...

R. R. ENGINEERING CO.

ZILA PARISHAD, BAREILLY & ANR .

March 10, 1980

:{Y. V. CHANDRACHUD, C. J., V. R. KRISHNA IYER, N. L. UNTWALIA,

P. N. SHINGHAL AND A. D. KoSHAL, JJ.]

U. P. KJhetra Samitis & Zila Parishads Act 1961-Circumstances and Pro- _perty Tax-Nature of tax-If a tax on income or profession.

State Legislature, if competent to impose tax.

Acting under the power conferred by section 108 of the District Boards Act, 1922 the District Board, Bareilly imposed "Circumstances_ and Property

Tax" on persons according to their circumstances and property, Jn 1958 the .powers and functions of the District Boards were vested in or were transfer- -red to the Antarim Zila Parishads and later they were transferred to the Zila 'Parishads constituted under the U.P. Kshetra Samitis and Zila Parishads Act 1961.

The 1961-Act empowered lhe Zila Parishads to impose the "Clrcum- stances and Property Tax." It also provided that where before the appointed date there was in force "Circumstances and Property Tax" under the 1922 Act such tax may continue to be levied by th~ Zila Parishads at the same rates and on the same condition$ under which it V.'as. being levied under the 1922 Act.

The tax which till then was being levied by the District Boards was henceforth levied by the Zila Parishads.

Dismissing the appellants' writ petition impugning the constitutional validity of the Act the High Court held (I) that the tax on circumstances and property was a single tax possessing altogether a separate and distinct identity from other taXes and could neither be equated with a tax on professions, trades, callings or employments nor with a tax on property and (2) that the tax feli under the residuary entry of List I, namely, Entry 97 (any matter not enumeraied in any other Entry in List I or in any of the Entries in list

II and lll) and that it could be continued to be levied by virtue of Article 277 of the Constitution. ·

In CA 564 of 1973 the appellants were assessed to the tax by the Town Area Committee under the U.P. Town Areas Committee Act, 1914 as amended in 1950. The appellants' suit challenging the validity of the tax was allowed by the Munsiff on the ground that the tax on circumstances and property was in truth and substance a tax on income and since prior to the Constitution it was not lawful for the Town Area Committee to Jevy it, it was not saved

y Article 277. The Civil Judge dismissed the appeal of the Committee, The High Court upheld the validity of the tax.

In appeal to this Court it was contended that the limitation contained in Article 276(2) of the Constitution cannot be transgressed by the State Legis- B Jature by adopting the subterfuge of impooing a consolidated tax by clubbing

l1p two or more entries in List II, and that the State Legislaturo could not

A exercise the power to levy a tax on circumstances and property by an artificial understanding on that expression so as to acqnire power to impose a laxc \.

on income.

Dismissing the appeal,

HEID : 1. (a) There is a basic distinction between a tax on income and a tax on circumstances and property.

While income tax can only be levied on income, tax on circumstances and property can be on the total turnover of the

assessee from his trade or calling or the fact of his having an interest in property. For the levy of tax on circumstances and property it is not necessary

that there should be income in the f¥mds of the assessee, in the sense of the Income Tax Act A person can be subjected to tax on circumstances and property in relation to the status which he occupies by reason of the pnrsuit~ by him of a beneficial calling or the possession by him of an interest in property.

While determining the status of an individual for the purpose of the tax on circumstances, the total turnover of his business or avocation may, therefore, be legitimately taken into consideration. [8 G-H; 9 C.DJ

(b) The fact that the tax on circumstances and property is levied on the basis of income which an assessee receives from bis profession, trade, calling or property is not conclusive of the naiture of the tax. It is only as a matter of convenience that income is adopted as a yardstick or measure for assessing

the tax. The measure of the tax is not a true test of the nature of the tax and, therefore, while determining the nature of a tax, thongh the standard on which the tax is levied may be a relevant consideration, it is not a conclusive

consideration. [9 El

District Board of Farrul:habad v. Prag Dutt, AIR 1948 AIL 382 (PB), Zila Parishad, Muzaffarnagar & Anr. v. JugaZ Kishore Ram Swarup and Anr.

AIR 1969 All 40, approved.

Re. a Rpference under Government of Ireland Act, (1936] A. C. 352; Governor-General in Council v. Province of Madras, 72 I.A 91, 99, referred to.

2. (a) The tax is referable to Entry 49 (taxes on lands buildings) Entry 60 (taxes on professions, trades, callings and employments) and among otber items to item 58 (taxes on animals and boats) .of List II.

The impupied' tax is a composite tax, one of its components being the circumstances of the assessee.

By 'circumstances' is meant his financial position, his status 1111 a whole, which depends inter-alia on his income from bis lands and buildings fllld from his trade or calling. The tax is wide enough to cover certain. other items in List II like Item 58 which relates to "tax on animals and boats".

[12 H;·

11 G-HJ

The Notified Area Committee & Anr. v. Sri Ram Singhasan Prasad Kal'ri•ar.

AIR 1970 Allahabad 561, approved.

(b) Yet the fact that one of the components of the tax, namely, the com ponent of 'circulnstances' is referable to other Entries in addition to Entry 60 should not be construed as conferring an unlimited charter on. the local authorities to impose disproportionately ext.•essive levies on the assessees who, are subject to their jurisdiction. [13 A-BJ

R. R. ENGINEERING CO. V. ZILA PARISllAD 3 ( Chandrachud, C. l.)

3. The High Court was wrong in holding that by reason of the fact that A the circumstances and property tax is a composite tax and since the clement of 'property' necessarily enters into that composition, the tax cannot be identified as a tax on profions, trades, callings or employments.

It is alsO not co1rect to say that since the tax on circumstances and property did not place as an entry expressly .enumerated in any of the three Lists of the Seventh

Schedule it falls under the residuary entry, namely, Entry 97 of List I. It is erroneous to take resort to Article 277 for the purpose of saving the tax. The B. mere name of a tax does not bear on legislative competence and the absence of express enumeration of a tax by a particular name will not justify the tracing of legislative authority to the residuary entry. [13 D-GJ

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1528 of 1970.

From the Judgment and Order dated 23-5-1969 of the Allahabad c- High Court in Civil Misc. Writ No. 37/67

AND

Civil Appeal No. 564 of 1973.

Appeal by special leave from the Judgment and Order dated 29-11-72 of the Allahabad High Court in Second Appeal No. 2359 of 1966. -

Yogeshwar Prasad, S. K. Bagga, Mrs. S. Bagga, Ashoke Srivastava and Mrs. Rani Chhabra for the Appellant in C.A. No. 1528/70.

E. C. Agarwal a for the Appellant in C.A. 564/73.

 K. C. Agarwa/a and M. M. L. Srivastava for the Respondent in

C.A. 1528/70.

J. P. Goyal and S. K. Jain for the Respondent in C.A. 564/73.

The Judgment of the Court was delivered by

CHANDRACHUD, C.J .-These are two appeals from Uttar Pradesh involving the validity of a levy which bears the somewhat unusual name of 'Circumstances and Property Tax'. Civil Appeal 1528 of 1970 is by certificate granted _by the Allahabad High Court under Articles 132(1) and 133(1)(c) of the Constitution while Civil Appeal 564 of 1973 is by Special Leave granted by this Court.

The facts leading to Civil Appeal 1528 of 1970 are as follows-:-

The appellant M/s. R. R. Engineering Company is a partnership firm engaged jn the business of manufacture and sale of machinery, machine tools and as structural engineers. Its registered office is situated at Clutterbukganj which was at one time within the local . limits of the jurisdiction of the District Board ofBareilly. Acting under the power conferred by section 108 of the District Boards Act, 1922,

A the District Board, Bareilly, by Resolution No. 3 dated February 18, 1928 decided to impose the 'Circumstances and Property Tax' on per- . sons according to their circumstances and property. Rule 7 framed under section 172 of the Act for assessment and collection ol the said tax was published on March 10, 1928, providing for the maximum assessment of Rs. 2,000/- on any single assessee.

Later by a Noti- B fication dated November 29, 1933 the State Government directed under section 114(d) of the Act that the total amount of tax on circumstances and property imposed by a District Board on any single assessee shall not in any year exceed the sum of Rs. 2,000/-.

On April 20, 1958 the U. P. Antarim Zila Parishad Ordinance -C 1958 was enacted by the State Government, providing for the establishment of Antarim Zila Parishads for the internal administrationJof local self-Government in rural areas, thereby facilitating the establishment of Zila Parishads for the co-ordinated administration of affairs concerning economic and social planning and of local self-Government in the various Districts ofUttar Pradesh. The Ordinance was repealed by the D U.P. Antarim Zita Parishad Act 1958.

In 1961, the U. P. Kshetra Samitis and Zila Parishads Act, 33 of 1961, was passed. By section 274 of that Act, the U. P. District Boards Act, 1922, was repealed as from the date Kshetra Samitis were established in a District, and the U. P. Antarim Zita Parishads Act was re- E pealed as from the date on which the Zila Parishad was established in a District. The powers and functions of District Boards were vested in or were transferred to the Antarim Zila Parishads and from them to the Zila Parishads on their establishment in the District.

By section 119 of the U. P. Kshetra Samitis and Zita Parishads F Act 1961, the Zita Parishads were empowered to impose the 'Circumstances and Property Tax'.

Sction 120 of that Act provides that where, before the appointed date, there was in force •circumstances and Property Tax' under the District Boards Act, 1922, such tax may continue to be levied by the Zila Parishad at the same rates and on the same conditions under which it was being levied under the District Boards -G Act. Section 121 provides that the total amount of the tax shall not exceed the amount as may be prescribed by rules framed under the Act.

