di.sa'epancies and the suspicious circumstances, relating to the alle&ed. iuppressi.on of the turnover and the Additional Commissioner gave notice to the former and furnished him with a full copy of the report. It cannot be said that the Com mercial Tax Officer and Additional Commissioner committed any illegality or breach of any statutory provision or rule or transgressed the limiti of their jurisdiction. [120 A-CJ

CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 669 and 670 of 1971.

Appeal by Special Leave from the Judgment and Order dated the I Ith June, 1970 of the Calcutta High Court in Sales Tax Reference No. 395 of 1969.

S. T. Desai, H. S. Parihar and I. N. Shroff, for the Appellant.

E !

L. N. Sinha, Solicitor General, Sukumar Basu and G. S. Chatterjee, for Respondent in C.A. 669 /71.

Leila Seth, Sukumar Basu, G. S. Chatterjee, for Respondent in

C.A. 670/71.

The Judgment of the Court was delivered by F

JASWANT SINGH, J.-These two appeals Nos. 669 and 670 o~ 1971 by special leave from the common judgment dated June I I, 1970, of the High Court at Calcutta in Sales Tax References Nos. 395 of 1965 and 521 of 1967 which raise important questions as to the scope and extent of the revisioual power of the Commissioner, Commercial G Taxes, lb1dec section 20(3) of 'the Bengal Finance (Sales Tax) Act 1941 (Act VI of 1941) (hereinafter referred to as the Act'), and f shall te disposed of by this judgment.

The fact:; giving rise to these appeals are : The appellant which is a Private Limited Company, incorporated under the Indian Companies Act, 1913, and is registered as a dealer under the Act sub H milted a return for 4 quarters ending with the last date of Chaitra, 1364 B.S. (corresponding to the period commencing with April 1-4, 1957, and ending with April 13, 1958) showing a gross turnover of

sales of Rs. 35,93,402/-. By his order dated December 7, 1959, the Commercial Tax Oflicer, Rajakatra Charge, rejected the appellant's books of accounts on the ground of absence of purchase and sale vouchers and of stock statements and enhanced the gross turnover shown by the appellant by Rs. 50,000/- and charged the entire enhanced amount to tax subject to deduction under section 5(2) (b) of the Act.

He also imposed a penalty of Rs. 1,000/- under section 11(1) of the Act.

On appeal under section 20(1) of the Act, the Assistant Commissioner, Commercial Taxes, Burrabazar Circle, by his order dated. September 10, 1960, reduced the enhancement of gross turnover from Rs. 50,000/- to Rs. 25,000/- and the penalty from Rs. 1,000/- to Rs. 500/-. Not satisfied with this reduction, the appellant moved the Commissioner, Commercial Taxes, West Bengal, in revision under section 20(3) of the Act on November 10, 1960.

Before the filing of the said revision petition, the Commercial Tax Officer, Central Section, to whom power under section 14 (1) of the Act has been duly delegated started an enquiry on January 20, 1960 and served on the appellant a notice dated October 25, 1960 to the following effect :-

"You are hereby directed to furnish the undersigned with the serial Nos. of the cash memos printed by you in 1363 B.S., 1364 B.S., 1365 B.S., 1366 B.S. and 1367 B.S.

The names of the suppliers of these memos relevant bills Nos. and dates, amount, dates of payment and modes of payment also are to be indicated.

The information may be supplied to the undersigned on 31st October, 1960 at 4 p.m. positively."

In response to the notice, the appellant appeared before the Commercial Tax Officer, who after hearing the former and examining the cash memos and other material submitted a report of the investigation made by him to the Assistant Commisioner, Central Section, observing inter alia that two original cash memos issued by the appellant bearing serial No. 30727-26 dated January 24 for Rs. 69.50 in respect of sale of Banarsi Saree and No. 31310-37 dated December 25, 1966 for Rs. 62.20 in respect of sale of ready-made garments were not properly recorded in the appellant's books of accounts and records and that on reference to the appellant's books of accounts and cash memos, it had been found that cash memo No. 30727-26 was issued in respect of mill-made cloth for Rs. 11.75 on August 18, 1964 and not in respect of Banarsi saree for Rs. 69 .50 n January 24 and cash memo No. 31310-37 was issued in respect of sale of mill-made cloth for Rs. 9.37 and not in respect of sale of ready-made garments for Rs. 62.20 on December 25, 1966. He also observed in his report that in cash memo No. 31310-37, the date appeared to have been tampered with by subsequent insertion of the numerals "66" after the date of issue and that the actual date appeared to be December 25 and that the appellant had not been able to furnish a satisfactory explanation with regard to these discrepancies.

