STATE OF MAHARASHTRA & ANR. v.

VINA YAK

January 6, 1977

[Y. V. CHANDRACHUD AND P. N. SHINGHAL, JJ.]

Seniority and arrears of salary-Respondellt Governme/lf ser.vant in Madhya Pradesh on Reorganisation of States was allotted to Bombay and then to Maharashtra-Supersession in seniority list. grievance about-Circular No.

SRV-1064-D dt. 25.2.1965 of the Maharashtra Government does not govern <JUCstions Of seniority and supers.ession arising froni Reorganisation •of Staies-

Circiilar No. SH-INT-1059-Vl-9 dt. 10.3.1960 alone applies to the respondent's case.

T/u, 1965 circular does not take away the rights, if any, under Rule 21 of the A /located Government Servants (Absorption, Seniority, Pay and A /loances) Rules 1957-Scope of Rule 21.

Consequent to reorganisation of States, the Maharashtra Government published seniority lists from time to time, erroneously according to the respondent a lower place of seniority with the result that juniors got promoted and his promotion was unduly delayed.

The respondent filed a writ petition asking for due recognition of his seniority, and later amended his petition, D claiming arrears of pay and allowances retrospectively from the date on which be ought to have been promoted according to the final gradation list wherein he was placed correctly and which was approved by the Central Government.

The writ petition was allowed by the High Court.

Before this Coµrt the respondent contended that under rule 21 of the Allocated Government Servants (Absorption, Seniority, Pay and Allowances) Rules, 1957, he was entitled to draw his pay and allowances from the date of his promotion including the deemed date of promotion.

Allowing the appeal by Special Leave, the Court,

HELD : (1) The Maharashtra Government circular No. SRV 1064 dt. 25.2.1965 does not have the effect of altering the respondent's conditions of service to his prejudice since the said circular issued by the State Government does not fall within the mischief of proviso to s. 115(7) of the States Reorganisation Act. [592 A]

(2) The circular deals with cases where Government servants who were superseded for promotion to the higher post are later promoted on orders of higher authorities who considered the supersession unjustified and who having power to set aside orders of supersession have set aside such orders.

[590 DJ

(3) The circular dt. 25.2.1965 is not intended to govern questions of senio;-ity and supersession arising as a result of Reorganisation of States.

That circular by its language is designed to meet cases in which a Government servant apart from the provisions of States Reorganisation Act and apart from the problems arising out of reorganisation of States was denied his rightful seniority but is later accorded a due and appropriate place in the seniority list.

[590 F-G]

( 4) The circular issued by the Government of Maharashtra on February 25 1965 does not take away from the respondent the right, if any, which w; s available to him under rule 21.

Rule 21 is not in the nature of an enti!lement. . On the other hand, it restricts the right of the allocated Government servant to receive pay and allowancs "only with effect from the . date" from which he became available for service or would have been so available except for the causes mentioned in rule 2(d).

[592 B-D]

. (5) The respondent's case must fall within the Bombay Government Circular No. SR-INT-1059-VI dt. 10.3.1960 in which .case he would not be en!Jtled. to the arrears for salary for the period prior to the date of his actuat promot10n.

[591 G]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 651 of 1976.

(Appeal by Special Leave from the Judgment and Order dated 19-6-1974 of the Bombay High Court in

S.C.A.

No. 1251 of 1970.)

M. N. Phadke, Girish Chandra and M. N. Shroff, for the appellants.

C S. V. Gupte, N. Kamalakar and A. G. Ratnaparkhi, for the respondent.

The Judgment of the Court was delivered by

CHANDRACHUD, J.

On the reorganisation of States on November 1, 1956 the respondent who was working as an Agricultural Overseer in the then State of Madhya Pradesh was allocated first to the State of Bombay and later to the State of Maharashtra.

By a resolution dated February 17, 1958 the Government of Bombay equated the post of Agricultural Overseer with that of an Agricultural Assistant,. 'Grade II. In July 1958 the respondent was promoted as an Agriultural Supervisor and in April 1967 he was appointed to the post of an Agricultural Officer.

On the reorganisation of States, a provisional combined seniority list of Agricultural Assisants, Grade II, was published by the Government of Maharashtra in 1961.

That list was revised from time to time, and ultimately tthe Government of India approved the final , seniority list which came to be published on May 29, 1973.

The respondent has no grievance against his placement in that list, but his

case is that under the seniority lists prepared from time to time by the

State Government, he was erroneously accorded a lower place of seniority with the result that persons who were in fact junior to him came to be promoted on the assumption that they were senior to him.

The respondent therefore filed the present writ petition on October 14, 1970 asking for due recognition of his seniority.

He later amended that petition and asked for arrears of pay and allowances retrospectively from the date on which he ought to have been promoted in accordance with the seniority list approved by the Central Govern- :ment.

The writ petition having been aUowed by the Nagpur Bench of the Bombay High Court, the State of Maharashtra has filed this appeal by special leave.

The sole question which arises for determination in this appeal is whether the respondent is en.titled to arrears of pay with effect from the date on which he would, in the normal course, have been promoted if his seniority were recognised as it eventually came to be

MAHARASHTRA v. VINAYAK (Chatzdrachud, J.) 5 89

recognised under the seniority list approved by the Central Government in 1973.

The answer to this question depends on whether the rights of the respondent are governed by the circular dated March 10, 1960 or by the circular dated February 25, 1965.

The case of the State Government is that the former, and not the latter circular, applies whereas the respondent contends that he is entitled to arrears of safary for the entire period under the latter circular.

We find it impossible to accept the respondent's contention, which has found favour with the High Court, that the circular of February 25, 1965 governs the matter.

That circular reads thus :

"Retrospective promotions of those who had been superseded earlier.

GOVERNMENT OF MAHARASHTRA

GENERAL ADMINISTRATION DEPARTMENT

I Circular Memwandum No. SRV-1064-D, Sachivalaya,

Bombay 32 (B.R.) 25th February, 1965 /Falgune 6, 1886.

CIRCULAR MEMORANDUM OF GOVERNMENT

A question has been raised whether in cases in which Government servants who were superseded for promotion to the higher post are later promoted on the orders of higher authorities who consider the supersession 4nfustified and who having powers to set aside the order of supersession, do so, their promotion should be effective from the date on which they are actually promoted or from the date they should have been promoted had they not been wrongly superseded.

The Government has, considered this question and decided that in such cases, the Government servants concerned, should be deemed to have been promoted to higher post from the date from which they would have been promoted, but for their wrongful supersession i.e. from the date from which their juniors who were promoted by superseding them started to officiate in such posts and they should be allowed pay in such post as if they were promoted on the dates on which their juniors were promoted and also paid arrears of pay and allowances from such dates.

(2) Orders in paragraph 1 above apply also to the cases of persons, who are superseded for promotion to gazetted post within the purview of the Public Service Commission ordered by Government but are later promoted when their earlier supersession is considered in consultation with the Commission unjustified.

(3) Pending cases should be regulated in accordance with these orders in paragraphs 1 and 2 above, and arrears of

D',

pay and allowances should be paid to the persons concerned provided that if the arrears relate to any period prior to the 1st May 1960, the payment is restricted to the period after that date, i.e. after the 1st May 1960. ·

( 4) This Circular Memorandum issues with the concurrence of the Finance Department VIDE that department unofficial reference No. 581/V, dated the 2nd February, 1965.

By Order and in the name of Government of Maharashtra.

Sd/- K. P. Nadkarni,

Deputy Secretary to Govt."

The language of this circular is singularly inappropriate to cover cases concerning equation and seniority consequent upon formation of new States.

The circular deals with cases where government servants who are superseded for promotion to the higher post are later promoted on orders of higher authorities who considered the supersession unjustified and who, having powers to set aside orders of supersession, have set aside such orders. In such cases, the circular provides, the government servant concerned should be deemed to have been promoted to the higher post from the date from which he would have been promoted but for his wrongful supersession.

There is no question in the present case of the respondent being promoted on the basis of any order passed by a higher authority.

Nor indeed did any higher authority consider the so-called supersession of the respondent as unjustified. While approving the revised seniority list in which the respondent occupied a much higher place than previously, the Central Government did not set aside any order of the respondent's supersession nor did it pass any order directing that the respondent be promoted to a higher post.

We are clear that the circular of February 25, 1965, on which judgment of the High Court rests, is not intended to govern questions of seniority and supersession arising as a rsult of reorganisation of States.

That circular, by its language, is designed to meet cases in which a government servant, apart from the provisions of the States Reorganisation Act and apart from problems arising out of reorganisation of States, was denied his rightful seniority but is later 'accorded a due and appropriate place in the seniority list.

Paragraph 2 of the circular which speaks also of posts within the purview of the Public Service Commission affords some indication that the circular is intended to apply only to cases of routine supersessions in the normal course of a service career.

If the circular of February 25, 1965 were intended to apply to a case like the present, it would have atleast referred to the circular of March 10, 1960 which specifically governs nmtters relating to fixation of seniority consequent upon the reorganisation of States.

That circular, insofar as relevant, reads thus : /.-

MAHARASHTRA v. VINAYAK (Chundrachud, J.)

"Fixation of Seniority and pay on pronwtion according to final gradation lists.

GOVERNMENT OF BOMBAY

PolitiC'al and Services Department

Circular No. SR-INT-1059-VI

Sachivalaya, Bombay, 10th March, 1960

CIRCULAR OF GOVERNMENT

Promotions made on and after the 1st November, 1956, have been treated as provisional pending absorption of the personnel and finalisation of gradation lists in accordance with the allocated Government Servants' (Absorption, Seniority, Pay and Allowances) Rules 1957.

They are also subject to review in the light of the changes that may be made in the gradation lists as a result of the decisions on the representations submitted by the Government Servants concerned.

Question has been raised as to how seniority and pay in the promotion post should be fixed in tfue case of a Government servant who in the light of the final gradation list, is promoted later than the date on which he was due for promotion.

