RAJENDRA PRASAD

STATE OF BIHAR

February 25, 1977

(Y. V. CHANDRACHUD, P. K. GOSWAMI AND P. N. SH!NGHAI.. JJ.J

Crin1i11a! J!rocedure.. Code 1898-Powers of Hi/h Court to set aside ocq11ittal -Whetl!er n:1al Cf!Ul'l 111dgn1e11t should be palpably 1\'rong-Credibility of witness -Test 1dent1ficat1011 parade-Delay in.

F.l.R.-Ahsence to na111e acc11sed-/j co1n•ictio11 ca11 be bnsed 011 sole testi~ 111011y of a witness.

P. W. 9 Sabir aged about 18 year \Vent to the house of Lala (deceased) \vho used to render physicril training and swin1ming lessons to young boys and requested Lala to accon1pany hirn to the b<ink of a river. \\'hen Lala was cleaning his teeth and washing his fncc the appellant \\Cnt there \Vith 4 or 5 rersons. The prosecution case is thrit those 4 or 5 persons engngcd Lala in talk and the appellant thn1t a dagger on the back of Lala who died within minutes after the assault. 20 to 25 persons who were there and P.\V. 9 and others ran behind the appellant.

The prosecution exan1inccl 13 witnesses out of \Vhieh 4 'vere cyc-\vitnesses, na1nely, P.W. 1. 4. 9 and 10.

The Sessions Judge disbelieved all the eye V11itnesscs, and acquitted the appellant.

The Sessions Judge while <icquitting the :ippellant took the fol'Jo\ving facts into consideration :-

( 1)

(2)

(3)

( 4)

P.\V. 4 who lodged the First Tnforn1ation Report did not na1ne any

<iccuscd and, in f<ict. he did not know the <1ccused before the occurrence nnd could not even identify hin1 at the test identification parnde.

V. \Vs 1 nnd 10 had opportunity to see the accused before and therefore the test identification parade could not be attached much significance.

P. \Vs 1 nnd 2 are supposed to hnve seen the accused at the time when he was running a\vay fron1 the place of occurrence and, therefore, it \V!!S highly , improbable that they V11ould be able to retain 1he i1nprcssion of the accused.

It is highly improbable that P.\V. 9 hnd seen the incidC'nt since he did not go to the Police Station nor even s!ayed at the place of occurrence till the arrival of the police.

On the other hand. he confined hi1nself in his house until a constable came to take him to the police station.

The police in the beginning Sll"octed him as one of the persons who participCJtcd in the nnirder of the deceased.

His conduct is very sllspicious.

The I-ligh Court in appeal by the State relied on the evidence of P.\V. ns being corroborated by P. Vls. l and 10.

The 1-Tigh Court thrrefore, set aside the ncquittal and convicted the accused under s. 302 l.P.C. rind sentenced him to rigorous in1prison1ncnt for life.

Allovvinothe appeal under s. 2(a) of the Supre1ne C:ourt (Enl<irgement of Criminal A'Prc<1l Jurisdiction) Act, 1970.

HELD : (I) When a trial court, with full view of the witnesses. acquits an accused after disbelievng direct. testin1ony it will_ b~ essential for the !Jigh

Court in nn appeal against ricqu1ttal to clearly 1nd1cate firn1 and weighty grounds fro1n the record for discarding the reasons of the trial ccurt in orer to be able to reach a cont1; ary con_cluio~ of guilt of the ace; used.

The High court should be able to point ont in 11s JtKlgmcnt that the tnal court re-no; ons

• •

RA.JENDRA PRASAD v. BJllAR (Goswami, J.) 69

are palpably and unerringly shaky and its own reasons arc demonstrably A. cogent.

As a salutary rule of appreciation of evidence in an appeal against .acquittal it is not legally sufficient that it is just possible for the High Court

10 take a contrary view about the credibility of witnesses but it is absolutely -imperative that the lfigh Court convincingly finds it \Yell-nigh impossible for the trial court.to reject their testi1nony. l74 A-C]

(2) This is not a case where it can be said that the Sessions Judge came to a palpably wrong conclusion on the evidence or that the reasons for .ncquittal of the accused are manifestly erroneous, shocking one's sense of B justice.

The H.igh Court \Vas not right in interfering with the acquittal of the accused in this case. r74-Dl

(3) Since the Sessions Cou1t and the High Court reached different con- .clusions from the same evidence this Court \Vent lhrcugh the entire evidence

carefully in order to see \Vhcther the appreciation of the evidence by the Sessions Judge was so unreasonable and unrealistic as to entitle the High Court to interfere \vith the same. r?OE-F] '

CRIMINAL APPELLATE JumsmcnoN : Criminal Appeal No. 159 of 1974.

I From the Judgment and Order dated 2-1-1974 of the Patna High Court in Govt. Appeal No. 48/68).

S. Shau/wt Hussain, for the appellant.

Pramod Swarup, for the respondent.

The Judgment of the Court was delivered by

GoswAMI, J. The day, April 4, 1966, broke ominously for Lala 1larhi (deceased) who used to render physirnl training and swimming lessons to young boys. One such boy, Sabir Hanfi (PW 9), aged about

18 years, went to the house of Lala Barbi (hereinafter, Lala) at Purani Bazar, in the town of Muzaffarpur.

Lala was then asleep.

Sabir Hanfi woke him up and they both went to the Ashram Ghat (known also as Balu Ghat) on the bank of the Gand<:k river.

There when Lala was cleansing his teeth and washing his face, the appellant Raje11dra Prasad (hereinafter to be described as the accused) came there with four or five persons. ' It is said that the accused had some differences \Vith Lala over son1e money \Vhich he had given to him to .assault somebody which Lala failed to accomplish. As his companions were keeping Lala engaged in talk, the accused thrust a dagger on the .back of Lala who then rnlled Sabir Hanfi.

Lala. himself a robu"st ':lOUng rnan) rushed towards the accused \Vho took to his heels \Vith l1is companions.

Lala fell down rushing forward a space of about forty yards and breathed his last.

Sabir Hanfi and others also ran behind Lala to his aid.

, Although thirteen witnesses were examined by the prosecution only four of them were eye-witnesses to the occurrence.

They are Ram Pukar Sah (PW 1), Parmeshwar Prasad (PW 4), Laehman Prasad

(PW 10) and Sabir Hanfi (PW 9). The Sessions Judge disbelieved .all the eye-witnesses and acquitted the accused.

On the other hand H the High Court relied on the evidence of PW 9 as being corroborated by PWs 1 and 10.

The High Court, therefore, set aside the acquittal

and convicted the accused under section 302, Indian Penal Code, and sentenced him to rigorous imprisonment for life.

Hence this appeal under section 2(a) of the Supreme Court (Enlargement of Criminal Appellate Jurisdiction) Act, 1970.

PW 4 who lodged the first information report without naming any accused and who did not know the accused before the occurrence could not even identify him at the Test Identification Parade which was held on September 29, 1966. The evidence of PW 4 is, therefore, of no significance.

The case, therefore, depended upon the evidence of recognition of the accused while running from the place of occurrence by PWs I, 10 and the direct testimonl'. of PW 9 who knew the accused from before.

The accused was known only to Sabir Hanfi (PW 9) by name. The other two witnesses did not know the accused from before and saw him only while running away followed by twenty or twentyfive other persons.

The evidence of PWs 1 and l 0, which we have carefully perused, go tp show that they did not know the accused from before.

They however, identified the accused in the Test Identification Parade held on September 29, 1966, nearly six months after the occurrence. There is no reason why the Test Parade was delayed so long when the accused had surrendered on June 17, 1966. As stated earlier, the trial court which had opportunity to see these witnesses disbelieved them by giving certain reasons.

For example, according. to the Sessions Judge, these two witnesses had the opportunity to know the accused from before and, therefore, their identification in the Test Indentification Parade was not considered of such significance.

He further observed that these witnesses saw the accused at the time when he was running away from the place of occurrence and, therefore, "it is highly improbable that they would be able to retain the impression of the assailant of Lala Barhi in their mind for so many months". The High Court, on the other hand, held that identification by PWs 1 and 10 was reliable. Thus when two courts have come to a different conclusion on the same evidence, we had ourselves to go through the entire evidence carefully in order to see whether the appreciation of the evidence by the Sessions Judge was so unreasonable and unrealistic as to entitle the High Court to interfere with the same.

PW 1 is the father of PW 10. His unole died on !lie previous night and both he and li"is son (PW 10) went for his cremation at Chandwara Ghat.

The cremation was over at about 6.16 A.M. on the morning of the day of occurrence. They then went to Balu Ghat for a bath.

They saw Lala Barbi doing physical exercise on the bank of the river and they went to take their bath in the river. After about ten minutes they heard a hulla 'pakro' 'pakro'. On hearing the hulla they came up to the Bank from the river and saw Lala Barhi running away towards the East and four persons were chasing him and raising a hulla 'pakro' 'pakro'.

They further stated that about twenty or twenty-five persons followed to catch two or three persons who were chasing the Lala. They had come out of the water at that time. PW 10 stated that he could not identify the other companions of Lala because he "saw their back only and not their face".

Since both the

RA, JENDRA PRASAD v. BlHAR (Goswami, J,) 71

witnesses came out of the water on hearing the hulla which was raised only after the assault, it was not possible for these two witnesses to see the stabbjng, Even if they recognised the persons running away, they would not be able to say who, amongst them, had stabbed the dece<Jsed, PW 1 O has candidly admitted that he could not recognise the companions of the deceased as they were running ahead and he was watching from behind. If this be the position with regard to the companions of the deceased it is difficult to see how these two witnesses 'vere able to recognise the accused who was running 3\\'ay.

Apart from that there were twenty to twentyfive others following the accused with two or three persons thus obstructing a clear view of the accused.

In this state of evidence it is impossible to hold, on their evidence. that the learned Sessions Judge did not reach a correct conclusion that identification by these two witnesses was futile for the purpose of establishing the charge against the accused.