The Commercial Tax Officer further stated in his report that his investig:ition revealed that the appellant got duplicate sets of 1,00,000

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RAM KANAI v. BOARD OF REVENUE (laswant Singh, J,) 113

cash memos bearing serial Nos, 2850 to 29500 and 30501 to 31500 printed and supplied by M/s Blackwoods India Limited and did not record sales to the extent of Rs. 30,00,000/- which in the absence of any evidence to the contrary appeared to be entirely taxable, This report was received by the Additional Commissioner, Commercial Taxes, while the aforesaid revision petition was still pending before him, He, thereupon gave the following notice to the appellant :-

"On discovery of fresh materials, as reported by the Commercial Tax Officer, Central Section, in his report dated 27-12-60 (copy enclosed), it appears that you have suppressed sales "estimated to be Rs. 30,00,000 in respect of the assessment of four quarters ending Chaitra 1364 B.S,

The above revision petition which has been filed before me is against the appellate order in respect of the assessment for the said period . . . . . . . . It also appears that sales to the extent of Rs. 30,00,000 (estimated) escaped taxation from the original assessment and consequently from the Assistant Commissioner's appellate order.

The above , revision petition wiUbe heard by me on 5-10-61 at 11.30 a.m. and the report dated 27-12-60, submitted by the Commercial Tax Officer, Central Section, will be considered at the time of hearing of the revision petition.

You should, .therefore, appear before me on that date at the hour fixed either in person or by a duly instructed agent to represent your case, failing which the matter will be decided ex-parte without any further reference to you."

In reply to the notice, the appellant wrote back denying that it had any transaction with M/s Blackwoods India Ltd. in relation to the printing of the duplicate sets of the cash memos in question and stating inter alia that on the matter being referred to the later, they could not say from whom actually, the order in question was received nor could they give any relevant particulars. It was further added by the appellant that the proposed enhancement of gross and taxable sales by Rs. 30,00,000/- was unjustified and unwarranted.

The Additional Commissioner disposed of the revision petition by enhancing the assessment by Rs. 20,00,000/- a~ against the admitted gross turnover of Rs. 35,93,402/- and cha.rged the entire enhanced amount of Rs. 20,00,000/- to tax subject to deduction under section 5 (2)(b) of the Act. ·

The appellant thereupon took the matter in further . rev1S1on to the Board of Rvenue, West Bengal contending that the conclusions arrived at by the Additional Commissioner, Commercial Taxes were wholly unwarranted and that while exercising his power of revision under section 20(3) of the Act, the Commissioner had to confine himself to the examination of the material before the Assessing Officer and could not take additional facts into consideration.

The Board negatived both the contentions and rejected the revision application.

Thereupon the appellant made an application to the Board under section 21 (1) of the Act requesting that the points of law arising

I0-833SCI/76

from its decision be referred for decision to the High Court. Although at the hearing of the application, the appellant stressed that reference be made on three points, the Board allowed the application in part and re(e1red only the following question of law for decision to the High Court :-

''Whether on the facts and circumstances of the case, in exercise of his powers under section 20(3) of the Bengal Finance (Sales Tax) Act, 1941, the Additional Commissioner was competent to reassess the gross turnover of the petitioner by taking into consideration additional material which had not been made available to the assessing officer"

The appellant did not rest content with this limited reference and C made an application under sub-sections 2(b) and (3) of section 21 of the Act to the High Court which directed the Board to submit for its decision the following further question of law :-

"Whether on the facts admitted or found by the Tribunals below, the Additional Commissioner of Commercial Taxes was vested with the authority or jurisdiction, under sub-section (3) of section 20 of the Bengal Finance (Sales Tax) Act, 1941, read with rule SOA of the Rules framed thereunder to admit or rely on the purported report, dated December 27, 1960, of the Commercial Tax Officer of the Central Section, pursuant to the enquiry, under sub-section

(1) of section 14 of the said Act, initiated long before the filing of the revision petition in question by the petitioner before the Commissioner of Commercial Taxes, West Bengal?"