Government is pleased to direct that seniority and initial pay on promotion according to the final gradation list should be fixed as if the Government servant had been promoted on the date on which he would have been promoted had the gradation list been finalised on the 1st November 1956.

The date on which he would have been promoted should be admitted on the basis of a certificate given by the appointing authority specifying the date.

No arrears of pay should, however, be paid for the period, prior to the date of actual promotion."

Under this circular, the senio1ity and initial pay of the respondent has to be fixed as if he was promoted on the date on which he would have been promoted if the gradation list had been finalised on 'November 1, 1956.

But no arrears of pay can be paid to him for the period prior to the date of actual promotion. The State Government relied upon this circular by their counter affidavit filed in the Hi_gh Court but no challenge was made by the respondent to the vires or the validity of that circular even though he had his petition amended in order to ask for arrears of salat')'.

On the assumption that the circular is within the powers of the State Government, we have no doubt that the respondent's case must fall within that circular, in which C'ase he would not be entitled to the arrears of salary for the period prior to the date of his actual promotion.

Mr. Gupte appearing on behalf of the respondent relies upon rule 21 of "The Allocated Government Servants' (Absorption, Seniority, Pay and Allowances) Rules, 19?7" and argues that i<ince

]).

; A under that rule the respondent is entitled to draw his pay and allow- " ances with effect from the date of his promotion to the higher post including the deemed date of promotion, the Government of Maharashtra has no power, in view of the proviso to s. 115 (7) of the States Reorganisation Act, to alter his conditions of service to his prejudice.

This arg4ment is being advanced for the first time in this Court, but, apart from that, we are unable to agree either that rule iB 21 has the effect contended for or that the circular issued by the State Government falls within the mischief of the proviso to s. 115(7).

By rule 21, the arrears of pay and allowances ''which may become due to an •allocated government servant" on the fixation of his pay as on November 1, 1956 shall be payable only with effect from the date from which he became available for service in the State of Bombay or would have been so available but for the causes men- 11

•.C tioned in rule 2(d).

Rule 21 is not in the nature of an entitlement.

On the other h•and, it restricts the right of the allocated government servant to receive pay and allowances "only with eficct from the date" from which he became available for service in the State of B::>mbay or would have been so available except for the causes mentioned in rule 2(d).

The circular issued by the Governmnet of Mahoarashtra on February 25, 1965 does not take away from the respondent the lD right, if any, which was available to him under rule 21.

For these reasons we set aside the judgment of the High Court, allow this appeal and direct that the respondent's writ petition shall

st•and dismissed.

In view ot the order passed at the time when special leave was granted, appellant shall pay the costs of the appeal to the respondent.

;.S.R.

Appeal allowed.

STATE OF MAHARASHTRA & ANR

VINA YAK

Y. V. CHANDRACHUD

Maharashtra Government

Central Government

s. 115(7)

States Reorganisation Act

States Reorganisation Act

Government of Maharashtra

February 25 1965

M. N. Phadke

Girish Chandra

M. N. Shroff

C S. V. Gupte

N. Kamalakar

A. G. Ratnaparkhi

CHANDRACHUD

Government of Bombay

Government of India

May 29, 1973

October 14, 1970

Bombay High Court

State of Maharashtra

GOVERNMENT OF MAHARASHTRA

1st May 1960

K. P. Nadkarni

February 25, 1965

States Reorganisation Act

Public Service Commission

March 10, 1960

GOVERNMENT OF BOMBAY

CIRCULAR OF GOVERNMENT

1st November 1956

November 1, 1956

Gupte

s. 115

States Reorganisation Act

s. 115(7)

Bombay

Mahoarashtra


DEPUTY COMMISSIONER OF COMMERCIAL TAXES A v.

H. R. SRI RAMULU

January 11, 1977

(H. R. KHANNA, P. K. GOSWAMI AND P. S. KAILASAM, JJ.]

Limitation-Star:i11g poi/// for computing tlie period of four years mentiolled ins. 21(3) for tlie exercise of revisio11al powers under s. 21(2) against an <Jrder under s. 12A of th, e Mysore Sales Tax Act 1957 in respect of an escaped turnover-Whether i11itial assessment order or an order made under s. 12A is 1he starting poillf for computation.

In respect of the assessment years 1959-60 and 1960-61, fresh assessments were made under s. 12A of the Mysore General Sales Tax Act 1957 by the Commercial Tax Officer.

By his order dated June 8, 1966, certain amounts which had escaped assessment under the .original assessment orders dated March 21, 1963 were included in the turnover of the respondent, but the deductions in respect of shop rent and tree tax were, however, allowed as in the initial orders. The appellant, in exercise of the powers under s. 21 (2) of the Act, by his orders dated 'June 28, 1967 revised the orders dated June 8, 1966 disallowing the deductions in respect of the, shop rent, following the decision of this Court in Shinde Brother etc. v. Deputy Commissioner Raic/1ur [1967]

I S.C.R. 548.

Two rectification applications and the two appeals therefrom on the ground that the revisions of assessment were barred by limitation under s. 21 (3) of the Act and, as such, there was a mistake apparent on the record were rcjcted as not maintainable. However, the writ petitions filed were allowed by the High Court holding that the orders dated June 28, 1967 were without jurisdiction since they had been made beyond the period of four years from the date of the initial assessment orders dated March 21, 1963.

On appeals by special leave to this Court,

HELD : The contention advanced on behalf of the appellants that the period of four years mentioned in s. 21 (3) of the Act should be computed from the orders dated June 8, 1966 made under S. I 2A cf the Act and not from the initial orders of assessment dated March 21, 1963 is well-founded.

[5'}5 C-DJ

Once an assessment is reopened, the initial order for assessment ceases to be operative.

The effect of reopening the assessment is to vacate or set a£ide the initial order for assessment and to substitute in its place the order made F on reassessment. The initial order for reassessmellt cannot be said to survive even partiallv although the justification for dessessment arises because of turnover escaping assessment in a limited field or only with respect to a part of the matter covered by the initial assessment order. The result of reopening the assessment is that a fresh order for reassessment would have to be made including for those matters in respect of which there is no allegation of , the t1m1over escaping assessment.

[596 D-E]

Jn the present case the assessment orders made under s. 12A were compre- G .fllensive orders and were not confined merely to matters which had escaped assessment earlier and the only orders which couTd be the subject-matter of revision by the appellant were the orders made under s. l 2A of the Act and not the iuitial assessment orders.

[596 E-FJ

J. Jaganmohan Rao & Ors. v. Commissioner of income-tax and Excess Profitr Tax, A ndhra Pradesh [1970] l S.C.R. 726=75 ITR 373; Commissioner of Sales Tax, Madhya Pradesh v. H. M. Es11fali H. M. Abd11/ali [1973] 3 S.C.R.

H 1005=90 ITR 271, followed.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 145-146/ 1972.

(Appeals by Special Leave from the Judgment and Order dated 9-12-1970 of the Mysore High Court in Writ Petitions Nos. 2042 and 2065 /70).

B Narayan Nettar, for the appellant.

R. M. Mehta, for the respondent.

The Judgment of the Court was delivered by

KHANNA, J.-These two appeals by special leave are against the common judgment of the Mysore High Court whereby the High Court in two petitions under article 226 of the Constitution of India quashed two orders made by the Deputy Commissioner of Commercial Jaxe> appellant under section 21 of the Mysore Sales Tax Act, 1957 (hereinafter referred to as tlie Act) .

The respondent is an ekise contractor.

He was assessed under the Act for the assessment years 1959-60 and 1960-61 as per orders dated March 21, 1963 rtrade by the Commercial Tax Officer Raichur.

Under those orders the taxable turnover of the respondent for the two years in question was determined after deducting the shop rent •and the tree tax.

For the assessment year 1959-60, a sum of s. 2,10,542 was deducted and the net taxable turnover was determinetl to be Rs. 25,989.

For the year 1960-61 a sum of Rs. 3,98,350 was dedl1cted and the net taxable turnover was determined to be Rs. 26,657.

The Commercial Tax Officer initiated proceedings under section 12A of the Act in respect of the aforesaid years because he was of the view that some items of turnover had escaped assessment.

As per orders dated June 8, 1966 he made assessment by including in the turnover of the respondent certain amounts which had escaped assessment under the original asse1ssment orders dated March 21, 1963.

The deduction in respect of shop rent and tree tax was, however, allowed to the respondent in orders dated June 8, 1966 as it had been allowed in initial orders dated March 21, 1963.

On June 28, 1967 the appellant, i.e., the Deputy Commissioner of Commercial Taxes, made two orders revising the orders dated June 8, 1966.

In the said orders the appellant disallowed the deduction which had been allowed to the respondent in respect of _ the shop rent.

The oappellant in those orders referred to the decision of this Court in Shinde Brother etc. v.

Deputy Commissioner Raichur(') and held that the amount of shop rent being not excise duty "should not !Je deducted in computing the turnover of the respondent for the two years in question. The taxable turnover of the respondent for the two years in question was accordingly enhanced.

The respondent made two applications for rectification of the orders of the appellant dated June 28, 1967. It was urged on behalf of the respondent that the revision of assessments was barred by limitation under section 21 ( 3) of the Act and as such there was a mistake apparent on the record.

The appellant rejected those applications. The respondent then preferred two appeals to the Sales Tax Appellate Tribunal.

The Tribunal too rejected those appeals on the ground that they were not maintainable.

The respondent thereafter filed two petitions in the High Court under article 226 for the issuance of writs in the nature of certiorari for quashing the orders dated June 28, 1967. The High Court, as already mentioned, allowed both the petitions and quashed orders dated June 28, 1967.

In the opinion of the High Court, orders dated June 28, 1967 made by the appellant were without jurisdiction since they had been made beyond the period of four years from the date of the assessment orders dated March 21; 1963.

Mr. Naravan Nettar. learned counsel for the appellant. has contended in appeal before us that the period of four years mentioned in section 21(3) of the Act should be computed from the orders dated June 8, 1966 made under section 12A of the Act and not from the initial orders of assessment dated March 21, 1963.