We are unable to appreciate how the High Court in this state of evidence could reasonably come to a contrary conolusion with regard to the testimony of these two witnesses.

This leaves PW 9 for consideration.

Although PW 9 knew the assailant by name, th~ is no mention of the accused's name in the first information report lodged the same day at 12.00 noon, five hours after the occurrence, the Thana being only one and a half miles from the place of occurrence.

The accused is described in the first information report as "a dark complexioned healthy young man. about the age 'f 24/25 years", It may be that PW 9 is the only witness who had seen the stabbing. He may be the witness from the beginning of the occurrence till the end and who described the incident in detail.

Accordirg to him while the deceased was cleansing his teeth the accused came near him with four or five persons and that while some of them kept the deceased engaged in some conversation the accused stabbed the deceased on his back with a dagger. The whole case wHI, therefore, rest on the evidence of this witness who knows the accused from before, The Sessions Judge has considered him as unreliable for the following reasons :-

(1) It is highly improbable that if he had seen the he would not have rushed to the police station stayed at the place of occurrence till the arrival police.

incident or even of the

(2) That on the other hand PW 9 confined himself in his house from 4th April till the eyening of the following day G when a constable went to his house to take him to the police station, •

(3) The police at first suspected that he might have a hand in the murder of the deceased and suspected him and kept him in the police lock-up.

( 4) The conduct of the witness is very suspicious and no reliance can be placed on his evidence.

6-240SCI /77

The High Court has considered the first two grounds as insufficient for holding the witness as unreliable. It observed that "it is of common knowledge that generally people try to avoid becoming an informant and to be an eye-witness of the occurrence for various reason".

With regard to the third and fourth grounds the High Court referred to the station diary entry (Ex. 4) and to the evidence of PW l 2 and held as follows :~

" ... it was by mistake that PW 9 was arrested by a constable. P.W. 12 has stated that in fact he was a prosecution witness. I do not find any valid reason for discrediting the evidence of P.W. 9".

From the evidence of PW 9 and PW 12 and in the context of the C station diary entry (Ex. 4), the position emerges as follows :-

A police officer went to the house of PW 9 in the evening of April 5, J 966, to bring him to the Thana. He was found by the Officer-incharge of the Thana (PW 12) sitting at the police station at 7.30 P.M.

Now let us read the station diary entry (Ex. 4). Before we quote the same we should state that this exhibit has not been correctlv translated at page 56 of the Paper Book. We, therefore, ourselves examined the original station diary entry and we will set out the same as correctly translated. as under :-

"XVIII. Entered in Thana Daily S. 186

186. That this time, Shri G. S. Chaturvedi, Town Inspector, came to Thana and took with him Mohd. Sabir Hanfi alias Funna r/o Saraiyaganj Thana Town the accused (Abhiyukta) in connection with S. No. 5(4)66, sec. 302 IPC.

On search nothing was found on his person except clothes he was wearing. After all the rules of Hajat were observed he was kept in Hajat''.

Some uncertainty was felt by counsel regarding the meaning of the word "hajat". We have no doubt that the word "hajat" means custody in this context.

Bhargava's Standard Illustrated Dictionary, Hindi Language, gives the meaning of Hajat, inter alia, as custody, and states thus : "Hajat mein rakhna" means "to keep a culprit in custody". ·

The High Court, we are afraid, does not appear to have examined the original° station diary entry (Ex. 4) with care otherwise it would '), G not have come to the conclusion that it was by mistake that PW 9 was arrested by a constable simply from the self-serving statement of PW ~

12. The High Court does not even refer to the fact that a very important recital in the original entry (Ex. 4), namely. the word , "abhivukta" (accused) has been scored out and in its place the word "gavah" (witness) was substituted.

The interpolation of the word "gavah" (witnes.) for "abhiyukta" (accused) appeared to be of a H different writer from the original writings in the entry. This is serious tampering with an official record in a criminal case when a man's life is in jeopardy in a trial for murder under section 302 !PC. We have also grave suspicion about the date of correction of the entry in Ex. 4 .

'RAJENDRA PRASAD v. BIHAR €Goswami, 1.) 7 3 .

Althouoh the above entry shows that PW 9 was brought to the Thana by the Town Inspector, G. S. Chaturvedi, he. was not even examined in the case to show why and under what circumstances PW

9 was brought by him. This entr)'. in the official record dearly shws

that PW 9 was at that stage considered as an accused m connection with this murder case and his person was searched before confmmg him in the Hajat. If he was only a witness there was no .reason why his person would be searched and why he wonld be kept m the lockup "after all the rules of Hajat were observed''. The High Court

completely lost sight of these serious infirmities in the prosecution evidence and it was absolutely impermissible to accept the statement of PW 12 when he stated that PW 9 "had not been arrested" and that ·"he was only a prosecution witness''.

There are some other disquieting features with regard to the evi- , dence of PW 9. It is not understood why he should have said that a constable brought him to the Thana whereas the entry (Ex. 4) shows that the Town Inspector, Chaturvedi, brought him to the Thana. If, as the entry shows, he was brought by the Town Inspector, Chaturvedi, .and he was kept confined in the lock-up as an accused in the murder case, it is difficult to comprehend how at that very stage Ex. 4 could be considered by PW 12 as containing a wrong recital without reference to the Town Inspector. Besides, PW 12, as he says, had taken .charge of the investigation from Sub-Inspector, Gupteshwar Dayal

(PW 13) at 11.00 A.M. on April 5; 1966, inspected the place of occurrence, unsuccessfully searched for the suspects Rajemlra Prasad, Ram Bilas Sahani and Mohan Jha at their houses, examined some witnesses and then reported to the Thana at 7.30 P.M. to find PW 9, the principal witness, sitting there.

Even then he would not record the statement of PW 9.

He admitted during the course of crossexamination that when he first interrogated PW 9 at the Thana he had not recorded his statement. He did not even record his statement when he came to the Thana from his house at 11.00 P.M. that night, These are very suspicious circumstances. PW 12, however, admitted that he recorded the statement of PW 9 on the following day (6-4-1966) at 12.05 A.N., after having produced him before the 'Superintendent of Police.

PW 9 admits that he was interrogated by the Superintendent of Police for twenty to twentyfive minutes. PW 12 stated in his examination-in-chief that he allowed PW 9 to go to his house. after he had recorded his statement on April 6, 1966, at 12.05

A.N.

From the evidence of PW 12 read with the entry (Ex. 4) it does not appear that PW 9 was freed from police custody at least till his statement was recorded on April 6, 1966.

Again, the statement of PW 9 was recorded by the Magistrate under section 164, Criminal Procedure Code, on AprH 12, 1966, when perhaps the police had finally decided to treat him as a prosecution witness instead of an accused.

This conclusion is irresistible on the state of evidence to which we have referred .above. If under these circumstances the Sessions Judge held that the conduct of this witness was such as would seriously affect his credibility, the High Court was not at all justified in taking a contrary view even without a proper analysis of the oral and documentary evidence. When the evidence of recognition of the

accused by PWs 1, 10 and 4 is unreliable, no conviction can be based on the sole testimony of a witness like PW 9, on whom the first suspicion fell, without any corroboration.

When a trial court, with full view of the witnesses, acquits an accused after disbeliving direct testimony, it will be essential for the High Court, in an aJJpeal against acquittal, to clearly indicate firm and weighty grounds, from the record, for discarding the reasons of the trial court in order to be able to reach a contrary conclusion of guilt of the accused.

The High Court should be able to point out in its judgment that the trial court's reasons are palpably and unerringly shaky and its own reasons are demonstrably cogent.

As a salutary rule of appreciation of evidence, in an appeal against acquittal, it is not legally sufficient that it is just possible for the High Court to take a contrary view about the credibility of witnesses but it is absolutely imperative that the High Court convincingly finds it well-nigh impossible for the trial court to reject their testimony.

This is the quintessence of the jurisprudential aspect of criminal justice.

This is not a case where it can be said that the Sessions Judge came to a palpably wrong conclusion on the evidence or that the reasons for acquittal of the accused are manifestly erroneous, shocking one's sense of justice.

The High Court was not right in interfering with the acquittal of the accused in this case. The appeal is, therefore, allowed. The judgment of the High Court is set aside.

The accused shall be released from detention immediately.

P.H.P.

Appeal allowetl.

RAJENDRA PRASAD

STATE OF BIHAR

February 25, 1977

Y. V. CHANDRACHUD

P. K. GOSWAMI

Sabir

Lala

s. 302

s. 2(a)

S. Shau/wt Hussain

Pramod Swarup

GoswAMI

Lala 1larhi

Sabir Hanfi

Lala Barbi

Muzaffarpur

Raje11dra Prasad

\Vith Lala

Sabir Hanfi

Lala

Sabir Hanfi

Ram Pukar Sah

Parmeshwar Prasad

Laehman Prasad

section 302

Indian Penal Code

section 2(a)

September 29, 1966

June 17, 1966

Lala Barhi

Balu Ghat

S. 186

G. S. Chaturvedi

Thana

Mohd. Sabir Hanfi alias Funna

sec. 302

IPC

Bhargava

section 302

Chaturvedi

Gupteshwar Dayal

April 5; 1966

Rajemlra Prasad

Ram Bilas Sahani

Mohan Jha

April 6, 1966

section 164

Criminal Procedure Code

AprH 12, 1966


TAKASEELA PEDDA SUBBA REDDY

PUJARI PADMAVATHAMMA & ORS.

April 28, 1977

[P. N. BHAGWAT! AND S. MURTAZA FAZAL ALI, JJ.]

Code of Civil Procedure, (Act V of 1908), 1908-0rdcr X){J, Rule 64--- Scope of-.Meaning of the words "as 1nny seieni necessary to satisfy the decree".

