Ka{ranpur_ Lime

Works Lid.

Statt of Bihar and Another.

Chui.am Hasan J.

March 11,

SUPREME COURT REPORTS [1954]

not the case.

We think, however, that though we decline to give a decree for specific performance of the contract for the short period, there is no reason why the Lime Co. should be deprived of compensation.

The plaintiff had prayed for a decree for compensation in the plaint and the trial court had decreed compensation for the period commencing from 1st April, 1948, till the date of getting possession of the leasehold property and the amount of compensation was left to be ascertained in subsequent proceedings.

As no question of possession arises in the view that we have taken in the case. it follows that the plaintiff is entitled to compensation from the 1st April, 1948, tili the 31st March; 1954.

We accordingly allow the appeal, set aside the judgment and decree of the High Court and direct that the plaintiff shall be allowed a decree for compensation from the 1st April, 1948, to the 31st March, 1954, the amount of compensation to be ascertained by the trial court.

After determining tl1e amount, the trial court will pass an appropriate decree.

We make no order as to costs.

Appeal allowed.

Agent for the appellant : S. p. Varma.

Agent for respondent No. 1 : R. C. Prasad.

Agent for respondent No. 2: B. P. Maheswari.

SULEMAN ISSA

THE STATE OF BOMBAY. [MEHR CHAND MAHAJAN C. J., MuKHERJEA, S. R. DAs,

VIVIAN BosE and GHULAM HASAN JJ.]

Criminal Procedure Code (V of 1898), s. 517-Person prosecuted undff s. 61-E of the Bombay District Police Act (Bombay Act TV of 1890)-Confiscation of gold worth about 3 lakhs- Propriety of.

Under s. 517 of the Code of Criminal Procedure the court is empowered on the conclusion of an enquiry or trial to make an

order for the disposal of any property or document produced before it or in its custody or regarding which an offence appears to have been committed or which had been used for the commission of any offf'nce. The power of the court extends to the confiscation of the property in the custody of the court but it is not in every case in which the court must necessarily pass an order of confiscation irrespective of the ci.rcun1stances of the case.

Held, that the confiscation of gold worth about 3 lakhs of rupees was singularly inappropriate in a case like the present where the prosecution story that the gold in question was smuggled into India from Africa was not accepted by the court and the accused was convicted for an offence under s. 6l~E of the Bombay District Police Act, 1890, which provides a maximum sentence of three months and a fine of Rs. 100 and which does not contain any substantial provision such as the Sea Customs Act imposing the penalty of confiscation.

CRIMINAL

APPELLATE JuR1smcnoN : Criminal Appeal No. 67 of 1951.

Appeal by special leave from the Judgment and Order, dated 26th June, 1950, of the High Court of Judicature at Bombay (Dixit and Chainani JJ.) in Criminal Appeal No. 784 of 1949.

N. C. Chatterjee (H. /. Umrigar and S. P. Varma, with him) for the appellant.

M. C. Setalvad, Attorney-General for India (Porus A. Mehta, with him) for the respondent.

1954. March 11.

The Judgment of the Court was <lelivered by

GHULAM HASAN J.-This. appeal is brought by special leave from the judgment and order of the High Court Of Judicature at Bombay (Dixit and Chainani

JI.), dated June 26, 1950, whereby the High Court allowed the appeal of the State of Bombay, setting aside the order of acquittal of the appellant passed by the Sssions Judge of Kaira, dated May 7, 1949, and restormg the order of conviction and sentence of the appellant passed by the Sub-Divisional Magistrate, Nadiad Prant, dated December 31, 1948.

Tht; appellant, Suleman Issa, who is an inhabitant of Natal m Suth Africa !ft Durban in August, 1947, by

ar fo.r nd1a t? pay a visit to his native place Sarsa Ill D1stnct . Ka1ra where his sister was living with her husband Ahmahmad Issak.

He was accompanied by

Suleman.1ssa

v. The State of .Bombay.

Suleman Issa v.

The State of Bombay.

Ghulam Hasan J.

SUJ:'REME COURT REPORTS [1954)

Daud Hassam another brother-in-law and both travelled to Mombasa by car.

From Mombasa they took a boat on August 30, and reached Colombo on September 1 L They flew from Colombo to Madras on September 14, but shipped the car by a steamer. They stayed in Madras until the steamer arrived on September 20.

The car was delivered to the appellant on October 1, after he had paid Rs. 2,700 as custom duty and a cash deposit of Rs. 10,000 by way of security as the appellant intended to take the car back to Durban on his return.

The party motored to Nardana on October 7, passing through Bangalore, Poona, Nasik and Dhulia.

From there they travelled by train and reached Sarsa on October 8. The car was booked in an open truck from Nardana to Anand where it was taken delivery of and then driven to Sarsa.

One Ratansing Kalusing Rao!, Senior Police In:.- pector of Nadiad town, having noticed the car bearing no Indian number passing in the town instructed policemen to keep a watch.

The appellant was ordered to appear before the Sub-Inspector on October 12.

On being questioned he stated that his family was the original inhabitant of Jamnagar State but for the last 60 years they were doing the business of contractors for purchasing and selling land in Durban. His brother Daud Issa was, however, serving in Bombay.

He gave details of the journey performed by him and his companion and produced passports, as also the receipts for paying custom duty and the deposit.

On October 15, Head Constable Ajit Singh, informed Raol that some unknown person had come to the shop of U marbhai jeweller with a large quantity of gold.

Accordingly the police visited the shop of the jeweller and his brother (also a jeweller) and came to know that gold had been given to him by the appellant to be melted.

This gold along with some other gold kept at another place wa& seized by the police.

The police also took possession of the car.