The above stand has. been controverted by Mr. Mehta, who argued the case amicus curiae as no one appeared on behalf of. the respondent.

After giving the matter our consideration, we are of the view that the contention advanced on behalf of the appellant is well-founded.

Before, however, dealing with the matter, we consider it appropriate to reproduce the relevent provisions of the Act.

Section 12A of the Act relates to assessement of escaped turnover.

Sub-section ( 1) of that section at the relevant time read as under :

"(1) Where for any reason the whole or any part of the turnover of a dealer has escaped assessment to tax or licence fee or has been assessed at a lower rate than the rate at which it is assessable, the assessing authority may, subject to the provisions of sub-section (2), at any time within a period of five years from the expiry of the year to which the tax or licence fee relates, assess to the best of its judgment, the tax or licence fee payable on the turnover referred to after issuing a notice to the dealer and after making such enquiry as it considers necessary."

Section 21 of the Act deals, inter alia. with revisional powers of the Deputy Commissioner.

Sub-section (2) and (3) of that section G read as under :

"(2) The Deputy Commissioner may of his own motion call for and examine the record of any order passed or oroceeding recorded under the provisions of this Act by a C0mmercial Tax Officer subordinate to him and against which no appeal has been preferred to him umier section 20, for H the purpose of satisfying him'self as to the legality or propriety of such order or as to the regularity of such ornceedinq and pass such order with respect thereto as he thinks fit.

4-112SCI/76

A ( 3) In relation to an order of assessment passed under this Act, the power under sub-sections (1) and (2) shall be exercisable only within a period of four years from the date on which the order was passed."

The short question which arises for determination in these appeals is that in the event of an order having been made under section 12A of the Act, what is the starting point for computing the period of four years, mentioned in section 21 ( 3), for the exercise of the powers under section 21 (2).

Is it the initial assessment order or is it the order made under section 12A ?

In the context of the present case, the question to be answered is as to whether the period of four years is to be calculated from March 21, 1963 when the initial assessment orders were made, or from June 8, 1966 when the orders under section 12A of the Act were made.

So far as this question is concerned, we are of the opinion that the period of four years should be calculated from June 8, 1966, i.e., the date on which orders under section 12A of the Act were made.

The reason for that is that once an assessment is reopened, the initial order for assessment ceases to be operative.

The effect of reopening the assessment is to vacate or set aside the initial order for assessment and to substitute in its place the order made on reassessment.

The initial order for reassessment cannot be said to survive, even partially, although the justification for reassessment arises because of turnover escaping assessment in a limited field or only with respect to a part of the matter covered by the initial assessment order.

The result o.f reopening the assessment is that a fresh order for reassessment would have to be made including for those matters in respect Orf which there is no allegation of the turnover escaping assessment.

As it is we find that in the present .case tfue assessment orders made under section 12A were comprehensive orders and were not confined merely to matters which had escaped assessment earlier.

In the circumstances, the only orders which could be the subject matter of revision by the appellant were the orders made under section 12A of the Act and not the initial assessment orders.

In the case of V. Jagannathan Rao & ors.

v. Commissioner of Income-tax and Exrcess Profits Tax, Andhra Pradesh (') this Court dealt with section 34 of the Indian Income-tax Act, 1922 which relates to reassessment in the case of income escaping assessment.

It was held by this Court that once assessment is reopened the previous under-assessment is set aside and the whole proceedings start afresh.

Ramaswami J. speaking for the Court observed :

"Section 34 in terms states that once the Income-tax Officer decides to reopen the assessment he could do so within the period prescribed by serving on the person liable to pay tax a notice containing all or any of the requirements which may be included in a notice under section 22(2) and may proceed to assess or reassess such income, profits or gains.

It is, therefore, manifest that once assessment is

~------·

OJ [1970J 1 s.c.R. 726=75 ITR 373.

reopened by issuing a notice under sub-ection ( 2) of section 22 the prvious under-assessment is set aside and the whole assessment proceedings start afresh.

When once valid proceedings are started under section 34(1) (b) the Incometax Officer had not only the jurisdiction but it was his duty to levy tax on the entire income that had escaped assessment during that year."

In the case of Commissioner of Sales Tax, Madhya Pradesh v. fl. M. Esufali H. M. Abdulali(') this Court dealt with reassessment made under section 19 of the Madhya Pradesh General Sales Tax Act, 1958.

It was held that when reassessment is made, the former assessment is completely reopened and in its place fresh assessment is made.

Hegde J. speaking for the Court observed :

"What is true of the assessment must also be true of reassessment because reassessment is nothing but a fresh assessment.

When reassessment is made under section 19, the former assessment is completely reop~_ned and in its place fresh assessment is made.

While reassessing a dealer, the assessing authority does not merely assess him on the escaped turnover but it assesses him on his total estimated turnover.

While making assessment under section 19, if the assessing authority has no power to make best judgment assessment, all that the assessee need do to escape reassessment is to refuse to file a return or refuse to produce his account books.

If contention taken on behalf of the assessee is correct, the assessee can escape his liability to be reassessed by adopting an obstructive attitude.

It is difficult to conceive that such could be the position in law."

In International Cotton Corpn. (P) Ltd. "1.

Commercial Tax Officer, Hubli & Ors. (') this Court held that once can assessment order had been rectified and it was sought to make a further rectification of that order, the period of limitation for making such further rectification would commence not froni the date of the original assessment order but from the date of the earlier rectification order. Alagiriswami J. speaking for the Court in this context observed :

"The other attack that the rectification order is beyond the point of time provided in Rule 38 of the Mysore Sales Tax Rules is also without substance.

What was sought to be rectified was the assessment order rectified as a consequence of this Court's decision in Yaddalam's case.

After such rectification the original assessment order was no longer in force and that was not the order sought to be rectified.

It is admitted that all the rectification orders would be within time calculated from the original rectification order.

Rule 38 itself speaks of 'any order' and there is no doubt that the rectified order is also 'any order' which can be rectified under Rule 38;" -

Although the above case related to an order which had been subsequently rectified, the principle laid down therein would, in our opinion, be also applicable in cases where reassessment is made on the ground that certain amounts of turnover had escaped assessment.

Before we conclude, we may observe that according to section 33B of the Indian Income-tax Act, 1922 the Commissioner cannot revise an order of reassessment made under the provisions of section 34 of the Act.

Likewise, sub-section (2) of section 263 of the Incometax Act, 1961 expressly prohibits the revision by the Commissioner of Income-tax of an order of reassessment made under section 147 of that Act.

No such prohibition in the provisions of the Act with which we are concerned has, however, ben brought to our notice.

We would, therefore, accept the appeals, set aside the judgment of the High Court and dismiss the petitions under article 226 filed by the respondent.

Looking to all the facts, we leav.e the parties to bear their own costs in this Court as well as in the High Court.

S.R.

Appeals allowed

DEPUTY COMMISSIONER OF COMMERCIAL TAXES

H. R. SRI RAMULU

H. R. KHANNA

P. K. GOSWAMI

P. S. KAILASAM, JJ.

s. 21(2)

s. 12A

Mysore Sales Tax Act 1957

s. 12A

s. 12A

Mysore General Sales Tax Act 1957

s. 21

June 8, 1966

s. 21

June 28, 1967

March 21, 1963

s. 21

s. 12A

B Narayan Nettar

R. M. Mehta

KHANNA

Mysore High Court

article 226

Constitution of India

section 21

Mysore Sales Tax Act, 1957

s. 2

section 12A

section 21

Sales Tax Appellate Tribunal

article 226

Naravan Nettar

section 21(3)

section 12A

21, 1963

Mehta

Section 12A

Section 21

section 20

section 12A

section 21

section 21

section 12A

section 12A

section 12A

section 12A

section 12A

section 34

Indian Income-tax Act, 1922

Ramaswami

Section 34

section 22(2)

section 22

section 34(1)

section 19

Hegde

section 19

section 19

International Cotton Corpn. (P) Ltd.

Alagiriswami

Yaddalam

section 33B

Indian Income-tax Act, 1922

section 34

section 263

Incometax Act, 1961

section 147

article 226


RETTI DEENABANDHU & ORS.

STATE OF ANDHRA PRADESH

January 11, 1977

[H. R. KHANNA AND R. S. SARKARIA, JJ.]

Appeal against conviction-Object of challenge to conviction-High Court should not decline to go into the validity of the conviction on the ground that the appellant is et at liberty, by set off under s. 428 of the Code of Criminal Procedure 1973 (Act 2 of 1974). ·

The appellants, upon conviction under the relevant sections of the Indian Penal Code, Explosive Substances Act and Arms Act, were sentenced to various terms of imprisonment. The total sentence of imprisonment to be undergone . C for some of the appellants was two years while in the case of other appellants it was one year. The High Court dismissed the appeal in view of the appellants' entitlement to set off the period of their pre-trial detention against the entire sentence of imprisonment imposed upon them after observing that it was not necessary to go into the matter as it would be only of an academic interest.

Accepting the appeal by Special Leave and remanding the cases to the High Court for disposing of on merits, the Court, D

HELD : ( 1) The High Court was in error in so far as it declined to go into the validity of the conviction of the appellants. [600 Fl

(2) The object of a challenge to conviction is to avoid certain consequences flowing from conviction and also to erase the stigma resulting from the. conviction. The fact that the convicted person has already undergone the sentence or is otherwise entitled to be set at liberty because of the length of the period during which he has been under detention during the course of investi- E gation, enquiry and trial cannot prevent the accused from challenging his conviction in appeal. [600 C-Fl

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 20 of 1977.

Appeal by Special Leave from the Judgment and Order dated 28-2-75 of the Andhra Pradesh High Court in Crl. A. No. 462 of 1973.

S. C. Agarwala and A. P. Gupta for the Appellants.

P. P. Rao, G. N. Rao and T. V. S. N. Chari for the Respondent.

The Judgment of the Court was delivered by

KHANNA, J. This appeal by special leave is against the judgment of G the Andhra Pradesh High Court dismissing the appeal filed by the appellants ..

