t758

STATE OF WEST BENGAL ETC.

MANMAL BHUTORIA & ORS. ETC.

May 3, 1977

[P. K. GOSWAMI AND S. MURTAZA FAZAL ALI, JJ.]

Prevention of Corruption Act, 1941-S. 5(2)-Scope of a Retired Army Officer and an outsider prosecuted under s. 5 (2 )-ProsecuJion, if valid-If i.

Special Court under the West Bengal Criminal Law A1nendment (Special Courts) Act, 1949 could try the case.

In May 1967. a case was lodged against the respondent and a Major of the Indian Army who was retired in 1966, alleging that the Major, along with the respondent, had -committed offences of conspiracy of criminal misconduct by a public servant in dishonestly abusing his position as a public servant, under s. 5(2) of the Prevention of Corruption Act, 1947. When the case, which was allotted to the Fourth Additional Special Court under s. 4(2) of the West Bengal Criminal Law Amendment (Special Courts) Act, 1949, came up for hearing the respondent filed a writ petition challenging its jurisdiction to try

th~ case. The order of allotment to the Special Court was held illegal by the High Court on the ground that the Special Court had no jurisdiction to try a person who had ceased to be a public servant on the date the Court was required to take cognisance of the offence since it could not be said that in certain respects he was a public servant and in certain others he was not.

It \Vas contended on behalf of the respondent that (1) since the case invol-ved interpretation of Art. 14 of the Constitution it should be referred to a larger Bench in view of Art. 144(A) of the Constitution; (2) in view of the definition of public servant contained in s. 21 IPC, a public servant is one who is in office and not one who has ceased to be in office; (3) in view of s. 10 of the Bengal A.ct the Special Court had no jurisdiction to try the offence; and ( 4) the respondent, not being a public servant, is outside the provisions of the B'2ngal Act and the Prevention of Corruption Act.

Allowing the appeal.

HELD : (1) There is no substance in the contention that the appeal should be referred to a larger Bench. The plea of applicability of Art. 14 on the basis of the JUdgment in S. A. Venkataraman v. The State [1958] S.C.R. 1037 is wholly misconceived. r764 Gl

(a) In view of the decision in Venkataraman's case there is no warrant for including in one category public servants in office and public servants who have ceased to be so. These two classes of public servants are not similarly situated as has been clearly pointed out in C. R. Bansi v. State of Maharashtra [1971] 3 S.C.R. 236. (764 El

(b) It cannot be argued that the decision in Venkatararian'5 case is violative of Art. 14 of the Constitution. That decision only says that s. 6 of the Act is not applicable to a public servant if at the time of taking cognizance by the Court he ceases to be so.

Because a particular sectiQTI is not applicable to a public servant after he has ceased to be in office, the question of the Act being violative of Art. 14 will not arise..

This Court has clearly placed a public servant, who has ceased to be in office, in. a separate caegory al!d the clMsification has held the field all these years without demur. [764 F-G]

( c) The proviso to s. 4( 1) of the Bngal Act cannot attract Art. 14.

By this proviso the Special Court, when trying a schedule offence finds that some other offence has also been committed, and the trial of the same in one trial is permissible under the Cr.P.C., it may try such a charge. Under s. 4(1) of the Bengal Act a scheduled offence which includes an offence under s. 5 (2) of

the Prevention of Corruption Act as also conspiracy to commit that offence A shall be triable by Special Courts only.

No other court can try those offences.

[764 H, 765 B-C]

The State of West Bengal v. Anwar Ali Sarkar [1952] S.C.R. 284 held inapplicable.

(2) Section 21 JPC does not afford a true test in determining the present controversy. The crucial date for the purpose of attracting the provisions of the Act as well as those of the Bengal Act is whether the offence had been committed by a public servant within the definition of s. 21 !PC. The date for determining the offence is the date of the commission of the offence when the person arraigned must be a public servant. Section 6 makes a clear dis tinction between cognizance of an offence and alleged commission of an offence. The date of sanction is necess; nily subsequent to the date of commis sion of the offence and some times far remote from that date. Retirement, resignation, dismissal or removal of a public servant would not wipe out the offence \1.'hich he had committed while in service.

Under s. 6 ( 1), as in the case of s. 190(1) Cr.P.C., the Court takes cognizance of an offence and not an offender. [765 E-GJ

\3) Section 10 of the Bengal Act which provides that the provisions of the Prevention of Corruption Act shall apply to trials under the Bengal Act are clearly attracted.

Section 6 is interpreted by this Court not to apply to a public servant who has ceased to be in office. That would not affect the interpretation of s. 10 of the Bengal Act. [766 A-Bl

( 4) There is no merit in the sublnission that the special Court cannot try the offence under s. 5(2) of the Act read withs. 120B IPC against the respon dent.

Even under the Prevention of Corruption Act, an outsider can be prose cuted under s. 5(3) of the Act when a person habitually commits an offence punishable under s. 165A, IPC. Section 165A which provides that "whoever, abets an offence punishable under s. 161 ors. 165, whether or not that offence

is committed in consequence of the abetment, shall punished .... " is clearly E

pplicabie to an outsider who may abet a public servant. Item 8 of the Schedule to the Bengal Act mentions any conspiracy to commit or any attempt to commit or any abetment of any of the offences specified in items 1, 2. 3 and

7. It is clear that under item 8 of the Schedule an outsider can be tried along wiih a pubhc srvant if the former abets or commits an offence of conspiracy 10 commit an offence under s. 5 of the Prevention of Corn1ption Act which is mentioned in item 7 to the Schedule. [766 C-E]

CIVIL APPELLATE Ju1USDICTION: Civil Appeal No. 1134 of 1973.

(From the judgment and Order dated 14-7-1972 of the Calcutta High Court in Appeal from Original Order No. 253 of 1969).

CRIMINAL APPELLATE JURISDICTION.: Criminal Appeal No. 319 of 1974. (Appeal by special leave petition from the .iudgment and order G dated 4-10-1973 of the Delhi High Court in Criminal Revision No. 264 of 1973).

CRIMINAL APPEAL No. 358 of 1976. (Appeal by Special Leave from the Judgment and Order dated 30-7-1976 of the Special Judge Delhi in criminal C.C. No. 16 of 1975).

H V. P. Raman, D. N. Mukherjee and G. S. Chatterjee, for the appellant in C.A. No. 1134173.

A Niren De and N. C. Talukdar, B. M, Bagaria, Dilip Sinha and D. P. Mukherjee, for respondent No. l, in CA 1134/73.

R. N. Sachthey, for the respondent No. 3 in CA No. 1134/73.

Praveen Kumar, for the appellant in Cr!. A. No. 319 /7 4.

B R. N. Sachthey, for respondent No. 1 in Crl. A No. 319174.

R. H. Dhebar and B. V. Desai for the appellant in Cr!. A. No. 358 of 1976.

V. P. Raman and R. N. Sacl; they, for the respondents in Cr!. A.

No. 385/76.

C The Judgment of the Court was delivered by

GOSWAMI, J.

In these appeals a common question of law arises for osideration., We will therefore refer to the. facts as appearing m C!Vll Appeal No. 1134 of 1973 to decide the issue and our decision will govern these appeals.

We are informed that the sole appellant in Criminal Appeal No. 319 of 1974 died. The said appeal, therefore, abates and is dismissed.

Civil Appeal No. 1134 of 1973 is directed against the judgment o± the Division Bench of the Calcutta High Court whereby the earlier judgment of the single Judge was reversed. The facts so far as material may be briefly stated :

E On or about May 27, 1967, a case was lodged by the Deputy Superintendent of Police, Central Bureau of Investigation, Sub-Division, Calcuta, against R. C. Bhattacharjee who was an ex-Major of the Indian Army and Manmal Bhutoria (hereinafter, the respondent) who was a businessman. It was alleged that R. C. Bhattacharjee in collusion and conspiracy with the respondent had accepted certain tenders from a fictitious nominee of the said respondent for supply F of certain stores to the military authorities at a price exceeding the price quoted by the other tenderers and thereby caused substantial loss to the Military Authority and to the Government of India.

It was further alleged that the said Bhattacharjee along with the respondent had committed offence of conspiracy of criminal misconduct by a public servant in dishonestly abusing his position as a public servant for obtaining undue pecuniary advantage which amounted to an offence G under section 5(2) of the Prevention of Corruption Act, 1947.

Accused Bhattacharjee was invalidated from the Military service with effect from February 14, 1966, as permanently unfit for any form of military service.

