MOT! NATWARLAL & ORS.

RAGHA VAYYA NAGINDAS & CO.

March 21, 1977

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

Bombay High Court original side Rule." 1957-Rules 569, 573-Whether a Solicitor's bill of co.<ot for work done in court subordinate to High Court can be taxed by the Taxing Master of High Court-Whether it can be taxed 01z the original side scale-Legal Practitioners' Fees Act 1926-Section 4-..Sectian 224 (l)(d) of Govt. of India Act 1935-Rules framed thereunder-Bombay City Civil Courts Act 1948-Sec.tion 18(2) of the Bon1bay City Civil Court Rules 1948.

Certain properties belonging to the appellants \Vere attached by the Citv Civil Court in Bombay in execution of a decree. The appel1ant engaged the respondent firm of Solicitors who by Vakalat executed in their favour by the appella..nts agreed to act, appear and plead for them in the City Civil c'ourt.

The respondents took out three Chamber Summonses on behalf of the appellants for raising the attachment. Thereafter, they submitted three bills.

Since the bills remained unpaid, they obtained an order fron1 the Prothonotary of the High Court directing the Taing Master to tax the bills. The aPpellants filed an appeal against the order of the Prothonotary which was dismissed by the Chamber Judge with liberty to the Taxing Master to decide whether the respondents were entitled to be remunerated on the original side scale of fees as between an attorney and client.

The Taxing Master rejected the appellants' contention and taxed the respondents' bills according to the scale of fees applicable on the original side by the High Court. A Chamber Summons filed by the appellants before a Single Judge was dismissed. An appeal before the Division Bench by the_ appellants also failed.

In an appeal by Special Leave the appellnnts contended :

1. The $olicitors' bill for cost and remuneration in respect of the work done by them in the City Civil Court cannot be taxed by the Taxing !\{aster of the Original Side, High Court.

2. The bill in any event cannot be taxed according to the scale of fees applicable on the original side as bet\veen an attorney and client, particularly in view of the provisions contained in the Legal Practitioners' Fees Act, 1926, Bombay City Civil Courts Act, 1948 and the Bombay City Civil Court Rules, F 1948 as well and the rules framed bv the Bombay High Court under section 224(1) (d) under the Government of India Act, 1935.

Dismissing th~ appeal,

HELD : I. Rule 569 of the Rules of the High Court of Bombay (Origin.I side) 1957, authorises the Taxing Master to tax the bills of cost on ev<!ry side of the High Court except the Appellate side of the High Court and in the Insolvency Court. All other bills of cost of attorneys shall also be taxed by hin1 G when be is directed to do so by a Judge's order. There is no justification for the apnellants' contention thatl "other bills of cost" mut be construed to mean other bills of cost relating to matters_ on the original side of the High Court.

Rule 573 as amended prescribed a limitation of 5 years for lodging the bill of cost for taxation after the disposal of the suit or the proceedings in the High Court. In respect of matters which are not the subject of any proceedings in the High Court the attorney ha.;; to lodge his bill of cost for taxation within 5 years from the completion of the matter.

The necessity for making this provision arose because rule 568 empowers the Taxing Master to tax the attorneys' bill of H cost in all matters except those on the Appellate side of the High Court. The Bombay High Court, over a long course of years has consistently taken tl1e view that the Taxing Master has jurisdiction to tax attorneys' bills of cost in relation

8-436SCI/77

A to the_ professiona, I services rendered by them whichever be the court in relation !O which the sef".1ces are rendered except the Appellate side of the High Court, in regard to which an exception has been expressly carved out by the 111 le

[354 G-H, 355 A-0] .

Nowroji Fudumji Sirdar v. Kanga & Savani, 28 Born. L.R. 384, Chitnis & Kanga v. Wanianrao S. Mantri, 46 Born. L.R. 76 and Mis. Pereia Fazalblzoy & Co. v. The Rajputana Cold Storage & Refrigeration Ltd., 65 Born. L.R. 87

. B approved .

. . 2. The preamble and the statement of objects and reasons of the Legal _Practitioners Fees Act 1926 shows that the Act was passed in order to give effect to the recomm.e!'-dations of the Indian Bar Committee that in any case in which a Legal Practitioner has acted or agreed to act he should be liable to be sued for negligence and be entitled to sue for his fees.

The Indian Bar Commjttee recomended by para 42 of its report that the distinction relating to suing for negligence and being sued for fees was not of great importance since suits by or against Legal Practitioners in respect of fees and the conduct of cases were extremely_ rare.

But it was necessary to provide that in any case in which a Legal Practitioner had acted or agreed to act he should be liable to be !\Ued for negligence and be entitled to su~ for his fees.

The definition of Legal Practitioner in the 1926 Act is the same as in the Legal Practitioners Act, 1879 (which includes an attorney). Section 3 of the Act of 1926 provides that any Legal Practitioner who acts or agrees to act for any person may by private agreement settle with such person the terms of his engagement and fees to be paid for his professional services. Section 4 of the Act provides that any such Legal Practitioner shall be entitled to institute and maintain legal proceedings for the recovery of any fee due to him under the agreement or if no such fee has been settled a fee computed in accordance with the law for the time being in force in regard to the computation of the cost to be awarded to a party in respect of the fee of his Legal Practitioner.

It may be that if an attorney institutes a suit he may be governed by section 4 but it really confers an additional right on the Legal Practitioner to institute a suit and cannot be con~ strued as detracting from any other right which he may possess in regard to the taxation and recovery of hi< fees. [358 G-H, 359 A-B, F-H]

3. The High Court was in error in observing that alternatively there \Vas an apparent conflict between section 4 of the 1926 Act and the original side rules relating to the taxation of an attorney's bills of cost. Bearing in mind the true object anc.l purpose for which the 1926 Act \Vas passed and the drive of secton 4, there is no conflict, apparent or real between the 1926 Act and the High Court Rules of 1957.

[360 D-E]

4. The rules framed by the High Court under section 224(1 )(d) of _the 1935 Act, are rules for fixing and regulating the fees payable as costs by any party in respect of the fees of his adversary's attorney. These rules according to their very terms have nothing to do with the taxation of any attorney's bill of cost as between himself and his O\Vn client.

[360 F-G]

5. The combined effect of section 4 of the 1926 Act and the Rules framed by the High Court under section 224 ( 1) (d) is that if an attorney-Who has appeared or acted for his client in the City Civil Court sues his client for fees he cannot recover in the suit anything more than what is permissible under the Rules framed by the High Court under sect!on 224(1)(d). Howe"".er, that c"!..O _not af(ec, t.the right of an attorney to have his bill taxed by the Taxing Master on the ong1nal

side scale. [361 C-Dl

6. Section 18(2) of the Bombay Cit~ Civil Courts Act .. 194? provides that in respect of suilci transferred from the High Courl to the City Ct"".il Court cost~ incurred in the High Court till the date of the transfer of t_he suit are to be assessed bv the city Civil Court in such man.ner as the State Government n1ay after consultation with the High C-Ourt determine by rules. Rule 2 framed l}nder section 18(2) provides that even as regards the fees of attorneys the Re~1strar

of the City Civil Court is _given the -power to tax nd allow all such costs and out of pocket expenses as shall have been properly incurred by au attorney upto the 1tate of transfer of the - suit. The nlle further provides that nfter the date

• •

--· ..._.,,

M. NATWARLAL v. R. NAGINDAS & co. (Cha11drachud, !.) 353

of the transfer such fees shall be taxed and allowed as in the opinion of the A Registrar are commensurate with the work done by the advocate having regard to the scale of fees sanctioned for the advocates in the City Civil Courts Rules.

The said rule, applies only to transferred suits. It has no application to the suits

and .proceedings instituted in the City Civil Court after 148. [361 D-H]

M/s. Sandersons & Morsans v. Mohan/al Lalluchand Shah, A.I.R. [1955) Cal 319 distinguished.

7. The Taxing Master, however, before allowing the cost claimed by the attorney from his client must have regard to the fact that the actomey ha~ appeared in a subordinate court and to the scale of fees generally prevalent in that Court. [363 G-Hl

The Court observed that power similar to the power of taxation of a bill of costs betv1een the advocate and client which is found in Supreme Court Rule~.