The appellants were convicted by the Additional Sessions Judge Visakhapatnam for offences under sections 147, 148 and 352 Indian Penal Code. Some of the appellants were also convicted for offences under section 5 of the Explosive Substances Act and section 25 of the H Indian Arms Act. They were sentenced to various terms of imprison ment and the sentences were ordered to run concurrently. The total sentence of imprisonment to be undergone by some of the appellants was

SUPREME COURT REPORTS

[1977) 2 S.C.R.

A two years while in the case of the other appellants it was one year. The appellants went up in appeal to the High Court against the judgment of the trial court. The High Court referred to the fact that the appellants had been in custody during the course of the investigation, inquiry and trial, for about two years. The appellants were held entitled under section 428 of the Code of Criminal Procedure, 1973 to set off the period of detention against the sentence of imprisonment imposed upon B them. The High Court in veiw of the above dismissed the appeal after observing that it was unnecessary to go into the matter as it would be

only of an academic interest. '

We have heard Mr. Agarwala on behalf of the appellants and Mr.

Rao on behalf of the State, and are of the opinion that the judgment of the High Court in so far-as it has refrained from going into the merits of the conviction of the appellants, cannot be sustained. The fact that a convicted person has already undergone the sentence or is otherwise entitled to be set at liberty because of the length of the period during which he has been under detention during the course of investigation, inquiry and trial cannot prevent the said person from challenging his conviction in appeal.

Conviction for an offence entails certain conse- ; quences.

Conviction also carries with it a stigma for the convicted person. A convicted person in challenging his convicticn in appeal not only seeks to avoid undergoing the punishment imposed upon him as a result of the conviction, he also wants that other evil consequences flowing from the conviction should not visit him and that the stigma which attaches to him because of the conviction should be wiped out.

In case the convicted person undergoes the sentence of imprisonment imposed upon him or he is otherwise entitled to be set at liberty by the time his appeal against conviction comes up for hearing in view of the length of the period he was in detention during the course of investigation, inquiry or trial, such a person would still be entitled to challenge his conviction. The fact that he is set at liberty and would not have to undergo any further sentence of imprisonment would not debar him from questioning the validity of his conviction. The object of such a challenge to conviction is to avoid the other consequences flowing from conviction and aso to erase the stigma resulting from the conviction.

The High Court, in our view, was in error in so far as it declined to go into the validity of the conviction of the appellants.

We, therefore, remand the case to the High Court for disposing of the appeal of the appllants on merit. ,

s. R..

Appeal allowed and case remanded.

RETTI DEENABANDHU & ORS

STATE OF ANDHRA PRADESH

January 11, 1977

H. R. KHANNA

R. S. SARKARIA, JJ.

s. 428

Code of Criminal Procedure 1973

Indian Penal Code

Explosive Substances Act and Arms Act

Andhra Pradesh High Court

S. C. Agarwala

A. P. Gupta

P. P. Rao

G. N. Rao

T. V. S. N. Chari

KHANNA

sections 147, 148 and 352

Indian Penal Code

section 5

Explosive Substances Act

section 25

Indian Arms Act

section 428

Code of Criminal Procedure, 1973

Agarwala

Rao


HARGOVIND DAYAL SRIVASTAVA & ANR: v.

G. N. VERMA & ORS.

January 12, 1977

[A. N. RAY, C.J., M. H. BEG AND P. s. KAILASAM, JJ.]

Contempt of Courts Act 1971-Criminal contempt-Duty of members of the bar to protect dignity and decorum of judiciary.

The appellant No. 1 is the President of the Oudh Bar and appellant No. 2 is the Chairman of Action Committee of the Oudh Bar Association. They met and passed a Resolution that the Chief Justice of Allahabad High Court was acting in a most partisan manner under the influence of the Allahabad Bar and that it was unbecoming of the office which he holds.

The High Court issued notices for contempt, inter alia, to the appellants.

The High Court discharged the notices but made certain observations against the appellants.

HELD : 1. If the High Court found that there was any cqptempt it should have punished the appellants. The High Court confused criminal contempt with contumacious conduct.

This Court is unable to find that the High Court D found contemners guilty of criminal contempt.

[602 D, G, HJ

2. There is no gainsaying that the members of the Bar did not act with dignity in regard to the resolution. The language used by them was unfortu nate,.

It is the duty of lawyers to protect the dignity and decorum of the judiciary. If lawyers fail in their duty the faith of the people in the judiciary would be undermined to a large extent. It is said that lawyers are the custodian of civilization Lawyers have to discharge their duties with dignity, decomm and discipline.

[603 C-D] E

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 315 of 1974.

Appeal from the Judgment and Order dated 22-5-1974 of the Allahabad High Court in Contempt Case No. 43/73.

D. Mukherjea, R. N. Sharma, Umesh Chand, R. N. Trivedi, S. P.

Pathak, Hari Nath Tilhari, S. R. Srivastava, M. N. Sharma and 0. P.

Lal for the Appellants.

Yogeshwar Prasad, (Miss) Rani Arora, S. K. Bagga and (Mrs.)

S. Bagga, for Respondent No. 1.

0. P. Rana for Respondents 2 and 3.

The Judgment of the Court was delivered by

RAY, C. J.

This appeal is against the judgment and order dated 22 May 1974 of the High Co1,1rt of Allahabad in Criminal Contempt Case No. 43 of 1973. .

The High Court issued notices to five persons on . the ground that they committed contempt of Court.

SUPREME COURT REPORTS

[1977] 2 S.C.R.

The two appellants before us are the President of the Avadh Bar Association and the Chairman, Action Committee of the Avadh Bar Association.

There were three charges against the appellants. It is not necessary to refer in detail to the same. The gist of the charge against the appellants was that they had met and resolved that the Chief Justice was acting in a most partisan manner under the influence of the Allahabad Bar. The text of the resolution was this-"The Action Committee is of the opinion that the Chief Justice is acting in the discharge of administrative power under clause 14 of the U.P. High Court's Amalgamation Order, 1948 in a most partisan manner under the influence of Allahabad Bar quite unbecoming of the office which he holds".

The High Court discharged the notices .. The High Court yet made certain observations; some of which are confusing, some of which are conflicting and some of which are vague.

If the High_ Court found that there was any contempt it should have punished the appellants.

The High Court however discharged the notices.

The High Court held that the Cha.irman of the Action Committee, described as contemner No. 2 was actively associated with the passing of the resolution which contained disparaging remarks about the Chief Justice and since he also issued that resolution for publication in newspapers, he is guilty of 'Criminal Contempt'.

The High Court held that since the resolution was passed under the presidentship of the first appellant described as contemner No. 1, he is as much guilty of having committed contempt as contemner No. 2 was. ·

The High Court further held that contemners Nos. 1 & 2 are guilty of .:ontumacious conduct, and the High Court gave the ground that they were responsible for the passing of the resolution. At another place the High Court used words showing that the conduct of the appellants individually was considered only "indiscreet" by it.

The High Court confused 'criminal contempt' with 'contumacious conduct'.

The matter becomes clear when the High Court said "we do not propose to punish contemners Nos. 1 & 2 for the contumacious conduct of which we have adjudged them guilty though we express our disapproval of that conduct and hope that the indiscretion will not be repeated".

We are unable to find that the High Court found the contemners guilty of criminal contempt. It is true that the High Court referred to the contumacious conduct of the appellants but the High Court did not wish to proceed against the appe1lants. The High Court said on that aspect as follows :

HARGOVIND DAYAL V G. N. VERMA (Ray, C. ].) 603

"It is a matter of regret that the contemners who are prominent members of the Avadh Bar, should have themselves embarked on the path of vilifying the Chief Justice of this Court and that we do not want to be over-sensitive in the matter, keeping in mind the surrounding circumstances in which the contumacious act was committed by them and also keeping in view the fact that it was. a single act of the Chief Justice for which the attack was made, we do not propose to punish contemners for the contumacious conduct for which we have adjudged them guilty, though we expres£ our strong disapproval of that conduct and hope that the indiscretion will not be repeated".

Counsel for the appellants did not justify the language of the resolution. There is no gainsaying that the members of the Bar did not act with dignity in regard to the resolution.

The language used by them was unfortunate.

Counsel for the appellants rightly said that it was not proper and it should not have been passed in that manner.

It is the duty of lawyers to protect the dignity and decorum of the judiciary. If lawyers fail in their duty the faith of the people in the judiciary will be undermined to a large extent. It is said that lawyers are the custodians of civilisation.

Lawyers have fo discharge their duty with dignity, decorum and discipline. ·

In view of the fact that the notices were discharged, the appeal is disposed of with the foregoing observations.

P.H.P.

Appeal allowed.

HARGOVIND DAYAL SRIVASTAVA & ANR

G. N. VERMA & ORS

January 12, 1977

A. N. RAY, C.J.

M. H. BEG

P. s. KAILASAM, JJ.

Contempt of Courts Act 1971

Allahabad High Court

D. Mukherjea

R. N. Sharma

Umesh Chand

R. N. Trivedi

S. P.

Pathak

Hari Nath Tilhari

S. R. Srivastava

M. N. Sharma

0. P.

Lal

Yogeshwar Prasad

Rani Arora

S. K. Bagga

S. Bagga

P. Rana

RAY

Avadh Bar Association

Allahabad Bar

clause 14

U.P. High Court

Avadh Bar


MAHABIR BEOPAR MANDAL LTD v.

FORWARD MARKET COMMISSION

January 13, 1977

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

Forward Cr-111ract (Regulation) Act 1952-Secs. 14A, 14B- Forward Market Commission-Power to impose conditions.

The appellants contended that the Forward Market Commission under the Forward Contract (Regulation) Act 1952 cannot impose conditions under sections 14A and 14B on the commodities in respect of which business can be carried out by persons who apply for registration. Secondly, the provisions. contained in s. 4 of the Act do not confer power on the Commission to impose conditions.

Thirdly, in respect of recognised associations, the Commission bad' no power to impose conditions with regard to commodities in which they deal.