Rule 7 framed under section 172 of the District Boards Act, 1922,

.vhich provides for a maximum levy of Rs. 2,000/- on a single assessee, r remains in force until the framing of rules under the Act of 1961.

II The appellant's registered office which was situated within the jurisdiction of the District Board of Bareilly is now within the jurisdiction of the Zita Parishad, Bareilly. The Circumstances and Property Tax

R. R. ENGINEERING CO. V. ZILA PARISHAD 5 ( Chandrachud, C. J.) which was being levied by the District Board of Bareilly is now being A- J levied by the Zila Parishad of Bareilly.

• ~

The appellant having been assessed to a tax of Rs. 2,000/- for the year 1965-66, filed Writ Petition 37of1967 in the High Court of Allahabad to challenge the constitutional validity of that tax. A learned single Judge referred the Petition to a Division Bench which in turn referred it to a Full Bench. The Full Bench consisting of Mr. Justice R. S. Pathak, Mr. Justice M. H. Beg and Mr. Justice H; C. P. Tripathi dismissed the Writ Petition but granted certificate to the appellant to appeal to this Court under Articles 132(1) and !33(I)(c) of the Constitution.

In Civil Appeal 564 of 1973, appellants who are residents of Kuraoli, District Mainpuri, were assessed to Circumstances and Property Tax l:y the Town Area Ccn:mittee of Kuraoli, for the years 1961-64.

The tax was levied by the Committee under section 14([) of the U.P.

Town Area Act, 1914, as amended by the U.P. Town Area (Validation and Amendment) Act,. 1950, which empowers the Town Area Committees to impose a tax on persons according to their "circumstances and

property", not exceeding such rate and subject to such limitations and restrictions as may be prescribed.

The appellants filed a suit, 62 of 1964, to challenge the validity of the tax. That suit was decreed by the learned Munsif, Munsir, on the

giound that the tax on circumstances and property was in truth and substance a tax on income and since, prior to the Constitution, it was not lawful for the Town Area Committee to levy it, it was not saved by Article 277 of the Constitution.

The appeal filed by the Committee against that judgment was dismissed by the learned Civil Judge, Mainpuri, but in Second Appeal 2859 of 1966, the High Court of Allahabad by its judgment dated November 29, 1972, took a contrary view, allowed the Committee's appeal and directed the dismissal of the appellant's suit. The learned Single Judge who decided the Second Appeal, followed the Full Bench decisions of the High Court in (i) Mfs R. J?.

Engineering Co.(l) which has given rise to the companion appeal herein, namely, Civil Appeal 1528of1970, and (ii) The Notified Area Committee & Anr. vs. Sri Ram Singhasan Prasad Kalwar.(2) Being aggrieved by the ; udgment of the High Court, the appellants have filed this appeal by Special leave of this Court.

Tt.e three learned Jtdges \\l:o ccnstituted the Full Bench of the High Court in R. R. Engineering Co.

(supra) delivered separate judgments,. coming ultimately to the same cdnclusion though not by

H '

(1) AIR 1970 Allahabad 316.

(2) AIR 1970 Allahabad 561-Full Bench.

the same process of reasoning. ilt was urged. before the High Court that the tax on 'circumstances and property' was a tax on professions, trades, callings and employments and therefore the total amount of tax in respect of any one person could not, by reason of Article 276(2) of the Constitution, exceed Rs. 250 per annum.

It was further contended that though the proviso to Articlei276(2) enables the levy of a tax on professions, trades, callings and !employments in excess of Rs. 250/- per annum if in the financial !year immediately preceding the commencement of the Constitution the tax was being imposed, the authority which is now seeking to impose the tax being different from the. one which was imposing the tax immediately before the Constitution came into force, the proviso would have no application.

Mr. Justice R. S. Pathak and Mr. Justice M. H. Beg rejected the contention that th@ tax on 'circumstances and yroperty' was a tax on professions, trades, callings or employments. Consequently, they held that the limitation contained in Art. 276(2) of the Constitution to the effect that the total amount payable in respect of any one person to the State or to any one municipality, district board, local board or other local authority in the State by way of taxes on professions, trades, callings and employments shall not exceed two hundred and fifty rupees per (annum was not applicable.

Justice Pathak held that the tax on circumstances and property is a composite tax and although a person's status and property are two intertwined strands which enter into the composition of the tax, the tax cannot be considered as consisting of two distinct taxes under a single denomination. According to the learned Judge, the tax on circumstances and property is a single tax possessing altogether a separate and distinct identity from other taxes and could neither be equated with a tax on professions, trades, callings or employments nor with a tax on property; that is to say, the constituent elements which enter into the composition of the tax could not be separated. On the question whether the circumstances and property tax levied by District Boards prior to the Constitution could be levied thereafter, the learned Judge relied upon Art. 277 of the Constitution as authorising the continued imposition of the tax. When the Constitution came into force, said the learned Judge, circumstances and property tax did not find a place in any of the three Lists of the Seventh Schedule and therefore it fell under the residuary entry, namely, entry 97 of List I which refers to any matter not enumerated in any other entry in List I or in any of the entries in Lists II and III.

U Justice M.H. Beg largely shared the view of Justice Pathak that the tax on circumstances and property was a composite tax and not merely a tax on professions, trades, callings or employments and therefore,

....

• __,., .

R. R. ENGINEERING CO. v. ZILA PARISHAD 7 (Chandrachud, C. J.) .the limit imposed by Art. 276(2) was not applicable to the tax. Accord A ingto'.thepearned Judge, the relevant enquiry in regard to the tax was . u to!what .was the legal basis of the tax or the reason without which there could be no such tax. He answered that question by saying that the best answer'one could give was that the tax on circumstances and property was a tax on the status of a person. The learned Judge .shared the view of Pathak, J., that after the enactment of the Constitution, B Art. 277 authorised the continued imposition of the tax.

Tripathi, J. followed"an"earlier Full Bench judgment of the Allahabad High Court and held that the tax on:circumstances and property was in the nature of a tax on professions, trades, callings or employments. The limitation prescribed by Art. 276(2) would, therefore, be .attracted, but the proviso to that article saved the imposition of the tax

even if it was in excess of Rupees two hundred and fifty per annum because the tax was in force in the financial year immediately pre- -oeding the co=encement of the Constitution and the Parliament had not by law made any provision to the contrary. The contention, that the Proviso would apply only if the authority imposing the tax .after the enactment of the Constitution was the same which did so

i=ediately prior to the Constitution was rejected by the learned Judge on the ground that what was important for the purposes of the Proviso was the identity of the purpose for which the tax was and is imposed, and the area of its operation, and not the identity of the authority imposing the tax. ·

In the companion Appeal, 564 of 1973, a different consideration arose in a significant respect, namely, that the tax was not in force in the financial year immediately preceding the commencement of the Constitution. The assessment.having been made by the Town Area Committee under section 14(f) of the U.P. Town Areas Act, which was introduced by a post-Constitution amendment of 1950 the proviso to Art 276(2) had no application and therefore the le~ in excess of Rs. 250 per annum could not be saved by the proviso if the . . ' tax was 1~ respect of professions, trades etc. A learned Single Judge of the High Court, however, upheld the validity of the tax following the Full Bench judgment in R. R. Engineering Co. (supra) .

. Before u~ also, the main controversy centred round the application of Article 276, the contention being that the imposition of the impugned tax in excess of Rs. 250 per annum is invalid. It was urged

b~ !'fr E. C. Agarwala, who appears on behalf of the appellant in Cml Appeal No. 564of1973, that although Entry 60 in List II empowers

SUPREME COURT REPORTS . [ l980] 3 S.C.lt

State Legislatures to levy tax on professions, trades, callings and emp- . loyments, the exercise of that power is necessarily limited by Article 276(2) of the Constitution. The constitutional limitation, according to the learned counsel, contained in Article 276(2) must be given its full effect and that limitation cannot be transgressed by the State Legislature by adopting the subterfuge of imposing a consolidated tax. by clubbing-up two or more entries in List II. Counsel further contended that the State Legislature cannot over-reach its taxing power by making an rtificial definition of words and expressions used in the legislative entries. Just as it cannot, by an artificial definition of 'sale of goods', exercise a power to legislate in respect of a subject matter outside its sphere, it cannot exercise the power to levy a tax on 'circumstances' by an artificial and colourable understanding of that expression so as to acquire the power to impose a tax on inclilme.

Lastly, it was contended by Shri Agarwala, and by Shri Y ogeshwar Prasad who appears in thl' companion appeal, that the power to levy a tax oa circumstances not being incidental to the power to tax professions, trades, etc. the doctrine of pith and substance had noapplication and could not save the impugned tax on circumstances and property.

The nature and validity of the tax on 'circumstances and property' have agitated the minds of the learned Judges of the Allahabad High Court for a long time, as is evident from various Full Bench judgments, .which are not quite consistent with one another, and some of which. have even taken conflicting positions. In some cases decided by single Judges or Division Benches, the view was taken that the tax on 'circumstances and property' is a tax on 'income'. (Tata Oil Mills Co. Ltd.

v. District Board of Allahabad;(l) Western U. P. Electric Power and Supply Co. Ltd. Etawah v. Town Area Jaswant Nagar(") and Raghubir Singh v. Town Area Committee.(3).

The correct position is, however, the one which was pointed out by Malik C.J., in his Full Benc!L judgment in District Board of Farrukhabad v. Prag Dutt(4).