 A case under the Prevention of Corruption Act, 194 7 (hereinafter, briefly the Act) can be tried only by a special court constituted under the provisions of the West Bengal Criminal Law Amendment (Special Courts) Act, 1949 (West Bengal Act XXI of 1949) (briefly the Bengal Act). By a notification in the Calcutta Gazette dated June 15, 1967, the State Government allotted the said case to the Fourth

Additional Special Conrt in Calcutta under sub-section (2) of Section 4 of the Bengal Act. When the Special Court fixed the case for trial on 23rd, 24th and 25th November, 1967, the respondent moved the High Court of Calcutta under Article 226 of the Constitution on November 7, 1967, inter alia, contending that-

(!) at the point of time when the case was distributed to the Special Court the co-accused, ex-Major Bhattacharjee, had ceased to be a public servant and as such the Bengal Act had no applica\ion and the said Court had no jnrisdiction to entertain the case;

(2) a public officer having ceased to be such an officer at the date of allotment of the case the order of allotment by the State Government was without jurisdiction and void; C and

(3) the Special Court had no jurisdiction to try cases in which two private persons were involved and the allotment of the case to the Special Court was thus illegal.

A point regarding absence of sanction was also taken up but was D not pressed before us in view of the decision of this Court in S. A.

Venkataraman v. The State(').

The single Judge of the High Court dismissed the writ application but the Division Bench by two concurring judgments set aside the said judgment and order of the single Judge. That is how this matter has come before us on certificate under Article 133(1) (c) of the Constitu- E ti on.

P. B. Mukherjee, J. held-

" ...... the only solution is to hold that these two acts, namely, the Special Courts Act and the Prevention of Corruption Act do not apply-to a pnblic servant who had ceased to be a public servant on the date the co)lrt takes cognizance.

F This solution seems all the more proper because it seems to steer clear of Article 14 of the Constitution "

The learped Judge further observed-

"Therefore a person who has ceased to be in office, that is, who has ceased to be a public servant, does not come within the ambit of the expression 'public servant' and consequently is not governed by the Prevention of Corruption Act and, as such, cannot commit an offence under section 5 (2) of the said Act".

The learned Judge again observed-

"lt will appear that though Major Bhattacharjee had ceased to be a public servant, the state Government by dis- H tributing the present case to the Special Court violated the

(l) [1958] S.C.R. 1037.

principle of equal protection clause by denying the advantages associated with the office of a public servant but imposing on him the disadvantages and/or disabilities associated with the office of a public servant.

Hence the Act is not discriminatory but the action, allotment and distribution of this case to the Special Court of the State Government is discriminatory.

Therefore it is to be struck down and the order of the distribution quaBhed''.

The learned Judge also observed-

" .... but a public servant who has ceased to be a public servant, can neither be prosecuted in respect of any scheduled offence nor of an offence under section 5 (2) of the c Prevention of Corruption Act and as such, the trial of such a person cannot be in accordance with the provisions of those two statutes".

* • • *

" so far as the appellant Manmal Bhutoria is concerned, he never being 'a public servant' is clearly not triable by the Special Court under the Prevention of Corruption Act and West Bengal Criminal Law Amendment (Special Courts) Act, 1949 and suffer all the handicaps of being presumed to be guilty".

B. C. Mitra, J. in his concurring judgment observed as follows :-

"On a careful consideration of the various clauses under s. 21 of the Penal Code, I have no doubt that a person who was previously a public servant, but who has ceased to be such, do not come within the ambit of that section.

• • * * Both s. 5 (1) and s. 5 (2) deal with public servants only.

There is no provision in this Act whereby a person who was previously a public servant, but has ceased to be a public servant at the relevant time, can be charged with an offence under s. 5(1) (d) or s. 5(2) of the Prevention Act''.

Before we proceed further we may immediately set out what this Court has held in Venkataraman's case (supra) since what was held therein has largely influenced the decision of the Division Bench. At page 1044 of the report in that decision this Court observed as follows:-

"'These provisions of the Act (namely Act 2 of 1947) indicate that it was the intention of the legislature to treat more severely than hitherto corruption on the part of a public servant and not to condone it in any manner whatsoever. If s. 6 had not found a place in the Act it is clear that cognizance of an offence under s. 161, 164 ors. 165 of the Indian Penal Code or under s. 5 (2) of the Act committed by a

public servant could be taken by a court even if he had ceased to be a public servant. The mere fact that he had ceased to be a public servant after the commission. of the offence would not absolve him from his crime.

Section 6 certainly does prohibit the taking of cognizance of his offence, without a previous sanction, while he is still a public servant but dos

that prohibition continue after he h_as ceased to be a pubhc servant"?

Again at page 1048/1049 this Court observed as follows :-

"In our opinion, in giving effect to the ordinary meaning of the words used in s. 6 of the Act, the conclusion is inevitable that at the time a court is asked to take cognizance not only the offence must have been committed by a public servant but the person accused is still a public servant removable from his office by a competent authority before the provisions of s. 6 can apply. In the present appeals, admitedly, the appellants had ceased to be public servants at the time the court took cognizance of the offences alleged to have been committed by them as public servants. Accordingly, the provisions of s. 6 of the Act did not apply and the prosecution against them was not vitiated by the lack of a previous sanction by a competent authority".

A, similar view was affirmed by the Court in C. R. Bansi v. State of Maharashtra.(') This Court held therein as follows :-

"The policy underlying s. 6, and similar sections, is that E there should not be unnecessary harassment of public servants.

But if a person ceased to be a public servant the question of harassment does not arise.

The fact that an appeal is pending does not make him a public servant. The appellant ceased to be a public servant when the order of dismissal was passed.

There is no force in the contention F of the learned connsel and the trial cannot be held to be bad for Jack of sanction nnder s. 6 of the Act".

Accepting the position that sanction under section 6 of the Act is not necessary if th~ public servant ceased to be a public servant on the date the court takes cognizance of the offence, the High Court arrived at the conclusion that there would be discrimination between one class of public servants and another similarly situated when those in G office will be protected from harassment on account of the requirement of sanction for prosecution whereas the public servants fter they ceased to be in office will be prosecuted and harassed in absence of the requirement of the sanction. It is in that view of the matter the High Court bas helcl that the Special Court has no jurisdiction to try a public servant who has ceased to be a public servant on the date the Court was required to take cognizance of the offence, since, accord- H ing to the High Court, "it cannot be said that in certain respects he

i~ a public servant for. the offences under the Prevention of Conupt1on Act and for certam other respects, he is not a public servant".

It is .in taking this view that P. B. Mukherjee, J. observed that "this

solution seems all the more proper because it seems to steer clear of

Aricle 14 of the Constitution".

The High Court, however, did not slnke down the Act or any provisions of the Act as unconstitutional.

It has only held the order of .allotment of the case to the Special Court as illegal as the case of a public servant who has ceased to be a pnblic servant cannot be allotted to the Special Court since, according to the High Court, to hold otherwise would be violative of Article 14 of the Constitution.

It is in the background of such a conclusion that Mr. Niren De, counsel for the respondent, submits that this appeal involves the determination of a question as to the constitutional validity, on the basis of Article 14 of the Constitution, of the provisions of the Bengal Acl, particularly the proviso to section 4 (1) of that Act.

He further sub- . mils that a person who ceased to be a public servant cannot be treated differently from a person who is a public servant in office for the purpose of the Bengal Act.

He, therefore, submits that in view of Article 144(A), as inserted by the 42nd Amendment, this appeal should be heard by a minimum number of seven Judges of this Court and we should therefore, refer the same to a larger Bench. This submission is supported by Mr. Dhebar who is appearing in an identical matter in Criminal Appeal No. 358 of 1976 and he has submitted an ppli

cation to urge additional grounds on the basis of Article 14 of the Constitution.

There is. some misconception both in the judgment of the High Court as well as in the submission made by counsel on this point.

In view of the decision in Venkataraman's case (supra) there is no warrant for including in one category public servants in office and

public servants who have ceased to be so.

These two classes of public servants are not similarly situated as has been clearly pointed out in Bansi's case (supra).

The plea of applicability of Article 14 on the basis of the judgment in Venkataraman's case (supra) is, therefore, wholly misconceived. It cannot be argued that the decision in V enkataraman's case (supra) is violative of Article 14 of the Constitution.

That decision only says that sction 6 of the Act is not applicable to a public servant if at the time of taking cognizance by the court he ceases to be so.

Because a particular section is not applicable to a public servant after he has ceased to be in office, the question of the Act being violative of Article 14 of the Constitution will not arise. This Court has clearly placed a public servant, who has ceased to be in office, in a separate category and that c)assification has held the fic!d all these years without demur.

There 1s, therefore, no substance Ill the contention that this appeal should be referred to a larger Bench.

Under section 4( 1) of the Bengal Act, the scheduled offences which include an offence under section 5 (2) of the Act as also conspiracy. to commit that offence shall be triable by Special Cou~ only.

No other court can, therefore, try these offences.