, .

The Board thereupon referred the above quoted second question l of Jaw as well to the High Court for its decision.

After hearing the appellant and the Revenue, the High Court by its common judgment dated Jnnell, 1970 answered both the aforesaid questions in the affirmative.

Aggrieved by this judgment of the High Court, the appellant applied for and obtained special leave to appeal to this Court.

Appearing for the appellant, Mr. Desai has strenuously urged that the revisional power of the Additional Commissioner under section 20(3) of the Act was a limited one and he was not competent to act as an original assessing authority and reassess the gross turnover by taking into consideration the additional material comprising fresh sources of revenue which was not available to the Assessing Officer.

He has further urged that the Additional Commissioner, could not admit or rely on the report dated December 27, 1960, of the Commercial Tax Officer, Central Section, based on the enquiry under section 14 (1) of the Act which was initiated long before the filing of the revision application before the Commissioner, Commercial Taxes, West Bengal.

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RAM KANAI v. BOARD OF REVENUE (laswant Singh,!.) 115

Though both these contentions are inextricably linked up, we -shall deal with them separately.

Turning to the first contention, we wish to make it clear that the scope and ambit of the revisional jurisdiction varies from statute to statute and it is difficult to make general observations in regard thereto.

For ascertaining the true scope, .content and am.bit of the revisional jurisdiction of the Commissioner or the Additional Commissioner, as the case may be, of Commercial Taxes, under the Act, it is necessary to notice section 20 thereof which in so far as is material for the purpose of these appeals stood thus at the relevant time :-

"20(3). Subject to such rules as may be prescribed and for reasons to be recorded in writing, the Commissioner upon application or of his own motion may revise any assessment made or order passed under this Act or the rules thereunder by a person appointed under section 3 to assist him, and subject as aforesaid, the Board of Revenue may, in like manner, revise any order passed by the Commissioner : Provided that before rejecting any application for the revision of any such order the Commissioner or the Board of Revenue, as the case may be, shall consider it and shall record reasons for such rejection. : Provided further that no application for revision shall lie to the Commissioner in respect of any assessment if an appeal lies under sub-section (1) to the Commissioner in respect of such assessment. ..... .

(5) Before any order is passed under this section which is likely to affect any person adversely, such person shall be given reasonable opportunity of being heard." The section as extracted above is very widely worded.

The word 'revise' occurring therein (which in dictionary is described as meaning to 're-examine, to review, to correct, or to amend the fault') is not hedged or qualified by any condition or limitation.

The controlling expressions like 'for the purpose of satisfying himself as to the legality or propriety of the order passed' or 'regularity of the proceeding' which are susceptible of being construed as restricting the revisional power to rectification of an illegality or impropriety of the order or of irregularity in the proceeding are also not to be found therein. There is also nothing in the Bengal Sales Tax Rules, 1941 (hereinafter called 'the Rules') to circumscribe or limit the power.

It is not, therefore, unreasonable to infer that the amplitude of the power conferred on the Commissioner or the Additional Commissioner is more extensive than the power exercisable by the High Court under section 115 of the Code of Civil Procedure.

In fact, it can be easily equated with the power exercisable by the appellate authority in an appeal under sub-section (2) of section 20 of the Act.

We are fortified in this view by the following observations made by this Court in Indira Sohan/al v. Custodian of Evacuee Property Delhi and Others(').

(1) <\..I. R. 1956 S. C. 77.

"Section 27 is very wide in its terms and it cannot be construed as being subject to any limitation such as filing of an appeal.