1966, should be conferred on appropriate officers of the Court subordinate to the High Court.

Such a power may enable the presiding Judge to c.ontrol the professional ethics of the advocates appearing before them more effectively than is possible at present. [362 A-Gl

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1317 of 1975.

lfrom the Judgment and Order dated 8-10-197 4 of the Bombay High tourt in Appeal No. 73 of 197 4)

P. H. Parekh and Miss Manju Jelley, for the Appellant S. K. Dholakia and R. C. Bhatia, for the respondent.

F. S. Nariman and B. R. Aggarwal, for the intervener.

The Judgment of the Court was delivered by

CHANDRACHUD, J. A question of practical importance concerning the dying profes'sion of Solicitors arises in this appeal by special leave.

The question is whether the bill of costs of a Solicitor or an Attorney who 'has rendered professional services to his client in the City Civil Court can be taxed by the Taxing Master, Original Side, Bombay High Court, and if so, whether it can be taxed on the Original Side scale.

The dual system which was prestigiously in vogue in Bombay since the inception of the Bombay High Court has been abolished with effect from January 1, 1977 and therefore the question is not of growing importance. All the same, though the question will by and by cease to have the importance which it has to-day, we are informed at the bar that quite a few cases are kept pending in Bombay to await the decision of this appeal.

Certain properties belonging to appellants were attached by the City Civil Court, Bombay, in execution of a decree passed by a Court in Bellary. The appellants appeared in the execution proceedings through a firm of Solicitors, Mis Raghavayya Nagindas & Co., respondents herein, who by the vakalatnama executed in their' favour by the appellants, agreed to act, appear and plead for them in the City Civil Court.

The respondents took out three Chamber Summonses on behalf of the appellants for raising the attachment, which was eventually raised in about 1960. Thereafter, they submitted three bills to the appellants for their costs and remuneration.

Since the bills remained unpaid, the respondents obtained on February 8, 1972 an order from the Prothonotary of the High Court directing the Taxing Master to tax the bills

G •

The appellants appealed against the order of the Prothonotary by way of Chamber Summons which was dismissed by the Chamber Judge on October 26, 1972 with liberty to the Taxing Master to decide whether

rnspondents were entitled to be remunerated on the Original Side scale of fees, as between au Attorney and client.

The Taxing Master rejected the a2pellants' contention, taxed the respondents' bills according to the scale of fees applicable on the Onginal Side of the High Court and directed the issuance of an allocatnr.

Before the respondents could obtain a payment order on the basis of the allocatur, the appellants took out a Chamber Summons on May 7, 1973 challenging the order of the Taxing Master.

That Chamber Summons was dismissed by the Chamber Judge whose decision has been confirmed in appeal by a Division Bench.

Three contentions were raised by the appellants in the High Court : ( 1) A Solicitor's bill for costs and remuneration in respect of the work done by him in the City Civil Court cannot be taxed by the Taxing Master, Original Side, High Court; (2) The bill, in any event, cannot be taxed according to the scale of fees applicable on the Original Side as between an Attorney and client; and ( 3) The recovery of the amount taxed by the Taxing Master is barred by limitation under art. 113 of the Limitation Act, 1963.

The High Cowt rejected all these contention~ by its judgment d, jlted October 8, 1974.

Mr. Parekh, appearing for the appellants before us, did not .press the third point regarding limitation and rightly so. Article 113 of the Limitation Act, though residuary, applies to suits and cannot govern , the special form of remedy available to the Attorneys for recovering their fee's.

Procedings in pursuance of that remedy are governed by rule 573(ii) (a) of the Original Side Rules and the proviso thereto.

The proceedings for recovery of fees under those provisions are not barred by time.

Counsel has, however, pressed the first two contentions with some zeal.

We wiU first take up for consideration the primary question whether the Taxing Master has jurisdiction at <tll to tax an Attorney's bill of costs for professional services rendered by him to his client in connection with a litigation in a court other than the Bombay High Court, in this case the City Civil Court.

Rule 569 of "The Rules o[ the High Court of Bombay (Original Side), 1957" affords, in our opinion, a complete answer to the appellants' contention that the Taxing Master who is an officer of the Original Side of the Hh Court has no jurisdiction to tax the Attorneys' bills in regard to work done by them in matters other than those on the Original Side. Rule 539 occurs in Chapter XXIX of the Original Side Rules under the rubric

"The Taxing Office". The rule reads thus :

"569. The Taxing Master shall tax the bills of costs on every side of the Court (except the Appellate Side) and in the Insolvency Court.

All other bills of costs of Attorneys shall also be taxed by him when he is directed to do 8o by a Judge's order."

M. NATWARLAL v. R. NAGINDAS & co. (Chandrachud, J.) 355

'I_be rule consists of two parts of which the first part confers jurisdic- A t1on on the Taxing Master to tax the bills of costs on every ide of the High Court including bills relating to matters in the Insolvency Court but excluding those on the Appellate Side of the High Court.

If the rule were to stop with the first part, it would have been possible to say that the Taxing Master has no jurisdiction to tax the bills in regard to matters outside the High Court.

But the second parts of the rule puts the matter beyond doubt by providing that all other bills B of costs of Attorneys shall also be taxed by the Taxing Master.

It is argued on behalf of the appellants that "other bills of costs" must be

ccmstrued to mean "other bills of costs relating to matters on the Original Side of the High Court" and bills relating to non-contentious matters. We see no jurisdiction for cutting down the scope of the second part o~ the rule by putting a limited meaning on words of width used therein. "All other bills of costs of Attorneys" to which C the second part of the rule refers must mean all bills of costs of Attorneys other than those which are referred to in the first part of the rule.

That we conceive to be the plain meaning of the particular provision.

Rule 573 which was amended by Slip No. 190 !l]so shows that the Taxing Master has jurisdiction to tax the bills of Att.orneys in regard D to professional services rendered. by them in matters outside the High Court. Amended rule 573(i) (a) provides that subject to the proviso and subject to the discretion of the Chamber Judge to enlarge the time, in "every suit or proceeding in the High Court" an Attorney 'shall lodge his bill of costs for taxation within five years after the disposal of the suit or the proceeding, and if an appeal is filed in the High Court, within five years from the disposal of the appeal.

Amend- E ed rule 573(ii)(a) provides that subject to the proviso and to the Chamber Judge's discretion, "Iu the case of matters which are not the subject of any proceedings in the High Court, an attorney shall lodge his bill of cosfs for taxation within five years from the completion of the matter." This latter rule prescribes the time within which an Attorney must lodge his bill of costs in regard to matters which are not the subject of any proceedings in the High Court.

The necessity F for making this provision arose evidently because rule 569 empowers the Taxing Master to tax the Attorneys' bills of . costs in .all matters except !hose on the Appellate Side of the , High .Court. The appellants' contention, if accepted, will render rule 573 (ii)( a) otiose because according to that contention, no matter which is not the subject of any proceeding on the Original Side of the High Court or in the Insolvency Court could be taken before the Taxing Master for G taxation of the Attorney's bills. It was then useless to provide that bills in rep:ard to matters which are not the subject of any proceeding in the High Court must be filed within a particular period.

Apart from what appears to us to be the only reasonable construction of rule 569, the Bombay High Court, over a long course of years, has consistently taken the view that the Taxing Master has H jurisdiction to tax Attorneys' bills of costs in relation to professional services rendered by them in all matters, contentious or non-contentious, and whichever be the Court in relation to which the services

are rendered, except the Appellate Side of the High Court in regard to which an exception has been expressly carved out by the rule. In Nowroji Pudumji Sirdar v. Kange & Savani(1) the appellants were represented by the respondent firm of Solicitors in litigation in the District Court and the Subordinate Courts of Poona.

The appellants having declined to pay the respondents' bills on the ground that they were excessive, respondents obtained an order from the Prothonotary for having the bills taxed by the Taxing Master.

In an appeal from the decision of the Chamber Jndge _who upheld the Prothonotary's order, it was contended by the appellants that the 'faxing Master had no jurisdiction to tax the bills of the respondents, firstly because the bills pertained to work which was not connected with the Original

Side of the High Court and secondly because the services were rendered to the appellants by a partner of the respondent firm in his capacity as a pleader.