The entire quantity of gold seized was 2773! t(llas the value of which is roughly estimated at Rs. 3 lakhs. Proceedings under section 20 of the Indian Telegraph Act were instituted

against the appellant and others on the assumption . that the wireless set in the car was a transmitter but they were dropped when it was found otherwise. The car was thoroughly examined but nothing incriminating was found.

The appellant was also detained under the Public Securities Act but was released. Ultimately on January 2, 1948, he along with others was prosecuted on the complaint of Rao! for an offence under section 61 E of the Bombay District Police Act (IV of 1890) read with section 109 of the Indian Penal Code.

Section 61E says:~

"Whoever has in his possession or conveys in any manner, or offers for sale or pawn, anything which there is reason to believe is stolen property or property fraudulently obtained, shall. if he fails to account for such possession or act to the satisfaction of the Magistrate, be punished with imprisonment for a term which may extend to three months or with fine which may extend to one hundred rupees."

He was convicted by the Magistrate and sentenced to a fine of Rs. 100 and the gold was directed to be confiscated under section 517 of the Code of Criminal Procedure.

The other accused who were charged with abctment were acquitted. The Magistrate took the view that there was no direct evidence to show that the accused had committed theft or had oloiained property fraudulently but there were in his opinion circumstances which led to the reasonable belief that the gold in question was either stolen or was fraudulently obtained.

The Sessions Judge held that although the possession of the gold was highly suspicious, nevertheless it did not constitute sufficient ground for a reasonable belief that the property was either stolen or was fraudulenly obtained.

He accordingly set aside the conviction and sentence and ordered the gold to be restored to the appellant. The High Court in appeal by the State did not accept the prosecution story that the gold was brought into India by the appellant in his motor-car, but held agreeing with the Magistrate that from the circumstances there was reason to believe that he was in possession of gold which was either stolen property or property 4-m S. C. lndiaf59

Suleman Issa . v.

The State of Bombay.

Ghulam Hasan J.

Suleman Issa v. , Th~ State of Bombay.

G!wlam~Hasan J,

fraudulently obtained.

The High Court did not accept the explanation of the appellant that his father had brought the gold to Sarsa from time to time when he visited his native place.

As regards the order of confiscation under section 517, the High Court held that it was not necessary that the property confiscated must be the property in relation to which an offence appears to have been committed but it was enough if the property is produced before the court.

In this view the acquittal was set aside and the order of the Magistrate was restored.

Mr. Chatterjee on behalf of the appellant stated at the outset that he was not prepared to concede that 'the appellant's conviction was right but he proceeded on the assumption that even if it was so, section 517 had no application to the case and the court had no jurisdiction to pass the order of confiscation of the gold.

He also urged that in any view of the matter the order of confiscation was not a proper order in the circumstances of this case.

Section 517 (1) reads thus:-

"When an inquiry or a trial in any criminal court is concluded, the court may make such order as it thinks lit for the disposal (by destruction, confiscation, or delivery to any person claiming to be entitled to possession ther!'of or otherwise) of any property or document produced before it or in its custody or regarding which any offence appears to have been committed, or which has been used for the commission of any offence."

The section on a plain reading shows that upon the conclusion of an inquiry or trial the court is empowered to make an order for disposal of any property or document produced before it. or in its cugody, or regarding which any offence appears to have been committed, or which has been used for the commission of an offence.

The section also shows that the power of the court extends to destruction, confiscation or delivery to any

person claiming to be entitled to possession of such property.

Mr. Chatterjee contended that the gold after it was seized by the Police was sent to the Treasury and was never produced before the court.

We do not think that the evidence on this point is clear and definite.

This point does not appeal to have been raised before the courts below.

The High Court justified the order on the ground that the property was produced before the court and held that it was not necessary to find before passing the order that "any offence appears to have been committed" in respect of it. It is clear to us that the property was not one regarding which any offence appears to have been committed, or which has been used for the commission of any offence. Now the power of the court no doubt extends to confiscation of property in the custody of the court but it is not every case in which the court must necessarily pass an order of confiscation irrespective of 'the circumstances of the case.

It is possible to conceive of cases where the subject matter of the offence may be property which under the law relating to that offence is liable to be confiscated as a punishment on conviction.

Assuming therefore that the court had jurisdiction to pass an order regarding the disposal of the gold, it seems 1to us that the order of confiscation was not an appropriate order in the circumstances of this case.

Section 517 contains a general provision for disposal of the property m the circumstances mentioned in the latter part of the section.

Section 61E by itself does not empower the court to impose the penalty of confiscation and the sentence of imprisonment and fine authorised by the section is a nominal sentence for the obvious reason that the section proceeds upon the mere belief that the property in possession of the person is stolen property or property fraudulently obtained possession of which is not satisfactorily accounted for.

It is an offence under the local Police Act and not under an Act which contains any substantive provision such as the Sea Customs Act impqsing the penalty of confiscation.

Con1iscation is not the only mode of disposal under section 517 and is singularly

Sultman Issa

T/,, State of

Bombay.

Ghulam HaJan ].

Suleman Issa v.

The Stak of Bombay.

Ghulam Hasan J,

March 12

inappropriate in a case where the accused is prosecuted for an offence punishable with a maximum sentence of 3 months and a fine of Rs. 100.

It was certainly open to the court to order the property to be delivered to the person claiming to be entitled to its possession.

Here the gold was found from the possession of the appellant, and the court was not called upon to consider any rival claims about its possession. Admittedly there was no evidence to prove that it was stolen, or that it was fraudulently obtained and all that was found was that there was reason to believe that it was stolen or fraudulently obtained and that the appellant failed to account for its possession to the satisfaction of the court.