The. learned Chief Justice elaborated the point by dwelling upon the basic distinction between a tax or> 'income' and a tax on 'circumstances and property'.

It is trite that income-tax can only be levied on income, that is to say, it can be !levied provided the assessee .. is in receipt of an income. . If there (s no income, there can be no income-tax. In contrast, the relevant consideration in the case~

(!) 1955 All LJ 630.

(2) AIR 1957 All 433.

(3) 1961 All LJ 743.

(4) l\IR 1948 All 382 (FB).

• '

R. R. ENGINEERING CO. V. ZILA PARISHAD 9 (Chandrachud, C. J.) of a tax on 'circumstances and property" can be the total turnover

of the assessee from his trade or calling or the fact of his. having an interest in a property.

This consideration assumes relevance because the tax on circumstances and property is a tax, so to say, on the status of the assessee. In their endeavour to give to that tax a local name and habitation, in order perhaps to soften resistance to it, the learned Judges of the Allahabad High Court have describe<l it as a tax on 'Haisiat' which, as far and as best as translation ca11

go, means 'status'. For the levy of tax on circumstances and property, it is not necessary that there should be income in the hands of th~ assessee, in the sense of the Income-tax Act. The outgoings, the der

ductions, the carry-forward losses, the development repate and the like may leave no income in the hands of an assessee which could be

brought to tax under the Income-tax Act. But a person can be subjected to tax on circumstances and property in relation to his 'Haisiat' •.

thafis to say, the status which he occupies by reason of the fact of the pursuit by him of a beneficial calling or the possession by him of an: interest in property. While determining the status of an individuar for the purposes of the tax on circumstances, the total turnover of his business or avocation may therefore be legitimately taken into consideration.

It may be, and is often so, that the tax on circumstances and property is levied on the basis of income which the assessee receives from his profession, trade, calling or property. That is, however, not conclusive on the nature of the tax. It is only as a matter of convenience that income is adopted as a yardstick or measure for assessing the tax. As. pointed out in Re a Reference under Govt. of fre/anif Act.(I) the measure of the tax is not a true test of the nature of the tax. Therefore, while determining the nature of a tax, though tlo.e standard on which the tax is levied may be a relevant consideration, it is not a conclusive consideration. One must have regard in such matters, as stated by the Privy Council in Governor-

General in Council v. Province of Madras,(2) not to the name of the tax but to its real nature, its pith and substance, which must determine into what category it falls. Applying these tests; the tax on 'circun:- stances' will faU in the category of a tax on "a man's financial position, his status taken as a whole and includes what may not properly be comprised under the term 'property' and at the same time ought not to esape assessment." This quotation finds place in the judgment of Malik C.J. in the Full Bench decision in

(!) [1936] A. C. 352.

(2) 72 I. A. 91, 99.

2-!89SCI/80

t\ .

District Board of Farrukhabad. (supra) The formulation, which the learned Chief Justice would appear to have extracted from anolh!r source, since he has put it within quotes, is in similar term; as that of this Court in Pandit Ram Narain r. The State of U.P.(1) In that case an ssessee challenged his liability to pay the tax on circumstances and property under section 14 (1) (f) of the U. P. Town Areas Act, 1914 on the greund that he did not reside within the jurisdiction of the Town Area Committee of Karhal and that Rule 3 framed under aeetion 39 (2) of the Act was invalid.

This Court, after referring approvingly to the decision in District Board of Farrukhabad, (supra) particularly to the staten~mt therein that the name given to a tax did not matter and that what had to be considered was the pith and substance of it, observed:

A tax on 'circumstances and property' is a composite tax and the word 'circumstances' means a man's financial position, his status as a whole depending, among other things, on hts mcome from trade or business.

The Full Bench decision under appeal in the instant case, R. R.

Engineering Co. (supra) has taken the same view of the nature of the tax on circumstances and property by holding that it is not a tax on income but is a tax on a man's financial position, his status as a whole, depending upon his income from trade or business. Earlier another Full Bench of the Allahabad High Court had held in Zila Parishad Muzajfarnagar v. Jugal Kishore (1) that the tax on circumstances jand property is fundamentally distinct fromand cannot be equated with income tax, that it is not covered by item 82, List I, Schedule 7, of the C-Onstitution and that it is essentially a tax on status or financial position combined with a tax on property. These decisions correctly describe the natu<e of the tax on circumstances and property. We affirm the view ta1<en therein, especially that the aforesaid tax is not a tax on income.

But even though the impugned tax is not a tax on income, it is necessary to consider whether it is within the legislative competence of the State legislature and, if so, under which entry it would fall. The reason for such an inquiry is mainly two-fold: firstly, even if the tax on circumstances is within the legislative competence of the State legislature, being referable to entry 60 of List II which relates to taxes on professions, trades, callings and employments, it carmot exceed the limit of two hundred and fifty rupees per annum prescribed by Article 276(2) of the Constitution, unless the proviso to that article

(I) [1956] S.C.R. 664, 673.

(l) AIR 1969 All. 40.

• '

R. R. ENGINEERING CO. v. ZILA PARISHAD 11 (Chandrachud, C. J.) .; s attracted: secondly, if the tax is beyond the legislative competence of the State legislature, being a composite tax not liable to lbe split up into distinct component parts, it will be necessary to .examine whether the tax is saved by article 277 of the Constitution.

Article 276(1) of the Constitution provides that notwithstanding anything in article 246, no law of the legislature of a State relating to taxes for the benefit of the State or of a municipality, district board, local board or other local authority therein in respect of professions, tra- .<Jes, callings or employments shall be invalid on the ground that it relates to a tax on income. By clause (2) of that Article, the total amount 1'.)ayable in respect of any one person to the State or to any one municipality, district board, local board or other local authority in the State by way of taxes on professions, trades, callings and employments shall not exceed two hundred and fifty rupees per annum. The proviso to this clause says that if in the financial year immediately preceding the commencement of this Constitution there was in force in the case of any State or any such municipality, board or authority a tax on profes- 1lions, trades, callings or employments the rate, or the maximum rate of which exeeded two hundred and fifty rupees per annum, such tax may .continue to be levied until provision to the contrary is made by Parliament by law, and any law so made by Parliament may be made either generally or in relation to any specified States, municipalities, boards or authorities.

Entry 49 of List II Seventh Schedule, relates to "taxes on lands and buildings" while Entry 60 of the same list relates to "taxes on professions, trades, callings and employments". Having already consider- ed the true nature of the tax on circumstances and property, we are of the opinion that it is, in any event and at the least, referable to Entries 49 and 60 of List II. The profession, trade, calling or employment which a person pursues and the lands and buildings which he owns determine the status which he occupies. The impugned tax is a composite tax one of its components being the 'circumstances' of the assessee. By 'circumstances' is meant his financial position, his status as a whole which depends, inter a/ia, on his income from his lands and building~ .and from his trade or calling. That is the view which was taken by a Full Bench 0f the Allahabad High Court in Zila Parishad, Muzaffar- 41agar & Anr. v. lugal Kishore Ram Swarup and Anr. (supra). Broome, J. who spoke for the court in that case observed thatit wasclearfrom the very nomenclature of the tax that it was of a composite character and .consisted of two components : a tax on property and a tax on circum- 'Stances. The tax on property was confined to immovable property and

fell within the jurisdiction of the Statel.egislature by virtue of Item 49 . of the State List whiie; the tax on circumstances, that is to say, status or financial position, meant the tax on man's trade, business, profession or employment which was covered by Item 60 of the State List.

This question was also considered by a Special Bench consisting of Five Judges of the Allahabad High Conrt in The Notified Area Committee and Anr. v. Sri Ram Singhasan Prasad Kalwar(l).

Mr. Justice.S.N. Dwivedi who delivered the Judgment of the Special Bench traced t.he entire history of the impugned tax in reference to three periods : (!) the period prior to the 1935 Constitution Act; (2)· the period between 1935 and 1950; and (3) the post-Constitution period. After a careful examination of the nature of the tax the, learned Judge summed up the position thus :

To sum up, the history of the tax on circumstances and. property after 1935 definitely shows that it was not a distinct and separate impost. The Government of India Act, 1935 and the Constitution treat it as a composite tax as its name suggests. As its constituents are already covered by one or the other entry in the legislative Lists, it is not enumerated as a category in the Lists as it was enumerated in the White Paper.

The conclusion to which the Special Bench came was that a tax on cir-. cumstances and property is a composite tax, that its components are varied, but that two of such components are firstly a tax on trades, callings, professions and employments and secondly, a tax on lands and buildings. In coming to this conclusion, reliance was placed by the learned Judge on the decision of the Supreme Court in Pandit Ram Narain (supra) and that of the Full Bench in the District I /3oard of Farrukhabad (supra). But the amplification of the legislative authority which the Special Bench made is significant. It did not say as Broome, J. said in the Full Bench decision in the Zi/a Parishad, Muzaffarnagar

(supra) that the tax on circumstances and property is referable only to two entries in List II namely, Entries 49 and 60. According to the Special Bench, the tax was wide enough to cover certain other items in List II, like Item 58 which relates to "taxes on animals and boats".

We are of the opinion that the Special Bench was right in coming to this conclusion. Accordingly, we affirm its view that the tax on cir, cumstances and property is referable to items 49 and 60 of List II of the Seventh Schedule, and amongst other items, to item 58 of that Lis~ The validity of the tax has therefore to be upheld.

(!) A.l.R. 1970 All. 561 (F.B.).