The prov1s1011s of the Bengal Act are clearly different from those of the West Bengal

Special CQllrts Act which were the subject matter in The State of West A Bengal v. Anwar Ali Sarkar(').

Proviso to section 4(1) of the Bengal Act is in the following terms :

"Provided that when trying any case, a Special Court may also try any offence other than an offence specified in the Schedule, with which the accused may under the Code of Criminal Procedure, 1898, be charged at the same trial".

By this proviso the Special Court, when trying a scheduled offence finds that some other offence has also been committed and the trial of the same in one trial is permissible under the Code of Criminal Procedure, may try such a charge. It is difficult to imagine how such

• a proviso can at all attract Article 14 of the Constitution.

On merits it is submitted by Mr. De that the respondent is a complete outsider and is not a public servant at all.

The Bengal Act is not applicable to him.

It is submitted that the Bengal Act provides for reference to the Special Court only offences mentioned in the Schedule to that Act and all the offences mentioned in the Schedule, according to him, are those which may be committed by a public servant.

He draws our attention to the definition of publio servant under section 21 of the Indian Penal Code which definition is applicable under section 2 of the Act. He sub mitts that the public servant in view Of the definition means a public servant in office and not one who has ceased to be in office.

It is true that section 21 IPC enumerates various classes of public servants who are or who happen to be in office.

That is, however, not the true test in determining the present controversy.

The crucial date fo; the' purpose of attracting the provisions of the Act as well as those of t!te Bengal Act is whether the offence has been committed by a public servant within the definition of section 21.

The date for determining the offence is the date of the commission of the offence when the person arraigned must be a public servant.. Section 6 of the Act provides that no court shall. take cognizance of an offence specified in that section alleged to have been committed by a public servant except with the previous sanction.

The section itself makes a clear distinction between cognizance of an offence ancL alleged commission of an offence.

Sanction refers to the date when after submission of a report or a complaint the court takes cognizance of the off=e-.

That date is necessarily subsequent to the date of commission of the offence and sometimes far remote from that date. Retirement, resignation, dismissal or removal of a public servant would not wipe out the offence which he had committed while in service. Under section 6(1) o~ the Act, as in the, case of section 190(1) Cr.P.C .. the court takes cognizance of an offence and not an offender (see Raghubans Dubey v. State of Bihar( 2).

The crucial date, therefore, for taking cognizance in this case is the date when the case. was recei; ed by the Special Court on being allotted by the State Government under section 4(2) of the Bengal Act.

(1) [1952] S.C.R. 284.

Mr. De submits that section 10 of the Bengal Act provides t11at the provisions of the Prevention of Corruption Act shall apply to trials under the Bengal Act.

He, therefore, submits that section 6 of the Act must apply and since this Court has held that that section does not apply and section 6 is also not applicable in the case of the respondent, being not a public servant, the Special Court has no jurisdiction to try the offence.

We are clearly of opinion that section I 0 of the Bengal Act will apply when the provisions of that section are dearly attracted.

Section 6 is interpreted by this Court not to apply to a public servant who has ceased to be in office.

That would not affect the interpretation of section 10 of the Bengal Act.

There is no merit in the submission that because of section 10 the Special Court cannot be said to have jurisdiction to try the offence in this case.

Mr. De further submits that since the respondent is not a public servant he is outside the provisions of the Bengal Act, as well as the Prevention of Corruption Act.

This argument is entirely misconceived.

Even under the Prevention of Corruption Act, an outsider can be prosecuted under section 5 (3) of the Act when a person habitually commits an offence punishable under section 165A of the Indian Penal Code. Section 165A provides that "whoever, abets any offence punishable under section 161 or section 165, whether or not that offence is committed in consequence of the abetment, shall be punished .... ".

This section is clearly applicable to an outsider who may abet a public servant.

Item 8 of the Schedule to the Bengal Act mentions any conspiracy to commit or any attempt to commit or any abetment of any of the offences specified in items I, 2, 3 and 7.

It is, therefore, clear that under item 8 of the Schedule an outsider can be tried along with a public servant if the former abets or commits an offence of conspiracy to commit an offence under section 5 of the Prevention of Corruption Act which is mentioned in item 7 to the Schedule.

There is, therefore, no merit in the submission that the Special Court cannot try the offence under section 5 (2) of the Act read with section 120B IPC against the respondent.

F All the submissions of counsel for the respondent fail.

The judgment and order of the Division Bench are set aside.

The appeal is allowed but there will be no order as to costs.

In Criminal Appeal No. 358 of 1976 the appellant was charged under section 5 (2) read with section 5 (I)( e) of the Prevention of Corruption Act.

At the time of commission of the offence he was G admittedly a public servant.

He, however, ceased to be a public servant on October 30, 1974, when the chargesheet against him was put , up before the Special Judge.

The offences are triable only by ; he f- Special Judge under the provisions of the Criminal Law Amendment Act 1952 (Act XI, VI of 1952). For the reasons given above in connection with Civil Appeal No. 1134 of 1973, the trial before the Special Judge cannot be questioned as illegal.

The appeal fails and H is dismissed.

P.B.R.

Appeal dismissed.

STATE OF WEST BENGAL ETC

MANMAL BHUTORIA & ORS. ETC

May 3, 1977

P. K. GOSWAMI

S. MURTAZA FAZAL ALI, JJ.

Prevention of Corruption Act, 1941

S. 5(2)

s. 5

s. 5(2)

Prevention of Corruption Act, 1947

s. 4(2)

Art. 14

Art. 144(A)

s. 21

IPC

s. 10

Art. 14

Venkataraman

[1971] 3 S.C.R. 236

Art. 14

s. 6

Art. 14

s. 4( 1)

Art. 14

Cr.P.C

s. 4(1)

s. 5

Prevention of Corruption Act

Section 21

s. 21

Section 6

s. 6

s. 190(1)

Cr.P.C

Section 10

Prevention of Corruption Act

Section 6

s. 10

s. 5(2)

IPC

s. 5(3)

s. 165A

IPC

Section 165A

s. 161

s. 5

Calcutta High Court

H V. P. Raman

D. N. Mukherjee

G. S. Chatterjee

A Niren De

N. C. Talukdar

B. M, Bagaria

Dilip Sinha

D. P. Mukherjee

R. N. Sachthey

Praveen Kumar

B R. N. Sachthey

R. H. Dhebar

B. V. Desai

V. P. Raman

R. N. Sacl

GOSWAMI

May 27, 1967

Calcuta

R. C. Bhattacharjee

Manmal Bhutoria

R. C. Bhattacharjee

Government of India

Bhattacharjee

section 5(2)

Prevention of Corruption Act, 1947

February 14, 1966

Prevention of Corruption Act

West Bengal Act

Calcutta

June 15, 1967

Section 4

23rd, 24th and 25th November, 1967

High Court of Calcutta

Article 226

November 7, 1967

Article 133(1)

P. B. Mukherjee

Prevention of Corruption Act

Article 14

Prevention of Corruption Act

section 5

section 5

Prevention of Corruption Act

Manmal Bhutoria

• •

" so far as the appellant Manmal Bhutoria is concerned, he never being 'a public servant' is clearly not triable by the Special Court under the Prevention of Corruption Act and West Bengal Criminal Law Amendment (Special Courts) Act, 1949 and suffer all the handicaps of being presumed to be guilty".

Prevention of Corruption Act

B. C. Mitra

s. 21

Penal Code

s. 5

s. 5

s. 5(1)

s. 5(2)

s. 6

s. 161, 164

Indian Penal Code

s. 5

Section 6

s. 6

s. 6

s. 6

s. 6

s. 6

section 6

Article 14

Niren De

Article 14

section 4

Article 144(A)

Dhebar

Article 14

Bansi

Article 14

V enkataraman

Article 14

Article 14

section 4( 1)

section 5

section 4(1)

Code of Criminal Procedure, 1898

Code of Criminal Procedure

Article 14

De

section 21

Indian Penal Code

section 2

section 21

IPC

section 21

Section 6

section 6(1)

section 190(1)

Cr.P.C

section 4(2)

section 10

Prevention of Corruption Act

section 6

section 6

Section 6

section 10

section 10

Prevention of Corruption Act

section 5

section 165A

Indian Penal Code

Section 165A

section 161

section 165

section 5

Prevention of Corruption Act

section 5

section 120B

IPC

section 5

section 5

Prevention of Corruption Act

October 30, 1974


1007t

MAGAN BIHARI LAL

STATE OF PUNJAB.

February 15, 1977

[P. N. BHAGWATI ,'\ND S. MURTAZA FAZAL ALI, JJ.]

Evidence-Value of opinion evidence-Conviction on the basis solely of opinion evidence of q handwriting expert without corroboration is unsafe- Evidence Act (Act No. 1 of 1872), s. 45-Probative value of circumstantial evidence.