The High Court thought that the gold was smuggled from Africa into India but assuming this to be so its confiscation under section 517 upon the existence of a mere belief required to sustain a conviction under section

61E was palpably harsh and unreasonable.

We hold, therefore, that the order of confiscation of gold cannot be supported.

We according! y set aside the order of confiscation and direct that the gold seized from the appellant's possession shall be restored to him.

Appeal allowed.

Agent for the respondent : R. H. Dhebar.

THE STATE OF RAJASTHAN v.

NATH MAL AND MITHA MAL.

lMam CHAND MAHAJAN. C. J., MUKHERJEA, S. R. DAs,

VIVIAN BosE and GHuLAM HASAN JJ.]

Constitution of India, arts. 19(1)(1) and 31(2)-Raiasthan Foodgrains Control Order, 1949, cl. 25-Whether ultra vires th< Constitution.

Held, that the first portion of cl. 25 of the Rajasthan Foodgrains Control Order, 1949, relating to the freezing of stocks of foodgrains is not void under art. 19(l)(f) of the Constitution because such freezing of stocks of foodgrains is reasonably related

Chui.am Hasan J.

S. p. Varma

R. C. Prasad

B. P. Maheswari

SULEMAN ISSA

THE STATE OF BOMBAY

MEHR CHAND MAHAJAN

MuKHERJEA

S. R. DAs

VIVIAN BosE

Criminal Procedure Code

s. 517

s. 61

Police Act

s. 517

Code of Criminal Procedure

India

Africa

s. 6

Bombay District Police Act, 1890

Customs Act

High Court of Judicature at Bombay

Dixit

Chainani

N. C. Chatterjee

S. P. Varma

M. C. Setalvad

Porus A. Mehta

High Court Of Judicature at Bombay

State of Bombay

Suleman Issa

Ghulam Hasan

Daud Hassam

Mombasa

Colombo

Madras

Durban

Nardana

Bangalore

Poona

Nasik

Dhulia

Sarsa

Anand

Ratansing Kalusing Rao

Nadiad town

Jamnagar

Daud Issa

Bombay

October 15,

Ajit Singh

Raol

section 20

Indian Telegraph Act

January 2, 1948

Rao

section 61

Police Act

section 109

Indian Penal Code

Section 61E

section 517

Code of Criminal Procedure

State of Bombay

G!wlam

Hasan

Sarsa

section 517

Chatterjee

section 517

Section 517

Section 517

Section 61E

Police Act

Customs Act

section 517

State of

Bombay

Stak of Bombay

section 517

section

61E

R. H. Dhebar

lMam CHAND MAHAJAN

MUKHERJEA

GHuLAM HASAN

Constitution of India

arts. 19(1)(1) and 31(2)

cl. 25

cl. 25

art. 19(l)(f)


Suleman Issa v.

The Stak of Bombay.

Ghulam Hasan J,

March 12

SUPREME COURT REPORTS [1954}

inappropriate in a case where the accused is prosecuted for an offence punishable with a maximum sentence of 3 months and a fine of Rs. 100.

It was certainly open to the court to order the property to be delivered to the person claiming to be entitled to its possession.

Here the gold was found from the possession of the appellant, and the court was not called upon to consider any rival claims about its possession. Admittedly there was no evidence to prove that it was stolen, or that it was fraudulently obtained and all that was found was that there was reason to believe that it was stolen or fraudulently obtained and that the appellant failed to account for its possession to the satisfaction of the court.

The High Court thought that the gold was smuggled from Africa into India but assuming this to be so its confiscation under section 517 upon the existence of a mere belief required to sustain a conviction under section

61E was palpably harsh and unreasonable.

We hold, therefore, that the order of confiscation of gold cannot be supported.

We according! y set aside the order of confiscation and direct that the gold seized from the appellant's possession shall be restored to him.

Appeal allowed.

Agent for the respondent : R. H. Dhebar.

THE STATE OF RAJASTHAN v.

NATH MAL AND MITHA MAL.

lMam CHAND MAHAJAN. C. J., MUKHERJEA, S. R. DAs,

VIVIAN BosE and GHuLAM HASAN JJ.]

Constitution of India, arts. 19(1)(1) and 31(2)-Raiasthan Foodgrains Control Order, 1949, cl. 25-Whether ultra vires th< Constitution.

Held, that the first portion of cl. 25 of the Rajasthan Foodgrains Control Order, 1949, relating to the freezing of stocks of foodgrains is not void under art. 19(l)(f) of the Constitution because such freezing of stocks of foodgrains is reasonably related

to the object which the Act was intended to achieve, nan1ely _to secure the equitable distribution and availability at fair prices and to regulate transport, distribution, disposal and acquisition of an .essential commodity such as foodgrains.

Held, that the last portion of cl. 25 to the effect that "such stocks shall also be liable to be requisitioned or disposd of under orders of the said authority at the rate fixed for purposes of GoYernment procurement", is void both under art. 19(1)(f) and art. 31(2) of the Constitution:-

(i) because the clause places an unreasonable restriction upon the carrying on of trade or business and is thus an infringement of the respondents' right under art. 19(1)(f) of the Constitution ;

(ii) because the clause by vesting the power in the authority to acquire the stocks at any price fails to fix the an1ount of co1npensation or specify the principles on which it is to be determined and leaves it entirely to the discretion of the executive authority to fix any compensation it likes and is thus hit by art. 31(2) of the Constitution.

CIVIL APPELLATE TuRISDICTION : Civil Appeal No. 136 of 1952.

Appeal under articles 132 ( 1) and 133 (I) ( c) of the Constitution of India from the Judgment and Order dated the 19th October, 1951, of the High Court of Judicature for Rajasthan at fodhpur in D. B. Miscellaneous Writ Petition No. 3/1951.