R. R. ENGINEERING CO. V. ZILA PARISHAD 13 ( Chandrachud, C. !. ) While doing so, we would like to utter a word of caution. The fact that one of the components of the impugned tax, namely, the component of 'circumstances' is referable to other entries in addition to Entry 60, should not be construed as conferring an unlimited charter on the local authorities to impose disproportionately excessive levies on the assessees who are subject to their jurisdiction. An excessive levy on circumstances will tend to blur the distinction between a tax on income and a tax on circumstances. Income will then cease to be a mere measure or yardstick of the tax and will become the very; subjectmatter of the tax. Restraint in this behalf will be a prudent prescription for the local authorities to. follow.

All that remains to be done is to express our inability to accept •as correct the view taken by Mr. Justice R. S. Pathak and Mr.

Justice M. H. Beg in R.R. Engineering Co. (supra)that by reason of the

fact that the circumstances and property tax!is a'.composite tax'.and; since

the element of 'property' necessarily enters into that composition, the tax cannot be identified as a tax on professions, trades, callings or employments. Our conclusion that the tax is referable, inter alia, to entries 49 and 60 of List II must necessarily result in the rejection of that view. The learned Judges were of the opinion, with which we are respectfully unable to agree, that since the tax on circumstances and property did not find place as an entry expressly enumerated in any of the three Lists of the Seventh Schedule, it falls under the residuary entry, namely, Entry 97 of List I. On that basis they held that Article 277 of the Constitution would save the tax since it; was within the competence of the Parliament to impose it. In the view that we have taken, namely, that the impugned tax falls within the competence of the State

Legislature by virtue of entries 49 and 60, inter a/ia, of List II, this part of the reasoning of the learned Judges has to be rejected. It is unnecessary and in fact erroneous to take resort to Article 277 of the <Constitution for the purpose of saving the tax on circumstances and pro- perty. The mere name of a tax does not bear on legislative competence and the absence of express enumeration of a tax by a particular name will not justify the tracing of legislative authority to the residuary entry. What is true in other jurisdictions is true in this branch of law also, namely, that one must have regard to the substance of the matter and not to the form or label.

We may [also mention that in so far as the Town Area Committees are concerned, Article 277 will not save the impugned tax since it was levied by the Town Area Committee in pursuance of the power conferred 'by clause (f) of section 14 of the Town Areas Act, which was intro-

.. duced by a post-Constitution amendment. We accept the reasoning

SUPREME COURT REPORTS (1980] 3 S.C.Rc

A of Mr. Justice S. N. Dwivedi in The Notified Area Committee,

(supra) by which the Special Bench expressed its disagreement with the view taken by the two learned Judges in R. R. Engineering Co.

(supra) in regard to the application of Article 277 on the basis. 1 that the residuary entry is attracted.

B For these reasons we uphold the validity of the tax on circumstances and property in both the appeals and dismiss the appeals with.costs.

P.B.R.

Appeals dismissed.

R. R. ENGINEERING CO

ZILA PARISHAD, BAREILLY & ANR

March 10, 1980

Y. V. CHANDRACHUD

V. R. KRISHNA IYER

N. L. UNTWALIA

A. D. KoSHAL, JJ.

Zila Parishads Act 1961

section 108

District Boards Act, 1922

Antarim Zila Parishads

Article 277

Town Areas Committee Act, 1914

Article 277

Article 276(2)

AIR 1969 All 40

Chandrachud

Seventh

Schedule

Article 277

Yogeshwar Prasad

S. K. Bagga

S. Bagga

Ashoke Srivastava

Rani Chhabra

E. C. Agarwal

K. C. Agarwa

M. M. L. Srivastava

J. P. Goyal

S. K. Jain

CHANDRACHUD

Articles 132(1) and 133(1)(c)

R. R. Engineering Company

Clutterbukganj

section 108

District Boards Act, 1922

February 18, 1928

section 172

March 10, 1928

November 29, 1933

section 114(d)

April 20, 1958

Antarim Zila Parishad Ordinance

ofUttar Pradesh

Antarim Zita Parishad Act 1958

Kshetra Samitis and Zila Parishads Act

section 274

District Boards Act, 1922

Antarim Zita Parishads Act

section 119

Zita Parishads

District Boards Act, 1922

Section 121

section 172

District Boards Act, 1922

High Court of Allahabad

R. S. Pathak

M. H. Beg

H; C. P. Tripathi

Articles 132(1)

section 14([)

Town Area Act, 1914

Munsir

Article 277

Civil Judge, Mainpuri

November 29, 1972

R. R. Engineering Co.

Article 276(2)

Art. 276(2)

Pathak

Art. 277

Seventh Schedule

M.H. Beg

U Justice M.H. Beg largely shared the view of Justice Pathak that the tax on circumstances and property was a composite tax and not merely a tax on professions, trades, callings or employments and therefore,

....

• ,., .

Art. 276(2)

Art. 277

Tripathi

Allahabad High Court

Art. 276(2)

Parliament

section 14(f)

Town Areas Act

Art 276(2)

Article 276

E. C. Agarwala

Article 276(2)

Article 276(2)

Agarwala

Y ogeshwar Prasad

Malik

AIR 1957 All 433

Income-tax Act

Income-tax Act

section 14

Town Areas Act, 1914

Karhal

District Board of Farrukhabad

R. R.

Engineering Co.

Schedule 7

Article 276(2)

article 277

Article 276(1)

article 246

Seventh Schedule

Broome

Allahabad High Conrt

Ram Singhasan Prasad Kalwar(l

S.N. Dwivedi

Government of India Act, 1935

Supreme Court

Pandit Ram Narain

Farrukhabad

Seventh Schedule

R.R. Engineering Co.

Seventh Schedule

Article 277

Article 277

Article 277

section 14

SUPREME COURT REPORTS (1980] 3 S.C.Rc

S. N. Dwivedi

Article 277


DR. RAJENDRA PRAKASH SHARMA v.

GY AN CHANDRA & ORS.

March 27, 1980

[R. S. SARKARIA AND R. S. PATHAK. JJ.]

Administration of Evacuee Property Act 1950 (31 of 1950). Sections 2(d), 7, 7A 8, 28 a11d 46 & Displaced Persom (Compe11Sation a11d Rehabilitation) Act 1954 (44 of 1954) Sections 2(c), 22, 23, 24 a11d 27 Property acquired undier section 12 and auctioned under section 20 of 1954 Act-Property not declared by Custodian as evacuee property under section 7 of 1950

Act-Jurisdiction of Civil Court to determine question whether property declared evacuee property-Section 46 of 1950 Act whether a bar-Section 27 of 1954 Act-Whether applicable.

The appellant field a suit in the civil ccurt alleging that the house in dispute was owned by one Abdul Rashid and that he had let out the house to his father who was paying rent to him, that Abdul Rashid had migrated to Pakistan and the house was declared evacuee property. Later, the house was put to auction on January 29, 1969 under section 20 of the Displaced Persons (Compensation a.nd Rehabilitation) Act, 1954, was purchased by him anti that the sale certificate was also issued. He further pleaded that the respondents-defendants had also filed suit No. 67 of 1970 for ejectment and arrears of rent against his father, that the suit was decreed on May 10, 1971, and that in pursuance of that decree they tried to dispossess him, and as he was not impleaded in the ejectment suit, he was not bound by that decree. The appellant claimed a declaration of his titlC to the property and prayed for perpetual injunction restraining the defendants-respondents from dispossessing him in execution of the ejectment decree.

The respondents resisted the suit, denied that the property in dispute was ever declared evacuee property or that it was ever acquired under the provisions of the Act of 1954, and asserted that the appropriate authorities never passed any order under section 7 of the Administration of Evacuee Property

Act, 1950 declaring the property to be evacuee property. The 1st defendant F further pleaded that Abdul Rashid had only ! /6th share in the house in question which was purchased by his father and therefore the respondents are exclusive owners of the House. The said Abdul Rashid had migrated to Pakistan in the year 1967 long after he had transferred his interest and share in the house in question and that the father of the appellant had in collusion with the Custodian Department prepared fictitious proceedings relating to the sale of the house in question, that the Custodian Department had no juris- G diction to declare the property as evacuee property, much less could they sell it under the Act of 1954, and that the auction if any held, was a nullity having been brought about by misrepresentation and fraud.

The trial court held that Abdul Rashid was not the owner of the house in question, that the entire proceedings taken by the Custodian Department were illegal and without jurisdiction and the pla.intiff did not acquire any title by virtue of the sale held by the Authorities under the Displaced Persons (Compensation and Rehabilitation) Act of 1954, and accordingly dismissed the suit.

On appeal, the Additional District Judge, affirmed the findings of the trial court and held that the jurisdiction of the Civil Court was not barred by section 46 of the Administration of Evacuee Property Act, 1950 and that it could go into the question whether or not the matter had been adjudicated upon by the authorities under that Act.

It found that no inquiry, as con templated under section 7 of the 19 50 Act was held and no Notification was issued by the Authorities under that Act, declaring the suit property to be evacuee property. It further held that Abdul Rashid had nG title or interest, whate,•er, in the house in question after lluly 31, 1953, when, in accordance with the decree of the Civil Court in partition Suit No. 289 of 1953, Phool Chand had deposited the value of I/6th share of Abdul Rashid in this property.

The High Court dismissed the Second Appeal preferred by the appellant affirming the concurrent findings of the conrt below. It also held that Abdul Rashid was in India much after the repeal of UP Ordinance No. I of 1949 and consequently there was no question of the property vesting automatically in the Custodian under the aforesaid Ordinance.