Order XXI Rule 64 of the C.P.C. lays down that "nny court executing a decree may order that any property attached by it and liable to sale or such

portion thercot as 1nay sei~1n 11ecessary to satisfy the decree, shall be sold and that the proceeds of such sale, or a sufficient portion thereof shall be paid to the party entitled under the decree to receiYe the same."'

The 5th respondent/decree-holder, S.P.R. Reddy obtained two decrees against the Judgment-debtor Pujari Subbarayudu in two suits viz.; 0.S. 15 of 1949 and O.S. 19 of 1953. He filed execution proceeding, No. 24 of 1953 in the trial Court for selling the .properties belonging to the judgment-debtor in Devanoor and Gudipadu vilJages in order to satisfy the decree in 0.S. 15 of 1949.

He also applied for permission to bidat the auction sale. In the auction sale held on March 2, 1955, the 5th respondent purchased the lands situated in village Devanoor for a sun1 of Rs. 16,880/-. Despite the fact that thesale proceeds of the land'i in village Devanoor alone was sufficient to satisfy the decretal amount mentioned in the warrant of sale and the proclamation of sale viz.; Rs. 16,715.50, the Court proceeded to sell the properties of the judgment-debtor in village Gudipadu which fetched Rs . .12,500/- and \Vhich were purchased by the appellant auction-purchaser. The jUdgment-debtor filed an application on March 31,. 1955 to set aside the sale contending, inter alia, that once the sale of the properties in village Devanoor ~'as sufficient to satisfy the amount mentioned in the sale proclamation, the Court should have stopped the sale as required by the mandatory provisions of Order XX! Rule 64 of the C.P.C. The Trial Court rejected the said application; whereupon the decree-holder on April 20, 1955 obtained an order from the court for rateable distribution of the sale proceeds. fn appeal the High Cou1t accepted the plea of the judgment-debtor regarding non-complianCc with the provisions of 0.XXI Rule 64 C.P.C. and set aside the sale ~'ith respect to the properties situated in village Gudipadu.

Dismissing the appeal by certificate the .court,

HELD : ( 1) The High Court rightly held that as the sale of the properties in village Devanoor fetched an aniount mentioned in the sale warrant, the Executing Court was not jutified in proceeding with the sale of the propert_ies in village Gudipadu and should have stoppe~ the sale. [694 F]

(2) The logical corollary which flows from O.XXI Rule 64 of the Co<le is that where the amount specified in the proclamation of sale for the recovery of which the sale was ordered is realised by sale of certain items, the saJe, of further items should be stopped. [695 C-Dl

(3) Under Order XXI Rule 64, the Executing Court derives jurisdiction to se11 properties attached only to the point at which the decree is fully satisfied. The words "necessary to satisfy the decree" clearly indicate that no sale can be mentioned in the sale proclamation and is sufficient to satisfy the decree, no alloVi'ed beyond the decretal amount mentioned in the sale proclamation. In other words, \Vhere thesale fetches a price equal to or higher than the amount

furth~!·sale should be held and the court should stop at that stage. [695 E~F]

(4) In the facts and circumstances of the present case, there being nothing to show that the decree-holder had approached the court for including the second tlccretal amount obtained in 0.S. 19 of 19~3 in the proclan1ation of sak, the

T. P. SUBBA REDDY v. p PADMAVATIJAMMA (Fazal Ali, f) 693

xuting Court was not justified in selling the properties situated in village Gud1padu.

The fact that tht! judgment-debtor did not raise an objection on this ground b.!fore the Executing Court is not sufficient to put him out of court

becaus~ this was a matter which went to the very root of the jurisdiction of the E'.xecutmg Court to sell the properties and the non-compliance with the provisions ot O.XXI, Rule 64 of the Code was sufficient to vitiate the same so far as the properties situated in village Gudapadu were concerned. [695 G-H, 696 Al

(5) The Court remitted the ffiatter to the Executing Court for an inquiry with the following directions : ,

\i) The appellant Will have to return the properties in village Gudipadu to the Judgment-debtor and he will be entitled to receive the value of improwments made by him during the time he. was in possession of these properties, as detern1ined by the Executing Court, in addition to Rs. 12,500/-.

(ii) He will not be etitlcd to any interest on the value of the improvements, 1f he 1s found to be 1n possession of the property.

(iii) If the Executing Court finds that the auction-purchaser was not in possession of the properties, the judgment-debtor will have to refund the amount of Rs. 12,500/- to the appellant with interest at the rate of 12 per cent per annum from the date of sale up!D the date of refund. [696 B-El

CML APPELLATE JURISDICTION : c. A. No. 2381 of 1968.

(From the Judgment and Order dated the 30th March 1965 of the Andhra Pradesh High Court in Appeal against Order No. 443 of 1963)

P. Ram Reddy, K. Jayaram and K. Ram Kumar, for the appellant.

8. R. Agarwa/a, for respondents.

The Judgment of the Court was delivered by

FAZAL Au, J. This appeal by certificate arises out of execution proceedings in respect of a decree obtained by the respondents/decreeholders.

It appears that the 5th respondent/decree-holder Siddam Pedda Rami Reddi hereinafter referred to as "SP" Reddi--obtained

a decree in 0. S. No. 15 of 1949 from the Court of Sub-Judge Kurnool against the judgment-debtor Pujari Subbarayudu hereinafter referred to as "Pujari" or "judgment-debtor". The 5th respondent had also. obtained another money decree against Pujari in another suit being O.S. No. 19 of 1953.

The 5th respondent/decree-holder filed Execution Proceedings No. 24 of 1953 in the Trial Court for selling !he properties belonging to the judgment-debtor in order to satisfy the decree in 0. S. No. 15 of 1949 and he also applied for permission to bid at the auction sale.

The first sale was held on October 12, 1954 at which the lands situated in villages Devanoor and Gudipadu were put to sale. But this sale was set aside as there was some delay in payment of the sale price. Consequently a second sale was held on March 2, 195 5 at which the 5th respondent SPR Reddi purchased the lands situated in village Davanoor and the appellant/auction-purchaser T.P.S. Reddy purchased the lands in village Gudipadu.

It is also not disputed that in the warrant of sale as also the sale proclamation, the decretal amount for which the properties were to be sold was mentioned as Rs. 16,715-8-0.

The sale of lands in village

A ..

Devanoor alone fetched a sum of Rs. 16,880/- at which the sale \fas knocked down.

Thus it would appear that the sale proceeds of the lands in village Devanoor were sufficient to satisfy the decretal amount mentioned in the proclamation of sale.

Despite this fact, the Court proceeded to sell the properties of the judgment-debtor in village Gudipadu which fetched Rs. 12;500/- and which were purchased by the appellant/auction-purchaser.

On April 20, 1955 the decree-holder obtained an order from the Court for rateable distribution of the sale proceeds.

In other words, this order was passed by the Court not before the sale so that the entire decretal amount could have been mentioned in the sale proclamation but a few days after the sale had already taken place.

This is rather an important aspect of the matter which appears to have been completely overlooked by the Trial Court.

On March 31, 1955 lhe Judgment-debtor Pujari filed an application to set aside the sale on various grounds, namely, that the sale was vitiated by material irregularities which caused serious prejudice to the judgment-debtor and that the properties sold by the Court were valuable properties and the same were grossly undervalued in the sale proclamation.

Finally it was contended by the judgment-debtor that once the sale of the properties in village Devanoor was sufficient to satisfy the amount mentioned in the sale proclamation, the Court should have stopped the sale as required by the mandatory provisions of 0.21 r. 64 of the Code of Civil Procedure-hereinafter referred to as 'the Code-instead of continuing the sale of the properties-in village Gudipadu.

The Trial Court, however, after hearing the objections of the decree-holder rejected the application of the judgment-debtor.

Thereafter the judgment-debtor preferred an appeal before the High Court which, while negativing the grounds taken by the judgment-debtor regarding the material irregularities in the conduct of sale or the under-valuation of the properties, accepted the plea of the judgment-debtor regarding the non-compliance with the provisions of 0.21 r. 64 or the Code.

The High Court held, and in our opinion rightly, that as the sale of the properties in village Devanoor fetched an amount which was sufficient to satisfy the amount mentioned in the sale warrant, the Executing Court was not justified in proceeding with the sale of the properties in village Gudipadu and should have stopped the sale.

The High Court accordingly accepted the plea of the judgment-debtor and set aiidc the sale with respect to the properties situated in village Gudipadu, but granted a certificate to the appellant to file an appeal in this Court and hence this appeal before us.

In this appeal the facts are more or less undisputed and the only serious point argued by the appellant is that the High Court was in error in setting aside the sale because even if the entire decretal amount was not mentioned in the sale proclamation, that was at best an irregularity which did not cause any prejudice to the judgmen!- debtor. It was also argued by learned counsel for the appellant that H the judgment debtor did not raise any objection before tlie Executing Court against continuing the sale of other properties situated in village Gudipadu. It was next submitted that the 5th respondent/decreeholder had obtained another decree in O.S. 19 of 1953 and the total

I 1

T. P. SUBBA REDDY v. p PADMAVATHAMMA (Fazal Ali, J.) 69'5

amount under the two decrees fully justified the selling of the properties in village Gudipadu also, particularly when the decreeholder had taken an order from the Executing Cuurt for rateable distribution Ofthe sale proceeds.

It is true that the High Court has not considered this aspect of the matter, but in our opinion the contentions raised by the appellant are wholly untenable.

It is not disputed that the warrant of sale was prepared long after the 5th respondentldccreeholder had obtained the second decree in 0. S. 19 cif i953 and yet no attempt was made by the decree-holder to approach the Court for amending the decretal amount mentioned in the sale proclamation, so as to include the decretal amount not only of the decree in the first suit No. 0. S. 15 of 1949 but also of the decree in the second suit in 0. S. 19 of 1953.