Nor can the scope of revisional powers be confined only to matters of jurisdictfon or illegality, because under s. 27 the Custodian General, can exercise revisional powers for the purpose of satisfying himself as to "the legality or propriety" of any order of the Custodian." ·

The following observations made by Ramaswami, J, in Asiatic Co. (India) Ltd. v. The Staid of Madras(') are also vant :-

East

"The purposes of this Act are two fold, viz., the levy of a generaltax on the sale of goods to supplement the lost revenues and for promoting the general public good; and secondly, to see that this is done under the provisions of the Act and not by carrying out in a capricious or arbitrary manner. Therefore, a revisional authority has to be created.

What is revision? The essence of revisional jurisdiction lies in the duty of the superior tribunal or officer entrusted with such jurisdiction to see that the subordinate tribunals or officers keep themselves within the bounds prescribed by law and that they do what their duty requires them to do and that they do it in a legal manner.

This jurisdiction being one of superintendence and correction in appropriate cases, it is exercisable even suo motu as is clear from the numerous statutory provisions relating to revision found in various Acts and Regulations such as the Civil Procedure

Code, Criminal Procedure Code, Income Tax Act, etc.

The jurisdiction of suo motu revision is not cribbed and cabined or confined by conditions and qualifications.

The purpose of such an amplitude being given suo motu revisions appears to be as much to safeguard the interests of the exchequer as in the interests of the assessce.

The State can never be the appellant and if there is an order against the State to its prejudice, and naturally the assessee in whose favour the order is passed does not prefer an appeal, the State would suffer unless its interests are safeguarded by the exercise of such supervisory jurisdiction as the one given to the authorities above-mentioned."

re le--

Thus the Commissioner or the Additional Commissioner can, in exe; cise of his revisional power, re-assess the turnover and while doing so rope in escaped items of turnover and thereby enhance the gross turnover.

Having found that the power of revision exercisable by the Commissioner, Commercial Taxes is not tramelled by any limitation, let us now sec whether the Commissioner while exercising the revisional power is confined to the order of assessment and the record of pro- --------

(!) 7. S T. C. 299.

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RAM KANAI v. !!OARD OF REVENUE (laswant Singh, l.) 11 7

.ceedings of the Assessing Officer or can he travel outside the same and A ll'e-assess the gross turnover by taking additional material under con- --. , sideration. The following observations made in the majority judgment of this Court in the State of Kerala v. K. M. Cheria Abdulla &; Co.(') are helpful in deciding this matter :-

"The words of section 12 ( 2) of the Madras General Sales Tax Act, 1939, that the Deputy Commissioner 'may pass such order with respect thereto as he tl, links fit' means such order as may in the circumstances of the case for rectifying the defect be regarded by him as just. Power to pass such order as the revising authority thinks fit may in some cases include power to make or direct such further enquiry as the Deputy Commissioner may find necessary for rectifying the illegality or impropriety of the order, or irregularity in the proceeding. It is therefore not right baldly to propound that in passing an order in the exercise of his revisional jurisdiction, the Deputy Commissioner must in all cases be restricted to the record maintained by the officer subordinate to him, and can never make enquiry outside that record.

Therefore, conferment of power under rule 14-A of the Madras General Sales Tax Rules, 1939, to make further enquiry in cases where after being satisfied about the illegality or impropriety of the order or irregularity in the proceeding, the revising authority thinks it just for rectifying the defect to do so does not amount to enlarging the jurisdiction conferred by section 12(2) ."

It will also be apposite in this connection to refer to the following observations made by the Madras High Court in State of Madras v, The Madura Knitting Co. Ltd.( 2)

"The powers given to the revising authority under section 12 ( 2) were not confined to errors patent on the face of the record but would extend to probing further into the records like calling for despatch registers and other evidence.''

It will also be useful in this connection to refer to the decision of this Court in Swastik Oil Mills Ltd. v. H. B. Munshi, Deputy Commissioner of Sales Tax, Bombay(') where this Court did not accept the principle laid down by the Andhra Pradesh High Court in State G of Andhra Pradesh v. T. G. Lakshmaiah Setty & Sons('), that the Deputy Commissioner of Sales Tax while exercising revisional powers under the Sales Tax Act of 1946 or of 1953 or of 1959 could not trav_el beyond the material or record that is availahk to the assessmg

authority and was not entitled to find data to institute an enquiry i; o as to include additional material in order to judge the correctness of 1he order sought to be revised and held : H

(1) (1965) 16 S. T. C. 875.