Dismissing the appeal,

HELD : All the 3 conditions raised in the present appeal are covered' against the appellant by the decision of this Court in the case of Union of India v. Mis Rajdhani Grain and laggery Exchange Ltd. reported in [19751 Supp, SCR 1.

[605 B-F]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 873 of 1975 ..

(From the Judgment and Order dated 11-11-1974 of the Allahabad High Court in Civil Misc. Writ Petition No. 6976/74)

AND Civil Appeal No. 1748 of 1975.

(Appeal by Special Leave from the Judgment and Order dated 8-11-1974 of the Allahabad High Court in Civil Misc. Writ Petition No. 6932/74).

AND Civil Appeal No. 1425 of 1974.

(From the Judgment and Order dated 1-9-1972 of the Allahabad High Court in Special Appeal No. 8/66).

A. N. Parekh, for the appellants in CA 1748/75.

Yogeshwar Prasad, for the appellants in CA 873/75.

D. N. Misra for the appellant in CA 1425/74.

L. N. Sinha, Solicitor General, S. N. Prasad (In CA 873/75) and: Girish Chandra, for the respondents in all the appeals.

The Judgment of the Court was delivered.by

RAY, C.J.

Civil Appeals Nos. 873 and 1425 areby certificate under Article 133 (1) of the Constitution of India and Civil Appeal No. 1748 is by special leave.

MAHABIR BEOPAR MANDAL V. FORWARD MARKET COMMISSION 605 (Ray, C.J.) These appeals turn on the question whether the Commission described as the Forward Market Commission under the Forward Contract (Regulation) Act, 1952, can impose conditions under section 14-A and Section 14-B on the commodities in respect of which business can be carried on by persons who apply for registration.

This Court in Union of India & Anr. v. Mis. Rajdhani Grains and Jaggery Exchange Ltd. & Ors. (1975 Supp. S.C.R. l) dealt with B this specific question and came to the conclusion that the specification of the commodities in respect of which the business can be carried on is a condition concerned with the regulation and control of the business relating to forward contracts. It is idle to suggest that the Commission in granting certificate of registration to carry on business will not be competent to specify the commodities in which the persons asking for registration wi11 deal.

Another contention was raised before us that the .provisions contained in Section 4 of the Forward Contract (Regulation) Act 1952 do not confer power on the Commission to impose conditions.

This contention is also repelled by the decision of this Court to which reference has already been made. It has been held in that case that the Commission alone is vested with power to impose conditions in regard D to commodities in respect of which forward contracts can be entered into by a particular association. Sections 15 to 18 of the Act do not clash with the power of the Commission to impose conditions in respect of commodities in which business of forward contract can be carried on.

Another contention was advanced before us that with regard to the E recognised associations the Commission had no power to impose conditions with regard to commodities in which they deal. This contention is also answered by the decision of this Court (supra). Further the provisions contained in Chapter III-A specifically deal with registration of all associations concerned with regulation and control of forward contracts and the power of the Commission to grant or refuse such certificate of registration.

All contentions advanced by the appellants are already answered by the decision of this Court (supra) and the observations made herein. The appeals are .therefore dismissed, There will be no order as to, costs.

P.H.P.

Appeals dismissed.

MAHABIR BEOPAR MANDAL LTD

FORWARD MARKET COMMISSION

January 13, 1977

A. N. RAY, C.J.

M. H. BEG, J.

Forward Market Commission

sections 14A and 14B

s. 4

A. N. Parekh

Yogeshwar Prasad

D. N. Misra

L. N. Sinha

S. N. Prasad

Girish Chandra

RAY

Article 133

Constitution of India

section 14

Section 14

Section 4

Sections 15 to 18


KALUMIYA KARIMMIYA v.

STATE OF GUJARAT AND ORS.

January 14, 1977

[P. K. GOSWAMI AND P. N. SHINGHAL, JJ.]

. l:and Acquisition Act 1894-Secs. 4, SA, 6-Reasonable opportunity in znquzry under sec. SA-Whether collector bound to give copy of the report submuted to Government to the owner of land-Effect of not giving the copy- Delay between sec. 4 & 6 notifications-Effect of-What is unreasonable delay-Vagueness of s, 4 notification. ·

A notification was issued under section 4 ( 1) of the Land Acquisition Act ~894 n 7.6.1966 intending to acquire a total area of 13,900 sq. yds of land mc!.udmg 474. sq: yards of the appellant's land in Surat City. After considermg the obiecl!ons under s. SA a notification under section 6 was issued on

13.1.1~69. _The _appellat filed a writ petition in the High Court challenging the said nolificalio~ which was summarily dismissed.

Th,\l High Court, however, grai:ited a rllficate ul'l:der Art. 133(1) (b) & (c) of the Constitution on the question of vzres of sect10ns 4, SA and 6 of the said Act.

Appellant contended :

( 1) In spite of the appellant's request for furnishing a copy of the report under s. SA the Collector did not give him a copy and, therefore, he did not have adequate and proper hearing under _s. SA.

(2) There was considerable delay between the notification under sections 4 and 6. ·

(3) Notification under s. 4 does not contain the public purpose as the requirement for "fire station". The notification merely mentions "station workshop and parking purpose."

Dismissing the appeal,

HELD : (1) Ordinarily there should be no difficulty in furnishing a copy of the report under s. SA to an object.or when he asks for the same. However, it is not a correct proposition that hearing under s. Sb is invalid because of failure to furnish a copy of the report at the conclusion of the proceeding under the said Act.

[608 F-G]

(2) A second hearing by the State Government after the report is furnished by the Collector is not necessary.

[608-H]

Abdul Husein Tayabali & Ors. v. State of Gujarat & Ors. [1968] (1) SCR S97, followed.

(3) Since other dags of land belonging to numerous persons were the subject matter of acquisition and individual objections had to be heard there was no inordinate delay in making the section 6 notification. Even the appellant has not submitted before the High Court a copy of his written objection. Nor has the same been produced in this Court with the result that one does not know how much delay was caused by the appellant himself. )"he delay in the present case is about 2t years and there is not even a clear statement of the appel\ant about delay to be attributable to the Government. [609 B-b]

( 4) Submission that s. 4 notification does not contain the public purpose is made on the basis of the copy of the notification anne; xed in. the pap_er book.

Even in the 5tatement of case the appellant has not raised this obiectton. On

the other hand it was conceded that the purpose was fire station, workshop A and parking place and the objection was that the appellant's l and was not suitable for construction of fire station. [609E-F]

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2731 of 1972.

(From the Judgment and Order dated 20-11-1970 of the Gujarat High Court in Special Appeal No. 1247 /70).

Vimal Dave and Miss Kailash Mehta, for the appellant.

D. V. Patel and M. N. Shroff, for respondent No. 1.

L. N. Sinha, Sol. Genl and Girish Chandra, for respondent No. 2.

K. C. Vakharia, P. H. Parekh and! Miss Manju Jetley, for respondent No. 3.

The Judgment of the Court was delivered by

GoswAMI, J.-This appeal by certificate under Article 132 (1) (b) and ( c) of the Constitution is from the judgment of the Gujarat High Court. The certificate was granted on October 21, 1972, before coming into force of the Constitution (Thirtieth Amendment) Act, 1972.

Mr. Dave, learned counsel for the appellant, does not press before us the challenge to the validity of sections 4, SA and 6 of the Land Acquisition Act, 1894.

We will now state the facts as will appear from the statement of case filed on behalf of the appellant.

A notification was issued under section 4(1) of the Land Acquisition Act, 1894 (briefly the Act) on June 7, 1966, intending to acquire a total area of 13900 sq. yds of land including 474 sq. yds. of the appellant's land in Ward No. 11 of Surat City included in City Survey Nos. 236S and 2366.

We are informed that only the appellant in raising objection to the acquisition and the plan has not yet been implemented on account of the pending litigation.

The appellant submitted his objections under section SA ( 1) of the Act to the Collector who gave him a hearing under sub-section (2) of section SA.

In. due course the Collector submitted his report to the State Government and after consideration of the same the Government issued a declaration under section 6 on January lS, 1969, that the land was required for the public purpose noted in the preliminary notification under section 4.

The apellnt in para 3 of the statement of case while referring to the not1ficat1on under section 4(1) of the Act averred as follows:-

"It was stated in the said notice that the suit lands wen: likely to be needed for fire station, workshop and parking purpose of the Surat Municipality as indicated in Govern~ ment Notification dated 7-6-1966;,.

In para 4 o~ the said statement it was averred ''that the appellant c?ntested the notice _by raising an. objection that the respondent No. 3-the Corporat10n-was not m need of the suit land for the purpose of the fire station, etc." After the declaration under scc- C , tion 6 of the Act, .as stated earlier, a notice under section 9 of the Act was served on the appellant but he did not submit any claims with regard to compensation under that section.

On Septemb.:r 22, l 970, the appellant filed an application under Article 226 or the Constitution before the High Court of Gujarat challenging the aforesaid notifications under the Act. . The High Court by its order of November 30, 1970, rejected the petition.

The High Court, how- D ever, by its order of October 21, 1 972, granted certificate under Article 133(1) (bl and (c) of the Constitution on, the question of vires of sections 4, SA and 6 of the Land Acquisition Act.

Mr. Dave confines his submissions before us only to the following points, which we will deal with seriatim :

First, that in spite of the appellant's reques~ for furnishing a copy of the report under section SA the Collector did not grant him a copy.

He complains that there was no proper and adequate hearing under section SA(2l of the Act.

According to the learned counsel a proper hearing would include furnishing of a copy of the report under section SA.

We are unable to accept this submission.

Although, ordinarily, there should be no difficulty in furnishing a copy of the report under section SA to an objector, when he asks for! the same, it is not a correct proposition that hearing under section SA is invalid because of failure to furnish a copy of the report at the conclusion of tlie hearing under the said section.

Unless there are weighty reasons, a report in public enquiry like this, should be available to the persons who take part in the enquiry.

But failure to furnish a copy of the report of such an enquiry cannot vitiate the enquiry if it is otherwise not open to any valid objection.