In the appeal to this court it was contended on behalf of the appellants :

(1) in view of th'e decision in Custodian of Evacuee Property, Punjab & Ors.

v. Jatran Begum [1967] 3 SCR 736 and section ~6 of the 1950 Act, the D Civil Court had no jurisdiction to adjudicate upon the question whether the suit property or any right or interest therein is or is not evacuee property,

(2) the sale of the suit property had been effected in favour of the appellant under section 20 of the 1954, Act, after it had been acquired by the Central Government under section 12 of that Act, free from all encumberances and formed part of the compensation pool, (3) the order of its acquistion passed under section 12, and its sale under section 20 of the 1954 Act had become E final and conclusive, the respondents could not be allowed to go behind those orders and question their finality on the ground that the property has never been evacuee property vesting in the Custodian, because section 27 of the 1954 Act bars the jurisdiction of the Civil Court to go into this question.

Dismissing the appeal,

HEW : I (i) Section 46 will not bar the jurisdiction of the Civil Court where the Custodian has never declared the property as evacuee property after taking proceedings under section 7 of the 1950 Act. [219 CJ

Custodian of Evacuee Property, Punjab & Ors. v. Jafran Begum [1967] 3 S.C.R. 736 referred to and explained.

(ii) Form a conjoint reading of section 7 & 8 of the 1950 Act it is, clear that the making of a declaration after inquiry under section 7 that the property is 'evacuee property' is a sine qua non for giving the Custodian dominion over the property.

If no proceeding is taken under section 7, there can be no vesting of the property in the Custodian. [216 Cl

In the instant case Abdul Rashid was throughout residing in India and personally managing the suit property and collecting its rent till 1963. He migrated or went away from India for good some time in 1963 or thereafter.

Therefore, if the Custodian had not taken any proceedings under section 7

R. P. SHARMA v. G. CHANDRA & ORS_. 209

of the 1950 Act to declare the suit property as evacuee property before the 7th day of May, 1954, and no such proceedings were pending on May 7, 1954, the property of Abdul Rashid could not be declared evacuee property under the Act, the power of the Custodian to do so having been terminated by section

7A. [217 B-CJ

(iii) It was for the plaintiffappellant to show by producing relevant notifications or other documentary evidence that the Custodian had taken proceedings and declared the suit property to be evacuee property in a.ccor dance with the provisions of section 7 or that such proceedings had been initiated earlier and were pending on the 7th day of May, 1954. Despite ample opportunity granted to the plaintiff he did not produce any such docu mentary evidence in the courts below. All that he showed was that Rehabi litation Authorities bad purporting to act under the 1954 Act sold the suit property to him and issued the sale certificate in his favour on April 1st,

1969. [217 DJ

(iv) Clauses (a), (c) and (d) of section 46 postulate that at the time when the question whether or not a property is evacuee property comes for adjudication the power of the Custodian-General or the Custodian under this Act of 1950 to determine the question is subsisting. That is to say, if at the point of time when the question arises, the power of the authorities cons tituted under this Act to adjudicate that question stands terminated or extin guished by the operation of section 7 A of the 19 54 Act, none of the clauses (a), (c) and (d) of section 46 will bar the jurisdiction of the Civil Court to determine that question, \Vhich had not been decided by the Custodian during the period he had the power to determine it. l219 F-G]

(v) Section 28 bas no application to the facts of the instant case because no order made by any of the authorities mentioned in that section is being called in question. Section 46, also, does not come in the way because no proceedings under section 7 of the 1950. Act to declare the suit house a.s evacuee property can be taken by the Custodian against Abdul Rashid. [219 H

220 A]

(vi) No notification under Sub-section (3) of section 7 published in the Official Gazette has been placed on the record. Nor was it sho\vn that any proceedings initiated under section 7 of the Act to declare it evacuee property were pending on May 7, 1954, and the question of saving those proceedings under the Proviso to section 7 A does not arise. I220 B]

In the instant case Qazi Abdul Rashid was throughout resident of India till 1963 and was personally managing the suit house and collecting rent of

it from the tenant. After May 7, 1954, therefore, the Custodian had no jurisdiction under the 1950 Act to declare the suit house as evacuee property.

G The jurisdiction of the Courts below to go into this question was thus not barred by anything in sections 28 and 46 of the 1950 Act. [220 CJ

2(i) Section 20 of the 1954 Act confers powers on the managing officer to transfer any property out of the compensation pool by sale or in any other manner indicated in clauses (b) to ( e) of that Section. The necessa.-y pre- requisite for sale is that the prope1ty must have been declared under section 7 of the 1950 Act to be evacuee property by the Custodian or it must be evacuee , property under the deeming provisions of any law which may be applicable to 1he case of the evacuee. In other words, only that property could be acquired

under section 12 and form part of the oompensation pool which satisfies the definition of "evacuee property'" given in section 2(c) of the 1954 Act. If the property was never evacuee property, as defined in section 2 ( c), it does not legally form part of the compensation pool and, therefore, cannot be disposed of under section 20 or the Rules framed under this~ statue.

[220 C, 221 H~

222 BJ

(ii) The necessary prerequisite for acquiring property under section 12 is that it must be 'evacuee property' as defined in section 2(c) of the 1954 Act.

In the absence of this essential prerequisite the Central Government is not competent to acquire, that property under this section for throwing it into the compensation pool. This prerequisite or condition precedent, was lacking in the instant case. No notification published in the Official Gazette either undef sub-section ( 1) or sub-section (3) of section 12 appears to have been brought on the record of this case, nor attention drawn to any such.·

notifications. [221 F-GJ

3. Section 27 of the 1954 Act is not attracted because the plaintiff, who filed the original suit and is now appellant in this appeal, is not questioning the finality of the order of the sale alleged to have been made by the manag .. ing officer.

It is the defendant-respondents who are resisting the plaintiff's claim on the ground that the sale is a nullity.

It could not be made under D this Act of 1954 for the reason that it was never declared evacuee property under section 7 of the Act and thus never formed part of the compensation pool. The vlords "under this Act'' occuring in section 27 are significant.

They sho.w that those orders which are not made by any officer or authority in accordance with the provisions of this Act, but outside the provisions of this Act in excess of jurisdiction, can be. called in question in the civil court.

The language of section 27 is not as wide as that of section 46 of the 1950 E Act. [222 G-223 A]

4. As Qazi Abdul Rashid remtained in India continuously upto 1963, no question of automatic vesting under the U.P. Ordinance No. 1 of 1949 could arise. That ordinance was not applicable to him at all. [214 H]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 424 of 1979-1

Appeal by Special Leave from the Judgmeut and Order dated 23-8-1978 of the Allahabad High Court in Second Appeal No. 34/78.

D. R. Gupta and B. V. Desai for the Appellant.

B. R. Agarwala for the Respondents.

The Judgment of the Court was delivered by

SARKARIA, J.-This appeal by special leave is directed against a judgment, dated August 23, 1978, whereby a learned Single Judge of the Allahabad High Court, dismissed the appeal of the appellant herein. It arises out of these circumstances.

The plaintiff, Dr. Rajendra Prakash Sharma, is the appellant before us. He filed a suit in the court of the Civil Judge, Bulandshahar, alleging that the house in dispute was owned by one Qazi Abdul Rashid, son of Qazi Abdul Raza~. Qazi Abdul Rashid had let out this house to Dr. Bhu Deo Sharma, father of the appellant, who was paying rent for the same to Qazi Abdul Rashid. He further alleged that the said Abdul Rashid had migrated to Pakistan and the house in dispute was declared evacuee property under the then existing law. Later on, it was put to auction on January 29, 19@ under Section 20 of the Displaced Persons (Compensation & Rehabilitation) Act, 1954, and was purchased by the plaintiff for a consideration of Rs. 1,000/-, and the appellant was declared purchaser of this property with effect from April, 1, 1969. Sale Certificate, dated March 19, 1969, was alsoissuedinhisfavour.

He further pleaded that the defendants-respondents had also filed Suit No. 67 of 1970 for ejectment and arrears of rent against the appellant's father, Bhu Deo Sharma. The suit was decreed on May 10, 1971, and that in pursuance of that decree they were trying to dispossess the plaintiff-appellant. He further stated that since he was not impleaded in the ejectment suit, he was not bound by that decree. On

these facts, the plaintiff-appellant claimed a declaration of his title to the property in question and further prayed for a perpetual injunction restraining the defendants from dispossessing him in execution of the said decree obtained by the defendants in Suit No. 67 of 1970.

The defendants resisted the suit. They denied that the property in dispute was ever declared evacuee property or that it was ever acquired under the provisions of the Act of 1954. They asserted that the appropriate authorities never passed any order under Section 7 of the Administration of Evacuee Property Act declaring this property to be evacuee property. The contesting defendant, Gyan Chandra, further pleaded that Qazi Abdul Rashid had only I/16th share in the house in question which was purchased by the defendants father (since deceased) and, therefore, the defendants are exclusive owners

0f the house. Gyan Chandra further alleged that Qazi Abdul Rashid had migrated to Pakistan in the year 1967, long after he had kansferred his interest and share in the house in question; that Dr.

Bhu Deo Sharma, father of the appellant had in collusion with the Custodian Department, prepared fictitious proceedings relating to the sale of the house in question; that the Custodian Department had no jurisdiction to declare the property in suit as evacuee property, much less could they sell it under the Act of 1954. According to the defendant, the auction if any held, was a nullity having been brought about by misrepresentation and fraud.