These contentions were rejected by a Division Bench consisting of Sir Norman Macleod, C. J., and H. C. Coyajee, J., who could "see no reason" why a Solicitor practising in Bombay and performing professional services for a client regarding business in the mofussil 'should not be entitled to get his bills taxed by tqe Taxing Master on the Original Side of the High Court.

In coming to this conclusion, the High Court relied on rule 494 of the Original Side Rules, 1922 which was identical with rule 569 of the Rules of 1957.

The High Court observed i11 Nowroji's case that it may be that Attorney would fall within the provisions of the Bombay Pleaders Act, 17 of 1920, with regard to any work done i11 mofu'ssil Courts aft1r the coming into force of that Act, but that it was unnecessary to consider that question because the work for which the respondents. had lodged their bills was done before that Act bad come into force, Relying upon this observation, it was submitted by Mr. Parekh that the decision in Nowroji's case is not good law after the coming into force of the Bombay Pleaders Act. It is not possible to accept this submission because even after that Act came into force, the Bombay High Court took the same view as was taken in Nowroji's case and for good reason which we will expiate while dealing with the appellants' contention bearing on the scale of fees according to which the bills can be taxed.

The relevant rule, couched iu identical language, with which the High Court was concerned from time to time leaves no doubt that the Taxing Master has the jurisdiction to tax all bills of costs of Attorneys, except those in regard to the work done by them on the Appellate Side of the High Court.

In Chitnis & Kanga v. Wamanrao S. Mantri( 2 ) the appellants, a firm of Solicitors, had obtained from the Prothonotary of the High Court an order under rule 534 of the Rules of 1936; directiM the Taxing Master to tax their bill of costs relating to (1) a suit filed on the Original Side of the High Court, (2) a petition for probate in the District Court at Satara, (3) an appeal in the Hir.Jt Court on its

(l) 28 Born. L.R. 384.

(2) 48 Born. L.R. 76.

M. NATWARLAL v. R. NAGINDAS & co. (Chandrachud, J.) 357

Appellate Side and ( 4) certain miscellaneous work done in the mofus- A sil. . The res110ndent, to whom the appellants had rendered these professional services, contended before the Taxing Master that the order of the Prothonotary was ultra vires insofar as it related to items (2),

(3) and (4). The Taxing Master rejected that contention whereupon the respondent took out a Chamber Summons submitting that it was not competent to the Attorneys to take advantage of the pro-. .cedure that applies to taxation of Solicitors' costs ou the Original Side B of the High Court in respect of costs incurred in the mofussil and on the Appellate Side of the High Court.

The respondent further contended by the Chamber Summons that the matter was governed by the Bombay Pleaders Act, 17 of 1920, and therefore the Taxing Master had no jurisdiction to tax the' appellants' bill in regard to items 2, 3 and 4.

The Chamber Judge set aside the ex-parte order of the Prothonotary without a speaking order, against which the c appellants filed an appeal which was heard by Sir John Beaumont, C. J., and Kania, J. The Division Bench held that the order of the

Prothonotary in regard to item 3 which related to the work done by the appellants on the Appellate Side of the High Court was clearly wrong in view of the provision contained in rnle 534 of the Rules of 1936. As regards the remaining three items, namely the suit on the Original Side, the probate proceedings in the Satara District Court D and the miscellaneous work done 1n the mofussil, the Court following the decision in Nowroj(s case held that the appellants were entitled to have their bill taxed in regard to these items by the Taxing Master. of the Original Side, although it related to work done in the mofussil.

Adverting to the observation made in Nowroji's case in regard to the effect of the Bombay Pleaders Act of 1920, the learned Judges held that the provisions of that Act had no effect on the question in issue.

E The learned Chief Justice referred in his judgment to s. 17 of the Act of 1920 which provided that a legal practitioner (which expression included an Attorney) may enter into a special agreement as to the terms of his remuneration and to s. 18 which dealt merely with the amount of pleader's fees which could be recoverea against the opposite party.

These provision's, according to the High Court, had nothing to do with the question whether an Attorney's bill of costs F in regard to the work done by him in the mofussil co1lld be taxed by the Taxing Master.

in Nowroji (supra), the learned Judge held that by reason of rule 569, age & Refrigeration Limited,(1) Mody J., sitting singly, took the same view of the Taxing Master's power to tax the Attorneys' bilfs.

Tn that .case the appellants had rendered professional services to the G respondents in respect of a petition for winding up which was filed in the High Court of Rajasthan. Respondents raised the same contenions which are rised by Mr. Parekh before us, namely, that the Prothonotary had no jurisdiction to pass the order directing the Taxing Master to tax the bill and secondly, that the bill of costs could not be taxect on the Original Side scale.

Relying upon the decision in Nowroji (supra), the learned Judge held that by reason of rule 569, H the very rule with which we are concerned in the instant case, an

(l) 65 Bom. L.R. 87.

Attorney of the High Court was entitled to have his bill of costs taxed by the Taxing Master in respect of professional work done by him even in a Court other than the Bombay High Court The karned Judge also negatived the second contention of the respondents before him, but we will turn to that part of the judgment later.

These decisions of the High Court contain a correct exposition of the relevant rule which was numbered a:s Rule No.494 in the Rules of 1922, No. 534 in the Rules of 1936 and is now Rule No. 569 in the Rules of 1957. The Rules of 1909 also contained a similar rule bearing No. 491. It is important to mention from the point of view of 'legislative' history, that prior to the framing of the 1909 rules, the. corresponding rule was Rule 544 of the 1907 Rules which, in material respects, was worded differently. It said :

"Rules 544.

The Taxing Officer shall tax the bills of costs on every side of the Court (Except the Appellate Side) and in the Insolvency Court.

He shall also tax all such attorney's bills of costs as he may be directed to tax by a Judge's order on consent of the parties, or on the application by any party chargeable with the bill."

Under this rule, the Taxing Officer could tax the bills referred to in the second part of the rule by consent of parties only or if an application was made for taxation of the bill by a person chargeable with the bill.

Further, the second part of Rule 544 did not contain the expression "Aii other bills of costs" (emphasis supp!ieo) which is to be found in the corresponding rule since the framing of the 1922 Rules.

The significant changes introduced in 1922 are directed at conferring on the Taxing Master the power to tax all bills of Attorneys, including those for work done in any other Court save the appeJ .. late side of the High Court.

It is argued on behalf of the appellants that assuming that the Taxing Master has jurisdiction to tax the bills in regard to the work done by the respondents in the City Civil Court, the bills cannot he taxed on the Original Side scale in view of the provisions contained in the Legal Practitioners (Fees) Act, 21 of 1926. We see no substance in this submission.

The statement of Objects and Reasons of the 1926 Act shows that the Act was passed in order to give effect to the recommendation of the Indian Bar Committee that in any case in which a legal practitioner has acted or agreed to act, he should be liable to be sued for negligence and be entitled to sue for his fee~. Prior to the Passing of the Act of 1926, various High Courts in India had held aim~! consistently that Vakils could be sued for negligence in the discharge of their professional duties and were entitled to sue for their fees but Barristers could neither be sued for negligence nor could they sue for their fees.

Ti)e Indian Bar Committee recommended by paragraph 42 of its report that in practice, the distinction relating to suing for negligence and being sued

M. NATWARLAL v. R. NAGINDAS & co. (Chandrachud, J.) 359

for fees was not of great importance since suits by or against legal practitioners in respect of fees and the conduct of c&ses were extremely rare; but it was necessary to provide that in any case in which a legal practitioner had 'acted' or 'agreed to act', he should be liable to be sued for negligence and be entitled to sue for his fees. The Jong title of the Act of 1926 describes it as an Act "to define in certain cases the rights of legal practitioners to sue for their fees and their liabilities tg be sued in respect of negligence in the discharge of their professional duties." The preamble of the Act is in the same terms. Section 2(a) of the Act defines a 'legal practitioner' to mean a legal practitioner as defined in s. 3. of the Legal Practitioners Act, 1879 according to which a 'legal practitioner' means "an Advocate, Vakil or Attorney of any High Court, a Pleader, Mukhtar or Revenue Agent".

Section 3 of the Act of 1926 provides that any legal practitioner who acts or agrees to act for any person may by - private agreement settle with such person the terms of his engagement and the fee to be paid for his professional services.