K. S. Haje/a, Advocate-General of Rajasthan, for the appellant.

K. N. Aggart11al an<l P. C. Agarwal for the respondents.

M. C. Setalvad, Attornev-General for India (Porus A. Mehta, with him) for the intervener (the Union of India).

1954.

March 12.

The Judgment of the Court was delivered by

GHuLAM HASAN J.-The question involved in this appeal relates to the constitutional validity of clause 25 of the Rajasthan Foodgrains Control Order, 1949, hereinafter called the Control Order. and arises in the following circumstances:- The respondents, who are grain merchants at Raniwarain Jodhpur Division, Rajasthan State, hdd

The State of Rajas than v.

Nath Mal and

Mitha Mal.

Th< Sta11 of

RajasthtJ.n

Nath Mal and -

Muha Mal.

Ghulam Hasan J.

licences for dealing in foodgrains.

They held considerable stocks of bajra in the ordinary course of business but on October 7, 1950, their stocks were frozen by the Deputy Commissioner, Civil Supplies, Jodhpur, through the Sub-Divisional Officer.

It is not disputed that the market price then prevailing was about Rs. 18 per maund.

The State, however, requisitioned the stocks at the rate of Rs. 9 per maund and sold them at Rs. 13-5-4 per maund.

The respondents claimed that they had purchased the bajra at the prevailing market rate of Rs. 17 to Rs. 18 per maund.

They filed a petition on January 23, 1951, for the issue of a writ under article 226 of the Constitution before the High Court of Rajasthan, contending that clause 25 of the Control Order was void under articles 14, 19(1) (g) and 31(2) of the Constitution.

The High Court held that clause 25 was void inasmuch as it is a restriction upon the fundamental right of the respondents to carry on business under article 19 ( 1) (g) of the Constitution, that the restriction is not reasonable and is not saved by clause (6) of article 19. The High Court further held that clause 25 was also hit by article 31 (2) as fair compensation had not been fixed by the law for the acquisition of the foodgrains.

As the grains had already been disposed of by the Government, the High Court holding that Rs. 17 a maund was fair compensation directed .that the State of Rajasthan shall pay compensation at that rate.

The State has preferred the present appeal on a certificate granted hy the High Court.

The impugned clause 25 is as follows:- "25.

Notwithstanding anything contained in this Order, the Commissioner, the Director, the Deputy Commissioner, the Nazim, the Assistant Commissioner, the Suh-Divisional Officer, the Senior Officer of a jurisdictional Thikana, the enforcement officer or such other officer as may be authorised by the Commissioner in this behalf, may freeze any stocks of foodgrai ns held by any person, whether in his own behalf or not, and such person shall not dispose of any foodgrains out of the stock so freezed except with the permission of the said authority.

Such stocks shall

also be liable to be requisitioned or disposed of under orders of the said authority at the rate fixed for purposes of Government procurement."

It is not disputed that bajra is an essential commodity within the meaning of the Essential Supplies Act (No. XXIV of 1946).

The question that arises for consideration is how far and in what respects clause 25 can be said to be void as violating Part III of the Constitution.

The clause authorises the Comm1ss10ner and yarious other authorities mentioned therein and such other officers as may be authorised by the Commissioner to freeze any stock of foodgrains held by a person.

It is true that the authority of the Commissioner to delegate his powers to any other officer at his discretion is expressed in somewhat wide terms but we need not decide that that per se would be sufficient to invalidate the clause.

Admittedly that power has not been exercised in the present case. Nor do we think that the power to freeze the stocks of foodgrains is arbitrary or based on no reasonable basis.

It is not disputed that the clause does not state in express terms the circumstances in or the grounds on which the stocks may be freezed but it should be read along with section 3 of the Essential Supplies Act which lays down the policy for controlling the production, supply and distribution of essential commodities.

Section 3 in so far as, it is material says:-

"The Central Government, so far as it appears to it to he necessary or expedient for maintaining or increasing supplies of any essential commodity, or for securing their equitable distribution and availability at fair prices, may by order provide for regulating or prohibiting the production, supply and distribution thereof. . , ............. "

Sub-section (2) lays down:- "Without prejudice to the generality of the powers conferred by sub-section ( l), an order made thereunder may provide ......... .

(a) ............... .

(b) ............... .

(c) ............... .

The State of

Rajt1sthan'

v. }lath Mal and

Mitha Mal.

Ghufom Hasan J.

1954 -.- The State of Rajasthan v.

Nath~Afal ani

Mitha Afal. ~

Ghulam~Hasan ].

( d) for regulating by licences. permits or otherwise the storage, transport, distribution, disposal, acqms1tion, use or consumption of any essential commocfoy; ( e) for prohibiting the withholding from sale of any essential commodity ordinarily kept for sa1e; "

We are clear, therefore, that the freezing of stocks of foodgrains is reasonably related to the object which the Act was intended to achieve, namely, to secure rhe equitable distribution and availability at fair prices and to regulate transport, ,:istribution, disposal and acquisition of an essential commodity such as foodgraim.

We do not agree wit]' the High Court 'hat the fiN portion of clause 25 is void under article 19 (1) (g).

The last portion of clause 25 to the effect that "such stocks shall also be liable to be requisitioned or disposed of under orders of the said authority at tile rate fixed for purposes . of Government procure1,.., ent'', however stands on a different footing. The clause, es it is worded, leaves it entirely to the Government ro requisition the stocks at any rate fixed by it and to ,\i,. pose of such stocks at any rate in its discretion This obviously vests an unrestrained authority to requtsttion the stocks of foodgrains at an arbitrary price. In contrast with this provision we may refer to clau, es 23 and 24 of the Control Order. They are as follows:-

"2.). The Commissioner or the Director, and the Deputy Commissioner or the Senior Officer of a jurisdictional Thikana with the approval of the Director, may fix the ceiling prices at which foodgrains in any area to which this-0rder applies shall be sold, and may from time to time vary such prices."