The trial court held that Qazi Abdul Rashid was not the owner of

the house in question; that the entire proceedings taken by the Custo- H dian Department were illegal and without jurisdiction and the plaintiff did not acquire any title by virtue of the sale held 'by the Authorities

SUPREME COURT REPORTS [1980] 3 S.C.ll.

under the Displaced Persons (Compensation and Rehabilitation) Act (No. 44 of 1954) (for short, called the 1954 Act). In the result, the trial court dismissed the plaintiff's suit.

On appeal, the Additional District Judge, Bulandshahr affirmed the findings of the trial court. He held that the jurisdiction of the civil court was not barred by section 46 of the Administration of Evacuee Property Act (No. 31 of 1950) (hereinafter called the 1950 Act) to go into the question whether or not the matter had been adjudicated upon by the Authorities under that Act. It found that no inquiry, as contemplated under Section 7 of Act 31 of 1950 was held and no Notification was issued by the Authorities under that Act, declaring the suit property to be evacuee property. It held that Abdul Rashid had no title or interest, whatever, in the house in question after July 31, 1953, when, in accordance with the decree of the Civil Court in the partition Suit No. 289 of 1953, Phool Chand had deposited Rs. 343/- regarding the value of !/6th share of Abdul Rashid in this property.

On the deposit of that amount, Phool Chand and his sons had become sole:owners of the property in question and the plaintiff's father became their tenant of the suit property.It was in that capacity that a decree for ejectment was passed against him and in favour of the respondents.

In the result, it was held that since the property had never been declared evacuee property after following the prescribed procedure under the Act and the Rules framed thereunder, the rights of the defendantsrespondents remained unaffected by the :auction held by the Custodian Department and the consequent issue of the sale certificate in favour of the plaintiff-appellant.

The High Court affirmed the concurrent findings of the two F courts below and dismissed the Second Appeal '.preferred by the plaintiff. It agreed with the lower appellate court that the auction in favour of the plaintiff-appellant was a nuJlity and wholly without jurisdiction and did not confer any rights on him because the suit property had never been declared as evacuee property in accordance with law. It also held that Abdul , Rashid was"in India much after the repeal of the G U.P. Ordinance I of 1949 and consequently there was no question of the property vesting automatically in the Custodian under the aforesaid Ordinance. The High Court, however, granted six months' time to the plaintiff-appellant to deliver vacanfpossession of the suit house to the defendants-respondents without the intervention of the court.

H After obtaining special leave under Article 136 of the Constitution, the aggrieved plaintiff has now come in appeal before this Court.

The main contention of the learned counsel for the appellant is A. two-fold : (a) In view of Section 46 of the 1950 Act, the Civilj Court had no jurisdiction to adjudicate upon the question whetherthe suit property or any right or intere•t therein is or is not evacuee property . (Reliance for this contention has been placed on the decision of this Court in Custodian of Evacuee Property, Punjab and Ors. v. Jafran Begumr).

(b) The sale of the suit property has been effected in favour of the appellant under Section 20 of the 1954 Act, after it_ had been acquired by the Central Government under Section 12 of that Act, free from all encumbrances, and formed part of the compensation pool. It will therefore, be presumed that prior to its acquisition under Section 12 of C the 1954 Act, it was evacuee property vesting in the custodian. The orders of its acquisition passed under Section;12 and its sale under Section 20 of the 1954 Act had become final and conclusive.

The respondent could not be allowed to go behind those orders and question their finality on the ground that the property.has never been evacuee property vesting in the custodian, because Section 27 of )) 1954 Act bars the jurisdiction of the Civil Court to go into this question.

The only remedy of the defendants-respondents is to claim compensa tion under the 1954 Act. Reference in this connection'.has been made to N. S. Gujral v. Custodian of Evacuee Property and Anr.(2)]

Before dealing !with these contentions, some basic facts concur- .E rently found by all the courts below may be noticed.

Qazi Abdul Rashid obtained a money decree in suit No. 523 of 1935 against one Ami Chand S/o Phool Chand and brother of present respondents (original defendants 1 to 4). In execution of that decree, he purchased with the permission of the court, the share of Ami Chand in 1937. At that time, a partition suit No. 3 of 1931 amongst the family mem hers of the said Ami Chand was pending in the Court of the Civil Judge, Bulandshahr. Qazi Abdul Rashid did not join as a party in the said partition suit. However, he instituted Suit

No. 452 of 1949 against the said Phool Chand and others in the court of the Munsif, Khurja for partition and separate possession of his share. The suit was contested. The Munsif decreed the suit hold ing that Qazi Abdul Rashid had l/16thshare in the house in question and one other shop. Applying the provisions of Section 4 of the Partition Act, the Munsif evaluated Qazi Abdul Rashid's !/16th share in the suit house at Rs. 343/- and directed the sale of that share.

(1) [1967] 3. S.C.R. 736.

(2) [1961!] J. S.r"'.R. 497.

Feeling aggrieved by the said decree, Qazi Abdul Rashid preferred Civil Appeal No. 289 of 1953. The First Appellate Court by its judgment, dated December 20, 1954 (Ex. A-2), partly allowed the appeal and modified the decree of the trial court in so far as it related to the shop. But it upheld the decree of the trial court in so far as it related to the house now in question, whereby Phool Chand defendant was required to deposit Rs. 343/- as the value of Qazi Abdul Rashid's share. In accordance with the decree affirmed by the First Appellate Court, Phool Chand on July 31, 1953 deposited Rs. 343/- (vide Ex.

A-1) to the credit of Qazi Abdul Rashid, the then plaintiff in the Court. Qazi Abdul Rashid being aggrieved bythedecreeoftheFirst Appellate Court, preferred Second Appeal No. 235 of 1955 in the High Court. The High Court dismissed this appeal as abated by an order, dated February 25, 1959 (Ex. A-1), due to the failure of Qazi Abdul Rashid to take proper steps for substitution of the legal representatives of the then respondents 7 and II, who had died during the pendency of the appeal.

During the pendency of the said litigation, Phool Chand and his two sons, Gyan Chand and Raghbur Sharan, instituted Suit No. 323 of 1953 in the court of the Munsif, Khurja for the recovery of the damages for use and occupation of the house in dispute against Qazi ,£ Abdul Rashid. By a judgment dated September 30, 1959 (Ex. A-4) the trial court decreed that suit against Qazi Abdul Rashid.

Aggrieved by that judgment and decree, Qazi Abdul Rashid preferred Civil Appeal No. 461 of 1959 which was partly allowed by the First Appellate Court on December 21, 1960.

The trial court further found---and this finding has been upheld b) the First Appellate Court and the High Court that Abdul Rashid definitely remained in India at least till 1963, if not till 1965. Upto 1963, he was directly receiving rent from his tenant, the father of the present plaintiff-appellant, in respect of the suit house. This was held primarily on the basis of documentary evidence (Ex. A-,14/A).

In view of the fact that Qazi Abdul Rashid remained in India continuously upto 1963, no question of automatic vesting nnder the U.P. Ordinance No. 1 of 1949, could arise. That Ordinance was not applicable to him at all. For our pnrpose, only the 1950 Act and the 1954 Act are relevant. It will, therefore, be worthwhile to notice, very briefly, the material provisions of these statutes.

( l

Clause (d) of Sectiou 2 of the 1950 Act defines "evacuee;" this A -definition so far as material, reads: "Evacuee means any persons-

(i) who on account of the' setting up of the Dominions ofindia and Pakistan or on account of civil disturbances or the fear of such disturbances, leaves or has, on or after the 1st day of March, 1947, left any ploce in a State for any place outside the territories now forming part ofindia, or

(ii) who is a resident in any place now forming part of Pakistan

and who for that reason is unable to occupy, supervise or manage in person his proporty in any p1rt of the territories to which this Act extends, or whose property in any p1rt of the said territories has ceased to be occupied, supervised or managed by any person or is being occupied, supervised or managed by an unauthorised person, or ........ "

(iii) to (iv) are not relevant for this case.

Clause (h) defines "evacuee property" to mean "any property of an evacuee (whether held by him as owner or as a trustee or as a beneficiary or as a tenant or in any other capacity) and includes any property which has been obtained by any person from an evacuee after the 14th day of August 1947, by any mode of transfer which is not elfoctive by reason of the provisions contained in Section 40 :) but does not include ........ " Sub-section (1) of Section 7 requires that where the Custodian is of opinion that any property is evacuee property within the meaning of this Act, he may after causing notice thereof to be given in such manner as may be prescribed to the persni interested, and after holding such inquiry into the m1tter ai the ciru.nitanees of the case permit, pass an order deelaring a•w suoh prop"ty to be evacuee property. Sub-section (3) of the Section peremptorily requires the Custodian to notify from ti:m to ti:n' bf p1',\i01tin'in t'D OJicial Gazette or in such other manner as m1y be prc1cribe1, all proinrties declared by him to be evacuee properties under S; ib-section (1).

Rule 6 of the Rules framed under the 1950 Act requires that the notice to be served underjSection 7(1) on persons interested in the property proposed to be declared evacuee property shall be in Form I.

Section 8 provides, "Any property doclared to be evacuee property under Section 7 shall be d"m'd to hive nsted in the Custodian for the State-

( a) in the case of the property of an evacuee as defined in subclause (i) of clause {d) of Section 2, from the date on which

he leaves or left any place in a State for any place outside the territories now forming part of India;

(b) in the case of the property of an evacuee as defined in subclause (ii) of clause (d) of Section 2, from the 15th day of August, 1947; and

(c) in the case of any other property, from the date of the notice given under sub-section (I) of Section 7 in respect thereof. (The rest is not material)."