Section . 5 of the Act provides that no legal practitioner who has acted or agreed to act shall, by reason only of being a legal practitioner, be exempf from liability to be sued in respect of any loss or injury due to any negligence in the conduct of his professional duties.

Section 4 of the Act of 1926 which is the sheet anchor of Mr. Parekh's

ugumcnt reads thus :

"4. Right of legal practitioner to sue for fees.

Any such fogal practitioner shall be entitled to institute and maintain legal proceedings for the recovery of any fee due to him under the agreement, or, if no such fee has been settled, a fee computed in accordance with the law for the time being in force in regard to the computation of the costs to be awarded to a party in respect of the fee of his legal practitioner." In the first place, as explained aliove, the Act of 1926 was passed for an entirely different purpose with which we are not concerned in .the present case.

Secondly, and that is more important, section 4 on which the appellants rely deals, as shown by its marginal note, with a limited question viz., the right of a legal practitioner to sue for his fees.

It may be that since an Attorney is included within the meaning of the expression 'legal practitioner', he will be governed by the provisions contained in s. 4 of the Act of 1926 if he brings a suit for the recovery of his fees.

But we are not concerned in this case to deJermine the scope and extent of an Attorney's right to sue for his fees.

It must further be borne in mind that s. 4, which is in two parts, provides in the first place that a legal practitioner 'shall be entitled' to institute and maintain a legal proceeding for the recovery of any fee due to him under an agreement.

This part of the section confers an additional entitlement on legal practitioners and cannot justifiably be construed as detracting from any other right which they may possess in regard to the tax-ation and recovery of their fees.

Section 4 provides by its second part that if there is no agreement between the legal practitioner and hls client in regard to the fees payable to him, he shall be entitled to institute and

maintain legl proceedings for the recovery of a fee c'omputed in the manner provided therein.

This also is in the nature of an entitlement, the right rcognisect thereby being the right to bring a suit to

r.eover the fees In the absence of an agreement.

Anj' legal practitioner who wants to enforce the right which is specially created and

confeed by the Act. of 1926 will have to comply with the conditions on which that nght 1s conferred.

When a statute creates a special nght, .. 1t can on1l:' be enforced in the manner and subject to the conditions prescnbed by the statute.

Therefore, the fees for the recovery of wnich legal proceedings are brought under s. 4 cannot be anY. larger than the fees computed in accordance with the law for the time being in force in regard to the computation of the costs to be awarded to a party in respect of the fee of his legal practitioner.

But, as we have stated earlier, the provisions of the Act of 1926 arc entirely be"side the point.

They have no bearing on the question whether an Attorney can have his bill taxed by the Taxing Master in respect of the work done by him in courts other than the High Court of Bombay and if so, on what scale.

The Bombay High Court in the judgment under appeal thought that there was an apparent conflict between s. 4 of the Act of 1926 and the Original Side Rules relating to the taxation of an Attorney's bill of costs.

We would like to make it clear that bearing in mind the true object and purpose for which the Act of 1926 was paSsed and the drive of s. 4 thereof, there is no conflict, apparent or real, between any of the provisions of tne Act of 1926 and the rules of taxation contained in the Original Side Rules of 1957. In that view. it is unnecessary to resort to the principle of harmonious construction which the High Court alternatively relied upon for holdTug that the Taxing Master has the jurisdiction to tax the respondents' bill in the instant case and on the Original Side scale.

Mr .. Parekh then relied upon the rules framed by the Bombay High Court under s. 224(1) (d) of the Government of India Act, 1935 which corresponds roughly to art. 227(3) of the Constitution and contended that the respondents' bills must be taxed in accordance with those rules and not according to the scale prescribed by the Original Side Rules. This contention too is unacceptable. The rules on which counsel relies were framed by the High Court "for fixing and regulating by taxation or otherwise the fees payable as Costs by any party in respect of the fees of his adversary's Attorney appearing, acting and pleading upon all proceedings in the Bombay City Civil Court." These rules, according to their very terms, have nothing to do with the taxation of any Attorney's bill of costs as between himself and his own client. The rules govern the fees payable by way of costs by any party in the Gity Civil Court, in respect of the fees of his adversary's Attorney.

That is to say, if an order of costs is passed in favour of a party to a suit or proceeding in the City Civil Court, he is entitled to recover from his adversary by way of professional charges incurred by him, The fees computed in accordance with lhe rules framed under _'s. 224(1) (d) <?f tbe Government of India Act and not what he has m fact paid to his

M. NATW, ARLAL v. R. NAGINDAS & co. (Clu111drachud, J.) 3611

Attorney: Rule 9 on which counsel relies particularly, makes this A position clear by providing :

"9. Where costs are awarded to a party in any proceeding the amount of the Attorney's fee to be taxed in the bill of costs is recoverable by such party if represented by an Attorney from the adversary and shall be computed in accordance with the rules above unless such fee has been settled under the provisions of section 3 of the Legal Practitioner's (Fees) Act, 1926, for a lesser amount in which case not more than such lesser amount shall be recoveral:ile."

The combined effect of this rule and s. 4 of the Legal Practitioners :(Fees) Act, 1926 is that iJf an Attorney who has appeared or acted C for his client in the City Civil Court sues his client for fees, he cannot recover in the suit anything mor~ than is permissible under the rules framed by the High Court under s. 224(1) (d) of the Government of India Act, 1933. Neither those rules nor anything contained in the Act of 1926 is calculated to affect the Attorney's right to have his bill taxed by< The Taxing Master on the Original Side scale, for work done by the Attorney in the City Civil Court.

The Bombay City Civil Court Act, 69 of 1948, provides! by s. 18 ( 1) that all suits and proceedings cognizable by the City Civil Court and pending in the High Court, in which issues have not been settled or evidence has not been recorded shall be transferred to the City Civil Court. Bys. 18(2), costs incurred in the High Court till the date of the transfer of the suit are to be assessed by the City Civil Court in such manner as the State Government may after tonsultation with the High Court determine by rules.

Mr. Parekh drew our attention to rule 8 framed by the Government of Bombay under s. 18 (2) but we do not see its relevance on the issue under consideration in the instant case.

That rule shows that even as regards the iees o!f Attorneys, the Registrar of the City Civil Court is given the power to tax and allow all such costs and out of pocket expenses as sh; i.ll have been properly incurred by an Attorney up to the date of the transfer of the suit.

The rule further provides that after !he date of the transfer such fees shall be taxed and allowed as in the opinion of the Registrar are commensurate with the work done by the Advocate having regard to the scale of f~ sanctioned for the Advocate in the City Civil. Court by the High Court.

Rule 2, being a rule framed under s. 18(2) of the Act of 1948, governs transl'erred suits only and it expressly authorises the Registrar to tax the Attorney's bill for the work done in such suits both before arid af!er the transfer of the suit from the High Court to the Citv Civil Court. There is no corresponding rule which can apply to suits and proceedings instituted in the City Civil Court after the Bombay City Civil Court Act, 1948 came into force and in the absence of such rule, the rules framed under s. 18(2) cannot support the appellants'. contention.

Mr. Parekh also drew our attention to the "Rules of the Bombay City Civil Court, 1948" framed by the Bombay High Court under s. 224 of the Government of India Act, 1935 but we see nothing

A in those rules either which can assist his contention regarding the power of the Taxing Master to tax an Attorney's bill as between him- .self and his client.

While we are on this aspect of the matter it would be useiful to refer to the.supreme Court Rules, 1966 and the Boll!.bay High Court Appellate Side Rules, 1960.

The Supreme Court Rules contain elaborate provisions in Order XLI and XLII thereof regarding costs of proceedings and taxation of costs.

Rule 13 of Order XLII provides that except as otherwise provided in the rules or by any law for the time being in force, the fees set out in the Second and Fourth Schedules to the Rules may be allowed to Advocates and officers of

the Court respectively.

Rules 23 to 29 of Order XLII deal specifically with Advocate and Client taxation.

The Second Schedule contains detailed provisions under which fees are payable to Advocates for various types of professional services rendered by them. Similarly,

Chapter 14 of the: Appellate Side Rules of the Bombay High Court contains various rules for computing the fees which an Advocate is entitled to charge his own client.