Apart from this solitary ground, our attention has not been drawn to any infirmity in the hearing under section SA.

We are, therefore unable to hold that the said enquiry under section SA was invalid. .

The matter would have been different if a second enquiry were essential under the law at the stage when the State Government was considering the report under section SA for issuing its declaration under section 6 of the Act.

We are, however, clearly of op1111on that there is no reason to hold that a second hearing by the State Government at that stage is necessary under section 6 of the A.Ct,

(See Abdul Husein Tayabali & Ors. v. State of Gujarat & Ors.(') Since that is the position in law, failure to furnish a copy of the report under Syctjon 8A is innocuous.

The matter, again, may be different if there is a proper allegation of ma/a fide against the Collector or the State Government.

There is no such allegation in this case.

The first submission of the learned counsel is, therefore, devoid of substance.

The learned counsel next contends that there was considerable delay between the notification under section 4 which was issued on June 7, 1966, and the declaration under section 6 ma, de on January 13, 1969.

Since numerous dags of land belonging to a number of persons were the subject matter of acquisition and individual objections had to be heard, we do not think that there has been anv inordinate delay in making the notification.

Even, the appellant has not submitted before the High Court a copy of his written objection nor is the same produced before us to indicate when his objections were actually filed and whether he was not also responsible for some delay in the conclusion of the enquiry.

The delay in this case is only about 2t years and, as we have said, there is not even a clear statement of the responsibility for delay which may be attributable to the Government.

The second submission of the learned counsel is also of no avail.

Mr. Dave lastly submits that the notification under section 4 did not contain the public purpose as the requirement for "fire station".

The notification, says counsel, mentioned station, workshop and parking purpose.

He is able to make this submission from a copy E of the notification in the Paper Book° at page 20 (Ex. A). We are, however, unable to agree with counsel that the notification under sectiO'll 4 did not in fact contain the purpose as fire station.

Even in the statement of easer of the appellan~ whic~ we have set out earlier, no objection was ever taken against the so-called vague description Of the requirement in the notification.

On the other hand, it was conceded, therein, that the purpose was fire station, workshop and F parking purpose and the objection was that the appellant's land was not "suited for the construction of fire station".

There is, therefore, no substance in this submission.

This Court rather liberally grants prayers for dispensing with -statement of case when such requests are made by P!lrties. lndeed, the fonn in vogue, in which statements of case are submitted in this G Court, has perhaps outlived its practical utility in hearings before this Court. If anything, besides being expensive, it causes delay in making appeals ready for hearing.

We, however, feel, instead of the usual statements of case bv both the parties, a very succinct statement of case and a list of dates submitted by the appellant alone. with material facts necessary H for deciding the questions of law together with the findings of fact

(I) [1968] 1 S.C.R. 597.

A of the court below and pinpointing the only legal issues to be raised in this Court will be of advantage in expeditious disposal of appeals before this Court.

For once, on occasion, we are able to say that the statement of case in this appeal is of use to us in visiting the appellant with the forfeiture of his right to make his last submission with regard to the B vagueness or ambiguity of the purpose mentioned in the notification under section 4 of the Act.

All the submissions having failed, the appeal is dismissed. Having regard to the fact that there was a certificate by the High Court, we will make no order as to costs.

P.H.P.

Appeal dismissed.

KALUMIYA KARIMMIYA

STATE OF GUJARAT AND ORS

January 14, 1977

P. K. GOSWAMI

Acquisition Act 1894

sec. 4 & 6

section 4

Surat City

section 6

Art. 133(1)

sections 4 and 6

s. 4

section 6

s. 4

Vimal Dave

Kailash Mehta

D. V. Patel

M. N. Shroff

L. N. Sinha

Girish Chandra

K. C. Vakharia

P. H. Parekh

Manju Jetley

GoswAMI

Article 132

Dave

sections 4

Land Acquisition Act, 1894

section 4(1)

Land Acquisition Act, 1894

section 6

January lS, 1969

section 4

section 4(1)

section 9

Septemb.:r 22, l 970

Article 226

High Court of Gujarat

November 30, 1970

October 21, 1 972

Article 133(1)

sections 4

section 6

section 6

section 4

June 7, 1966

section 6

January 13, 1969

section 4

[1968] 1 S.C.R. 597

section 4


REV. STA:INISLAUS

STATE OF MADHYA PRADESH & ORS.

January 17, 1977

{A N. RAY, c. J.; M. H. BllG, R. s. SARKARIA, p, N. SHJNGHAL AND

. •

JASWANT SINGH, JJ.]

Constitution of India-Article 25(1)-Freedom of re/igion-Rig; zt to profess-Practice and propogate religion-Whether forcible and fraudulent conversion included-Public order-Meaning of-Seventh Schedule List II Entry 1-Madhya Pradesh Dharnia Swatantraya Adhlnivam 1968-0rissa Freedom of Religion Act 1967-Constitutional validity of.

The constitutional validity of the Madhya Pradesh Dharma Swatantraya Adhiniyam, 1968, was challenged in the High Court of Madhya Pradesh and the constitutional validity of the Orissa Freedom of Religion Act, 1967 was challenged in the High Court of Orissa. The two Acts prohibit forcible conversion and make the offence punishable. The Madhya Pradesh High Court upheld the validity of the Act. The Orissa High Court held that Art. 25 ( 1) of the Constitution guarantees propogatj.on of religion and conversion 1s a part of Christian religion; that the State Legislature has no power to enact the impugned legislation which in pith and substance is a law relating to religion; and that entry 97 of List I would apply.

Upholding the validity of both the Acts,

HELO.: ( 1) Article 25 guarantees to all persons right to fr.eedom and conscience and the right freely to profess, pract.ice and propogate religion subject to public order, morality and health.

The word 'propogate' has beel'l used in the Article as meaning to transmit or spread from person to person or .from place to place. The Article does not grant right to convert other person to one's own religion but to transmit or spread one's religion by an exposition of its tenets.

The freedom of religion .enshrined in Art. 25 is not guaranteed in respect of one religion ol)ly but covers all religions alike which can be properly enjoyed by a person if he exercises his right in a manner commensurate with the like freedom of persons following other religion.

What is freedom for one is freedom for the other in equal measure and there can, therefore, be no such thing as a fundamental right to convert any person to one's own religion.

[616 B-F, 617 A-BJ

(2) The Madhya Pradesh Act prohibits conversion from one religion to another by use of force, allurement or fraudulent means and matters incidental thereto. Si!Jlilarly, the Orissa Act prohibits conversion by the use of force or by inducemen.t or by any fraudulent means.· Both the statutes, therefore, clearly provide for the maintenanee of public order because if forcible conversion had not been prohibited that would have created public disorder in the States.

The expression "public order" has a wide connotation.

[617 C-E]

Ratilal Pc.11achand Gandhi v. The State of Bombay & Ors. [1954]

S.C.R. 1055; Ramesh Thappar v. The State of Madras [1950] S.C.R. 594; Ramiilal Modi v. State of U.P. [1957] S.C.R. 860 and Arun Ghosh v. State of West Bengal [1966] I S.C.R. 709, followed.

{3) If an attempt is made to raise communal passions, e.g. on the .ground that someone has been forcibly converted to another. religion it would in all

H . probability give tise to an apprehe~&lon of a breach of the nublic. o:der effecting ·!he community at large. The impugned Acts therefore fall w1thm the ourview of Entry I of List II of the Seventh Schedule as they are meant to avoid

5-112SCI/77

disturbaD:ce to the public order by prohibiting conversion from one religion to another m a manner r.eprehensible to the. conscience of the community. The two Acts d.o i:ot provide for the regulat10n of religion and do not fall under Entry 97 of Lm I. [618 A-C]

CIVIL APPELLATE JURISDICTION : Civil Appeal N 1489 & 1511 of 1974.

OS.

(Appeals by certificate/Special Leave from the Judgment and Order dated 23-4-1974 of the Madhya Pradesh 'High Court in Misc

Petition No. 136/73). ·

Criminal Appeal No. 255 of 1974.

(From the Judgment and Order dated 23-4-1974 of the Madhya c Pradesh High Court in Criminal Revision No. 159/71) and

Civil Appeal Nos. 344-346 of 1976.

(Appeals by Special Leave from the Judgment and Order dated 24-10-1972 of the Orissa High Court in C.J.C. 185, 186 and 217 of 1969).

Frank Anthony, in CA 1489, Crl. A. 255/74 and CA 346/76 for the appellant in CAs 1489 and 1511/74 and Crl. A. No. 255/74 and RR. 1 and 2 in 'CAs 346/76.

Soli J. Sorabjee in CA 1511, Crl. A. 255/74 J. B. Dadachanji, K. J. /ohn,, O. C. Mathur and Ravinder Narain for the appellant in CAs 1489 and 1511/74 and Crl. A. No. 255/74 and RR. 1 and 2 in CAs 346/76.

Gobind Das (In CAs 344-346/76) B. Parthasarthi, for the appellants in CAs 344-346/76.

Soli J. Sorabjee, B. P. Maheshwari and Suresh Sethi, for R. 3 in

CA 346/76.

Brijbans Kishore, B. R. SabharwaJ, for RR. in CA 345/76.

Gobind Das, Raj Kumar Mehta, for the Intervener (State Orissa) in C.A. 1489/74.

The Judgment of the Court was delivered by

of ~

RAY, C. J.-These appeals were hear~ together ?ecause they raie common questions of law relating to the mterpretat1on of the Constitution.

Civil Appeals No. 1489 and 1511 of.1974 and Criminal Appeal No. 255. of 1974 are directed against a Judgment of the Madhya "Pradesh High Court dated. 23 Apil: 1974. We shall refer to these as the Madhya Pradesh cases .. CIVIi .Appeals No. 344-346 of 1976 relate to a judgment of the Orissa High Court d.ated 24 October,

1972. We shall refer tc:dhese _appeals as the Onssa cases.

The controversy in the Madhya Pradesh .case~ relates to the

A-- Madhya Pradesh Dharina Swatantraya Adhiniyam, 1968, hereinafter referred . to. as the Madhya Pradesh Act. . The controversy in . the Orissa cases arises out of the Orissa Freedom. , of Religion Act, 1967 hereinafter referred to as the Orissa Act

The provisions of the 'two Acts. in so far as they relate to prohibition of forcible conversion and punishment therefor, are similar

B' and the questions which have been raised before us are common to 1'oth of them.