A certain consignment of iron sheets despatched by Mis. Hindustan Steel Plant EXBNDM (Banda Bunda, near Bhilai) to Bikaner in wagon No. SEKG

C 4875 was carried to Ludhiana via. Agra because at some point of time before it reached Aara, the labels attached to the wagons were either changed or removed and the entry in the vehicle summary guidance was also tampered with and chaneed to EXLAR to LDH indicating that the wagon was despatched from Lalitpur and its destination was Ludhiana. One Umedi Lal, a resident of Agra, approached a firm called Mis. Jindal Khemka & Co. represented by its partners Joginder Lal and Ram Nath with a forged railway receipt Ex. PW 10 /A written on a blank form stolen from the Railway Receipt Book maintained at Ban more Railway Station and offered to sell to them the iron sheets covered by the afore-

D said consiillment sent by Mis. Hindustan Steel Co. Ltd. to Bikaner. Umedi Lal represented himself as the partner of M /s. Bansi Dhar & Sons., Laljtpur since the fori:ed RR (to self) bore the name of the consignor as Mis. Bansi Dhar & Sons, Lalitpur. After negotiations when one of the partners, Mr. Joginder Lal presented the RR and claimed the goods, a goods clerk on duty, by name Teja Singh Sodhi, entertained a doubt and returned the RR as defective. Thereafter, Umedi Lal accompanied by one Bhoja Ram, a washing soap dealer presented Ex. PW! OA himself and obtained the delivery of the goods from the very same

I!: goods clerk, Teja Singh, who entertained the suspicion abont the RR earlier.

Joginder Lal later on refused to purchase the iron sheets being a controlled item, in the absence of bill of purchase, but, however, took a receipt Ex. PW451 A from Umedi Lal to the effect that the latter has taken back the Iron sheets brought by him to their godown. The appellant, a guard working in the Nortnern Railway, was stated to have accompanied and been present on the day i.e., 6-8-1964 when Joginder Lal asked Umedi Lal to produce the original purchase bill. On . this basis coupled with the circumstances, namely, (a) his absence on leave from 1-8-1964 to 16-8-1964; (b) the tally of his handwriting given before the Police F during the investigation with that of Ex. PWlO /A as opined by the handwritten expert and (c) his identification by Ram Nath, one of the partners of M/s.

Jindal Khemka & Co. at the identification parade the appellant was put on trial for the offences under ss. 109/420, 411, 468, 471 but convicted for offences under ss. 468, 411, 1091420 I.P.C. and sentenced to 2 years R.I. with a fine of Rs. 1,0001or in default to undergo further R.I., for six months under s. 468 and to R.I. for one year each under s. 411 and 109/420 I.P.C.-the subsiantive sentences to run concurrently. The appeals before the Sessions Judge and the revision before the High Court were dismissed.

Allowing the appeal by special leave,· the Court,

HELD : ( 1) It is well settled that expert opinion must always be received with great caution and perhaps none so with more caution than the opinion of a handwriting expert. It is unsafe to base a conviction solely on expert's opinion without substantial corroboration.

In the instant case, it would be extremely hazardous to condemn the appellant merely on the strength of opinion evidence of a handwriting'. expert.

(IOI IC-DJ H, Ram Chtindra v. State AIR 1957 SC 361; lshw,.ri Prasad v. Md. Isa AIR 1963 SC 1728; Shashi Kumar v. Subodh Kumar AIR 1964

SC 529 and Fakhruddin v. State AIR 1967 SC 1326, reiterated.

~.,_.

SUPREAIE COURT REPORTS (1977] 2 s.c.ll..

A Curnev v. Langlande (1622) 5 B & Ald. 330; Morllar of Alfred Foster's Will 34 Mich. 21, quoted with approva1. .

(2) In the instant case, the circumstance that the appellant was on leave from 1st August 1964 to 16th August 1964 does not lead to the inferences that be had gone to Ludhiana in connection with the sale of iron sheets and that be was present in Ludhiana on 6th August 1964. The identification by Ram Nath after. some hesitation,· the improbability of identifying after 2! years aperson who is supposed to have merely accompanied another only once-and the inability of I oginder Lal to identifY him-all these are circumstances, \vhich militate the prosecution theory of the appellant's presence. No conviction can therefore, be founded on such evidence. [10t2D-A, 1013-A-BJ

(3) In the instant case the various facts, namely, inability of the Police to trace Umedi Lal or even Bhoja Ram who was frequently going to the Railway Station for taking delivery of goods on behalf of ~.f/s_ Jindal Khemka & Co. and

apprehend them, the passing on of the forged Ex. PWIO/A to Joginder Lal by Umedi Lal, a stranger without insisting on payment and even without settling the bargain, the delivery of the gqods the next day to Umedi Lal by Teja Singh who earlier suspected the genuineness of the RR when presented by Joginder Lal, the return of the iron sheets on the advice of some broker on the non-22roduction by Umedi Lal of a bill of purchase, taking a receipt Ex. P\V45/ A when Umedi Lal removed back his goo<ls etc. prima facie indicate that Umedi Lal was a fictitious person and M/s. Jindal Khcmka & Co. were not absolutely innocent in so far as this transaction was concerned. This iron sheets appeared to have been taken delivery of bY. "'Af/s- Jindal Kbamka & Co. for themselves on the strength of the fofged Railway Receipt No. PWlO/ A.

But some how or the other, due to police inaction, theY 3ppear to ha-Ve escaped and a small maii like the appellant seems to have been made a scape-goat.- The prosecution has totally failed to bring home the charge against the appellant.

[1013C-H, ~014-

A-BJ

[Their Lordships expressed their dissatisfaction in the way the case was investigated and observed that "it wasliiOeed a sad commentary on the efficiency of the Police".]

[10!3B-C]

CRIMmAL APPELLATE JuR1so1cTmN : Criminal Appeal No. 22 of 1976. (

(Appeal by Special Leave from the Judgment and Order dated the 12th September. 1975 of .the Punjab and Haryana High Court in Criminal Revision No. 314 of 1973).

R. L. Kohli, for the appellant.

0. P. Sharma, for respondent.

The Judgment of the Court was delivered by

BHAGWATI, J.-We made an order on 28th January, 1977 immediately after the conclusion of the hearing of the appi:al and by that order, we allowed the aypeal and set a"side the order of conviction and sentence ecorded against the appellant. We now proceed to give our reasons for making that order.

The appellant wa, s tried and convicted by the Judicial Magistrate, 1st Class, Ludhiana for offences under sections 468, 411 nd 420 read with section 109 of the Indian Penal Code. He carried an appeal. to the Sessions Court but the appeal was unsuccessful.

A further revision application followed but that too was rejected hy the High Court.

Hence the present appeal by special leave.

The facts giving rise to the prosecution are set out in great detail in the judgment of the High Court and hence it is not necessary to reiterate them.

It is enough to state that 354 bJack iron sheets worth Rs. 17, 701.91 were despatched by Hindstan Steel Plant from Murida near Bhilai to M/s. Shiv Rattan Mohatta at Bikaner in Wagon No.·· SEKC 4075 .. The Railway Receipt in respect of this consignment was sent to M/s Shiv Rattan Mohatta through the State Bank of Ilikaner and M/s Shiv Rattan Mohatta took delivery of the Railway Receipt against payment to the Bank.

The consignment, however, did not reach Bikaner and on enquiries being made, it was found by the Railway authorities that tht< wagon containing the goods had reached Agra en route Bikaner but at some point of time before it reached Agra; the labels attached to the wagon were either changed or removed and the entry in the vehicle -summary guidance was. also tempered with and changed to Ex-LAR indicating that the wagon was despatched from Lalitpur and its destination was Ludhiana. The resuft was that wagon, instead of going to Bikaner, was carried to Ludhiana and it reached there on 1st August, 1964.

The prosecution case was that round about this time, one person styling himself.as Umedi Lal, resident of Agra, approached a firm ealled M/s Jindal Khemka & Co. which was carrying on business as dealers in iron sheets in Ludhiana.

Umedi Lal produed a Railway Receipt Ex. PW 10/ A before Joginder Lal and Ram Nath, partners

ofthis. firm and offered to sell the goods covered by thi's Railway Receipt .to M/s Jindal khemka & Co.

This Railway Receipt was a . forged docu,\flent written out on a blank form stolen from the Railway Receipt Book.maintained at a railway station called Banmore. Joginder Lal went to Ludhiana Railway Station with this Railway Receipt

on 2nd August, 1964 for taking delivery of the goods and presented the. Railway Receipt to Teja Singh Sodhi, who was the Goods Clerk on duty at the goods-sheet.

Teja Singh entertained some doubt about the genuineness of the Railway Receipt and he told Joginder Lal that the Jlailway_ Receipt appeared to be defective.