Similar provision is to be found in England in the Supreme Court Costs Rulec~. 1959 (see The Annual Practice 1965, p. 1998/300). Mr. Nariman who appears on behalf of the Incorporated Law Society, Bombay, drew our attention to rule 29 of the last mentioned rules under which a Solicitov:s bill can be taxed as between himself and his client.

These provisions are on a par with the rules of taxation of the Original Side of the Bombay High Court.

The important point to be noted is that the Rules of the City Civil Court do not, except in regard to suits transferred from the High Court, contain any provision under which an Attorney can have. his bill taxed as between himself and his client.

Perhaps there is good reason for this because though under s. 224(1) (d) of the Government of India Act, 1935 '1!1d art. 227(3) of the Constitution, the High Court has got the power to settle tables of fees to be allowed t~ Attorneys practising in Subordinate Courts, that power has not been exercised by the High Court for the reason, probably, that the Rules of Taxationi on the Original Side of the High Court adequately and effectively take care of that matter.

The High Court did exercise its powers under s. 224(1)(d) in relation to the City Civil Court bot did not in the rules framed in the exercise of that power provide for taxation of an Attorney's bill of costs as between him and his client. It is not too much to suppose that the High Court did not want to do once over again what it had elaborately done while framing the rules on the Original Side, which were in vogue for a large number of years and were working satisfactorily.

Mr. Parekh sought to derive some sustenance to his argument from a decision ofi the Calcutta High Court in Messrs Sande~ sons & Morgans v. Mohan/al Lalluchand Shah('1) but we find that the question which arose for decision therein was entirely different.

The appellants therein, a firm of Solicitors, submitted to. the rj!Spondents a bill of costs for the work done by them for the respondents on the

(I) A.I.R. 1955 cal. 319.

M. NATWARLAL v. R. NAGINDAS & co. (Cha11drachud, J.) 363

Original Side of the Calcutta High Court.

The respondents challen- A ged the bill by a Chamber Summons, which the appellants resisted on the ground that there was a private agreement between the parties to pay a particular amount by way of fees and therefore the bill was not liable to be taxed under the Original Side Rules.

On a corisioeration of the Original Side Rules of the Calcutta High Court, Particularly mies 4 and 74 of Chapter 36, the High Court came to the conclusion that the solicitors were bound to have their bills taxed according to B the Original Side scale, agreement or no agreement.

We are concerned in the instant case with a different question under a different set of mies and as pointed out by the High, Court, the Calcutta Rules are in material respect different from the Bombay Rules.

We must interpret the Bombay Rules on their own terms and decisions 01\ other statutes cannot afford material assistance unless, of course, any principle of general application is laid down.

We have already mentioned that in Messrs Pereira Fazalblwy & Co. Mody J., held that an Attorney was entitled to have his bill taxed on the Original Side scale even in respect of the work done by him -0utside the Higi. Court.

For the various reasons mentioned above we endorse that view.

Before concluding, we ought to refer to' a rather 1anxious plea made by Mr. Parekh which involves ethical considerations.

Counsel urged that it is unfair that for small work done in the City Civil Court Solicitors. should be permitted to charge high fees prescribed m1der the Original Side Rules.

We find ourselves unable to share this concern.

If anything, Solicitors are subject to the watchful supervision of the High Court wherever they may render professional services.

The object of bindll)g the Attorneys to the scale of fees prescribed in the

Origin~ Side Rules is not to confer on them any special benefit which is denied, to other legal practitioners.

The object on the contrary is to ensure that Attorneys shall always be subject to the jurisdiction of the High Court no matter whether they have acted on the Original

Side or in any Court subordinate to the High Court.

The only exception is made by rule 569 in regard to the work done on the Appellate Side of the High Court which, as indicated earlier, prescribes its own scale of fees as between an Advocate and his client.

In fact, wt! are unable to see why a power similar to the power of taxation of a bill of costs between an Advocate and his client which is to be found in the Supreme Court Rules should not be conferred on appropriate officers of Courts subordinate to the High Court.

Such a power may enable the Presiding Judges. to control the professional ethics of the Advocates appearing before them more effectively than is possible at present. In this very case, a bill o~ Rs. 6000 odd lodged by the appellants was reduced on taxation to a sum of about Rs. 850/- only. If there were no machinery for taxing the bill, the appella'nts might perhaps have got off with the demand.

We would only like to add that before allowing the costs claimed by an Attorney

from his client, the Taxing Master must have regard to th~ fact that the Attorney has appeared in a Subordinate Court and to the scale of fees generally prevalent in that Court.

A judicious exercise of

disccretion postulates elimination of uufair play, particularly where one party to a transaction is in a position to dominate the will of the other. !he client must receive the protection of the\ Court and its officers, whenever necessary.

For these reasons we confirm the judgment ad! the High Court and dismiss the appeal. There will however be no o_rder as to costs.

P.H.P.

Appeal dismissed.

MOT! NATWARLAL & ORS

RAGHA VAYYA NAGINDAS & CO

March 21, 1977

Y. V. CHANDRACHUD

Bombay High Court original side Rule

Fees Act 1926

Section 4

India Act 1935

City Civil Court Rules 1948

Vakalat

Fees Act, 1926

Bombay City Civil Courts Act, 1948

Bombay High Court

section 224(1)

Government of India Act, 1935

Practitioners Fees Act 1926

Indian Bar Commjttee

Section 3

Section 4

section 4

section 4

section 224(1 )(d)

section 4

section 224

Section 18(2)

Civil Courts Act

section 18(2)

Supreme Court Rule

P. H. Parekh

Manju Jelley

S. K. Dholakia

R. C. Bhatia

F. S. Nariman

B. R. Aggarwal

CHANDRACHUD

Bombay

January 1, 1977

City Civil Court, Bombay

Bellary

February 8, 1972

art. 113

Limitation Act, 1963

October 8, 1974

Parekh

Article 113

Limitation Act

City Civil Court

Chapter XXIX of the Original Side Rules

Subordinate Courts of Poona

Norman Macleod

H. C. Coyajee

Original Side Rules, 1922

Nowroji

District Court at Satara

John Beaumont

Kania

Satara District Court

Nowroj(s

s. 17

s. 18

in Nowroji

Mody

High Court of Rajasthan

Indian Bar Committee

Prior to the Passing of the Act

Section 2(a)

s. 3

Legal Practitioners Act, 1879

Section 3

Section 4

section 4

s. 4

s. 4

Section 4

s. 4

High Court of Bombay

s. 4

s. 4

s. 224(1)

Government of India Act, 1935

art. 227(3)

Bombay City Civil Court

s. 224(1)

Government of India Act

section 3

s. 4

s. 224(1)

Government of India Act, 1933

s. 18

Government of Bombay

s. 18

s. 18(2)

Citv Civil Court

s. 18(2)

s. 224

Government of India Act, 1935

Court Rules, 1966

High Court Appellate Side Rules, 1960

Supreme Court Rules

Fourth Schedule

Second Schedule

Appellate Side Rules

Nariman

s. 224(1)

Government of India Act, 1935

art. 227(3)

s. 224(1)(d)

Calcutta High Court

must interpret the Bombay Rules


' •

EMPLOYEES STATE INSURANCE CORPORATION,

BHOPAL

I'.

CENTRAL PRESS & ANR.

Febrnary 21, 1977

[M. H. BEG, C. J., A. C. GUPTA AND P. S. KAILASAM, JJ.]

E1nployees State Insurance Act (Act 34 of 1948), 1948-Sections 45A, 75(I)(c), and 75(2) mid 99A.,-Scope of.

Section 75(1)(c) of the Employees State Insurance Act 1948 makes it obligatory on the Insurance Court to decide "the rate of contribution payable by a principal employer in respect of any employees'', if such question or dispute C arises.

Section 75(2) also provides that "the claim for the recovery of contributions from the principal employer'" shall be deckh:d by it.

1'he appellant .Corporation filed five applicatLJns under s. 7 5 of the En1ployces State Insurance Ac( before the Insurance Court, Bhopal (Civil Judge First Class) for recovery from the respondent of employees' contributions pay able under s. 39 of the Act for different periods from 27·9·1959 on wards, ¥.'orking out the contribution payable on an "ad hoc basis" by taking the wages at Rs. 100/· per erpployce per month as D indicated by the Central Government by their notification

SRO 224 dated 1'5·1·1957 issued in exercise of their pon>ers under s. 99A of the Act.