From a conjoint reading of Sections 7 and 8, it is clear that the making of a declaration after inquiry under Section 7, that the property is 'evacuee property' is a sine qua non for giving the Custodian dominion over the property. If no proceeding is taken under Section 7, there can be no vesting of the property in the Custodian. (See observations in Fazalbhoy v. Official Trustee of Maharashtra(l).

The other point to be noted is that in the case of an 'evacuee' falling under sub-clause (i) cf the ddinilicn cf 'evacuee', that is one, who on account of the things mentiLned in that sub-clause, leaves India or has left India on or after August 14, 1947, the vesting will date from the date he leaves India fer any outside destination. Jn the instant case, Qazi Abdul Rashid left India to settle in Pakistan long after August 14, 1947 (in 1963).

Section 9 gives power to the Custodian to take possession of evacuee property which vests in him under Section 8.

Then, there is Section 7 A which was inserted by the Administration of Evacuee Prcp<rty (Amendment) Act, 1954 (42 of 1954) with effect from May 7, 1954.

"Notwithstanding anything contained in [this Act, no property' shall be declared toj be evacuee property on or after the 7th day of May 1954;" This is made subject to two Provisions. Clause {a) of the First Proviso saves from the application of this Section any property in respect of which proceedings are pending on the 7th day of May, 1954 for declaring such property , to be evacuee property. Clause (b) of the Proviso saves from the bar of this Section property of any person who became an evacuee on or after the Jst day of March, 1947, and who on the 7th day of May, 1954 was resident in Pakistan.

The second Proviso lays de wn that no notice under Section 7 for declaring any property to be evacuee property with reference to Clause (b) of the preceding ?roviso shall be issued after the expiry of six months from the commencement of the Administration of Evacuee

(l).[1979] 2 s.c.R..699 at_p. 712.

Property (Amendment Act, 1954). Then, there are three Explanations,

A , which are not material for our purpose.

It is clear from the facts concurrently found in the' instant case that Qazi Atdul Rrshid was throughout residing in India and personally ncanagitg the rnit rroperty and collecting its rent till 1963. He migrated or went away from India for good sometime in 1963 or thereafter.

Therefore, if the Custodian had not taken any proceedings under Section 7 of the 1950 Aot to declare the suit property as evacuee pro .. uerty before the 7th day of May 1954, and no such proceedings were pending on May 7, 1954, the property of Qazi Abdul Rashid could not be declared evacuee property under the Act, the power of the Gusto

<lian to do so having been terminated by Section 7A.

It was for the plaintiff-appellint to show by producing relevant notifications or other documentary evidence that the Custodian had taken proceedings and declared the suit property to be evacuee property in accordance with the provisions of Section 7 or that such proceedings had been initiated earlier and were pending on the 7th day

bf May, 1954. Despite ample opportunity granted to the plaintiff, he did not produce any such documentary evidence in the courts below. 1 All that he showed was that the Rehabilitation Authorities had, purporting to act under the 1954 Act, sold the suit property to him and issued the sale certificate in his favour on April 1, 1969 .

. .f.

Section 24 gives a person aggrieved of an order made under E

Section 7 by the Custodian a right of appeal.

Section 27 confers power of revision on the Custodian-General to revise suo motu or on the application made to him, any order passed by the Custodian if it is not found to be legal or proper.

Sections 28 and 46 bar the jurisdiction of courts. Section 28 reads thus:

"Save as otherwise expressly provided in this Chapter, every order made by the Custodian-General, Custodian, Additiona Custodian, Authorised Deputy Custodian, Deputy Custodian or Assistant Custodian shall be final and shall not be called in question in any Court by way of appeal or revisi<>n or in any original suit, application or execution proceeding."

Section 46 of the 1950 Act provides:

"Save as otherwise expressly provided in this Act, no civil or revenue court shall have jurisdiction-

F ,

(a) to entertain or adjudicate upon any question whether R any property or any right to or interest in any property is or is not evacuee property; or 15-i 89SCJ /80

(c) to question the legality of any action taken by the Custo

dian-General or the Custodian under this Act, or

(cl) in respect of any matter-which the Custodian-General or the Custodian is empowered by or under this Act to determine."

The scope of Sections 28 and 46 of the 1950 Act came up for consideration before this Court in Jafran Begum's case (ibid). The facts of that case were that a person who was in possession of a house inlndia, migrated to Pakistan. Notice was issued to his son under s.7 of the Administration of Evacuee Property Act, 1950, and after hearing him the Deputy Custodian declared the house to be evacuee property. Jafran Begum, who was the mother of the evacuee and on whom the notice under s.7 of the Act was not served, started proceedings before the Custodian, claiming that the owner of the house had executed a will bequeathing the property to her and so the property could not be declared evacuee property. That application was dismissed by the Custodian.

When she failed before the authorities constituted under the Act, she filed a suit in the civil court basing Ii.er case on the will and prayed for a permanent injunction restraining the auth0rities from evicting her from the house. On the question of jurisdiction being raised, the High Court held that determination of a complicated question of law relating to title by authorities under the 1950 Act was not final and could be reopened in the civil court, and Section 46 did not bar the civil court's jurisdiction to entertain such a question. After examining the scheme of the 1950 Act, Wanchoo, C.J., speaking for the Bench constituted _by three learned Judges, laid down the law, thus:

"(Where) the question whether certain properties are evacuee properties has been decided under s. 7 etc., whether that decision is based on issues of fact or issues oflaw, jurisdiction -0f courts is clearly barred under S. 46(a).

It is difficult to see how a distinction can be drawn between decisions under S. 7 based on questions of fact and decisions based on questions -0f Jaw. The decision is made final whether based on issues of law or of fact by S. 28 and S. 46 bars the jurisdiction of civil and revenue courts in matters which are decided under S. 7 whatever may be the basis of decision, whether issues of fact or of law and whether simple or complicated."

( Empha is supplied)

-~-

" .......... S.46 is a complete bar to the jurisdiction of civil or revenue courts in any matter which can be decided under

S. 7.

This conclusion is reinforced by the provision contained in S. 4(1) of the Act which provides that the Act overrides other Jaws and would thus override S. 9 of the Code of Civil Procedure on a combined reading of Ss.4,

28 and 46. (But) ...... S. 46 or S. 28 cannot bar the B jurisdiction of the High Court under Art. 226 of the Constitution."

(Emphasis supplied)

'From the crucial Words underlined in the above extract, it is clear that

even according to the rule of the above decision section 46 will not bar the jurisdiction of the civil court where the Custodian has never declared the property as evacuee property after taking proceedings under Section 7 of the 1950 Act.

A Full Bench of the Allahabad High Court in Khalil Ahmed Khan

v. Malka Mehar Nigar Begum(I), held that where the matter as to whether a property is evacuee property or not, has never been adjudi cated upon by the Custodian himself but he merely takes action on the basis of the judgment of the court of first instance, without deciding the matter for himself, that judgment being subject to correction by the court of appeal does not become final merely because the Custodian had taken action on the basis thereof. In such a case, the jurisdiction .of the civil court of appeal to determine the correctness of an adjudi-

-cation already made by the civil court is not barred. This decision was .noticed by this Court in Jafran Begum (ibid) , and it was observed that to some extent, "this case is in line with the view we have taken."

The matter can be looked at from another angle . also. Clauses {a), (c) and {d) of section 46 postulate that at the time when the question whether or not a property is evacuee property comes for adjudi- cation, the power of the Custodian-General or the Custodian under this Act of 1950 to determine that question is subsisting. That is to say, if at the point of time when the question arises, the power of the authorities constituted under this Act to adjudicate that question stands terminated or extiµguished by the operation of Section 7A of 1954, none of the clauses (a), (c) and (d) of section 46 will bar the jurisdiction of the civil court to determine that question which had not been decided by the custodian during the period, he had the power .to determine it.

section 28 has no application to the facts of the instant case because II no order made by any of the authorities mentioned in that section is

(I) A.J.R. 1954 All. 362.

being called in question. Section 46, also, does not come in the way because no proceedings under section 7 of the 1950 Act to declare the suit house as evacuee property were taken by the Custodian against Qazi Abdul Rashid. No notification under sub-section (3) of section 7 published in the Official Gazette has been placed on the record. Nor was it shown that any proceedings initiated under section 7 of the Act to declare it evacuee property were pending on May 7, 1954, and the question of saving those proceedings under the proviso to section 7 A does not arise.

Qazi Abdul Rashid was throughout a resident of India till 1963 and was personally managing the suit house and collecting rent of it from the tenant. After May 7, 1954, therefore, the Custodian had no jnrisdiction under the 1950 Act to declare the suit house as evacuee property. The jurisdiction of the courts below to go into this question was thus not barred by anything in sections 28 and 46 of the 1950-

Act.

D We, therefore, negative the first contention of the appellant.

Now let us have a look into the relevant provisions of the 1954 Act.

Section 2(c) of the 1954 Act defines "evacuee property" to mean any property which bas been declared or is deemed to have been declared as evacuee property under the Administration of Evacuee Property Act, 1950. At this place, it may be recalled that the second part of the definition which contains a deeming provision has no application to the facts of the instant case because Qazi. Abdul Rashid was throughout residing in India till his migration to Pakistan in 1963.