Jn these circumstances, therefore, under the provisions of 0.21 r. 64 of the Code when the amount as specified in' the sale proclamation was fully satisfied by the sale of the properties in village Devanoor, the Court should have stopped the >ale of further items of the properties.

It is manifest that where the amount specified in the proclamation of sale for the recovery of which the sale was ordered is realised by sale of certain items, Jhe sale of fur lher items should be stopped.

This, in our opinion, is the logical corollary which flows from 0.21 r. 64 of the Code which may be extracted

thus :

"Any Court executing a decree may order that any property attached by it and liable to sale, or such portion thereof as may seem necessary to satisfy the decree, shall be sold, and that the proceeds of such sale, or a sufficient portion thereof, shall be paid to the party entitled under the decree to

receive the same." E

Under this provision the Executing Court derives jurisdiction to sell properties attached only to the point at which the decree is fully satisfied.

The words "necessary to satisfy the decree" clearly indicate lhat no sale can be allowed beyond the decretal amount mentioned in the sale proclamation.

In other words, where the sale fetches a price equal to or higher than the amount mentioned in the sale proclamation F and is suf!iclent to satisfy the decree, no further sale should be held and the Court should stop at that stage. In the instant case, we have already indicated that the sale of lands in village Devanoor alone fetched a sum of Rs. 16880 which was more than sufficient to satisfv the amount of Rs, 16,715-8-0 mentioned in the sale proclamation.

It is true that the decree-holder had obtained another decree in O.S. No. 19 of 1953, but there is nothing to show that the decree-holder had G approached the Court for including the second decretal amount in the proclamation of sale.

In these circumstances, therefore, we are clearly of the opinion that the Executing Court was not justified, in the facts and circumstances of the present case, in selling the properties situated in village Gudipadu.

The fact that the iudgment-debtor did not raise an objection on this ground before the Executing Court is not sufficient to put him out of Court because this was a matter H which went to the very root of the jurisdiction of the Executing Court to sell the properties and the non-compliance with the provisions of

0. 21 r. 64 of the Code was sufficient to vitiate the same so far as the

"A ..

properties situated in village Gudipadu were concerned.

For these reasons, the contentions raised by counsel for the appel.lant must be overruled.

This, however, does not put an end to the issue, because the High Court, while setting aside the sale, has passed no order for d justing the equities between the parties.

According to the appellant he had taken possession of the properties purchased by him at the auction sale and had made substantial improvements.

If the sale of these properties is to be set aside, the appellant will have to return these properties to the judgment-debtor, but he will be entitled to receive the value of improvement's made by him during the time he was in possession of those properties in addition to the return of the sum of Rs. 12,500/-. The Executing Court will have to hold au inquiry into the matter and de'.ermine the value of the improvements made by the appellant which will have to be paid to him.

The appellant will not be entitled to any interest on the value of the improvements if he is found to be in possession of the properties.

If, however, the Executing Court finds that the auction-purchaser was not in possessio11 ot the properties and the properties continued to be in possession of the judgment-debtor, then the question of the value of improvements will naturally not arise. 'In that event the judgment-debtor will have to refund the amount of Rs. 12,500/- to the appellant with interest' at the rate of 12 % per annum from the date of sale upto the date of refund.

For these reasons, .therefore, the appeal is dismissed with the modification indicated above and the case is sent back to the Executing Court to hold an inquiry into the matter.

In the special and peculiar circumstances of the present case, we make no order as to costs.

S.R.

Appeal dismissed.

TAKASEELA PEDDA SUBBA REDDY

PUJARI PADMAVATHAMMA & ORS

April 28, 1977

S. MURTAZA FAZAL ALI, JJ.

Code of Civil Procedure

Order XXI Rule

C.P.C

S. 15

S. 19

S. 15

March 2, 1955

Devanoor

Gudipadu

March 31,. 1955

C.P.C

April 20, 1955

C.P.C

S. 19

Gudapadu

P. Ram Reddy

K. Jayaram

K. Ram Kumar

R. Agarwa

FAZAL Au

Siddam Pedda Rami Reddi

October 12, 1954

March 2, 195 5

Reddi

Davanoor

T.P.S. Reddy

March 31, 1955

debtor Pujari

the Code of Civil Procedure

S. 19

S. 19

S. 15

S. 19

Gudipadu


TARULATA SYAM AND ORS.

COMMISSIONER OF INCOME-TAX, WEST BENGA1"

April 28, 1977

{P. N. BHAGWATI, R. S. SARKARIA AND S. MURTAZA FAZAL ALI, JJ.] B

Indian Income Tax Act, 1922-S. 2(6A)(e)-Scope of.

Co1npany a s. 23A Co111pany in which public are not substantiq/.ly intertsted -Had accunut!ated profits-Gave loan/ to a shareholder-Loan repaid before !he end of tlir financial year-Loun if dividend withiln s. 2(6A)(e).

Under section 2(W\) (e) of the Indian Income-tax Act, 1922, the term dividend includes any payment by a company not being a company in v,; hich

the public are substantially interested \Vithin the meaning of s. 23A of any sum (whether as represcntirw: a part of the assets of the company or otherwise) by way of advance or Joan to a shareholder or a•ny payment by any such company on behalf or for the individual benefit of a shareholder to the extent to \Vhich the company in either case possesses accumulated profits.

According to s. 12(IA) of the Act, income from other sources include'> dividends.

Sub-section (1B) of s. 12 provides any payment by a conl.pany to a shareholder by way of advance or loan which would have been treated .as dividend within the meaning of s. 2(6A)(e) in any previous year relevant io any assessment year prior to the assessment year ending on the 31st day -Of March, 1956 had that clause been in force in that vear, shall be treated

a<S a dividend received by him in the previous year relevant to the assessment year ending on the 31st day of MarCb, 1956, if such loan or advance remained outstanding on the first day of such previous year.

The provisions of s. 2(6A) (e) and s. 12(1B) had been borrowed and adopted with certain .alterations from s. 108(1) of the Commonwealth Income Tax Assessment Act of Australia the last limb of which provided that payment to a shareholder by \Vay of advance or loan was to be treated as dividend paid by the company on the last day of the year of income of the company in \Yhich payment \Vas n1ade.

The appellant-assessce waG a shareholder and Managing Director of a Private Ltd. Company.

In the calendar year 1956 (assessment year 1957- 58), the assessee \vithdrew in cash from the con1pany n• sum of Rs. 4.97 lakhs, \vhich was less than the accumula-ted profits of the company.

Before the end of the year, the assessec repaid the whole amount. Deducting a sun1 of Rs. 1.59 lakhs \Vhich was credited to the assessee's account by way of dividend in the company's books, the Income-tax Officer treated the balance of Rs. 2.72 lakhs as dividend income in the assessee's hands and grossed up: the amount under s. 16(2).

On appeal, the Accountant Member Of the Appellate Tribunal held that any payment made as envisaged in s. 2(6A)(e) became dividend and must be treated as the assessee's income and no subsequent repayment could take it out of the mischief pf the provision.

The Judicial Member on the otMr hand held that since total income of the assessee during the relevant previous year could be computd and assessed only at the end of that year any ad\·nce or loan taken during the interim periods of the previous year would have to be ignored.

On reference the President agreed \vith the Accountant Member.

The J-Iigh Court ans\vered the reference in favour of the Revenue.

A were taken and (ii) the last limb of s. I 08 (I ) of the Australian Act should be read into the Indian Act because what was explicit in. s. 108(1) of the ' Australian Act is implicit in s. 2(6A) (e) and s. 12(1B) of the Indian Act.

Distnissing the appeal.

HELD: The fiction created by s. 2(6A)(e) read with s. 12(1B) of the Act is attracted as soon as all the conditions necessary for its application exist in a case.

[707' C]

1. In Navnit Lal C. Javeri v. K. K. Sen, Appellate Assistant Co1n1nissivner !11co11ie-tax [1965] 1 SCR 909, this Court he1d that the combined effect of these two provisions is that three kinds of payments made to a shareholder of a company are treated as taxable dividend to the extent of the accumulated profits held by the company, namely, payments made to the shareholder by

\Vay of advance or Jon. payments made on his behalf and payments made for his individual benefit.

The five conditions to he satisfied are : (i) The company n1ust be one in which the public are not substantially interested within the meaning of s. 23A; (ii) The bQrrower must be a shareholder at the date v.; hen the loa-n \Vas advanced; (iii) The loan advanced can be deemed to be dividend only to the extent of the accun1ulated pro'fit on the date of the Joan: (iv) The loan must not have been advanced by, the company in 1he ordinsiry course of its business and (v) The loan must have remained outstanding at the comn1encement of the shareholder's previous year in re!a ... tion to the assessment year 1955-56. [707 D-GJ

In the instant case the con1pany was a controlled con1pany \Vithin the meaning of s. 23A; the assessee was its shareholder; the company possessed "accumulated profits" in excess of the a•mount paid to the assessee during the previous years; and the company's business \Vas not money lending. 1'he last condition was not applicable because it was a transitory provision ap_plicable to the assessment year 1955~56 only \Vhile the assessment yea<r in this. case was 1957-58. f708 Al

2. (a) The language of ss. 2(6A)(e) and 12(1B) is clear and unambiguous.

There is no scope for importing into the statute \VOrds \Vhich )<. are not there. Such importation would be not to construe it but to amend the statute.

Even if there be ai casus 01nissus, the defect can be remedied only by legislation and not by judicial interpretation. [708 HJ

(b) No justification to depart from the normal rule of construction according to which the intention of the legislature is prin1arily to be gathered F from the won.l:; used in the statute hs been made out.

(c) The Indian Legislature has deliberately omitted to use in ss. 2(6A) (e) and 12 (lB) words analogous to those in the last li1nb of s. 108( 1) of the Australian P..ct.

When ss. 2(6A)(e) and 12(1B) \Vere inserted by Finance Act. 1955, Parliament must have been aware of the provision contained in s. 108 of the Australian Act.