"24. The Commissioner, the Director, the Deputy Commissioner, the Nazim, the Assistant Commissioner, the Sub-Divisional Officer, or the Senior Officer of the jurisdictional Thikana as the case may be, may direct any person or persons in possession, whether on his own behalf or not of any foodgrains to sell such foodgrains or part thereof to any person or persons at any

specified place and at such price as may be fixed under clause 23."

It appears from these clauses that while the authorities may fix the ceiling price at which foodgrains should be sold in the market by the dealers and may direct any person in possession of foodgrains to sell them to any other person at the price fixed under clause 23, there is no such limitation upon the power of the Government to acquire the stocks.

In other words, it will be open to the Government to requisition the stocks at a price lower than the ceiling price thus causing loss to the persons whose stocks are freezed while at the same time the Government is free to sell the same stocks at a higher price and make a profit.

It is obvious that the dealer whose stocks are thus freezed will stand to lose considerably and will be unable to carry on his trade or business at the prevailing market price.

No dealer will be prepared to buy foodgrains at the market price when he knows that he is exposed to the risk of his stocks being freezed any moment and the same being requisitioned at the procurement rate.

The present is a typical case which illustrates how the business of a grain dealer can be paralvsed, for it is admitted that while the Government procurement rate was Rs. 9 a maund, the market rate was Rs. 17 or Rs. 18 per maund, with the result that the stock holder suffered nearly cent. per cent. loss, while the Government made a profit of Rs. 4-5-4 per maund on the stock requisitioned.

We hold, therefore. that the last portion of clause 25 places an unreasonable restriction upon the carrying on of trade or business and is thus an infringement of the respondent's right under article 19(1) (g) of the Constitution and is, therefore, to that extent void. The same result follows if the impugned clause is examined in the light of article 31 (2).

The clause by vesting the power in the authority to acquire the stocks at any price fails to fix the amount of the compensation or specify the principles on which the compensation is to be determined.

The clause leaves it entirely to the discretion of the executive authority to fix any compensation it likes.

The High Court

The State of Rajastlum v.

Nath Mal and Mitha Mal.

Ghu!am Hasan).

The State of Rajasthan v.

Nath Mal and

Mitha Mal.

March 12.

rightly held article 31(2). that the clause offended against

For the foregoing reasons portion of clause 25 is void with costs.

we hold that the last and dismiss the appeal

Appeal dismissed.

Agent for the appellant and for the intervener: R. H. D!tebar.

SRIMA TI ORAMBA SUND ARI DASI

ti.

SRI SRI ISWAR GOPAL JIEU. [MuKHERJEA, VrvIAN BosE and

VENKATARAMA AYYAR JJ.) Bengal Money-Lenders Act, 1940 (Bengal Act X of 1940), s. 36 -Scope of-Court whether competent to make an enquiry that decree-holder on record is benamidar for another person.

Held, that in a proceeding under s. 36 of the Bengal Money-Lenders Act, 1940, it is not competent to the court to go behind the decree and embark on an enquiry as to whether the decree-holders on record were in fact benamidars for another person.

Scope oi s. 36 of the Act discussed.

Renual v. Manmatha (72 I.A. 156) and Bank of Commel'C6 Ltd. v. Amulya Krishna Basu Roy Chowdhury ( [ 1944 ]F.C.R. 126) referred to.

C1v1L

APPELLATE JuR1smcTION : Civil Appeals Nos. 130 and 131 of 1951.

Appeals from the Judgment and Decrees, dated the 12th August, 1948, of the High Court of Judicature at Calcutta in Appeals from Original Decrees Nos. 214 of 1942 and 231 of 1943 arising from the Decrees, dated the 16th June, 1942, of the Court of the Subordinate Judge, Burdwan, in Money Suit No. 261 of 1932/ Miscellaneous Case No. 132 of 1941 and Money Suit No. 262 of 1932/Miscellaneous Case No. 131 of 1941.

N. C. Chatterjee (A. K. Dutt and Sukumar Ghose, with him) for the appellant.

Manmo!tan Mukherjee and P. K. Chatterjee for respondent No. I.

Ghulam Hasan J

Africa

India

section 517

section

61E

R. H. Dhebar

THE STATE OF RAJASTHAN

NATH MAL AND MITHA MAL

lMam CHAND MAHAJAN

MUKHERJEA

S. R. DAs

VIVIAN BosE

Constitution of India

arts. 19(1)(1) and 31(2)

cl. 25

cl. 25

art. 19(l)(f)

cl. 25

art. 19(1)(f)

art. 31(2)

art. 19(1)(f)

art. 31(2)

articles 132

Constitution of India

K. S. Haje

K. N. Aggart11al

P. C. Agarwal

M. C. Setalvad

Porus A. Mehta

clause 25

State of Rajas

Nath Mal

Mitha Mal

October 7, 1950

January 23, 1951

article 226

High Court of Rajasthan

clause 25

articles 14, 19(1)

clause 25

article 19

article 19

clause 25

article 31

State of Rajasthan

clause 25

clause 25

section 3

Section 3

Central Government

Ghufom Hasan

clause 25

article 19

clause 25

clause 23

clause 23

clause 25

article 19(1)

article 31

article 31(2)

clause 25

R. H. D!tebar

SRIMA TI ORAMBA SUND ARI DASI

ISWAR GOPAL JIEU

VrvIAN BosE

VENKATARAMA AYYAR

Bengal Money-Lenders Act, 1940

Bengal Act X of 1940

s. 36

s. 36

Bengal Money-Lenders Act, 1940

s. 36

N. C. Chatterjee

A. K. Dutt

Sukumar Ghose

Manmo!tan Mukherjee

P. K. Chatterjee


The State of Rajasthan v.