(2) (1959) to S. T. C. 155.

(3) [1968] 2 S. C.R. 492.

(4) 12 S. T. C. 663.

"Whenever a power is conferred on an authority to revise an order, the authority is entitled to examine the correctness, legality and propriety of the order and to pas such suitabl.e orders as the authority may think fit in the circumstances of the particular case before it.

When exercising such powers, there is no reason why the authority should not be entitlecl to hold an enquiry or direct an enqmry to be held and, for that purpose, admit additional material.

The proceedings for revision, if started suo motu, must not of course be based on a mere conjecture and there should be some ground for invoking the revisional powers.

Once these powers are invoked, the actual interference must be based on sufficient grounds, and, if it is considered necessary that some additional enquiry should be made to arrive at a proper and just decision, there can be no bar to the revising authority holding a further enquiry or directing such an enquiry to be held by some other appropriate authority.

This principle has been clearly recognised by this Court in the State of Kera/a v.

Abdulla and Company (1965) 16 S.T.C. 875."

The decisions of this Court in Deputy Commissioner of Agncul-· tural Income-tax and Sales Tax, Quilon and Anr. v.

Dhanalabhmf Vilas Cashew Co.(') the State of Kerala v. M. Appukutty(') and Commissioner of Income-tax, Bombay v. Shapoorji Pallonii Mistry(') relied upon by Mr. Desai in support of his contention that while exercising his revisional power under section 20(3) of the Act, the Commissioner cannot travel ontside the return made by the assessee and the assessment order passed by the Sales Tax Officer with a view to finding out suppressed or escaped items of turnover and enhance the

assessment are distinguishable as in all those cases. there were specific and separate provisions which enabled escaped turnover or incorr.e being brought to tax after following a special procedure. In Dhanclakshmi Vilas Cashew Co's case (supra), there was rule 33 of Kerala General Sales Tax Rules, 1950, in M. Appukutty's case (supra), there was rule 17 of the Madras General Sales Tax Rules, 1939; and' in Shapoorii Pallonji Mistry's case (supra) there were sections 3~ and' 33B of the Income Tax Act, 1922 which enabled escaped turnover or escaped income to be brought to tax. In the Act before us, however, there are no separate or specific provisions for assessment of escaped turnover which may, by implication, be said to exclude from the ambit of the revisional jurisdiction of the Commissioner the taking of additional facts into consideration and enhancing the gross turnover.

In view of the foregoing discussion. we have no hesitation in repelling the first contention raised on behalf of the appellant by Mr. Desai' and in holding that the High Court was right in answering the first question referred to it by the Board of Revenue in the affirmative.

This takes us to the second contention advanced on behalf 'of the appellant which is covered by the second question referred by the

(I) (1969)24S.T.C.491.

(2) (1963) 14S.T.C.242.

(3) (1962) 441.T.R. 891.

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RAM KANAI v. BOARD OF REVENUE (Jaswant Singh, J.) 119

Board of Revenue at the requisition of the High Court.

For effcc A tively dealing with this contention, it is necessary to advert to the following two provisions viz. section 14 of the Act and rule 80A of the Rules :

"14. (1) The Commissioner may, subject to such conditions as may be prescribed, require any dealer-

(a) to produce before him any accounts, regiskrs or documents,

(b) to furnish any information, relating to stock of goods of, or purchases, sales or deliveries of goods by, the dealer or relating to any other matter, as may be deemed necessary" for the purposes of this Act.

(2) (a) All accounts, registers and documents relating to the stocks of goods of, or purchases, sales and deliveries of goods by any dealer; and

(b) all goods kept in any place of business of any dealer shall at all reasonable times be open to inspection by the Commissioner.