Jn spite of such awareness, Parliament has not thought it fit to borrow the whole hog what is sa.id in s. 108(1) so far as the last lin1b of that section is concerned.

Our Parliament imported only G a very restricted version, and incorporated the san1e as the 5th condition in s. 12(1B) to the effect, that the payment dee1ned as divi<lend shall be treated as dividend received by him in the previous year relevaont to the assessment j

year ending on the 31st March, 1956 if such loan or advance remained outstandirtg on the last day of such previous year The word "such" prefixed to the previous year shows that the application of this clause is confined to the assessment year ending on 31st ~.farch, 1956. (709 C~D]

In the instanl case the assessment year did not end on 31st March, 1956 lvhich showed tht the Legislature has deliberately not made the subsistence of the loaQ or advance or its being outstanding on the last, date of the previous year relevant to the asse_ssment year, a pre-requisite for raising the statutory fiction.

In other \Vords, even if the loan or ndvance cCased to be

outstanding at the end of the previous year, it could still be deemed as dividend if the other four conditions factually existed to the extent of -the accumulated profits possessed by the company. (709 EFl

(.d) Under s. 3 which is the charging section, the previo~~ year. is the unit of tiine on which the assessment is based.

As the taxab1hty of income is related to its receipt or accrual -in the previous year, the momnt dividend is received whether actual or deemed, income taxable under the residuary head, "income from othr sources", arises. The charge being on accrual or recipt. the statutory fiction created by ss. 2(6A)(e) and s. 12(1B) would cme mto operation at the time of payment by \vay of advance or loan prov1Jed the other conditions are satisfied. [709 G-H]

CIVIL APPELLATE JURISDICTION: c. A. No. 147 of 1972.

(Appeal by Special Leave from the Judgment ad Order dated 19.2.1971 of the Calcutta High Court in Income Tax Ref. No. 98/67) G. C. Shanna, D. N. Mukherjee, A. K. Ganguly and G. S. Chatteriee, for the appellants.

B. B. Ahuja and R. N. Sachthey, for respondent.

G. C. Shanna, D. K. Jain, A11111> Sharma, S. P. Nayar and.Miss K.

Jaiswal for the Intervener.

The Judgment of the Court was 'delivered by

SARKARIA J. Whether any payment by a Company, not being a Company in which the public are subsantially interested within the meaning of s. 23A, of any sum by way of advance or loan to a shareholder, not exceeding the accumulated profits possessed by the Company, is to be deemed as his dividend under Section 2(6A) (e) read with Section)2(1B) of the Incometax Act, 1922, even if that advance or loan is subsequently repaid in its entirely during the relevant prev>'ous year in which it was taken, is the only question that falls to be determined in thls appeal by special leave.

The assessment year is 1957-58, and the corresponding previous year is 'the calendar year 1956. The assessee is a shareholder and the Managing Director of M/s. Dolaguri Tea Co. (P) Ltd.

The Company is admittedly one in which the public are not substantially interesteJ within the meaning of s. 23A of the Indian Income-tax Act, 1922 (for short, the Act). At the commencement of the previous year, there was in the books of the Company a credit balance of Rs. 65,246/- in the assessee's account, which had been brought forward from the earlier year. Between the 11th January and the 12\h

November, 1956, the assesscc withdrew in cash from time to time from the Company, amounts, aggregating Rs. 4,97,442/-.

The first two cash amounts of Rs. 3,50,000/- and Rs. 40,400/-, were '.aken by the assessee on 11.1.1966. Deducting therefrom the opening balance of Rs. 65,246/- and two more items, namely, Rs. 1,40,000/- being outstanding dividends declared on 31.12.1955 of his major son, and transferred to his account, and a further dividend of Rs. 19,493/- credited to his account from Kathoni Tea Estate, there remained a sum of Rs. 2,72,7°'3/- to the debit of the nssessce

in the books of the Company as on the 12th November, 1956. On December 29, 1956, the assessee paid back to the Company a sum of Rs. 1,90,000/-. On December 31, 1956, his account was credited with another sum of Rs. 80,000/- in respect of the dividend due to him and his wife, and with a further sum of Rs. 29,326/- for liypotecation. In this manner before the end of the previous year, the asscssee'& :tccount was credited with an aggregated amount oi Rs. 2,99,326/- which exceeded the debit balance of Rs. 2,72,703/- as on November 12, 1956.

Thus at the end of the relevant previous year, no advance or loan was due to the Company by the assessee.

The Income-tax Officer found that the accumulated profits of the Company as on January 1, 1956, amounted to Rs. 6,83,005.

He, therefore, deducted the two aforesaid items of Rs. 1,40,000/- and Rs. 19,493/-, aggregating Rs. 1,59,493/-, from the amount paid in cash to the assessee and treated the balance of Rs. 2,72,703/- as the net 'dividend' income in the hands of the assessee within the meaning of Section 2 ( 6A)( e). The Income-tax Officer grossed up that amount under Section 16(2) and gave credit for tax in accordance with that Section to the assessee.

D The asscssee's appeal to the Appellate Assistant Commissioner having failed, he preferred a further appeal to the Income-tax Appellate Tribunal. There was a divergence of opinion between the Members of the Tribunal. The Accountant Member took the view that the moment a payment is made as envisaged in Section 2 ( 6A) ( e) it becomes clothed with the character-of a dividend and has to be treated as such income of the assessee, and no subsequent action or repayment "E by the share-holder can take it out of the mischief of this provision.

He therefore held that the sum of Rs. 2,72,703/- was taxable ns

dividend under Section 2 ( 6A)( e). •

The Judicial Member expressed a contrary opinion.

In his view, the total income of the assessec during the relevant previous year could be computed and assessed only at the end of that year; it could not be computed at interim periods during the previous year. "If it is found that although the shareholder had taken by way of advance or loan an amount from the Company during the course of a previous year but. had returned the same to the Company before the close of that previous year, it can only be said while computing the shareholder's total income at the end of that previous year that no advance or loan from the 23A Company of which he was a shareholder stood for his benefit at the time relevant for computation of his total income. The advances or loans taken during the interim periods of the previous year would just have to be ignored." On these premises, the Judicial Member crune to the conclusion that the sum of Rs. 2, 72, 703 /- grossed up to Rs. 3,19,245/-, was not a dividend within the fiction under Section 2(6A)(e) of the Act.

On account of this difference of opinion, the following question \vas referred to the President of the Tribunal :

"Whether on the facts and in the circumstances of the case, the sum of Rs. 2,72,703/- net (Rs. 3,19,245/- gross)

T. sYAM v. c. I. T. (Sarkaria, J.) 701

is to be treated as dividend income in the hands of the asses- A see within the meaning of Section 2 ( 6A)( e) ?"

The President agreed with the Accountant Member and held that an "advance or Joan received by the shareholder of a Private Company forthwith assumes the character of a dividend and becomes his income by virtue of the fiction created by Section 2(6A) (e) and it ceases to be a liability for the purpose of taxation, although the assessee may, in B fact or in law, remain liable to the Company . to repay it. If the

assessee repays the loan subsequently, such repayment would not liquidate or reduce the quantum of the income which had already accrued, as such repayment is not be llowed as a permissible deduction under Section 12(2) ." On these premises, he answered the question in the affirmative.

In accordance. with the majority opinion, the Tribunal dismissed the asessee's appeal, but, at his instance, referred the same question for opinion to the High Court under Section 66(1) of the Act.

The High Court held that the tax was attracted at the point of time when the said Joan was borrowed by the shareholder and it was immaterial whether the loan was repaid before the end of the accounting year or not. On this reasoning it answered the question in favour of the Revenue and against the assessee.

Hence this appeal by the assessee.

Before dealing with the contentions canvassed, it is necessary tcr have a look at the general scheme and the relevant provisions of the Act, Section 2(6A) (e) of the Act reads as follows :

"2 (6A) "dividend" includes-

(a) to (d)

(e) any payment by a company, not being a company in which the public are substantially interested within the meaning of section 23A of any sum (whether as representing a part of the assets of the company or otherwise) by way of advance or loan to a shareholder or any payment by any such company on behalf or for the individual benefit of a shareholder, to the extent to which the company in either case possesses accumulated profits; but "'dividend" does not includc- ( i) a distribution made in accordance with sub-clause

(c) or sub-clause (d) in respect of any share issued for full cash consideration where the holder of the share is not entitled in the event of liquidation to participate in the surplus assets;

(ii) any advance or loan made to a shareholder by a company in the ordinary course of its busmess where the lending of money is a substantial part of the business of the company;

(iii) any dividend paid by a company which is set off by the company against the whole or any part of any sum previously paid by it and treated as a dividend within the meaning of clause ( e), to the extent to which it is so set off; ·

Explanation.-The expression "accumulated profits", wherever it occurs in this clause, shall not include capital gains arising before the 1st day of April, 1946, or after the 31st day of March, 1948, and before the !st day of April, 1956;

Sub-section (15) defines 'total income' as meaning "total amount of income, profits and gains referred to in sub-section (!) of Section c 4 computed in the manner laid down in this Act."

Section 3 is the charging section. Two of the principles deducible from the Section are :

(I ) That the tax is levied on the total income of the assessable entity;

(2) That each previous year is a distinct unit of time for the purpose of assessment, and the profits made or liabilities or losses incurred before or after the relevant previous year are wholly immaterial in assessing the profits of that year unless there is a statutory provision to the contrary.

Section 4 ( 1) so far as it is material reads as fo1Iows :

"Section 4 (!) : Subject to the provisions of this Act, the total income of any previous year of any person includes all income, profits and gains from whatever source derived which- ( a) are received or are deemed to be received in the taxable territories in such year by or on behalf of such person, or

(b) if such person is resident in the taxable territories during such year,-

(i) accrue or arise or any deemed to accrue or arise to him in the taxable territories during such year, or

(ii) accrue or arise to him without the taxable territories during such year, or (iii)

(c) if such person is not resident in the taxable territories during such year, accrue or arise or are deemed to accrue or arise to him in the taxable territories during such year : (emphasis supplied) "Provided that .. ,,

The principles .deducible from Sec. 4(1) are : (l ) The charge is on accrual or receipt basis. Such receipt or accrual may be actual or statutory, i.e. the result of any statutory fiction created by the Act.