Nath Mal and

Mitha Mal.

March 12.

SUPREME COURT REPORTS [1954]

rightly held article 31(2). that the clause offended against

For the foregoing reasons portion of clause 25 is void with costs.

we hold that the last and dismiss the appeal

Appeal dismissed.

Agent for the appellant and for the intervener: R. H. D!tebar.

SRIMA TI ORAMBA SUND ARI DASI

ti.

SRI SRI ISWAR GOPAL JIEU. [MuKHERJEA, VrvIAN BosE and

VENKATARAMA AYYAR JJ.) Bengal Money-Lenders Act, 1940 (Bengal Act X of 1940), s. 36 -Scope of-Court whether competent to make an enquiry that decree-holder on record is benamidar for another person.

Held, that in a proceeding under s. 36 of the Bengal Money-Lenders Act, 1940, it is not competent to the court to go behind the decree and embark on an enquiry as to whether the decree-holders on record were in fact benamidars for another person.

Scope oi s. 36 of the Act discussed.

Renual v. Manmatha (72 I.A. 156) and Bank of Commel'C6 Ltd. v. Amulya Krishna Basu Roy Chowdhury ( [ 1944 ]F.C.R. 126) referred to.

C1v1L

APPELLATE JuR1smcTION : Civil Appeals Nos. 130 and 131 of 1951.

Appeals from the Judgment and Decrees, dated the 12th August, 1948, of the High Court of Judicature at Calcutta in Appeals from Original Decrees Nos. 214 of 1942 and 231 of 1943 arising from the Decrees, dated the 16th June, 1942, of the Court of the Subordinate Judge, Burdwan, in Money Suit No. 261 of 1932/ Miscellaneous Case No. 132 of 1941 and Money Suit No. 262 of 1932/Miscellaneous Case No. 131 of 1941.

N. C. Chatterjee (A. K. Dutt and Sukumar Ghose, with him) for the appellant.

Manmo!tan Mukherjee and P. K. Chatterjee for respondent No. I.

1954. March 12.

The Judgment of the Court was delivered by

MuKHERJEA J.-These two analogous appeals, which are between the same parties and involve the same points in dispute, are directed against a common judgment of a Division Bench of the Calcutta High Court dated the 12th of August, 1948, by which the learned Judges affirmed, in appeal, the decision of the Subordinate Judge of Burdwan passed in two analogous proceedings under section 36 of the Bengal Money- Lenders Act. The facts material for our present purpose lie within a narrow compass and may be stated as follows : The principal respondents are certain idols, represented . by their managing Shebait Ram Govinda Roy.

The idols are the family deities of the Roys of Bonpash in the district of Burdwan, and the number of Shebaits being very large, there is a recognised usage in this family that the seniormost member amongst the descendants of the founder acts as the managing Shebait and it is he who manages the endowed properties and looks after the due performance of the worship of the idols.

It is not disputed by the parties that it is within the competence of the managing Shebait to borrow money to meet the necessities of the idols and to execute such documents as may be necessary for that purpose.

Admittedly Adwaita Charan Roy was the managing Shebait of the deities from 1926 to 1930 and as Shebait, he executed a Hatchita in favour of one Nanitosh Chakraborty some time in April, 1928, on the basis of which he received advances of money from time to time from the latter.

The last entry in the Hatchita was made in March, 1929, and the total amount borrowed up to that date came up to Rs. 3,801. Adwaita died in March, 1930, and after his death, Satish Chandra Roy became the managing Shebait and continued to act as such till his death in 1940. There was an adjustment of accounts between Nanitosh, the creditor, in whose favour the Hatchita was executed, and Satish Chandra, the managing Shebait some time in October, 1931, and a sum of Rs. 5,068, having been found due to the

Sn'mati Oramba

Sundari Dasi v.

Sri Sri lswar

Gopal Jieu.

Mukhedea J.

Srimati Oramba Sundari Dasi v.

Sri Sri Iswar Gopal Jieu.

Mukherjea J.

creditor, Satish Chandra gave him a renewed Hatchita for that amount. It appears that while Adwaita was still the managing Shebait, a suit was instituted by some of his co-Shebaits to remove him from his offce and pending the hearing of the suit, Ramjanaki Rnv, another co-Shebait, was appointed a Receiver of the debutter property by the court.

With the permission of the court, Ramjanaki harrowed from the same Nanitosh Chakraborty three sums of money on three different promissory notes executed respectively on the 27th Septemher, 1929, 1st October, 1929, and 14th January, 1930.

The suit was eventually dismissed for non-prmecution after A, lwaita's death. Nanitosh d].-d in 1931, and i,-, 1932, his two sons Aditya and Dhirendra, who figure as respondents 14 and 15 in these appeals, instituted two money suits against Satish Chandra, t)1e managing Shebait, in the Court of the Subordinate Judge, Burdwan, being Money Suits Nos. 261 and 262 of 1932. for recovery of the moneys due in respect of the Hatchita and the promissory notes mentioned aforesaid.

Both the suits were decreed ua the basis of a compromise elated the 23rd July, 1933, and two consent decrees were passed, one for a sum of Rs. 5,800, and the other for Rs. 2,200, both papble in sixteen vearly instalments with a further stipulation that in default of payment of any one of the instalments, the whole or balance of the clecretal amount would become clue and payable in each.

The instalments not having been paid in either of the rnses both the decrees were put into execution.