(3) If the Commissioner has reason to suspect that any dealer is attempting to evade payment of any tax under this Act, he may, for reasons to be recorded in writing, seize such accounts, registers or documents, of the dealer as may be necessary, and shall grant a receipt for t~ same, and shall retain the same only for so long as may be necessary for examination thereof or for a prosecution. . ..... "

"Rule 80A. The appellate or revisional authority may, before finally disposing of the matter, make such inquiry or cause such inquiry to be made by such officer as it may think fit."

A combined reading of the provisions of Section 20(3) of the Act aHiil rule 80A of the Rules would show that the Commissioner, Commerci::l Taxes is empowered to make or cause to be made such enquiry as he may think fit for proper exercise ol the revisional jurisdiction

cotferred on him under section 20(3) of the Act. It would be further noticed that the Commissioner can, under section 14 of the Act, call upon any dealer to produce any accounts, registers or documents or

to furnish any information relating to his business as may be deemed necessary for !he purpose of the Act whid1 include the exercise of revlsional jurisdiction. It would also be noticed that the powers under section 14 of the Act have been duly delegated to the Commercial Tax Officer. In this state of affairs, it is immaterial whether the Commissioner proceeds to make the enquiry before or after filing of a revi; ion petition so long as he affords to the person likely to be adversely affected by his action, an opportun\ty of being heard. In the instant case, the whole thing was duly processed.

As already stated, the Commercial Tax Officer, Central Setion, by his notice dated

120 SUPl\EME COURT REPORTS

(1976] SUPPLEMENTARY

October 25, 1960 gave adequate opportunity to the appellant to explain the discrepancies in its cash memos and books of accounts.

Another opportunity to explain the suspicious circumstances relatlng

to the alleged suppression of the turnover as also to refute the material collected by the Commercial Tax Officer, Central Section, as a result of the investigation made by him and to show cause why action to subject the escaped turnover to tax be not taken was afforded to the appellant by the Additional Commissioner, Commercial Taxes, when on receipl of the aforesaid report dated December 27, 1960 of the Commercial Tax Officer, Central Section, he gave a notice to the former and furnished him with a full copy of the report. It cannot, therefore, be maintained with any show of force that, in admitting and relying on the aforesaid report dated December 27, 1960 of the Commercial Tax Officer, Central Section, the Additional Commissioner, Comrnerciai Taxes committed any illegality or breach of any statutvry provision or rule or transgressed the limits of his jurisdiction.

IL will also not be out of place to mention that the contention which is the subject matter of the second question was never raised before the Board of Revenue as appears from the statement of the case drawn by it.

We are, therefore, clearly of the view that the High Court was right in answering the second question also in the aflirmalive.

In the result, the appeals fail and are hereby dismissed but in the circumstances of the case without any order as to costs.

P.B.R. '.

Appeals dismissed.

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MEMBER BOARD OF REVENUE, WEST BENGAL

A. C. GUPTA

JASWANT SINGH, JJ

S. 20(3)

Section 20(3)

s. 3

s. 20(1)

s. 20(3)

s. 20

s. 20(3)

s. 14(1)

s. 115

the Code of Civil Procedure

s. 2

s. 20

s. 20(3)

section 20(3)

Indian Companies Act, 1913

section 5(2)

section 11(1)

section 20(1)

section 20(3)

section 14

section 5

section 20(3)

section 21

section 20(3)

sections 2(b)

section 21

section 20

section 14

section 20(3)

section 14

section 20

section 3

section 115

the Code of Civil Procedure

section 20

Section 27

s. 27

Criminal Procedure Code

Income Tax Act

section 12

Madras General Sales Tax Act, 1939

Madras General Sales Tax Rules, 1939

section 12(2)

section 12

[1968] 2 S. C.R. 492

section 20(3)

Kerala General Sales Tax Rules, 1950

Madras General Sales Tax Rules, 1939

sections 3

Income Tax Act, 1922

section 14

Section 20(3)

section 20(3)

section 14

section 14


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R. DAY ANANDA SAGAR ETC.

VATAL NAGARAJ ETC.

April 23. 1976

(H. R. KHANNA, M. H. BEG AND V. R. KRISHNA !YER, JJ.]