It will, therefore, be enough, for the purpose of appreciating the controversy, to make a som.ewhar'detailed mention of the facts of th\l Madhya Pradesh case. . . . .

The Sub-Divisional Magistrate of. Baloda-Bazar sanctioned the pro"secution of Rev. Stainislaus for the commission of offences under C i:ections 3, 4 and 5 (2) of the Madhya Padesh Act.

When the case came up before Magistrate, First-Class, Baloda-Bazar, the appellant Rev. Stainislaus raised a preliminary objection that the State Legislature did not have the necessary legislative competence and the Madhya Pradesh Act was ultra vires the Constitution as it did not fall within the purview of Entry I of. List If and Entry I of Li.st III of the Seventh Schedule.

The appellant's contention . was D t'hat it was covered by Entry 97 of List I so that Parliament alone had the power to make the law and not the State Legislature.

An objection was also raised that the provisions of sections 3, 4 and $ (2) of the Act contravened Article 25 of the Constitution and were -roid.

The Magistrate took the view that there was no force in the objection and did not refer the case to the High Court under soction 432 of the Code of Criminal Procedure, 1898.

The appellant applied to the Additional Sessions Judge . for a revision of the Magistrate's order refusing to make. a reference to the High Court.

The Additional Sessions Judge also t08k the view that no question of constitutional importance arose in the case and he did not think it necessary to mak61 a reference to the High Court.

The appellant thereupon applied to the High Court for revision nnder section 439 of the Code of Criminal Procedure and he also filed ll petition under Articles 226 and 227 of the Constitution. ·

The High Court heard both the revision and the writ .petition together.

The appellant raised the following three questions in the High Court :-

. G

(i) that sections 3, 4, 5 (2) and 6 of the M. P. Dharma Swatantraya Adhiniyam, 1968 are violat:ve of the petitioner's fundamental rights guaranteed by Article 25 ( 1) of the Constitution of India;

(ii) that in exercise of powers conferred by Entry No. 1 . of List II, read with Entry No. 1 of List III of the H Seventh Schedule the Madhya Pradesh Legislature in the name of pubc order could not have enacted

the said legislation. But the matter would fall within the scope of Entry No. 97 of List I of the Seventh Schedule, which confers residuary powers on Parliament to legislate in respect of any matters not covered by List I, List II or List III.

Therefore it is contended that Parliament alone had the powe; to legislate on this subject and the legislation enacted by the State Legislature is ultra vires the powers. of the State legislature;

(iii) that section 5(1) and section 5(2) of the M. P.

Dharma Swatantraya Adhiniyam, 1968 amount to testimonial compulsion and, therefore, the said provisions are violative q:f Article 20(3) of the Constitution of India.

The High Court examined the controversy with reference to the relevant provisions of the Madhya Pradesh Act and the Madhya Pradesh Dharma SWatantraya Rules, 1969 and held as follows:-

"what is penalised is conversion by force, fraud' or by allurement.

The other element is that every person has a right to profess his. own religion and to act according to it.

Any interference with that right of the other person by resorting to conversion by force, fraud or allurement cannot, in our opinion, .be said to contravene Article 25 ( 1) of the Constitution of India, as the Article guarantees religious freedom subject to public health.

As such, we do not find that the provisions of sect.ions 3, 4 and 5 of the M. P.

Dharma Swatantraya Adhiniyam, 1968 are violative of Article 25 (1) of the Constitution of India.

On the other hand. it guarantees that religious freedom to one and all including those who might be amenable to conversion by force, fraud or allurement. As such, the Act, in our opinion, guarantees equality of religious freedom to all, much less can it be said to encroach upon the religious freedom of any particular individual."

The High Cour~ therefore held that there was no justifi1; ation for the argument that sections 3, 4 and 5 of the Madhya Pradesh Act were violative of Article 25.( 1) of the Constitution.

The High Court in fact went on to hold that those sections "establish the equality of religious freedom for all citizens by prohibiting conversion bv objectionable activities such as conversion by force, fraud and by allurement".

As regards the question of legislative competence, the High Court took note of some judgments of this Court and held that as "the phrase 'public order' conveys a wider .connotaion as laid don bv their Lordships. of the Supreme Court m the different cases.

We are of the opinion that the subject matter of the Madhya Pradesh Dharma Swa•atJt.raya A<lhinivam. 1968 falls within the scope of Entry No. I of List lI of the Seventh Schedule! relating to the State List regarding public order".

. ~

REV. STAINISi,.\US v. MADHYA PRA{)ESH (Ray, C.J.) 615

On the remaining point relating to testimonial compulsion with reference to Article 20(3) of the Constitution, the High Court held • that section 5 of the Madhya Pradesh Act read with Form A, pres cribed by the Rules, merely made provision for the giving of intimation to the District Magistrate about conversion and did not require its maker to make a confession of any offence as to whether the conversion had been made on account of fraud, force or allurement, which had been penalised by the Act.

The High Court thus held that mere giving of such information was not violative of Article 30(1) of the Constitution.

But the question of testimonial coinpul sion within the meaning of Article 20(3) of the Constitution has not been raised for our consideration.

The Orissa cases arose out of petitions under Article 226 of the c Constitution challenging the vires of the Orissa Act.

The High Court stated its conclusions in those cases as follow$.:-

( 1) Article 25 ( 1) guarantees propagatio~ of religion and conversion is a part of thei Christian religion.

{2) Prohibition of conversion by 'force' or by 'fraud' as defined by the Act would be covered by the limitation subject to which the right is guaranteed under_ Article 25 (1) .

(3) The definitionof the term 'inducement' is vague, and many proselytizing adivities may .be covered by the definition and the restriction in Article 25 ( 1 ) cannot be said to cover the wide definition.

( 4) The State Legislature has no power to enact the impugned legislation which in pith and substance is a law relating to religion. Entry No. 1 of either List II. or List III does not authorise the impugned legislation.

(5) Entry 97 of List I applies. ·.The High Court has therefore declared the Orissa Act to be ultra vires the Constitution and directed the issue of mandamus to the State Government not to give effect to it.

The criminal cases which were pending have been quashed,

The common questions which have been raised for our considera- l:ioi:J: are (ll whether the two Acts were violative of the Jun(:!amenta:I G right guaranteed under Article 25 (1) of the Constitution, and (2) whether the State Legislatures were competent to enact them ?

Article 2.5 (1) of the Constitution reads as foUows :

"25 ( 1) Subject to public order, morality and health and to the other provisions of this Part, all personsare H eauallv entitled to freedom of comcie1ice and the right freely to profess, practise and 'propagate reli~ gion." " · - ;: ·

. SUPREME COURT RiPORTS [1977] 2 s.c.R..

, cou~l for the appellant has argued 'that the right to 'propagate'

oe s rehg10n mean~ the nght to convert a person. to one's own reli- • g10n.

On that basis, counsel has argued further that the right to convert a person fo one's own rel:gion is a fundamental right guaranteed by Article 25 ( 1) . of the Constitution. ·

The expression 'propagate' has a number of meanings, including "to multiply specimens of (a plant, animal, disease etc.) by any process of atural reproduction from the parent stpck", but that cannot, for obv10us reasons, be the meaning for purposes of Article 25 ( l) of the Constitution.

The Article guarantees a right to freedom of religion, and the expression 'propagate' cannot therefore be said to have been used in a biological sense.

The expression 'propagate .. has been defined in the Shorter Oxford Dictionary. to mean "to spread from person to person, or from place to place, to disseminate, diffuse (a statement, belief, practice, etc.)".

According to the Century Dictionary (which is an Encylopaedic Lexicon of the English Language) Vol. VI, 'propagate' means as follows:-

"To transmit or spread from person to person or from place to place; carry forward or onward; diffuse; extend; as to propagate a report; to propagate the Christian religion".

We have no doubt that it is in this sense that the word 'propagate' has been used in Article 25 ( 1), for what the Article grants is not the right to convert another person to one's own religion, but to transmit or spread one's religion by an exposition of its tenets. It has to be remembered that Article 25 ( 1) guarantees "freedom of conscience" to every citizen, and not merely to the followers of one particular religion, and that, in turn, postulates that there is no fundame:atal right to convert another person to one's own religio11. because if a

person purposely undertakes the conversion of another person to his religion, as distinguished from his effort to transmit or spread th1 tenets of his religion, that would impinge on the "freedom of comcience" guaranteed to all tho citizens of the country .alike.

The meaning of guarantee under Article 25 of tho Constitution came up for consideration in this Court in Ratilal Panachand Gandhi T.

The State of Bombay & Ors.(1) and it was held as follows:-

"Thus, subject to the restrictions which this Article imposes, every person has a furidamental right under our Constitution not merely to entertain such religiom• belief as may be approved of by his judgment or conscience but to exhibit his belief and ideas in such overt act~ as are enjoined or sanctioned by his religion and further to propagate his religiom views for the ediftcation of others." ------ ·-·-- (!) [1954] S.Cl't. 10~5.

This Court has given the correct meaning of the Article, and we find no justilication for the view that it grants a fundamental right to convert persons to one's own religion. . It. has to be appreciated that the freedom of religion enshrined in the' Article is not guaranteed in respect of one religion only, but covers all religions alike, and it can be properly enjoyed by a person if he exercises his right in a manner commensurate with the like freedom of persons following the other religions.

What is freedom for one, is freedom for the other, in equal measure, and there can therefore be no such thing as a fundamental right to convert any person to one's own religion.

It was next been argued by counsel that the Legislatures of Madhya Pradesh and Orissa States did not have legislative competence to pass the Madhya Pradesh Act and the Orissa Act respectively, because their laws regulate 'religion' and fall under the Residuary Entry 97 in List I of the Seventh.Schedule to the Constitution.