In view of thi's, . Joginder,- ~Lal, according to the prosecution, returned the Railway .ReGeipt to Uriledi Lal on the following day when he came to enquire about the receipt of. the goods.

Umedi Lal then went to the railway station accompanied. by one Shoja Ram,. who was .a. Washing Soap . dealer in Ludhiana, and presented the Railway Receipt to Teja Singh . Sodhi. Jor taking delivery of the goods.

Curiously enough, though ·.only a .day. before, Teja Singh Sodhi had entertained doubt about the ; genuineness of tlie Railway Receipt, his doubts suddenly seemed to have vanished and he delivered the consignment of 354 black iron sheets which had come in wagon No. SEKG 40765 to Umedi Lal.

It'does not appear from the record as to where this consignment of 354 black iron sheets was kept by Umedi.Lal, but out of it, 200/250 if on. sheets were taken to the premises of Mis Jindal Khemka & Co. for sale on commission~ basis. Joginder Lal and Ram Nath were, however, according to the prosecution, advised by some broker that since iron sheets were controlled items, they should insist on production of a bill showing purchase of these iron sheets by Umedi Lal.

.Ionder L<il and Ram N!!th ;:tccording asked Umedi L11l to produce

the bill in connection with the purchase of these iron sheets, but Umedi Lal pleaded his inability to do so on the ground that these iron sheets represented surplus goods remaining after execution of a works contract by his firm of M/s Bansidhar & Sons of Lalitpur.

When this talk took 'place between Joginder Lal and Ram Nath on the one hand and Umedi Lal on the other, Umedi Lal ws, according to the prosecution, accompanied by the appellant who was at the material time employed as a Guard in the Northern Railway.

Since Joginder Lal and Ram Nath refused to purchase the iron sheets, Umedi Lal removed the same in three carts and passed a receipt in, respect of the same in favour of M/s Jindal Khemka & Co.

The prosecution case was that at this time also Umedi Lal was accompanied by three or four persons who included the appellant.

It appears that since M/s Shiv Rattan Mohatta did not receive

delivery of the iron sheets consigned to them in Wagon No. SEKC 40765, they lodged a claim with the Railway Administration and this led to enquiries being made by the Railway Administration. Ultimately, the Railway Administration filed a first information report with the Special Police Establishment, Ambala Branch. and following upon the first information report, the police started investigation. During the course of investigation, the police entertained suspicion against the appellant and they obtained from the appellant specimen handwritings PW 27 /37 to PW 27 /57 for the purpose of comparing them with tre handwriting on the Railway Receipt Ex. PU J 0 I A which was a forged document. The Police also requested the Railway authorities to direct the appellant and one Ameeruddin, who was also an employt!e of the Railway Administration, to subject themselves to test identification parade at the hands of the Special Railway Magistrate, Patiala.

The appellant and Ameeruddin accordingly went to Patiala and they were taken to the Central Jil and there, a test identification parade was held, at which Joginder Lal failed to identify the appellant hut Ram Nath, after some hesitation, managed to identify him.

The specimen handwritings of the appellant Exs. PW 27 / 37 to PW 27157 were sent, along with the Railway ReceiptEx. PW

10. 'A, to B. Lal, Government Examiner of Questioned Documents and B. Lal gave his ooinion that the writing marked at Al on the Railway Receipt Ex. PW 10/ A and the specimen handwritings PW 27 /37 to 27 /57 were all by one and the same person.

The appellant was, on the basis of this material, put up for trial before the Judicial Magistrate, 1st Class, Ludhiana. The learned Magistrate convicted the appellant and his conviction was maintained in appeal as well as revision.

The que'stion is whether the material on record was sufficient to justify the conviction of the appellant. '

We have carefully gone through the evidence but we find it difficult to sustain the conviction of the appellant.

The only two pieces of evidence against the appellant are the evidence of B. Lal, the handwriting expert, who identified the handwriting on the foqzed Railway Receipt Ex. PW 10/ A as that of the same person who wrnte the specimen signatures Exs. PW 27 /37 to PW 27157 and the evidence showing the oresence of the appellant with Umedi Lal at Ludhiana when the talk took place between Umedi Lal on the one

hand and Joginder Lal and Ram Nath on the other in .connection with the 'sale of the iron sheets.

We do not think that these two pieces of evidence are at all satisfactory and in any event, on conviction can be founded on them.

 In the first place, it may be noted that the appellant was at the material time a Guard in the employment of the Railway Administration wi..th his Headquarters at Agra . and he had nothing to do with the train by which Wagon No. SEKG 40765 was despatched from Munda to Hikaner, nor with the train which carried that wagon from Agra to Ludhiana.

He was not a Guard on either of these two trains. There was also no evidence to connect the appellant with the theft of the blank Railway Receipt at Hanmore Station. It is ind.eed difficult to see how the appellant, who was a small employee in the Railway Admini'stration,. could have possibly come into possession of the blank Railway Receipt from Hanmore Station which was not within his jurisdiction at any time. It is true that H. Lal, the handwriting expert, deposed that the handwriting on the forged Railway Receipt Ex. PW 10/A was that of the same person who wrote the 8pecimen handwritings Ex. 27 /37 to 27 /57, that is the appellant, but we think it would be extremely hazardous to candemn the appellant merely on the strength of opinion evidence of a handwriting expert. It is now well settled that expert opinion must always be received with great caution and perhaps none so with more caution than the opinion of a handwriting expert.

There i's a profusion of precendential authority which holds that it is unsafe to base a conviction solely on expert opinion without substantial corroboration.

This rule has been universally acted upon and it has almost become a rule of law.

It was held by this Court in Ram Chandra v. State(') that it is unsafe to treat exJLert handwriting opinion as sufficient basis for conviction, but it may be relied upon when supported by other items of internal and external evidence.

This Court again pointed out in lshwari Prasad v. Md. lsa(2) that expert evidence of handwriting can never be conclusive because it is, after all, opinion evidence, and this view 1 was reiterated in Shashi Kumar v. Subodh Kumar (') where it was P,, c>nted out by this Court that expert's evidence a's to handWriting being opinn evidence can rarely, if ever, take the. place of substantive evidence and before acting on: such evidence, it would 'be desirable to consider whether it is corroborated either by clear direct evidence or by circumstantial evidence.

This Court had again occasion to consider the evidentiary value of expert opinion in regard to handwriting in Fakhruddin v. State(~) and it uttered a note of caution , pointing out that it would be. risky to found a conviction solely on the evidence of a handwriting expert and before acting upon such evidence, the court must always try to see whether it is corroborated by other evidence, direct or circumstantial. It is interesting to note that the same view is also echoed in the judgments of English and America! courts.

Vide Gurney v. Langlands(5 ) and Matter of Alfred

(1) AIR 1957 SC 381.

(2) AIR 1963 SC 1728

(3) Al.fl 1964 SC 529 (4) AIR 1967 SC 1346

(5) 1822, 5:0 & Qld 330

-.-, F'

Fogter's Will(').

The Supreme Court of Michigan pointed out in the last mentioned case : "Every one knows how. very unsafe it is to rely upon any one's opinion concerning the .niceties of penmanship

-Opinions are necessarily received, and may be valuable, but at best this kind of evidence, is a necessary evil".

We need not subscribe to the extreme view expressed by the Supreme Court of Michigan; but there can be no doubt that this type of evidence being opinion evidence, is by its very nature, weak and infirm and cannot of itself form ihe. basis. for a conviction.

We must, therefore, try to see whether, in the present case, there is, apart from the evidence of the hand writing expert B. Lal, any other evidence connecting the appellant

with the offence.

The. only other evidence which was sought to be .relied upon on ·,...... _behalf of the prosecution was that showing the presence of the appellant with Umedi Lal at Ludhiana when there was talk between Umedi Lal on the one hand and Joginder Lal and Ram Nath on the other in regard to the sale of the iron sheet's.

But this evidence is wholly unsatifactory and does not inspire any confidence at all.

In the first place, it is difficult to see why the appellant should have gone with Urnedi Lal to Ludhiana for the purpose of selling the iron sheets.

The appellant was a mere railway Guard and even if it be assumed for the purpose of argument that his service were utilised for the pur- , pose of forging the railway receipt Ex. PW 10/ A, there is no reason

\vhy he' should have been persuaded to accompany Umedi Lal to Ludhiana. It is true that the appellant was on leave from 1st AugJ, Ist, 1964 to 16th August, 1964 but from that circumstance, it does. not follow that he had gone to Ludhiana in connection with the sale of the iron sheets.

Even according to the prosecution, the .appellant was in. Ludhiana only on 6th August, 1964 and that would not necessitate the appellant taking such a long leave from 1st August, 1964 to 16th August, 1964. The leave taken by the appellant. from 1st August, 1964 to 16th August, 1964 would not necessarily. support the inference th?t the appellant was preent in Ludhiana on. 6th August, 1964.