That is to say, he had not become an evacuee before the repeal of the U.P. Ordinance No. I of 1949. This Ordinance is not relevant for the purposes of the present case. The first part of the definition, also, is not applicable because the suit house has never been declared as evacuee property under the 1950 Act.

The next provision is to be found in section 12, which reads as G follows:

"S. 12. Power to acquire evacuee property for rehabilitation of displaced persons.-

(!) If the Central Government is of opinion that it is necessary to acquire any evacuee property for a public purpose, being a purpose connected with the relief and rehabilitation of displaced persons, including payment of compensation

--~-.

to such persons, the Central Government may at any time acquire such evacuee property by publishing in the Official Gazette a notification to the effect that the Central Government has decided to acquire such evacuee property in pursuance of this section.

(2) On the publication of a notification under subsection (1), the right, title and interest of any evacuee in the evacuee property specified in the notification shall, on and from the beginning of the date on which the notification is so published, be extinguished and the evacuee property shall vest absolutely in the Central Government free from all encumbrances.

(3) It shall be lawful for the Central Government, if it so considers necessary, to issue from time to time the notifications referred to in sub-section (I)

in respect of-

(a) al! evacuee property generally; or

(b) any class of .evacuee property; or

(c) all evacuee property situated in a specified area; or ( d) any particular evacuee property.

( 4) All evacuee property acquired under this section

shal1 form part of the compensation pool."

It may be noted that the necessary prerequisite for acquiring property under Section 12 is that it must be 'evacuee property' as ilelined in section 2(c) of the 1954 Act. In the absence of this essential prerequisite, the Central Government is not competent to acquire that property under this section for throwing it into the compensation pool. This prerequisite or condition precedent, as already noticed, was lacking in the instant case. No notifications published in the Official Gazette either under sub-section (I) or sub-section (3) of section 12 appear to have been brought on the record of this case. Our attention was not drawn to any such notifications.

Then, there is section 20 which confers power on the managing officer to transfer any property out of the compensation pool by sale

or in any other manner indicated in clauses (b) to (e) of that section.

Again, the necessary prerequisite for sale is that the property must ll have been declared under section 7 of the 1950 Act to be evacuee property by the Custodian or it must be evacuee property under the

deeming provisions of any law which may be applicable to the case of the evacuee. In other words, only that property which was evacuee property could be acquired under section 12 and form part of the com- pensation pool which satisfies the definition of "evacuee property" given in section 2(c) of the 1954 Act. If the property was never evacuee property, as defined in section 2(c), it does not legally form part of the compensation pool and, therefore, cannot be disposed of under Section 20 or the Rules framed under this statute.

Then, there are Sections 22, 23 and 24. Section 22 gives a right of appeal to a person aggrieved by an order of the Settlement Officer or a managing officer, to the Settlement Commissioner.

Any person aggrieved by the order of the Settlement Commissioner/Additional Settlement Commissioner/Assistant Settlement Commissioner or a managing officer has been given a right to prefer an appeal to the Chief Settlement Col)lmissioner under Section 23. But no appeal is competent from any order passed in appeal under Section 22. Section 24 confers the power of revision on the Chief Settlement Commissioner to revise any order of the authorities mentioned in that Section, including that of the managing officer.

Some argument was made by the learned counsel for the appel !ant that the only remedy of the respondents was to prefer an appeal or revision, under the aforesaid provisions of this Act and that, since they did not avail of the same under Section 27, the sale made by the managing officer in favour of the plaintiff-appellant has become final and cannot be questioned in any court. Section 27 reads thus :

"27. Finality of orders.-Save as otherwise expressly provided in this Act, every order made by any officer or iluthority under this Act, including a managing corporation, shall be final and shall not be called in question in any court by way of an appeal or revision or in any original suit, application or execution proceeding."

It will be seen that Section 27 is not attracted because the plaintiff;.

G who filed the original suit and is now coming before us by way of appeal, is not questioning the finality of the order of the sale alleged' to have been made by the managing officer. It is the defendant. respondents who are resisting the plaintiff's claim on the ground that the sale is a nullity. It could not be made under this Act of 1954 for the reason that it was never declared evacuee property under Sec- -U tion 7 of the Act and thus never formed part of the compensation pool.

The words "under this Act" occurring in Section 27 are significant.

They show that those orders which are not made by any officer or

authority in accordance with the provisions of this Act, but outside the provisions of this Act in excess of jurisdiction, can be called in question in the civil court. It may be noted that the language of Section 27 is not as wide as that of Section 46 of the 1950 Act.

The facts of N.S. Gujral (ibid) were entirely different. There, an Indian citizen held a money decree against a person who, subsequent to the passing of the decree, turned an evacuee. It was held that at no time, the decree-holder had any right whatsoever in the property which vested in the Central Government on the issue of the notification under Section 12. It was further held that though the decree-holder cannot claim to proceed against the property in suit or its income after the date on which it vested in the Central Government by virtue of the notification under Section 12, he can ask the Custodian to pay him out of the moneys lying with him on the date of such vesting if he can satisfy him in the manner provided in Section !0(2)(n) read with Section 10(1) of the 1950 Act. The ratio of that decision has no application to the facts of the pncent cas.

The second contention, also, being meritless. is over-ruled.

For the foregoing reasons, the appeal fails and is dismissed with costs.

Before parting with this judgment, we may note here that at 1te conclusion of final arguments in this Court, counsel for the appellant represented that his client was making all efforts to search out and produce the Gazette Notification, whereby the suit property was declared and notified as evacuee property by the Custodian under subsection (3) of Section 7 of the 1950 Act. He wanted some time. We therefore, reserved this judgment to give the plaintiff-appellrnt a last chance to produce such a notification of which the Court could take judicial notice. But, he has failed to produce any such Gazette Notification. Instead, he has produced, what purports to be, a copy of an order, dated January 5, 1951, of the Assistant Custodian. This is not a copy of any Gazette Notification of which judicial notice, without formal p1oof, could be taken. We, therefore, do not find any good ground to reopen the case, and decline the appellant's request for permitting him to produce additional evidence at this very late stage.

NVK.

Appeal dismissed.

RAJENDRA PRAKASH SHARMA

GY AN CHANDRA & ORS

R. S. SARKARIA

R. S. PATHAK

Sections 2(d), 7, 7A

Sections 2(c), 22, 23, 24

section 12

section 20

section 7

Section 46

Section 27

Abdul Rashid

Pakistan

January 29, 1969

section 20

May 10, 1971

section 7

Act, 1950

section 46

section 7

lluly 31, 1953

Phool Chand

India

[1967] 3 SCR 736

section 20

section 12

section 12

section 20

section 27

Section 46

section 7

[1967] 3 S.C.R. 736

section 7 & 8

section 7

section 7

section 7

7th day of May, 1954

section

7A

section 7

April 1st,

1969

section 46

section 7

section 46

Section 28

Section 46

section 7

section 7

section 7

May 7, 1954

section 7

Qazi Abdul Rashid

sections 28 and 46

Section 20

section 7

section 12

section 2(c)

section 2

section 20

section 12

section 2(c)

Central Government

section 12

Section 27

section 7

section 27

section 27

section 46

Allahabad High Court

D. R. Gupta

B. V. Desai

B. R. Agarwala

SARKARIA

August 23, 1978

Rajendra Prakash Sharma

Civil Judge, Bulandshahar

Qazi Abdul Raza~.

Bhu Deo Sharma

January 29, 19@

Section 20

April, 1, 1969

March 19, 1969

Section 7

Gyan Chandra

SUPREME COURT REPORTS [1980] 3 S.C.ll

Additional District Judge, Bulandshahr

section 46

Section 7

July 31, 1953

Abdul , Rashid

Article 136

Section 46

Section 20

Section 12

Section 12

Section 20

Section 27

Qazi Abdul Rashid

Ami Chand

Ami Chand

Civil Judge, Bulandshahr

Phool Chand

court of the Munsif, Khurja

Section 4

Partition Act

December 20, 1954

First Appellate Court, Phool Chand

February 25, 1959

Gyan Chand

Raghbur Sharan

Qazi ,£ Abdul Rashid

September 30, 1959

December 21, 1960

1st day of March, 1947

14th day of August 1947

Section 40

Section 7

Section 7(1)

Section 8

Section 7

Section 2

Section 2

15th day of August, 1947

Section 7

Sections 7 and 8

Section 7

Section 7

August 14, 1947

Section 9

Section 8

Section 7

Jst day of March, 1947

Section 7

Amendment Act, 1954

Qazi Atdul Rrshid

Section 7

Section 7A

Section 7

April 1, 1969

Section 24

Section 7

Section 27

Sections 28 and 46

Section 28

Section 46

Sections 28 and 46

Jafran Begum

Section 46

Wanchoo

s. 7

S. 46(a)

S. 7

S. 28

S. 46

S. 7

S. 7

S. 4(1)

S. 9

the Code of Civil Procedure

Ss.4,

28 and 46

S. 46

S. 28

Art. 226

section 46

Section 7

section 46

Section 7A

section 46

section 28

Section 46

section 7

section 7

section 7

section 7

sections 28 and 46

Section 2(c)

Qazi. Abdul Rashid

section 12

S. 12

Section 12

section 2(c)

section 12

section 20

section 7

section 12

section 2(c)

section 2(c)

Section 20

Sections 22, 23 and 24

Section 22

Section 23

Section 22

Section 24

Section 27

Section 27

Section 27

Section 27

Section 27

Section 46

N.S. Gujral

Section 12

Section 12

Section 10(1)

Section 7

January 5, 1951