The Insurance Court disallowed the claims on the ground that the claims have been made on an "ad hoc basis". The first appeals against that order V.'ere allowed by a single Judge of the Madhya Pradesh High Court (Jabalpur Bench) relying on s. 99A of the Act an<l on a further notification dated 16·1·1968

issued by the Central Government under s. 99A.

The Letters Patent Appeals filed by the respondent were allo, .. ved by the Division Bench which held : ( 1) 'fhe power of the Central Government of issuing directions is not absolute and E the directions cannot be inconsistent with the Act (22). When under section 45A of the Act a special procedure is prescribed regarding the method of cal culation of the employees' contribution, no notification or order can be issued by the Central Government prescribing any other method on ad hoc basis which obviously becomes inconsistent with the other provisions of the Act, namely, section 45A.

Remanding the matter to the Insurance Court, the Court,

HELD:

( 1) The nature of the proceedings under the Employees State Insurance Act 1948 was not properly understood either by the Employees Insurance Court or by the H'igh Court when the matter was taken before these authorities. [37D]

(2) The scheme of the Act is that the Corporation itself should, in a case where there is omission on the part of the employer to maintain records in accordance with s. 44 of the Act, determine the amount of contribution on the strength of such information as it may collect, make a demand and upon refusal come up before the Insurance Court under s. 75 of the Act. The Court should give the Corporation a direction to perform its duty where it considers that this should be performed by the Corporation. It cannot decline to per

form its own duty because the Corporation has failed to discharge its function.

The Insurance _Court is under a duty to determine the basis of calculation itself.

[36F-H]

(3) The notification of the Central Govern1nent under s. 99A of the Act ff was intended to overcome difficulties in determining the wages of the employees.

This provision cannot be availed of for the purpose of supplying a defect or over

coming a difficulty in adjudication of a dispute for which the Emplovees Insu ranee Court is given ample powers under s. 75(1)(c) and 75(2). [37A-B]

SUPREME COURT REPORTS

[1977] 3 SC.R.

CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 325-329

of 1977.

(Appeals by special leave from the Judgment and Order dated l.12.1971 of the Madhya Pradesh High Court in LP.A. Nos. 13-17 of 1969).

L. N. Sinha, Sol. Genl. and Girish Chandra for the appellant.

J. P. Go}al and Shreepal Singh, for the respondent.

The Juugment of the Court was delivered by

BEG, C.J.-This appeal by special leave arises out of the proceedings initiated on 12.7.1961 by the appellant Corporation, under section 75 of the Employees' State Insurance Act, 1948 (hereinafter referred to as the Act), claiming contributions from the respondents for various periods between, 27.9.1959 and 31.3.1965, which they are liable to pay under section 40 of the Act.

It appears that the respondents-employers failed to maintain the registers or records and to submit re_turns of wages paid as required under sectivn 44 of the Act.

Hence, the Insurance Court, which was called upon to adjudicate under Section 75 (I) ( c) of the Act, on the matter in dispute, found itself unable to decide the question in issue.

It dismissed the application on the ground that there was no provision for deciding such a dispute on an "ad hoc basis."' We fail to ur.derstand what is precisely meant by "ad hoc basis." We find that Section 75 (2) of the Act provides, inter alia, that a claim for the recovery of contributions shall be decided by the Employees' Insurance Court. i\ot only as the mandatory dutycast upon it to decide such disputes, but it is armed with the powers of a Civil Court, including sununc, ning and enforcing the attendance of witnesses, compelling the discovery and production of documents and material objects, under section 78 of the Act.

The powers of the Corporation are given in Section 45A of the Act, infroduced by Act 44 of 1966, whereby the Corporation may, on the baoIS of the information available to it, determine the amount of contributions payable and make necessary demands. Apparently, the scheme of the Act, after the amendment, is that the Corporation itself should, in a case where there is omission on the part of the employer to maintain records in accordance with Section 44 of the Act,· determine the amount of contributions on the strength of such information as it may collect.

It can then make the demand.

If the employer refuses to comply with the demand so made, the matter can come up before the Employees' Jnsurance Court under ~, ection 75 of the Act.

The Court should give the Corporation a direction to perform its duty where it considers that this should be performed by the Curporation.

It cannot decline to perform its own duty because the Corporation has failed to discharge its function.

The. matter having come up before that Court, the claim by the Corporation was rejected erroneously merely on the ground that there

, -----~

___ .,.,

E.S.I. CORP. V. CENTRAL PRESS (Beg, C.J.) 37

was difficulty in detennining .the basis of wages in a particular factory A so as tc c,,;, ble a calculation of the amount of contributions to be made by the employer.

It seems that the notification of the Central Government under section 99A of the Act, also introduced by Act 44 of 1966, was intended to overcome such a difficulty in determining the v:ages of the ePooloyces.

After having considered the provisions oi section 99A of tho Act, we doubt whether this provision can be availed of for the 1mrpose of supplying a defect or overcoming a difficulty in B adjudication of a dispute for which the Employees' Insurance Court is given ample powers.

Moreover, the Corporation has itself to collect the ; nformation initially and make a provisional demand on the basis of that information under section 45A in such a case.

The learned single Judge, before whom the matter went up in appeal, thought that the notification of the Central Government fixing c wages, presumably on the strength of some notion as to what prevailing wag>s i;; such cases arc, could be used for this purpose.

The Corporation. itself should have gathered information under section

45A.

T:1e Employees' Insurance Court should be apprised of this information and is under a duty to detennine the basis of calculation itself.

It cannot expect the Central Government to overcome such a diJ:icully by an order or direction under section 99A of the Act. We D think that the nature of the proceedings was not properly understood either by the Employees' Insurance Court or by the High Court when the matter was taken before these authorities.

Hence, the Division Bench, w;, ich accepted the appeal from the decision of the sii:igle Judge haJ, W'h1le invalidating the notification under section 99A of the Act, failed tL give a direction that the Employees' Insurance Court should itself perform its duties.

In the light of the foregoing statement of the legal position, we allow this appeal, set "side the judgments of the Division Bench as well as of the learned single Judge and orders of the Employees Insurance Court. We remand the matter to the Employees' Insurance Court for determination in accordance with law as explained by us above.

Parties will bear their own costs.

S.R.

Appeal allowed and case remanded.

CENTRAL PRESS & ANR

M. H. BEG

A. C. GUPTA

P. S. KAILASAM, JJ.

State Insurance Act

Sections 45A, 75(I)(c)

Section 75(1)(c)

Employees State Insurance Act 1948

Section 75(2)

s. 7

s. 39

Central Government

s. 99A

s. 99A

s. 99A

section 45A

section 45A

s. 44

s. 75

s. 99A

s. 75(1)(c) and 75(2)

CIVIL APPELLATE JURISDICTION

L. N. Sinha

Girish Chandra

J. P. Go}al

Shreepal Singh

BEG

section 75

State Insurance Act, 1948

section 40

Section 75

Section 75

section 78

Section 45A

Section 44

section 99A

section 99A

section 45A

section

45A

section 99A

section 99A


TEG SINGH AND OTHERS

CHARAN SINGH AND ANOTHER

March 23, 1977

[Y. V. CHANDRACl!UD, P. K. GOSWAMI AND P. N. StrJNGHAL JJ.J

(i) Punjab Customs (Power tq contest) Act, 1920 S. 7 as amended by s. 3 B of the Punjab Custon1s (Power to contest) Anzendm-ent Act (Act 12) 1973- G'onstruction and effect of-(ii) Punjab Lin1itation (Custoni) Act, 1 of 1920, S.

8 scope of.

S. 7 of the Punjab Customs (Power to Contest) Act, 1920 provided that no person shall contest any alienation of non-ancestral immovable property on the ground that such alienation is contrary to custom. S. 3 of the Amendment Act 12 of 1973 amended s. 7 with the result that no challenge could be made to the alienation of any immovable property, whether ancestral or non-ancestral, on the ground that it is contrary to custom.