The appellant might have taken this long leave for some other purpose. Moreover, it may be noted that .A Joginder Lal . could not identify the appellant at the test identification parade held at the Central Jail, Patiala. Ram Nath, of course, did identify the appellant but that was after some hesitation. The Special Railway Magistrate (PW 39) stated in cross-examination that Ram Nath took some time in identifying the appellant. The ai:ioellati.t in fact raised an objection before the Special.

Railway Magistrate; prior to the test identification parade, that he had a doubt that he had been shown to the witnesses by the police.

The identi- . fic:ltion made by Ram Nath at the test identification parade can- . not, therefore, insoire any confidence in the mind of the Court.

M0reover, it is difficult to imapne how Ram Nath who is supposed to have seen the appellant for the first time on 6th August, 1964 on a stray occasion could identify him at a test identification parade held after about two and a half years on 25th February, 1967: It ;, not as if the appellant had any direct talk with Ram Nath on thi~

--(fj34 MiCh-:-zI- - -

solitary occasion.

The appellant was supposed to have merely accompanied Umedi, Lal along with one or two other persons_ and

it is impossible to believe that Ram Nath could have remembered his fact after such a long period as two and a half years.

We are not at all satisfied that the appellant was with Umedi Lal when the latter is supposed to have negotiated. :iWith Joginder Lal and Ram Nath in connection with the sale of the irnn sheets. i.

It is indeed strange that the police could not trace Umedi _Lal or even Bhoja Ram.

Bhoja Ram, according to the . prosecuti.on evidence, was frequently going to the Railway Station for taking delivery of goods on behalf of Mis Jindal Khemka & Co. and yet he could not be caught hold of by the police.

That is indeed a sad commentary on the efficiency of the police.

We fail to understand why the police did not try to find out what happened to the iron sheets-where they went froni the shop of Mis Jindal Khemka & Co. If the prosecution story is true, these iron sheets were removed by Umedi Lal from the shop of Mis Jindal Khemka & Co. and they must have been removed by some cartmen.

We find it difficult to believe that the police could not have pursued the matter and traced the iron sheets by making enquiries from the cartmen.

ft is also intriguing why the police did not try to find out the where abouts of Bhoja Ram.

Surely he could not .have disappeared into the thin air. It is not right for us to speculate but we cannot help feeling that Mis Jindal Khemka & Co. were not absolutely innocent in so far as this transaction is concerned.

Umedi Lal was a stranger to both Joginder Lal and Ram Nath and yet, according to the prosecution case, Umedi Lal handed over the forged Railway Receipt PW.

IOI A to Joginder Lal for the purpose of takiug delivery of the goad's without insisting on payment and even without settling the bargain.

The Railway Receipt Ex. PW lOIA was found to be defective by T_eja Singh Sodhi, Goods Clerk on 2nd August, 1964 and yet on the next day, strangely enough, he was, for some inexplicable reason, "l. persuaded to accept the same Railway Receipt and delivered the f

wiron sheets against it at the instance of Bhoja Ram, who was a person

, frequently acting on behalf of Mis Jindal Khernka & Co.

Then again, Joghider Lal and Ram Nath are supposed to have returned the _ iron sheets to Umedi Lal because some broker told them that they •hould insist on the production of a bill of purchase by Umedi Lal which Umedi Lal was unable to do. This also appe_ars to be a rather disingenuous story made up by Joginder Lal and Ram Nath for the purpose_ of 'showing as if the iron sheets did not remain with them. ft is ii'rc!eed strange why they should have taken a receipt from Umedi Lal when the latter removed the goods from their shop.

The iron

beets belonged to Umedi Lal and if Umedi Lal took them back from Joglnder Lal and Ram Nath, there was no reason why the latter should have insisted on taking a receipt from him.

Presumably the receipt was fabricated for the purpose of supporting their case that they did not keep the iron sheetS with them, because otherwise they would have no account for them. It does appear to us prima facie that Umedi Lal was a fictitious person and the iron sheets were taken delivery of by Mis Jindal Khemka & Co. for themselves on the

strength of the forged Railway Receipt PW 10/ A.

But some how or the other, due to police inaction, they appear to haye escaped and a small man like the appellant seems to have been made a scape-goa~.

. . i ; We are of the view that the prosecution has totally failed to bring·."' mome the charge against the appellant and hence our. order dated 28th January, 1977 setting aside the order of conviction and sentence JI recorded agains_t the appellant and acquitting him of the offences . charged against him.

S.R.

Appeal allowed.

206SCI/77-GIPF •.

LAL

STATE OF PUNJAB

February 15, 1977

P. N. BHAGWATI

ND S. MURTAZA FAZAL ALI, JJ.

s. 45

Bikaner

Ludhiana

Lalitpur

Umedi Lal

Agra

Mis. Jindal Khemka & Co.

Joginder Lal

Ram Nath

Mis. Hindustan Steel Co. Ltd.

Laljtpur

Teja Singh Sodhi

Bhoja Ram

Teja Singh

Jindal Khemka & Co.

ss. 109

ss. 468, 411, 1091420

I.P.C

s. 468

s. 411 and 109

I.P.C

AIR 1957 SC 361

AIR 1963 SC 1728

AIR 1964

SC 529

AIR 1967 SC 1326

SUPREAIE COURT REPORTS (1977] 2 s.c.ll

1st August 1964

16th August 1964

6th August 1964

I oginder Lal

Jindal Khcmka & Co.

Jindal Kbamka & Co.

CRIMmAL APPELLATE

R. L. Kohli

P. Sharma

BHAGWATI

sections 468, 411

section 109

Indian Penal Code

Hindstan Steel Plant

Murida

Bhilai

Shiv Rattan Mohatta

State Bank of Ilikaner

1st August, 1964

Jindal khemka & Co.

Banmore

2nd August, 1964

Joginder,- ~Lal

Uriledi Lal

Shoja Ram

Umedi.Lal

Mis Jindal Khemka & Co.

.Ionder L

Ram N!!th

Umedi L11l

Bansidhar & Sons of Lalitpur

Ameeruddin

Special Railway Magistrate, Patiala

Patiala

B. Lal

B. Lal

Munda

Hikaner

H. Lal

AIR 1957 SC 381

AIR 1963 SC 1728

AIR 1967 SC 1346

Supreme Court of Michigan

Urnedi Lal

1st AugJ, Ist, 1964

16th August, 1964

6th August, 1964

Umedi

Umedi _Lal

T_eja Singh Sodhi

PW lOIA was found to be defective by T_eja Singh Sodhi, Goods Clerk on 2nd August, 1964 and yet on the next day, strangely enough, he was, for some inexplicable reason, "l. persuaded to accept the same Railway Receipt and delivered the f

wiron sheets against it at the instance of Bhoja Ram, who was a person

, frequently acting on behalf of Mis Jindal Khernka & Co.

Then again, Joghider Lal and Ram Nath are supposed to have returned the  iron sheets to Umedi Lal because some broker told them that they •hould insist on the production of a bill of purchase by Umedi Lal which Umedi Lal was unable to do.

Mis Jindal Khernka & Co.

Joghider Lal

Joglnder Lal

28th January, 1977


-STATE OF UTTAR PRADESH AND ORS.

MODI INDUSTRIES LIMITED

January 4, 1977

(V. R. KRISHNA IYER AND P. N. SHINGHAL, JJ.]

U. P. Sales Tax Act, 1948-S. 31-Scope of.

The respondent filed its sales tax returns for the assessment years 1948-49 and 1949.50 on the basis of its turnover of two previous years. In respect of certain commodities, the rate of sales tax was enhanced with effect from certain C dates falling . within the assessment years.

The High Court on reference took the view that the dealer who had chosen to be assessed on the basis of its tuinover of the previous year of assessment: \Vas liable to be assessed at the rule prevailing On the first day of the relvant assessment year and tJ, J.at any change in. the rate during the assessment year could not be applied to that assessment.

The assessee, who had paid tax at the enhanced rate, applied for refund of the excess tax together With interest thereon under s. 11 (6) of the U.P. Sales Tax Act, 1948. The Additional Judge (Revisions), however, rejected the application holding that refund was not permissible in view of s. 31 introduced by the Amending Act (U.P. Act 3 of 1963). That section provided that where a dealer opted to be assessed to tax: on the basis of his turiiover of the previous year, he shall be assessed to tax at such .ta.tes as are prevalent during the year for which the assessment is being made, and if the rates of tax are altered during such assess

ment year, the dealer, in respect of the turnover of such goods. shall be liable to pay tax at the altered rates, as if the altered rates were in force during the previous year also proportionately for the number of days involved as they were in force during the assessment year. According to sub-section (2) of that sec-· tion the assessments made at the enhanced rates in accordance with the notifica tion dated April 9, 1948 were to be deemed to be gocxI and valid as if they had been duly made and as if the amendment made by the inserfion of s. 31 had been in force on aU material dates. It was expressly provided by the suO-section that that was to be so notwithstanding any judgment, decn:e-or order of any court.