It is .ot in controversy that the Madhya Pradesh Act provides for the prohibition of conversion from one religion to another by use of force or allurement, or by fraudulent means, and matters incidental thereto.

The expressions "allurement" and 'fraud' have been defined by the Act.

Section 3 of the Act prohibits conversion by use of force or by allurement or by fraudulent means and section 4 penalises such forcible conversion.

Similarly, section 3 of the Orissa Act p;:ohibits forcible conversion by . the use of force or by inducement or by any fraudulent means, and section 4 penalises such forcible conversion.

The Acts therefore clearly provide for the maintenance of public order for, i£ forcible conversion had not been prohibited, that would have created public disorder in the States.

The expression "Public order" is of wide connotation.

It must have_ the connotation which it is meant to provide as the very first Entry in List II. It has been held by this Court in Ramesh Thapper v. The Statt1 of Madra3(') that "public order" is, an expression of wide connotation and signifies state of tranquillity which prevails among the members of a political society as a result of internal regulation~ enforced by the Government which they have established".

Reference may also be made to the decision in Ramjilal Modi v.

State of U. P. (') where this Court has held that the right of freedom of religion guaranteed by Articles 25 and 26 of the Constitution is expressly maqe subject to public order, morality and health, and that

"it cannot be predicated that freedom of religion can have no bearing whatever on the maintenance of public order or that a law creating an offence relating to religion cannot under any circumstances be said to have been enacted in the interests of public 01der". It has been held that these two Article's in terms contemplate that restrictions may be imposed on the rights guaranteed by them in the interests of public order.

Reference may as well be made to the decision in Arun Ghosh v. State of West Benga1C) where it has been held that if a thing disturbs the current of the life of the community,

(1) (1950) S.CR. 594.

(2) (1957) S.C.R. 860.

(3) [1966) I S.C.R. 709.

and does_ not merely affect an individual, it would amount to disturbance of the public order.

Thus if an attempt is made to raise communal passions, e.g. on the ground that some one. has been "forcibly" converted to another religion, it would, in all probability, give rise to an apprehension of a breach of the public order, affecting the community at large. 'f!ie impugned Acts therefore fall within the purview of Entry I of List II of the Seventh Schedule as they are meant to avoid disturbances to the public order by prohibiting conversion from one religion to another in a manner repi:ehensible to the conscience of the community. The two Acts do not provide for the regulation of religion and' we do not find any justification for the argument that they fall under Entry 97 of List I of the Seventh Schedule.

In the result Civil Appeals No. 1489 and 1511 of 1974 and.

Criminal Appeal No. '255 of 1974 fail and are <Iismissed while Civil Appeals No. 344-346 of 1976 are allowed and the impugned judgment of the Orissa High Court dated 24 October, 1972 is set aside.

The parties shall pay and bear their own costs, in Madhya Pradesh appeals.

The State shall pay the respondent costs in the Orissa appeal according to previous direction.

P.H.P.

C.As. Nos. 1489 & 1511 of 1974 amt

Cr.. '1. No. 255 of 1974 dismissed.

C.As. Nos. 344-346 of 1976 allowed.

REV. STA:INISLAUS

STATE OF MADHYA PRADESH & ORS

January 17, 1977

A N. RAY

R. s. SARKARIA

JASWANT SINGH, JJ.

Constitution of India

Article 25(1)

Seventh Schedule

Freedom of Religion Act 1967

High Court of Orissa

Madhya Pradesh High Court

Orissa High Court

Art. 25

Article 25

Art. 25

Seventh Schedule

CIVIL APPELLATE JURISDICTION

Frank Anthony

Soli J. Sorabjee

J. B. Dadachanji

K. J. /ohn,

O. C. Mathur

Ravinder Narain

Gobind Das

B. Parthasarthi

Soli J. Sorabjee

B. P. Maheshwari

Suresh Sethi

Brijbans Kishore

B. R. SabharwaJ

Raj Kumar Mehta

RAY

Religion Act, 1967

Stainislaus

Seventh Schedule

Parliament

sections 3, 4

Article 25

Code of Criminal Procedure, 1898

section 439

Code of Criminal Procedure

Articles 226 and 227

sections 3, 4, 5

Article 25

Constitution of India

Seventh Schedule

Seventh Schedule

section 5(1)

section 5(2)

Article 20(3)

Constitution of India

Article 25

Constitution of India

Article 25

Constitution of India

sections 3, 4 and 5

Article 25

Supreme Court

Seventh Schedule

Article 20(3)

section 5

Article 30(1)

Article 20(3)

Article 226

Article 25

Article 25

Article 25

Article 25

Article 2

Article 25

Article 25

Article 25

Article 25

Article 25

State of Bombay

Madhya Pradesh

Section 3

section 4

section 3

section 4

Articles 25 and 26

Seventh Schedule

Seventh Schedule


STATE OF MADHYA PRADESH & ORS.

GALLA TILHAN VY AP ARI SANGH & ORS.

January 17, 1977

[S. MuRTAZA FAZAL Au AND P. S. KArLASAM, JJ.]

Madhya Pradesh Krishi Upaj Mandi Adhiniyam, 1972, S. 37(5)(a), co1t<1titutiona/ validity of-Whether unreasonable to commission agents.

The respondents challenged the constitutional validity of s. 37(5)(a) of the Madhya Pradesh Krishi Upaj Mandi Adhiniyam, 1972, before the High Court on the ground that it places unreasonable restriction on the commission agent and puts a great burden on him for storing the goods given to him by his principal, without charging the commission for its safe custody. The plea was accepted and the High Court struck down the impugned provision as unconstitutional.

Allowing the appeal by Special Leave, the Court,

HELD : Section 3 7 ( 5 )(a) is constitutionally valid and there is no hardship

or unreasonableness in it. The provision prevents the commission agent from D levying any additional charges from the farmer or the principal for safe custody of the goods, but s. 37(4) of. the Act compensates him by authorising him to charge not. only his commis:!io"n from th~ principal trader, but also the expenses incurred by him for the purpose of storing the produce, and .the services rendered by him.

[620 D, E, G] ·

CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 1912-1914 of 1976.

(Appeal by special Leave from the Judgment and order dated 7-2-1975 of the Madhya Pradesh High Court in Misc.

Petition No. 231174 and 685 and 732173 respectively.)

I. N. Shroff and H. S. Parihar, for the appellants.·

S. K. Gambhir, for respondents Nos. 1 and 2.

The Judgment of the Court was delivered by

FA~AL Au, J.

In this appeal by special leave, on an appication filed by the respondents before the High Court of Madhya Pradesh, the High Court struck down the constitutional "."alidity of sub-s. (5)(a)

of s. 37 of the Madhya Pradesh Krislti Upaj Mandi Adhiniyam, 1?72 -hereinafter referred to as 'the Act'-(No. 24 of 1973).

The impugned sub-section runs as follows : ' ' ...

" ( 5) Every commission agep.t shall be liable-:-;

to keep the gods' of' his. pr_inc; ipal 'in ·. sfe: custody . without any charge other than the comm1s~1on payable to him; and"

620.

SUPREME COURT REPORTS [1977] 2 s.c.R.

The High. C:ourt thought that this statutory provision places unreasonale res.tncton on the comission agent and pu!B great burden on ~1m for storm~ 'f!he good.s given to him by the principal without chargrng. the. comm1ss1on for its safe custody. The Act is a social piece of

leg1slaton and should have been liberally construed so as' to advance the. obiect of the Act and fulfil the aims to be achieved thereby.

The mam purpose of the Act is to secure a scientific method of storage, sale, distribution and marketing of agricultural produce and cut out

a~ far. as possible middle-man's profit.

The Act, therefore, contains prov!S!ons of a beneficial nature preventing profiteering tendencies. It is not, however, the hardship that can be termed unreasonable so as to make a statute unconstitutional.

Moreover, the High Court does not appear to have looked to the scheme of the Act and has in fact completely overlooked the ptovisions of s. 3 7 ( 4) which runs as follows : .

" ( 4) The commission agent shall recover his commission only from his principal trader at such rates as may be specified in the bye-laws including all such expenses as may be incurred by him in storage of the produce and other services rendered by him."

This section clearly empowers the commission agent to charge such rates as may be specified by the bye-laws even for the storage of the

Produce and other services rendered by him.

This provision also does not prevent the commission agent from levying reasonable charges for the storage over and above his commission.

All that the Act prevenffi is that the commission agent is prohibited from levying any charges for safe custody from the farmer or the principal.

This is done in order to attract and lure the farmers to place their goods with commission agents without additional payment of charges for

afe custody.

Section 37 ( 4), however, compensates the commission agent by authorising him to charge his commission and all expenses which may be incurred by the commission agent in connection with the storage of the produce and the services rendered by him.

This

ection, therefore, clearly authorises the commission agent not only to charge his commission from the principal trader but also expenses incurred by him for the purpose or the storage.

That apart s. 2(e) of the Act which defines a "Commission agent" empowers him to charge any commission or percentage upon the amount involved in

uch transaction.

For these reasons, therefore, we do not see any hardship or unreasonablenei& in the provisions df s. 3 7 ( 5) (a) of the Act.

The High Court, therefore, committed an error of law in striking down this proviion as unconstitutional.

In our opinion, therefore, s .. 3_7 (5)(a) of the Act is constitutionally valid. In the view we take, 1t is not necessary to 80 into the question whether the law violates Art. 19 of the CoI111titution which stands suspended during the emergency.

The lilppeal is accordingly allowed.

The order of the High Court is quashed.

In the circumstances, there will be no order as to costs.

M.R.

Appeal allowed.

STATE OF MADHYA PRADESH & ORS

GALLA TILHAN VY AP ARI SANGH & ORS

January 17, 1977

S. 37(5)(a)

s. 37(5)(a)

Section 3

s. 37(4)

I. N. Shroff

H. S. Parihar

S. K. Gambhir

FA~AL Au

s. 37

s. 3

Section 37

s. 2(e)

s. 3

Art. 19