(2)

(3)

If a particular amount of income is taxed under any of the clauses (a), (b) or (c) of the sulrsection the same amount cannot be taxed under any other clause either in the same year or in a different year. That is to say, income which is taxed on accrual under clause (b) (ii) cannot be taxed again on receipt under clause (a) or on remittance under Clause (b) (iii) (see Kanga and Palkhiwala, Vol. I; 1959 Edition, page 153).

The receipt spoken of in this clause is the first receipt after the accrual of the income l See the decision of this Court in Keshav Mills v. Commissioner of lncome-t(lx(')).

Sub-section (I) of Sec. 4 also highlights the basic principle embodied in the charging section 3, that the accrual or receipt of income C (actual or deemed) is taxed with regard to the relevant previous year.

Section 12 deals with the residuary head : "Income from other sources".

Its sub-section (JA) says that:

"Income from other sources shall include 'dividends'.

Sub-section (!Bl in crucial.

It provides :

"Any payment by a company to a shareholder by way of advance or loan which would have been treated as a dividend within the meaning of clause ( e) of sub-section ( 6A) of section 2 in any previous year relevant to any assessment year prior to the assessment year ending on the 31st day of March, 1956 had that clause been in force in that year, shall be treated as a dividend received by him in the previous'year relevant to the assessment year ending on the 31st day of March, 1956, if such loan or advance remained outstanding on the first day of snch previous year".

Sub-section (2), inter alia lays down that in computing any income by way of dividend, allowance shall be given for any reasonable sum paid by way of commission or remuneration to a banker or any other person realising suc.h dividend on behalf of the assessee.

It is to be noted that sub-section (6A) of section 2 and subsections (!A) and (lB) u/s 12 were inserted in the Act by the Finance Act, 1955, with effect from the 1st April, 1956.

t In the relevant assessment year, Section 16(2) of the Act was operative and ran as follows :

"16(2) For the purpose of inclusion in the total income of an assessee any dividend shall be deemed to be income of the previous year in which it is paid, credited or distributed or deemed to have been paid, credited or -----

(!) [1953] 23 I.T.R. 230.

A •

distributed to bim, and shall be increased to such amount as would, if income-tax (but not super-tax) at the rate applicable to the total income of the company. . . . . for the financial year in which the dividend is paid, credited or distributed or deemed to have been paid, credited or distributed were deducted therefrom, be equal to the amount 'of the dividend."

Mr. G. C. Sham1a, Counsel for the appellants c011tends that the scope of the fiction created by Sec. 2( 6A)( e) should be confined to those advances and loans only, which are not repaid but remain subsisting at the end of the previous year in which they were taken. It is argued that the sole object of this provision is to curb the evil of distributing profits under the guise of loaru; or advances; that if an advance or loan is repaid in the same accounting year, it cannot be said that it \Vas a device for distribution of profits. It is submitted that only in the case of an advance or loan which remains outstanding at the end of the accounting year, Sec. 2(6A) (e) raises an irrebutablc presumption that it was a payment of dividend under the cloak of a loan. It is maintained that if this construction of Sec. 2(6A) (e) is not adopted, it will lead to extremely oppressive, unreasonable and anamolous results, including double taxation.. To illustrate bis point Couasel compares and contrasts the position of a shareholder who promptly, after a short period, repays the loan in the same year, with one who does not do so but allows it to remain outstanding and be carried over to the next year, and thereafter a dividend is declared. If the interpretation adopted by the High Court is correct-says Mr. Sharma-the shareholder in the prior case who had promptly repaid the loan would not be entitled under sub-clause (iii) of Clause (e) of s. 2(6A) to set off any part of the subsequently declared dividend against the loan which he had repaid earlier, but will have to pay double tax on the same item, once on it as deemed dividend and then on it as declared dividend.

His liability cannot be reduced to the extent of the dividend; because at .the date on which the dividend was declared, no loan was outstanding against which it could be set off.

As against the fOl'lller, the latter shareholder who makes full use of the' loan and . does not repay any part of the loan in the same year, but leaves it unpaid till a dividend is declared net year, will get rellef by set olt of the subsequently declared dividend. in whole or in part against the loan outstanding against him.

Another example cited by Mr. Sharma is of a case where the accumulated profit, say is Rs. 9,000/- and the shareholder takes an advance or loan of Rs. 3,000/- and he repays it after a week, and again gets the same amount (Rs. 3,000/-) back as a loan, and again repays it after a week, and again retakes the same amount as loan-all the three loans being taken and repaid, in the same year. If the unrestricted interpretation of the provision, sought by the Revenue were to be adopted, the same amount of loan in all the three transactions of loan would be subjected to triple taxation. Such an absurd and oppressive result, says the Counsel, would be against the intendmcnt of the provision and inconsistent with the scheme of the Act which generally aillls avoids double taxation.

The upshot of the arguments of Mr.

( . .,

Sharma is that under the Act, only that item or entity is taxable which is rationally capable of being considered as the income of the asscssee; that an advance or oan which is genuine and not a subterfuge for payment of dividend and is not subsisting or outstanding at the end of the previous year on account of its repayment by the sh.areholder cannot reasonably be deemed to be his dividend income w1thm

the contemplation of s. 2(6A) (e) read with s. 12 of the Act.. Mr Sharma has taken us through various decisions having a bearing on the problem. The cases referred to, discussed or sought to be distinguished by him are : K. M. S. Lakshman Aiyar v. Assistant Income-tax Officer,(') N.avnit Lal C. Javeri v. K. K. Sen, Appellate Assistant Commissioner, Income-tax, Bombay;(') Commissioner. of Income-tax, i\fadras v. K. Srinivasan;(•) JValclzand & Co. Ltd. v. Commissioner of

Incon1e-tax, IJ01nbay;(') Comn1issioner, Inco1ne-tax Bo1nbay. v. R. K. . C Badiani.( 5 ) • ·

Mr. Sharma also has referred to Sec. I 08 of the Comnionwealih Income-tax Act as in force in Australia, and submitted that since the substance of Sec. 2(6A)(e) and s. 12(!B) has been borrowed from s. 108 of the said Act and the object of these provisions in the two enactments is the same, it will not be illegitimate to determine ana . D circumscribe the scope of the fiction created by the provision in question in the light of the principles indicated in Sec. 108 of the Commonwealth Act.

On the other hand. Mr. Ahuja appearing for the Revenue, submits that sub-clause (iii) . which permits a set off against a loan deemed as dividend, docs not apply in cases where the dividend is not declared E in the same accounting year because to hold otherwise would be against

the basic scheme ingrained in ss. 3 and 4 of the Act, according to which the unit of time for the purpose of assessment is the previous year of th" assessce. Mr. Ahuja further maintains that even if during the same accounting year after repayment' of the loan, a dividend is declared, sub-clause (iii) will apply, and the Income-tax Officer -will'not be aebarred from reducing, in an appropriate case, the amount treated by F him as 'dividend' under clause ( e) of s. 2 ( 6A) to the extent of the subsequently declared dividend, on the principle of notional set off underlying sub-clause (iii). The point sought to be made out is that since

the treatment of the loan to the assessee shareholder as his dividend rests on a legal fiction, it will not be an illegitimate use of sub-clause

(iii) to allow a notional set off to meet such a situation.

Thus construed, says the Counsel, there would be no anomaly.

Mr. Ahuja further submitted that s. 2(6A) (e) was enacted to •uppress the evil of receiving profits or dividends nnder the guise of !?ans by the shareholders of a controlled Company, as such a malpracltce resulted in evasion of tax. This provision, it is urged should be construed in .a manner which suppresses the mischief and advances the remedy. It is maintained that the language of the provisions in question H

(I) [t96~) XL I.T.R. 469 (M1d.)

(3) (1963) 50, !TR 788 (Mid).

(5) [1970)76 l.T.R. 369 (Born).

(2) [1965] I, SCR 909-56 I.T.R.19.8.

(4) too I.T.R. 598(Bom).

is plain and unambiguous and no question of seeking external aid tor its interpretation arises; the Court must give effect to it regardless of the hardship, if any, resulting therefrom. The sum and substance of his arguments is. that since all the factual ingredients necessary for raising . the fiction contemplated bys. 2(6A)(e) ands. 12(JB) have been found to exist by the Income-tax al!thorities and the Tribunal, the loan. had to be treated as the assessee's dividend income, the moment it was received, and the subsequent repayment of the loan cou:d not neutralise or take it out of that category of 'incdme'.

Counsel has drawn our attention to the ooocrvations of this Court in Navnit Lal C. Javeri v.

K. K. Sen. Appellate Assistant Commissioner of Income-tax (sµpra).

He has further adopted the reasoning of the Bombay High Court m Walchand & Co.'s v. Commissioner of Income-tax, Bombay (supra).

Section 2(6A)(e) ands. 12(1B) were inserted in the Act by the Finance Act 1955 which came into operation on 1-4-1955.

These provisions seem to have been adapted, and borrowed with alterations, from s. 108 of the Commonwealth Income-tax Assessment Act in force ' in Australia. Section 108 reads as follows:

"Loans to shareholders, (1) If amounts are paid or assets distributed by a private company to any of its shareholders by way of advances or loans, or payments are made by the company on behalf of or for the individual benefit of, any of its shareholders, so much, if any, of the amount or value of those advances, loans or payments, as, in the opinion of the Commissioner, represents distributions of income shall, for the proposes of this Act other than the purposes of Division llA of Part III and Division 4 of Part VI be deemed to be dividends paid by the company on the last day of the year of income of the company in which the payment 0r distributio"n is made.