The High Court quashed the order of assessment on the £round that the

Revisin~ Authority was not free to take a different view from the one expressed by it (High Court) on anv ground whatsoever, including the grollnd of any subsequent amendment of the law. .

Allowing the Appeal to this Court,

HEt.D : There is nothing wrong with the vieW' taken bv the Rvising Authority.

Wbe"n S. 31 of the Act is va1id, and is retroactive .and the Legi<; fatnre has shown the intention of restorin~ the assessments and orde"n; made before the a"lend ment a<il l!Clod and valid in law a<il if thev had bPPTI dulv madethat wac; enouh to set the controversy at rest.

The amendment made by S. :11 wac; rPtrn::ic:tive and anpJied to assessments vendinP or c1oc:M a.c; if the Amending Act had been in force at aU ma.terial times. [554CD; S52C] ,

Comml,.,:•iion~'r of Sales Tax, U.P. v. Bijli Cotton Mills, Hathras, f19641 7 S.C.R. 383 referred to.

(a) Section 31 was sou2ht to be annlied to the facts of the case wh"'n the Ailditfr, nal Tnd.2e (Revisinnci) wac; in <:E"i•d'n of the c:tcie fnr , the .nnmn•P .r.f .nao::ciin~ the necessary orders. to dispose it of finally in conformity with, the judgment of

u. P. v. MODI lNDl'.STRIES (Shinghal, !.) 549

the High Court. If he had passed an order under s. 11 (6) of the Act as directed by the High Court, that would have been of no consequence and would have been inoperative because of s. 31 (2).

[553B-C & F]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1694 of 1971.

(From the Judgment and Decree dt. 11-2-70 of the Allahabad High Court in Civil Misc. Writ No. 973 of 69).

S. C. Manchanda and 0. P. R.ana for the Appellants.

A. K. Sen, J. P. Goyal and Shreepal Singh, for the Respondent.

The Judgment of the Court was delivered by

SHINGHAL, J. This appeal by the State of Uttar Pradesh and three sales tax officers is directed against the judgment of the Allahabad High Court dated February U, 1970. The High Court has granted a certificate of fitness under clause ( c) of article 13 3 ( 1) of the Constitution.

Respondent Mod~ Industries Limited. hereinafter referred to as the dealer, was known earlier as the Modi Sugar Mills Ltd. It manufactured various. articles likei sugar, oil, vanaspati and soap. It exercised the option under section 7 (as it stood prior to its amendment by section 7 of U.P. Act XIX of 1956) of the U.P. Sales Tax Act, 1948, hereinafter referred to as the Act, to submit its returns of sales-tax on the basis of its turnover of the previous years and filed the returns accordingly.

The assessment years for which the returns were filed were 1948-49 and 1949-50, and the corresponding previous years were November 1, 1946 to October 31, 1947, and November l, 1947 to October 31, 1948 respectively. The rate of sales tax for certain commodities was enhanced during the assessment year 1948- 49, with effect from June 9, 1948, and for some other commodities with effect from July 1, 1948. The dealer contended that sales tax on its entire turnover of the two previous years should be assessed at the old rate of 3 pies per rupee and not at the enhanced rate of 6 pies per mpee because the enhancement was made after both the previous years had expired.

The Sales Tax Officers rejected that contention and assessed the sales tax at the enhanced rates.

The appellate authority however upheld the dealer's contention and the matter went uv in revision to the Judge (Revisions). He upheld the order of the Sales Tax Officer.

The dealer applied for a reference under section 11 ( 1) and the following two questions of law were referred to the High Court,-

"( 1) Whether the enhanced rate under notifications dated 8th June, 1948 and 30th June. 1948 issued under section 3-A of the U.P. Sales Tax Act. 1948 are appiicable to the sales of goods mentioned in paragraph 2 above which took place before 8th June 1948 and 30th June, 1948.

(2) Whether sub-section (ii) of section 3-A of the U.P. Sales Tax Act, 1948, empowers Provincial Government to fix the rate of sales tax in respect of an assessment year or in respect of certain specified sales only ?"

By its judgment dated July 24, 1961, the High Court answered question No. 1 in favour of the dealer, but declined to answer the other question.

The High Court took the view that the dealer who had chosen to be assessed on the basis of its turnover of the previous year was liable to assessment, on the entire turnover of the previous year, at the rate prevailing on the finst day of the relevant assessment year and that any change in the rate of the sales tax during the course ol the assessment year could not be applied to that assessment.

The dealer filed an app:ication under section 11 (8) of the Act for a direction for the payment of interest on the amount which had become refundable as a result of the judgment of the High Court. The High Court held in its order dated February 22, 1966 that the dealer was entitled to interest at the rate of two per cent on the refundable amount.

The dealer accordingly made an application to the Revising Authority on October 11, 1968 to pass an order under sub-section

(6) of section 11 for a refund of Rs. 3,48,420/13 with interest at two percent per annum.

The Additional Judge (Revisions) Sales Tax however dismissed the application byi his order dated December 28, 1968, as he took the view that that was not permissible because of the insertion of section 31' in the Act by the Uttar Pradesh Bikri Kar (Sanshodhan) Adhiniyam, 1962 (U.P. Act III of 1963) hereinafter referred to as the Amending Act.

The dealer felt aggrieved and filed a writ petition under article 226 of the Constitution.

It is that petition which has been allowed by the impugned judgment of the High Court dated February 11, 1970 by which the order of the Additional Judge (Revisions) Sales Tax Meerut, dated December 28, 1968, has been quashed and a direction hais been given to him to pass an appropriate order under section 11 (6) of the Act in accordance with the law and in the light of the observaHons made by the High Court. This is why the State of Uttar Pradesh and others have come up to this Court in appeal.

We have made a mention of the facts bearing on the controversy, and we may as well refer to th~ relevant provisions of the law.

The Act came into force on April 1, 1948. It provided for pay- F ment of the sales tax on several commodities at a uniform rate of 3 pies in the rupee.

Section 3-A was inserted by Act XXV of 1948 conferring certain powers on the Proviosial Government.

The provincial Government issued a notification under that section declaring. inter alia, that with effect from June 9, 1948. the rate of sales tax in [respect of the turnover of the goods specified in the notification shall be as stated in the schedule to the notification.

The rate of tax ·- G was thus enhanced to 6 pies per rupee. The enhancement of the tax was challenged on the grouil_d that it was not permissible in thi case of an assessee who had taken the option to submit his return on the basis of the turnover of the sales in the previous year as he was liable to pay the tax according to tbe rates prevailing during the assessment year. That case came up to this Court at the instance of the present respondent, which was then known as the Modi Sugar H Mills Limited, and it was helrl in Commissioner of Sales Tax. Uttar Pradesh v. The Modi Sugar Mills Ltd. (') that the assessee who had

(I) (1961] 2 S.C.R. 189.

elected to submit his return on the turnover of the previous year wa& A liable to be assessed to sales tax at the rate in force on the first day of the year of assessment because the liability arose on that date, and any subsequent enhancement of the rate by the notificali.on under section 3-A did not alter the liability.

The Legislature however passed the Amending Act and inserted the following as section 31,--

"31 ( 1) Where any dealer has, in accordance with the provisions of Section 7, as it stood prior to its amendment by Section 7 of U.P. Act XIX of 1956, opted to be assessed to tax on the ballis of his turnover of the previous year, he shall be assessed to tax at such rates as are prevalent during the year for which the assessment is being made, and if the rates of tax on any goods or class of goods are altered during such assessment year, the dealer, in respect of the turnover of such goods, shall be liable to pay tax at the altered rates, as if the altered rates were in force during the previous year also proportionately for the same number of days as they are in force during the assessment year.

(2) Notwithstanding any judgment, decree or order of any court, all assessments or orders made, actions or proceedings taken, directions issued, jurisdictions exercised or tax levied or collected by any officer or authority purporting to act under the provisions of sub-section ( 1 ) of Section 7, as it stood prior to its amendment by Section 7 of U.P. Act XIX of 1956, shall be deemed to be good and valid in law as if such assessments, orders, actions, proceedings, directions, jurisdictions and tax have been duly made, taken, issued, exercised, levied or collected, as the case may be,

under or in accordance with the said provisions of this Act as amended by the Uttar Pradesh Bikri Kar (Sanshodhan) Adhiniyam, 1962 and as if the amendment so made had been in force on all material dates.