C A gift"1.eed was executed by one Mula, in favour of appellant No. 13 Bhag- \Vati Devi, on De<:ember 3, 1964. Appellants 1 to 12 claiming to 'be potential reversioners obtained a decree on May 31, 1966 in a suit filed against the donor and the donee for a declaration that under the Punjab Customs (Power lo Contest) Act z, of 1920 the gift-deed was not binding on .them and that decree was confirmed in appeal on October 16, !967. On July 10, 1966, Mula

acto,, ted the respondent. On March 11, 1970 appellant No. 13 executed in favour of appellants 1 to 12,, a lease in respect of the property which was the D subject matter of the gift.

Mula died on August 23, 1971. On December 13, 1971, respondent filed a suit for possesion of certain propert.ies including the property which Mula had gifted to appellant No. 13. The suit was decreed on January 20, 1971 and that decree was confirmed in appeal by the District Court and the High Court; In appeal by special leave, the appellants contended (i) In decreeing the suit the Courts below had overlooked the, relevant provisions of the Punjab

Customs (Power to Contest) Amendment Act, 1973 by virtue of which the legality of the gift made by Mula to appellant No. 13 could not be contested E and (ii) since the respondent was not entitled to impeach the gift in favour of Bhagwati Devi, having been adopted after the date of the gift, the decree obtained by appellants 1 to 12 cannot enure for his benefit, under s. 8 of the

Pun'jab Limitation (Custom) Act, of 1920.

Dismissing the appeal, the Court- HELD : ( 1) That a declaratory decree obtained under the Punjab C'ustoms (Power to Contest) Act by a reversioner to the effect that an alienation would not bind them after the alienor's death, had the effect of restoring the property F alienated to the estate of the aliener and therefore, all persons who are heirs to the dece\sed were entitled to obtain possession of the alienated property.

[367 E-FJ

(ii) The decree obtained by appellants I to 12 on May 31, 1966 would enure for the benefit of all persons who are. entitled to a share i'n the property of the deceased as it existeQ at the_ moment of his death.

Since Mula's property stood freed from the encumbrance of the gift at the moment of his death, respondent as the adopted son would be entiled to the possession Of the gifted G properly.

[367 H, 368-A] Giani Ram v. Ramii Lal (1969) 3 SCR 944, relied on to; Chand Singh v. lad Kanr (1974) I PLR 226 approved.

(iii) It is true that, if it became necessary after the amending Act of 1973 to contest the gift executed by Mula in favour of Bhagwati Devi, s. 7 of the Act of 1920 would operate as a bar to such a contest.

But in the instant case, the basis on which the respondent has asked for the relief is that upon the death of Mula in 1971, the gift ceased to be operative by reason of the decree pas<e.d

in suit No. 14311965. He has not and indeed he need not have contested the va1iditv of the gift-deed since the question was decided finally in the aforesaid suit. [367 B-DJ ·

A CIVIL APPELLATE JURISDICTION : Civil Appeal No. 686 of 1976.

(Appeal by Special leave from the Judgment and Order dated 13-2-1976 of the Punjab and Haryana High Court in R.S. A No. 249 of 1976).

P. P. Juneja, for the appellants.

S. K. Mehta, K. R. Nagaraja and P. N. Puri, for respondent No. 1

The Judgment of the Court was delivered by

CHANDRACHUD, J. (1) One Mula executed a registered gift deed in favour cif appellant No. 13, Bhagwati Devi, on December 3,

1964. On April 29, 1965, appellants l to 12 claiming to be potential reversioners filed Suit No. 143 of 1965 against the donor and the donee for a declaration that under the Punjab Custom (Power to Contest) Act, 1920, the gift-deed was not binding on them.

The suit was decreed by the trial court on May 31, 1966 and that decree was confirmed in appeal on October 16, 1967.

(2) In between, on July 10, 1966 Mula adopted the respondent.

On March 11, 1970, appellant No. 13 executed in favour of appellants 1 to 12 a lease in respect of the property which was the subject matter of the gift. Mula died on August 28, 1971.

(3) On December 13, 1971 respondent filed the present suit against the appellants for possession of certain properties including the property which Mula had gifted to appellant No. 13.

The suit was decreed by the trial court on January 29, 1971 and the decree was confirmed in appeal by the District Court and the Higb Court.

( 4) On June 3, 197 6 appellants Jilcd a special leave petition in this Court challenging the High Court judgment.

They raised, inter alia, a new contention (ground No. B) that in decreeing the suit, the courts below had overlooked the relevant provisions of the Punjab Customs (Power to Contest).

Amendment Act of 1973, by virtue of which the legality of the gift made by Mula in favour of Bhagwati Devi could not be contested.

On June 11., 1976 this Co'lrt granted special leave to the appellants limited to the aforesaid Ground (B) of the special leave petition.

(5) We have heard an interesting argument from Mr. Juneja, who appears on behalf of the appellants, as regards the true construction and effect of the Punjab Customs (Power to Contest) Act, 1920, as amended in 1973, but we are of the opinion that the argument lacks basis and cannot, therefore, be accepted.

The contention, sought to be raiSed for the first time by the learned counsel, is founded on the assumption that by reason of the Amendment Act of 1973, the gift-deed executed by Mula cannot be challenged by the respondent.

The assumption on which the argument is founded is fallacious, because the respondent does not seek by his plaint, as indeed he need not have sought, to challenge the gift-deed executed by Mula in favour of Bhagwati Devi.

That gift. was challenged by appellants 1

'"I'

• •

TEG SINGH v. CHARAN SINGH (Chandrachud, J.) 367

to 12 in Suit No. 143 of 1965, and they succeeded in obtaining a declaration in that suit that the gift was not binding on the reversioners.

That decree became final, with the result that as on August 28, 1971, when Mula died, the property which he had sought to gift away w

Bhagwati Devi, was free from the encumbrance of the purported gift..

By the present suit, the respondent merely asks for possession of the property in respect of which Mula had executed the deed of gift. The basis on which he has asked for that relief is that upon the death of Mula in 1971, the gift ceased to be operative by reason of the decree passed in Suit No. 143 of 1965. It seems to us plain that he has not and he need not have contested the validity of the gift-deed since that question was decided finally in the aforesaid suit. ( 6) Section 7 of the Punjab Custom (Power to Contest) Act,

1920 provided initially that no person shall contest any alienation of c non-ancestral immovable property on the ground that such alienation is contrary to custom.

This section was amended by s. 3 of the Punjab Custom (Power to Contest) Amendment Act, 12 of 1973, as a result of which no challenge could be made to the alienation of any immovable property, whether ancestral or non-ancestral, on the ground that it is contrary to custom. It is, therefore, true that if it became necessary after the Amending Act of 1973 to contest the gift executed D by Mula in favour of Bhagwati Devi, s. 7 of the Act of 1920 would operate as a bar to such a contest.

However, as we have stated earlier, it was not necessary for the respondent, in view of the decree passed in suit No. 143 of 1965, to contest the validity of the gift.

(7) The decision of this Court in Giani Ram v. Ramji Lal(') may, with advantage be referred to on this point.

Under the customary law of the Punjab, the wife and daughters of a holder ot ancestral property could not sue to obtain a declaration that the allegation of ancestral property will not bind the reversioners after the death of the alienor. But the reversioner who was entitled to challenge that alienation could obtain a declaratory decree that the alienation will not bind the reversioners after the alienor's death. It was held by this Court that such a declaratory decree had the effect of restoring the property alienated to the estate of the alienor and therefore all persons, including the wife and the daughters of the deceased,

were entitled to the benefit of that restoration. Since the property alienated had reverted to the estate of the alienor at the point of his death, the widow and daughters, who also became heirs along with the sons under the Hindu Succession Act, 1956 were held entitled to obtain possession of the ancestral property.

Mr. JUneja attempted to get over the effect of thi's decision by invoking the provisions of s. 8 of the Punjab Limitation (Custom) Act, 1 of 1920, which provides that when a person obtains a decree declaring that an alienation of ancestral immovable property is not binding on him, according to custom, the decree shall enure for the benefit of all persons entitled to impeach the alienation.

Counsel argnes that since the respondent was not entitled to impeach the gift in favour of Bhagwati Devi, having been adopted after the date of the gift, the decree obtained by appellants 1 to 12 cannot ensure for his benefit. The short answer

(1) [1969] (3) S.C.R. 944.