(2) Where the amount or value of an advance, loan or payment is deemed, under the last preceding sub-section, to be a dividend paid by a company to a shareholder, and the company subsequently sets off the whole or a part of a dividend distributed by it in satisfaction in whole or in part of that advance, loan or payment, that dividend shall, to the extent to which it is so set off, be deemed, not to be a dividend for any purpose of this Act."

It will be seen that under s. 108 (1) formation of "the opinion of the Commissioner" is the sine qua non for bringing this provision into provision into operation. It has been held be the Australian Board of Review that the mere fact that a shareholder in a private Company has become indebted to it, does not justify the formation of the opinion by the Commissioner such as is indicated in sub-section (1) of s. 108. "There must be something that goes beyond a mere debt automatically arising upon a taking of accounts and which points to a subterfuge whereby a payment which, upon examination, is found to relate to tne

income of the Company and to represent the distribution thereof, is made to appear to be a loan or advance" (J.C.T.B.R. (N.S.) Case No. 80.)

"" ..

It is noteworthy that at least in one material aspect the Indian Jaw ; s different from that under s. I 08 (I) of the Commonwealth Act as explained and interpreted by the Board in the case mentioned above.

Under s. 108, the raising of the fiction is dependent upon a positive finding recorded by the Commissioner of Income-tax that the payment represents distribution of the Company's income. Buts. 2(6A){e) and

5. 12 of the Act do not leave this question to the adjudication of the Income-tax authorities. Parliament has itself, in the exercise of its Jegi>- lative judgment, raised a conclusive presumption, that in all cases where loans are advanced to a shareholder in a Private Ltd. Company having accumulated profits, the advances should be deemed to be the dividend income of the shareholder. It is this presumption juris et de jure which is the four, dation of the statutory fiction incorporated in s. 2(6A) (e).

Thus s. 108 of the Commonwealth Act appears to be more reasonable and less harsh than its Indian counterpart.

Frol)l the above discussion it emerges clear that the fiction created 'bys. 2(6A) (e) read withs. J2(1B) of the Act is inexorably attracted as soon as all the conditions necessary for its application exist in a case.

In Navnit Lat's case (supra), this Court, after an analysis of these provisions, listed these conditions, as follows :

" ... the combined effect of these two provisions is that D three kinds of payments made to the shareholder of a company to which the said provisions apply, are treated as taxable dividend to the extent of the accumulated profits held by the company. These three kinds of payments are: (1) payments made to the shareholder by way of advance or loan, (2) payments made on his behalf and (3) payments made for his 'individual benefit. There are five conditions which must be E satisfied before section 12(1B) can be invoked against a shareholder.

The first condition is that the company in question must be one in which the public are not 'substantially interested within the meaning of section 23A as it stood in •the year in which the loan was advanced. The second condition is that the borrower must be a shareholder at the date when the loan was advanced; it is immaterial what the ex- F tent of his shareholding is.

The third condition is that the loan advanced to a shareholder by such a company can be .deemed to be dividend only to the extent to which it is shown that the company possessed accumulated profit at the date of the loan. This is an important limit prescribed by the relevant section. The fourth condition is that the loan must not have been advanced by the company in the ordinary course G of its business.

In other word's, this provision would not apply to cases where the company which advances a loan to its shareholder carries on the business of money lending itself; and the last condition is that the loan must have remained outstanding at the commencement of the shareholder's previous year in relation to the assessment year 1955-56."

(emphasis; supplied) H The first four conditions factually exist in the instant case.

The •ast condition is not applicable because it was a transitory provision

6-707 SCT/77 . '

applicable to the assessment year 1955-56 only, while we are concerned with the assessment year 1957-58 and the previous year is the calendar year 1956.

There is no dispute that the company is a controlled (Private Ltd.) company in which the public are not substantially interested within the meaning of s. 23A.

Further the assessee is admit.tedly a shareholder and Managing Director of that Company.

It is also beyond. controversy that at all material times, the company possessed "accumulated profits" in excess of the amount which the assessee-shareholder was paid during the previous year.

The Income-tax Officer found that on January 1, 1956, the accunmlated profits of the Company amounted to Rs. 6,83,005/- while from 11.1.1956 to 12.11.1956, th.e assessee received in cash from time to time from the Company payments aggregating Rs. 4,97,449/-.

After deducting the opening credit balance and some other items credited to his account, the Income-tax Officer found that in the previous year the assessee share-holder had received a net payment of Rs. 2, 72, 703 /- by way of loan or advance from the Company. The Company's business is not money lending and it could not be said that the loans had been advanced by the company in the ordinary course of its business.

Thus all the factual conditions for raising statutory fiction created by ss.2(6A) (e) and 12(IB) appeared to have been satisfied in the instant case.

Mr. Sharma, however, contends that in order to attract the statutory fiction one other essential condition is, that the loan or advance must be outstanding at the end of the previous year, and if the loan had ceased to exj,5t owing to repayment or otherwise before the end of the year-as in the present case-the fiction cannot be invoked.

In this connection, Counsel has again referred to the last limb of s. 108 ( 1) of the Commonwealth Income-tax Act, according to which, the payment to a shareholder by way of advance or loan. is to be treated as a dividend paid by the Company on the last day of the year of income of the Company in which the payment is made.

It is urged that the principle in the last limb of sub-section' ( 1) of s. 108 of the Commonwealth Act should also be read into the Indian statute.

It is maintained that the omission of such words from ss. 2(6A) (e) and 12(1B) does not show that the intendment of the Indian Legislature was different.

According to the Counsel what is implicit in s. 108(1) of the Commonwealth Act, is implicit in ss. 2(6A) (e) and 12(1B) and the general scheme of. the Act which requires that the assessment is to be made on the basis of total income of the whole previous year.

Such a view concludes Mr ..

Sharma, would also be in consonance with reason and justice.

We have given anxious thought to the persuasive arguments o~ Mr.

Sharma.

His arguments, if accepted, will certamly soften the rigour of this extremely drastic provision and bring it more in conformity with logic and equity. But the Janguge of ss. 2(6A) (e) a.ml ~2qB) is clear and unambiguous.

There 1s no scoe for mportmg mto the statute words which are not there.

Such 1mportat10n would be, not to construe but to amend the statute. Even if there be a casu.~ omissus the defct can be remedied only by 1egfslation: and i1ot by judicial interrretation. -

To us, there appears no justificatiou to depart from the normal rule of construction according to which the intention of the legislature is primarily to be gathered from the words used in the statute. It will be well to recall the words of Rowlatt J. in Cape Brandy Syndicase v. I. R. C.(1) at p. 71, that "in a taxing Act one has to look merely at what is clearly said.

There is no room for any intendment.

There is no equity about a tax.

There is no presumption as to a tax. nothing is to be read in, nothing is to be implied. One can qnly look fairly at the langnage used".

Once it is shown that the case of the assessee comes comes within the letter of the law, he must be taxed, however great the hardship may appear to the judicial mind to be.

In our opinion, the Indian Legislature has deliberately omitted to use in ss. 2(6A) (e) and 12(1B) words analogous to those in the last limb of sub-section ( 1) of s. I 08 of the Commonwealth Act. When Sections 2(6A) (e) and 12(1B) were inserted by the Finance Act, 1955, Parliament must have been aware of the provision contained in s. 108 of the Commonwealth Act. In spite of such awareness, Parliament has not thought it fit to borrow whole hog what is said in s. I 08 (I) of the Commonwealth Act.

So far as the last lim.b of s. 108 (I) is concerned, our Parliament imported only a very restricted version arid incorporated the same as the 'fifth condition' in sub-s. ( lB) of s. 12 to the effect, 'that the "payment deemed as dividend shall be treated as a dividend received by him in the previous year relevant to the assessment year ending on the 31st day of March, 1956 if such loan or advance remains outstanding on the last day of such previous year".

The word "such" prefixed to the "previous year" shows that the application of this clause is confined to the assessment year ending on 31-3-1956. In the instant case we are not concerned with the assessment year ending on 31-3-56.

This highlights the fact that the Legislature has deliberately not made the subsistence of the loan or advance, or its being outstanding on the last date of the previous year relevant to the assessment year, a prerequisite for raising the statutory fiction.

In other words, even if !he loan or advance ceases to be outstanding at the end of the previous year, it can still be deemed as a 'dividend' if the other four conditions factually exist, to the extent of the accumulated profits possessed by the Company.

At the commencement of this judgment we have noticed some general principles, one of which is, that the previous year is the unit of time

on which the assessment is based (s. 3).

As the taxability of an G income is related to its receipt or accrual in the previous year, the moment a dividend is received whether it is actual dividend declared by the company or is a deemed dividend, income taxable under the residuary head, "income from other sources", arises.

The charge being on accrual or receipt the statutory fiction created by s. 2 ( 6A) ( e) and s.l2(1B) would come into operation at the time of the payment by

way of advance or loan, provided the other conditions are satisfied.

(l)

(1921) l, K.B. 64 at p. 71.

A We do not propose to examine the soundness or otherwise of the • illustrations given by Mr. Shanna since they are founded on assumed facts which do not exist in the present case.

For the foregoing reasons we would answer the question posed in favour of the Revenue and dismiss this appeal with costs.

P.B.R.

Appeal dismissed.