In Execution Cases Nos. 76 and 77 of 1936, arising out of Money Suits Nos. 261 and 262 of 1932, the properties mentioned in Schedule Ka in each case were put up to sale and they were purchased ostensibly by the two clecrceholclers Aclitya and Dhircn.

Three years bter, Execution Cases Nos. 17 and 18 of 1939 were started again in connection with the said decrees and this time the properties specified in Schedule Kha were attached and put up to sale and they were also purchased by the Chakraborty clecreeholclers. Finally in Execution Cases Nos. 163 of 1939 and 5 of 1940. the properties described in Schedule Ga were sold and

thev were knocked down to Srimati Oramba Sundari

Da; i, who figures as the appellant in the appeals before us and who. it may be noted, is the wife of Aghore Nath Roy, a son of Adwaita, the former managing Shebait of the debutter estate.

Subsequently, the deqeeholders, who purchased Ka and Kha Schedule properties sold them by a registered Kabala to the said Oramba Sundari Dasi on the 26th of July, 1940.

The result, therefore, was that the properties described in the three Schedules came to vest in Oramba Sundari, the wife of Aghore Nath Roy.

On the 28th August, 1941, the deities represented by some of the Shebaits filed two applications under section 36 (6) (a) (ii) of the Bengal Money-Lenders Act, praying for the reopening of the two compromise decrees mentioned aforesaid and the passing of new instalment decrees iri accordance with the provisions of the Act. There were prayers also for restoration to the deities of all the properties mentioned in Schedules, Ka, Kha and Ga which were purchased in execution of tl1e decrees. The principal opposite parties to these proceedings were the Chakraborty decreeholders, Oramba Sundari, the ostensible purchaser, a.nd Aghore Nath Roy, her husband.

The allegations in the applications, in substance, were that the Chakrabortys were mere benamidars for Aghore Nath Roy, who was the real lender and the real decreeholder in both these suits.

It was alleged that Aghore Nath Roy purchased these properties in the benami of the decreeholders in two out of the three execution proceedings and in the benami of his wife Oramba Sundari in the third. The subsequent Kabala executed by the Chakrabortys in favour of Oramba Sundari was also asserted to be a fictitious conveyance made in favour of Aghore Nath Roy in the name of his wife.

In these circumstances, the iudgment-debtors prayed that they were entitled to have the two compromise decrees reopened and on the passing of new instalment decrees to have the properties, which were in possession of the real decreeholder. restored to the deities in terms of section 36(2) ( c) of the Bengal Money-· Lenders Act. The trial judge decided

Srimati Oramba

Sundari Dasi

Sri Sri Iswar

Gopal Jieu.

Mukherjea J.

Srimati Oramba

Sundari Dasi v.

Sri Sri lswar

Gopal Jieu.

Mukherjea J.

in favour of the judgment-debtors and granted their prayers in both the applications.

Orders were made for reopening of the decrees and making of fresh decrees in their places in accordance with the provisions of the Bengal Money-Lenders Act. Direction was also given for restoration of the properties mentione, d in Schedules Ka, Kha and Ga to the deities under the provision of section 36(2) (c). Against this decision, Oramba Sundari took two appeals to the High Court of Calcutta and the learned Judges, who heard the appeals, affirmed the decision of the court below and dismissed both the appeals.

Oramba Sundari has now come up in appeal to this court on the strength of a certificate given by the High Court under sections 109 (a) and llO of the Civil Procedure Code.

Mr.

Chatterjee, who appeared in support of the appeals, has not challenged before us the findings of fact concurrently arrived at by the courts below, viz., that the appellant Oramba Sundari was a mere benamidar for her husband Aghore in respect of the purchase of Ga Schedule properties in court sale, and also that the Kobala executed by the Chakrabortys in her favour on July 26, 1940, was a fictitious transaction.

The point, which he has pressed for our consideration, is that in a proceeding under section 36 of the Bengal Money-Lenders Act, it is not open to the court to go behind the decree and launch an enquiry as to whether the decreeholders on record were in fact benamidars for another person.

In other words, the contention is that, even if Aghore was proved to have advanced the money upon which the Chakrabortys obtained the decrees, in reopening the decrees and in working out the rights of the parties in accordance with the provisions of the Bengal Money-Lenders Act, the court could treat the Chakrabortys alone as the decreeholders.

For a proper determination of this point, it is necessary to examine the scope of section 36 of the Bengal Money-Lenders Act and the reliefs which the court is competent to grant in terms of that section. ' Section 36 of the Bengal Money-Lenders Act sets out the various powers which the court can exercise,

if it has reason to believe that the exercise of one or more of the powers will give relief to the borrower as contemplated by the Act; and one of the powers, which is mentioned in clause (a) of sub-section (1) of the section is to reopen any transaction and take an account between the parties.

The drafting of section 36 is indeed obscure and somewhat clumsy, but it is dear, as the Privy Council(') has pointed out, that the power of reopening a transaction, as contemplated bv the section, extends to reopening of decrees as well.

Sub-section (2) of section 36 contains detailed provisions as to what the court may or may not do when a decree is reopened.

It cannot be disputed that the court reopens a decree under section 36(2) only for the purpose and so far as it is necessary to give relief to the borrower in the manner provided for in the Act, namely, to release him from all liability for interest in excess of the limits prescribed by section 30 of the Act.

A new decree is passed only for the purpose of substituting the method of accounting sanctioned by the Act for the calculations upon which the original decree was passed and to give an opportunity to the judgment-debtor to pay the decretal dues thus ascertained by instalments.