9-436 SCI/77

to this contention is that the decree would ensure for the benefit of all persons who are enitled to a share in the property of the deceased as it existed at the moment of bis death.

Since Mula's property stood freed from the encumbrance of the gift at the moment of his death, respondent as the adopted son would be entitled to the possession of the gifted property.

( 8) Another facet of the same question can be seen in Chand Singh v. Ind Kaur.(') A learned Single Judge of the Punjab and Haryana High Court held therein that though a suit to contest, under the customary law, an alienation of immovable property may not lie after the coming into force of the Amending Act of .1973, a declaratory de.cree already obtained by a reversioner would continue to be operative !\S the Amending Act does not render such a decree a nullity.

(9) There is thus no substance in the contention raised by the appellants and their appeal must fail.

Appellants 1 to 12 shall pay the respondent's costs of the appeal.

S.R.

Appeal dismissed.

Pl (1974) I P.L.R. 226.

TEG SINGH AND OTHERS

CHARAN SINGH AND ANOTHER

March 23, 1977

P. K. GOSWAMI

S. 7

s. 3

S.

8

S. 7

S. 3

s. 7

Mula

May 31, 1966

October 16, !

July 10, 1966

March 11, 1970

August 23, 1971

December 13, 1971

January 20, 1971

Amendment Act, 1973

Mula

Bhagwati Devi

s. 8

(1969) 3 SCR 944

s. 7

P. P. Juneja

S. K. Mehta

K. R. Nagaraja

P. N. Puri

CHANDRACHUD

October 16, 1967

August 28, 1971

January 29, 1971

June 3, 197

Jilcd

June 11., 1976

Juneja

Section 7

s. 3

s. 7

Hindu Succession Act, 1956

JUneja

s. 8

Punjab and Haryana High Court


CHET SINGH

STATE OF PUNJAB & ORS.

March 24, 1977

[M. H. BEG, C.J., A. C. GUPTA AND P. S. KAILASAM, JJ.]

Constitution of India, Article 136-Powers to be exercised when-whether non-est orders can be ig11ored-East Puniab Holdings (Consolidation and Pre- 1-ention of Fragmentation) Act 1948-Section 42 .

Gurdev Singh had certain complaints about the Consolidation Scheme.

He \Vas not present when his application was being considered. Therefore, the application was dismissed by the Additional Director, Consolidation. Thereafter, Gurdev Singh respondent No. 3 filed an application for restoration supported by an affidavit attributing his absence to his illness. The Additional Director C accepted the ground of resJ)ondent No. 3 about illness and granted necessary relief to him. The appellant filed a writ_petition in the High Court under Articles 226 and 227 of the Constitution. The High Court held that the assertion of rights by the appellant merely because of some report contained in the "Fard Badar" could not take away the effect of the entries in the revenue records. The High Court alsc held that no injustice was caused to the appellant and, therefore. there was no ground for interference under Article 226.

D Jn an appeal by Special Leave, the appellant contended that the Additional Director had no power to review his previous order. The power to review CQn~

ferred by section 42 of the Act has to be exercised only after hearing the interested parties. Since respondent No. 3 was not given an opportunity of being heard on account of his illness, it shows that the 9rder passed was nonest and can be ignored at any stage. The court dismissed the appeal on the ground that this was not a fit case for interference under Article 136. rhe Court, how ever, observed that if the appellant has any right on account of long possession or otherv.:ise he can assert them by adopting proper proceedings and that his E rights would not be affected by \vhatever is staled in the judgment of this court as well as the High Court.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2150 of 1968.

(Appeal by Special Leave from the Judgment and Order dated. 5.9. J 968 of the Punjab & Haryana High Court in L.P.A. No. 458/68).

V. C. Malwjan, Hardev Singh and R. S. Sodhi, for the appellant.

0. P. Sharma, for the respondents 1 and 2.

K. R. Nagaraja and P. N. Puri, for respondent No. 3.

The Judgment of the Court was delivered by

BEG, C.J.

This appeal under Article 136 of the Constitution is directed against a very detailed Judgment of the Punjab & Haryana

High Court on a Writ Petition No. 1875 of 1965 filed under Articles 226 and 227 of the Constitution, assailing an order of the Additional Director, Consolidation of Holdings, passed on 8 June,

1965. A .perusal of that order, together with the earlier order of 4 May, 1965, H and the application for restoration dated 15 May, 1965, filed by Gurdev Singh, respondent No. 3, shows : Gurdev Singh, wl10 had

37 0

SUPREME COURT REPORTS

[1977] 3 S.C.R.

some complaint against the Consolidation Scheme, was not present so that his petition was ordered to be filed by the Additional Director, Consolidation on 4 May, 1965.

Gurdev Singh, soon thereafter i.e. on 15 May, 1965, filed an application for restoration supported by an affidavit, attributing his absence on 4 May, 1965, to his illness. The order dated 8 June, 1965, of the Additional Director, shows that the applicant Gurdev Singh's assertion that he could not attend due to illness, over which he had no control, was accepted by the Additional Director, who proceeded to exercise his powers under ection 42 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 (hereinafter referred to as the Act) and to set right the grievance of the applicant, Gurdev Singh, alter going into all the relevant records.

The learned Judge of the High Court, who heard the petition also went through the records very carefully, came to the conclusion that an assertion of rights by the petitioner/ appellant, a member of the Sanjam Group, merely because of some report contained in the "Fard Badar," could not take away the effect of entries in the revenue records.

The learned Judge held that no injustice was caused to the petitioner/appellant also, there was no ground for interference under Article 226 of the Constitution.

The learned counsel for the appellant has relied upon the case of Harbhajan Singh v. Karam Singh & Ors. reported in 1966 (I) S.C.R. 817, where thiB Court held that the Addi. Director exercising the powers of the State Government has no jurisdiction under section 42 of the Act to review his previous order.

Section 42 of the Act runs as follows :

"The State Government may at any time for the purpose of satisfying i\self as to the legality or propriety of any order passed, scheme prepared or confirmed or repartltlon made by any officer under this 'Act, call for and examine the record of any case pending before or disposed of by such officer and may pass such order in reference thereto as it thinks fit :

Provided that no order or scheme or repartition shall be varied or reserved without giving the parties interested notice to appear and opportunity to be beard excep! in case where the State Government is satisfied that the proceedings have been vitiated by unlawful consideration."

The proviso to Section 42 lays down that notice to interested parties to appear and opportunity to e beard are conditions precedent . to passing of an order under Section 42.

The fact that the. Additional Director was satisfied that the respondent, Gurdev Smgh, did not have an opportunity of being hard due to his illness, s:ems o us to amount to a finding that the proviso could not be complied with so that the previous order could not be held to 1Je au order duly passed under

Section 42 of the Act. It could be ignored as "non est." The view taken in Harbhajan Singh's case (supra) would not apply to the

CHET SINGH v. PUNJAB (Beg, C.J.) 3 71

instant case although Section 42 of the Act does not contain a power A of review.

Orders which are 'non est' can be ignored at any stage.

On the facts and circumstances of this case, we think that this is not a fit case for interference under Article 136 of the Constitution.

The appellant, if he has acquired any rights by reason of long possession, can assert them whenever any proceedings are taken before a competent authority to dispossess him.

What we have held here or whatever has been held by the High Court will not affect such other rights, if any, as the Appellant may have acquired by reason of possession.

We do not know and refrain from deciding who is actually in possession and for how long and , in what capacity.

This appeal is dismissed.

Parties will bear their own costs.

P.H.P.

Appeal dismissed.

CHET SINGH

STATE OF PUNJAB & ORS

March 24, 1977

M. H. BEG, C.J.

A. C. GUPTA

P. S. KAILASAM, JJ.

Constitution of India

Article 136

Section 42

Gurdev Singh

Articles 226 and 227

Article 226

section 42

Article 136

V. C. Malwjan

Hardev Singh

R. S. Sodhi

P. Sharma

K. R. Nagaraja

P. N. Puri

BEG

Article 136

Articles 226 and 227

Gurdev Singh

Gurdev Singh

Sanjam Group

Article 226

section 42

Section 42

Section 42

Section 42

Gurdev Smgh

Section 42

Harbhajan Singh

Section 42

Article 136