TARULATA SYAM AND ORS

COMMISSIONER OF INCOME-TAX, WEST BENGA1

April 28, 1977

P. N. BHAGWATI

R. S. SARKARIA

S. MURTAZA FAZAL ALI, JJ.

Indian Income Tax Act, 1922

S. 2(6A)(e)

s. 23A

s. 2(6A)(e)

section 2(W\)

Indian Income-tax Act, 1922

s. 23A

s. 12(IA)

s. 12

s. 2(6A)(e)

s. 2(6A)

s. 12(1B)

s. 108(1)

s. 16(2)

s. 2(6A)(e)

s. 108(1)

s. 2(6A)

s. 12(1B)

s. 2(6A)(e)

s. 12(1B)

[1965] 1 SCR 909

s. 23A

s. 23A

ss. 2(6A)(e) and 12(1B)

ss. 2(6A)

s. 108( 1)

ss. 2(6A)(e) and 12(1B)

Vere inserted by Finance Act

Parliament

s. 108

s. 108(1)

s. 12(1B)

s. 3

ss. 2(6A)(e)

s. 12(1B)

CIVIL APPELLATE JURISDICTION

G. C. Shanna

D. N. Mukherjee

A. K. Ganguly

G. S. Chatteriee

B. B. Ahuja

R. N. Sachthey

D. K. Jain

S. P. Nayar

K.

Jaiswal

SARKARIA

s. 23A

Section 2(6A)

Incometax Act, 1922

Dolaguri Tea Co. (P) Ltd.

s. 23A

Indian Income-tax Act, 1922

Kathoni Tea Estate

12th November, 1956

December 29, 1956

December 31, 1956

November 12, 1956

January 1, 1956

Section 2

Section 16(2)

Assistant Commissioner

Section 2

Section 2

Section 2(6A)(e)

Section 2

Section 2(6A)

Section 12(2)

Section 66(1)

Section 2(6A)

section 23A

1st day of April, 1946

31st day of March, 1948

st day of April, 1956

Section 3

Section 4

Section 4

Sec. 4(1)

Sec. 4

section 3

Section 12

section 2

31st day of March, 1956

section 2

s 12

Act by the Finance Act, 1955

1st April, 1956

Section 16(2)

G. C. Sham1a

Sec. 2( 6A)( e)

Sec. 2(6A)

Sec. 2(6A)

Couasel

Sharma

s. 2(6A)

s. 2(6A)

s. 12

Income-tax Act

Sec. 2(6A)(e)

s. 12(!B)

s. 108

Sec. 108

Ahuja

ss. 3 and 4

s. 2

s. 2(6A)

Bombay High Court

Section 2(6A)(e)

Act by the Finance Act 1955

s. 108

Section 108

s. 108

s. 108

s. 108

s. 2(6A)

s. 108

Navnit Lat

section 12(1B)

section 23A

s. 23A

s. 108

Income-tax Act

s. 108

ss. 2(6A)

s. 108(1)

ss. 2(6A)

Sharma

ss. 2(6A)

Rowlatt

ss. 2(6A)

Sections 2(6A)

Finance Act, 1955

s. 108

s. 108

s. 12

s. 3

s. 2

Shanna


TARLOK SINGH

STATE OF PUNJAB

April 28, 1977

[V. R. KRISHNA IYER AND P. S. KAILASAM, JJ.]

Crinzinal Procedure Code (Act 2 of 1974), 1973-Section 235, object and .scope of.

The appellant was convicted along with t~'O other accused under s. 302 1.P.C. and sentenced to death while the other two "'ere sentenced to life iniprisonment.

In appeal to this Court against the orders of the High Court confirming the death sentence imposed, the special leave was granted limited

to sentence.

Allowing the Criminal Appeal No. 337 of 1976 in part and modifying the death sentence to one of life imprisonmenti, the Court,

HELD : (!) The object of s. 235 Cr.P.C. 1974 is to give a fresh opportunity to the convicted person to bring to the notice of the court such circun1stances as may help the court in awarding an appropriate sentence havregard to the personal, social and other circumstances of the case. (712 D]

!2) Failure to give an opportunity under s. 235(2) Cr.P.C. will not affect the conviction under ainy circumstance. In a' murder case where the charge is made out the limited question is as beiween the two sentences pre.scribed under the Penal Code. If the minimum sentence is imposed, question of providing an opportunity under s. 235 would not arise. [712 F]

(3) The hearing contemplated by s. 235(2) is not confined merely to hearing oral submissions but extend giving an opportunity to the prosecution and the accused to place before the court facts and materials of sentence1 and, if they are contested by either side, then to produce evidence for thb purpose of establishing the same.

[712 G]

Santa Singh v. State of Punjab A.I.R. l't76 S C 2386, reiterated.

(4) To save time and expense and help produce prompt justice, it may be more appropriate for the appellate court to give an opportiunity to the parties in. terms of s. 235 (2) to produce the materials they wish to adduce F instead of going through the exercise of sending the case back to the trial court. [713 Al

In the instant case, the Court mcxlifi.ed the death sentence to one of life imprisonment in view of the facts : (i) The death sentence has been inflicted nearly two years ago and the agony of such a sentence has been an excruciating experience suffered by the convict for a long period; (ii) The appellant had two other assailants with hi1n who have been .. a\varded life imprisonment; (iii) There was no motive for the appellant to kill the innocent child; and (iv) The other circumstances present indicate that the ends of justice would be met by awarding life imprisonment. [713 G-E]

E. Annamma v. State of Andhra Pradesh A:1.R. 1974 S.C. 799, referred to.

CRIMINAL APPELLATE JURISDICTION : Cr!. A. 337 & 367 /1976 ff

(Appeals by Special Leave from the Judgment and Order dated 24.3.1976 of the Punjab and Haryana High Court in Sri. A No. 757

SUPREME COURT REPORTS

[1977) 3 S.C.R.

75 and Murder Reference No. 27 /75 and in Cr!. Appeal No. 759 of 1975)

A. K. Sen and Hariinder Singh, for the appellant.

N. S. Das Behl, for the respondent. ·

The Judgment of the court was delivered by

KRISHNA IYER, J. In Cr!. Appeal No. 337 /1976 by special leave Shri A. K. Sen has confined his challenge-indeed, leave itself was limited-to the question of sentence. The case of murder was proved and the conviction by the Sessions Court was confirmed by the High Court. The Sessions Judge awarded life imprisonment to two accused and death sentence to the appellant.

The High Court confirmed the . death sentence and hence this appeal.

Section 235 Cr. P.C. 1974 makes a departure from the previous Code on account of humanist considerations to personalise the sentence to be awarded. The object of the provision is to give a fresh such circnmstances as may help the court in awarding an appropriate sentence having regard to the personal, social and other circumstances of the case. Of course, when it is a case of conviction under s. 302, I.P.C. if the minimum sentence is imposed the question of providing an opportunity under Sec. 235 would not arise.

In this case it is admitted that no opportunity was given under s. 235(2) Cr. P. C. to the appellant to show cause as to why the lesser sentence of life imprisonment should not be inflicted.

We may make it absolutely clear that such a failure will not affect the conviction under any circumstances.

The only point is relevant to sentence.

Even there in a murder case where the charge of murder is made out, the limited question is as between the two sentences prescribed under the Penal Code.

In Santa Siligh v. State of Puniab(') this Court considering s. 235

(2) Cr. P. C. held that the hearing contemplated by that sub-section is not confined merely to hearing oral submissions but extends to giving an opportunity to the prosecution and the accused to place before the court facts and materials relating to the various factors bearing on the question of sentence and, if they are contested by either side, then to produce evidence for the purpose of establishing the same.

Of course, in that particular case this Court sent the case back to the sessions court for complying withs. 235(2) Cr. P. C. It may well be that in many cases sending the case back to the Sessions Court may lead to more expense, delay and prejudice to the cause of justice. Jn such cases it may be , more appropriate for the appellai~ court to give an opportunity to the parties in terms elf s. 235(2) to produce th-e ----·----

(I) A.1.R. 1976 S.C. 2386

~. •

TARLOK SINGH v. PUNJAB (Krishna Iyer, J.) 713

materials they wish to adduce instead of going through the exercise of sending the case back to the trial court.

This may, m many cases, save time and help produce prompt justice.

ln the present case we propose to adopt that course and counsel for the parties agree that they will rely upon the materials available on record and they have nothing more to offer to the court bearing on the question of sentence.

It will be an idle formality in a situation like :that to remit the case to reconsider the question of sentence to the Sessions Court.

Coming, to the facts of the present case, having heard both sides we are impressed by Shri Seu's submission that the death sentence has been inflicted nearly two years ago and the a-gony of such a sentence

has been an excruciating experience suffered by the convict for a C long period.

This, by itself, may not be a circumstance to bring down the death sentence, if otherwise the act is too brutal, depraved or meriting the highest penalty.

It has been now established in many decisions of this Court that death sentence must be awarded where there are aggravating factors (vide E. Annamma v. State of Andhra Pradesh(').

The appellant had two other assailants with him who have been awarded life imprisonment.

Moreover, it is evident from the D records that there was an exchange of abuse between the parties, viz., Shiv Singh and the accused party.

It is also apparent that there was no motive for the appellant to kill the innocent child who died, a circumstance which has influenced the courts below in awarding the capital sentence.

The other circumstances present also indicate that there is no particular reason why the appellant should have been given the severer sentence and we are satisfied that the ends of justice would E be met be awarding life imprisonment.

We accordingly direct that the sentence of life imprisonment should be substituted in place of death sentence awarded by the trial court and confirmed by the High Court.

We allow the appeal to this extent.

Cr!. Appeal No. 367 of 1976 is dismissed as not pressed.

S.R.

(l) A.LR. 1974 S.C. 799

Cr. A. 337 allowed in part and sentence modified. Cr. A. 367 /76 dismissed.

TARLOK SINGH

STATE OF PUNJAB

April 28, 1977

V. R. KRISHNA IYER

P. S. KAILASAM, JJ.

Crinzinal Procedure Code

Section 235

s. 302

s. 235

Cr.P.C

s. 235(2)

Cr.P.C

Penal Code

s. 235

s. 235(2)

s. 235

[1977) 3 S.C.R.

75

A. K. Sen

Hariinder Singh

N. S. Das Behl

KRISHNA IYER

Section 235

s. 302

I.P.C

Sec. 235

s. 235(2)

Penal Code

s. 235

s. 235(2)

Seu

Shiv Singh