Explanation-For the purposes of this section the expre5sion "previous year" shall have the meaning assigned to it in sub-clause

(ii) of clause (j) of Section 2 of this Act, as it stood prior to its amendment by Section 2 of the U.P. Act XIX of 1956."

The validity of the aforesaid section 31 of the Act came up for consideration in this Court in Commissioner of Sales Tax,

U.P. v Bi; li Cot.ton Mills Hathras(') and Wall upheld.

It was held that as the Legislature had amended the Act and declared that notwithstanding the option exercised by the assessee the tax would have to be computed in the light of the rates prevailing in 1948-49 as if they were projected upon the turnover of the previous; year, the Legislature had expressly stated that that rule would prevail as if it were in force during the assessment year and all assessments would be made in the light of the amended provision.

It was observed that in taking that view this Court was seeking to apply a legislative provision which was, by express enactment, in force at the time when the liability

(1) (1964]7 S.C.R. 363.

A arose, for section 31 incorporated by the Amending Act was to be deemed to have been in operation at all material times in supersession of the previous rule declared by this Court. It was held fw- ther that this would be the position even if the laws were amended with retr.oactive operation during the pendency of a reference to the High Court. It was accordingly held that "if the law which the Tribunal seeks to apply to the dispute is amended, so as to make the B law applicable to the transaction in dispute, it would be bound to decide the question in the light of the law so amended." The validity and the retroactive operation of section 31 have therefore been placed beyond challenge by the aforesaid decision in Bijli Cotton Mills' case and have in fact not been challenged by counsel for the dealer..

It may be mentioned that in its judgment in Bijli Cotton Mills' case this Court took notice of its earlier decision in the Modi Sugar Mills' C case (supra) so that it is well settled that the amendment made by section 31 is retroactive and applies to assessments pending or closed as if the Amending Act had been in force at material times.

The qnestion is whether the judgment of the High Court dated July 24, 1961 answering question No. 1 of the aforesaid reference by stating that the sales tax had to be charged from the dealer for the assessment year 1948-49 at the rate applicable to the various commodities on April 1, 1948, and for the assessment year 1949-50 at the rate applicable on April 1, 1949, was binding on the Additional Judge (Revisions) in spite of the amendment made by the Amending Act by insertion of section 31 in the Act? The High Court has taken the view in its impugned judgment dated February 11, 19/0 that the Revising Authority was not free to take a different view from the one expressed by it (High Court) on "any ground whatsoever", including the yound of any subsequent amendment in the law. and that it was bound to decide the case in conformity with the judgment of the High Court.

The High Court has expressed its view as follows,-

"The judgment of the High Court may be said to have become erroneous as a result of the amendment but so long as 'the judgment stands, it is binding upon the parties and the revising authority has no option except to give effect to it in its order passed under section 11 ( 6)."

The High Court further made the following observation,-

"We however, express no opinion as to the course which the depa1iment should adopt in a situation like this, but we have no doubt in our mind that the amendment brought about by section 31 of the Act does not make the judgment of the High Court a nullity and the Judge (Revisions) was not free to ignore it for any reason whatsoever.''

The question is whether this view of the High Court is correct ?

The answer to the question depends on the answer to the further queBtion whether the proceedings for the assessment of the sales tax had become final after the High Court's judgment dated July . 24,

1961 or whether, after that judgment, something remained to be do~ by the Additional Judge (Revisions) ? ·

Sub-section ( 6) of section 11 of the Act provides that the High, Court, upon hearing the reference, shall decide the questiom; of . law and shall deliver its judgment thereon and shall send its copy to the Revising Authority and the Commissioner of Sales Tax, "and the Revising Authority shall thereupon pass such orders as are necessary to dispose of the case in conformity with such judgment." So while the Additional Judge (Revisions) was in seisin of the case for the limited purpose for passing such orders as were necessary to dispose it of in conformity with the judgment of the High Court, it cannot be gain said that he was in such seisin and was required, in the facts and circumstances of this case, to make an order which would make the assessment order final and binding in all respects. It was at that stage that section 31, which was inserted by section 7 of the Amending Act, was sought to be appiied to the controversy.

According to sub-section (2) of that section, the assessments made at the enhanced rates, in accordance with the notification dated April 9, 1948, were to be deemed to be good and valid as if they had been duly made, and as if the amendment made by the insertion of section 31 had been in force on all material dates. It was expressly provided by the sub-section that that was to be so notwithstanding any judgment, decree or order of any court.

The order of the Additional Judge (Revisions) dated December 28, 1968 had therefore the effect of recognising the restoration of the orders of assessment which were made by the Sales Tax Officer at the enhanced rates, and sub-section

(2) of section 31 had the effect of making them "good and valid in law".

It cannot be said that the Additional Judge (Revisions) erred in taking that view, and in not passing an order for giving effect to the judgment of the High Court dated July 24, 1961 which had become unenforceable by the aforesaid section 31.

It has to be appreciated that even if the Additional Judge (Revisions) had passed an order under sub-section (6) of section 11 of the Act as directed by the High Court, that would have been of no consequence and would have been inoperative because of the specific provisions of subsection (2) of section 31, so that the position would !i<1ve beeii the same as if no such order had been passed at all.

The High Court has expressed the view that if its judgment (dated July 24, 1961) was considered by the department to be erro-- neous, it could have filed an appeal against it to this Court under article 136 of the Constitution to have it set set aside or modified.

It is not clear to us how that would have been possible when the Amending Act had not been passed till then, and was enacted some 1 t years thereafter.

The. other suggestion of the High Court that it may have been open to the department to ask for a fresh reference to it against the order of the Revising Authority under section 11 (6) on the ground that by the amendment a fresh question of Jaw had arisen, is also untenable -because that order (dated December 28,

1968) was in favour of the department.

In fact any suggestion or observation of the High Court fer seeking any other mode of redress is beside the point for the State felt aggrieved against the impugned

A judgment o! the High Court dated February 11, 1970 and has come up in appeal against it.

And now that this Court is in seisin of the case, it would be a work of supererogation ta require the parties, or. any of them, to go back to the Additional Judge (Revisions) or the High Court for an order.

B It has next been argued that the amendment made in the Act by imertion of section 31 can not possibly be implemented as no machinery has been provided to give effect to it and that it should therefore have been ignored altogether. This argument has been made wilh

reference to this Court's decision in Modi Sugar Mills' case (supra), but it is futile because no question regarding any such machinery could possibly be said to arise for the purpooe of giving effect to section 31 of the Act in the facts and circumstances of this case.

C So when section 31 of the Act is clearly valid and is retoractive, and the Legislature has shown the intention of restoring the assessments and orders made under the provisions of sub-section (1) of section 7 ·(as it stood prior to its amendment by section 7 of U.P.

Act XIX of 1956) as good and valid assessments in law, as if they had been duly made, that was enough to set the controversy at rest and there is nothing wrqng with the view which has been taken by the D Additional Judge (Revisions) in his order dated December 28, 1968.

The appeal is allowed and the impugned judgment of the High Court dated February 11, 1970, is set aside.

In the circumstances of the case, the parties shall pay and bear their own costs.

P.B.R.

Appeal allowed.

1546 SCI/76- GIPF.

STATE OF UTTAR PRADESH AND ORS

MODI INDUSTRIES LIMITED

January 4, 1977

V. R. KRISHNA IYER

Sales Tax Act, 1948

S. 31

s. 11

Sales Tax Act, 1948

s. 31

April 9, 1948

s. 31

S. 31

Section 31

s. 11

s. 31

Allahabad High Court

S. C. Manchanda

0. P. R.ana

A. K. Sen

J. P. Goyal

Shreepal Singh

SHINGHAL

State of Uttar Pradesh

February U, 1970

article 13

Mod~ Industries Limited

section 7

section 7

Sales Tax Act, 1948

June 9, 1948

July 1, 1948

section 11

8th June, 1948

30th June. 1948

section 3

Sales Tax Act

section 3

Sales Tax Act, 1948

July 24, 1961

section 11

February 22, 1966

October 11, 1968

section 11

Additional Judge (Revisions) Sales Tax

December 28, 1968

section 31

article 226

section 11

April 1, 1948

Section 3

Modi Sugar H Mills Limited

(1961] 2 S.C.R. 189

section 3

section 31

Section 7

Section 7

Section 7

Section 7

Section 2

Section 2

section 31

section 31

section 31

Bijli Cotton Mills

Modi Sugar Mills' C

section 31

section 31

February 11, 19/0

section 11

section 31

24,

1961

section 11

section 31

section 7

section 31

section 31

section 31

section 11

section 31

article 136

section 11

December 28,

1968

February 11, 1970

section 31

Modi Sugar Mills

section 31

section 31

section 7

section 7