Review of judgn1t11t of Supreme Court should not be a routine sequel to a <defeat in Court-Cons1i1ution of India, Art. 137 and Order XL of the Supreme

Court Rules, 1966 rtad with Order XLVfl, Rule 1 of tlie Civil Procedure Code.

The petitioner filed a review petition on the ground that certain observa- 1ions in the judgment amounted to almost branding him as an unindicted crimi- C nal-2uilty of abetting forgery and perjury and they should be obliterated.

Dismissing the petitions and modifying the rigour of the observations, the Court, held :

(1) A ill!l!onent of the final Court of the.land is final.

A review of such a judgment is 8.n exceptional phenomenon, permitted only when n grave and ¥1aring error or other well-established ground is made out. Unfounded and indiscriminate petitions almost as a routine sequel to defeat in court should be D avoided dolpite the theoretical possibility of succeS>.

[121 F.GJ

Obiter : Wisdom cannot be confounded with obstinacy and a charitable -.construction _of a situation cannot be excluded.

(122 E]

CrviL APPELLATE JURISDICTION : Review Petition Nos. 43 and 44 ()f 1975.

Application for review of this Hon'ble Court's Judgment dated 11th October 1974 in the matter of CM! Appeal No. 1738 of 1973.

A. K. Sen, M. Veerappa and Altai Ahmed for the Petitioners in Review Petition No. 43 of 1975.

V. S. Desai and R. B. Datar for the Petitioners in Review Petition

No. 44 of 1975.

The Order of the Court was delivered by

KRISHNA !YER, J. A judgment of the final Court of the land is final.

A review of such a judgment is an exceptional phenomenon, permitted only where a grave and glaring error or other welt-established ground is made out.

Unfortunately, the theoretical possibility, successful in G a microscopic rarity of cases, has led to frequent, unfounded and indiscriminate petitions, almost as a routine sequel to a defeat in Court.

The present review petitions fall under the latter category and fail by the fonner test and are therefore dismissed.

Shri Asoke Sen made a limited submission on behalf of Dayananda Sagar in CMP 2095 of 1975 that certain observations in the judgment H almost branding his client as an unindicted criminal-guilty of abetting forgery land purjury-were altogether unmerited and should be obliterated.

While we cannot agree to this course, we admit that these

SUPREME COURT REPORTS

[1976] SUPPLEMENTARY

strictures are in no way integral to the decision, although relevant if we take an overall view.

It is true that the words used are strong and we felt then tJ1at they were warranted.

After hearing both sides we deem it meet to soften the judicial blow.

Shri Sen submits that we were misled in reaching the inference drawn.

Maybe, we were.

Judge Learned Hand once said that the spirit of liberty is 'the spirit which is not too sure that it is right'.

That great Judge was 'fond of recalling Cromwell's statement : 'I beseech ye in the bowels of Christ, think that ye may be mistaken'.' He told a Senate Committee, 'I should like to have that written over the portals of every church, every school and every court-house, and may I say, of every legislative body in the United States. I sbould like to have every court begin. 'I beseech ye in the bowels of Christ, think that we may be mistaken'. (Yale Law Journal: Vol. 71, 1961 November part).

In a sense, it is this likelihood of error that persuaded Jesus Christ to caution : 'Judge not, that ye be not judged'.

Our search for truth sometimes reaches a blind aBey expressed by Bacon : " 'what is truth?' said Jesting Pilato : and would not stay for an answer'."

In this conspectus of great sayings, we are inclined to be humble. in spirit and free to tone down the harshness of the characterisation to some extent.

We would content ourselves by saying that the materials placed before us in appeal, read in the light of the conclusions of the High Court, may well lead to the inference and justify the observations made by us, although it may not be ruled out that a more innocent inference exculpating any role for the petitioner is possible .. Thus far, we modify the rigour, but decline to cancel, as pleaded by the petitioner.

Wisdom cannot be confounded with obstinacy and a charita-- ble construction of a situation cannot be excluded.

That is whv we. liave consented to the dilution. ·

S.R.

Petitions dismissed.

R. DAY ANANDA SAGAR ETC

VATAL NAGARAJ ETC

H. R. KHANNA

M. H. BEG

Art. 137

Order XL of the Supreme

Civil Procedure Code