But save and except for these, the old decree as well as the adjudications made thereunder are not wiped out and the parties are not relegated to their rights and liabilities under the original cause of action('). How the rights of the parties are to be ad justed and worked out when a decree has been reopened has been dealt with exhaustively in the several dauses of section 36 (2) of the Bengal Money-Lenders Act, and an examination of these clauses makes it clear to our minds that an enquiry as to whether the decreeholder was in fact a benamidar for another person in respect of the decree, does not come within the purview of these provisions. Clause (a) of section 36(2) empowers th~ court to pass a new decree in accordance with the provisions of the Act.

Obviously, this new decree is to be passed in favour of the original decreeholder and only the calculations upon which the old

(1) Vide Rettula v. Manmat!1a, 72, I. A. 156.

(2) Vide Bank of Commerce Lid. v.

Amulya KriJhna Basu Rqy Chowdhury F. C. R. 126.

Srimati Oramba

Sundari Dasi

Sri Sri Iswar

Gopal Jieu. -" MukherJea J.

Srimati Oramba

Sundri Dasi v.

Sri Sri Iswar Gopol Jieu.

Mukhei:iea J.

decree was based would be changed by substituting the statutory method of accounting in place of what rested upon the contract between. the parties.

Clauses (b) and (c) contemplate cases where properties have been sold in execution of the original decree.

If the purchaser is the decreeholder himself and he is in possession of the property when the decree is reopened, it is incumbent upon the court to order restoration of these properties to the judgment-debtor under clause (c).

If, on the other hand, the properties had been acquired by strangers either by purchase at the execution sale or from the decreeholder purchaser, their interests would be protected if they have acquired these rights bona fide as contemplated by clause (b ).

Under clause (cl), the court has to order the payment of the decreetal amount in such instalments as it thinks proper, and clause ( e) further imposes a duty on the court to give a direction in such cases that if there is default in the payment of any one of the instalments, the properties restored to the judgment-debtor under clause ( c) would be put back into the possession of the decreeholder.

It is quite true that the object of restoring possession of the properties sold in execution of the decree to the judgment-debtor is to enable the latter to pay off the decretal dues, but it is to be remembered that the sale itself is not annulled, and in case of default in payment of any of the instalments, the properties are returned to the decreeholder purchaser.

We agree that if the purchaser is a mere benamidar for the decreeh0lder, clause (b ), subsection (2) of the section would not afford protection to him in any way. He could not be regarded as a person other than the decreeholder acquiring rights bona fide as contemplated by that clause. For the purpose of giving effect to clauses (b) and ( c), therefore, the court has not only the right but is under a duty to make an enquiry as to whether the ostensible purchaser at the execution sale, or the person who purports to have acquired an interest therein under a subsequent transfer from the decreeholder purchaser, has bona fide acquired such rights within the meaning of clause (b).

But we do not agree with the learned

Judges of the High Court that in making a new decree under clause (a) of section 36(2) and giving the judgment-debtor consequential relief under clause ( c) of . the sub-section, the court can at all enter into the question as to whether the decreeholder on record is himself a benamidar for another person in respect of the decree.

Such enquiry, it seems to us, is altogether outside the purview of the different clauses of section 36(2) of the Bengal Money-Lenders Act. These provisions do not recognise any other decreeholder than the one in whose favour the original decree was passed.

It is between him and the judgment-debtor that the rights ate to be adjusted in accordance with the provisions of the Act; to him would the instalments have to be paid under the new decree, and he alone would be compelled to restore the properties which he had purchased in execution prdceedi.ngs.

None but the decreeholder on record can give a valid discharge or record satisfaction of the decree.

This being the position, it is altogether immaterial, in our opinion, that it was Aghore, the husband of the appellant, who really advanced the money upon which the decrees were obtained.

We must treat the Chakrabortys and the Chakrabortys alone as the decreeholders and see to what extent the provisions of the Act could be applied against them in the circumstances of the present case.

So far as the properties described in Schedules Ka and Kha ate concerned, it is not disputed that they were purchased by the decreeholders themselves.

No price was actually paid by the decreeholders, but the sale proceeds were set off against the decretal dues. The decreeholders, therefore, must be deemed to be the purchasers of these properties within the meaning of clause ( c) of section 36(2); and as the subsequent conveyance of these properties in favour of Oramba Sundati, the appellant, has been held by both the courts below . to be a fictitious transaction, we must hold that 0Iamba Sundati did not bona fide acquire my right which could be protected under clause (b) of section 36a).

With regatd to these properties, therefore, the order for restoration of possession made by both the courts below should stand. As regards Ga: 5-97 S. C. India/59

Srimati Oramba

Sundari Dasi v.

Sri Sri lswar Gopal Jitu.

Mukherjea J~

Srimati OramlitJ

Sundari Dasi

Sri Sri Iswar Gopal .7itu.

Mukhtlj1a ].

March 15.

Schedule properties, however, Oramba Sundari was the purchaser at the execution sale and whether or not the money for such purchase was paid by her husband becomes immaterial.

This was not the property purchased by the decreeholders and there is no proof of the decreeholders being in possession of the same either by themselves or through Oramba Sundari.

In these circumstances, clause (c) of section 36(2) cannot be attracted in favour of judgment-debtors so far as this property is concerned and the possession of it must remain with the appellant. We, therefore, allow the appeal in part and set aside the order for restoration of possession made by the courts below in respect to the Ga Schedule property.

The rest of the decision of the High Court will stand.

We make no order as to costs of these appeals.

A pp(a/ partly allo1ud.

THE STATE OF RAJASTHAN v.

RAO MANOHAR SINGHJL [MEHR CHAND MAHAJAN C. J., MuKHJ'.RJEA, S. R. DAs,

VIVIAN BosE and GHULAM HASAN JJ.] Constitution of India, art. 14-Section 8-A of Rajasthan Ordinance XXV/l of 1948 as amended-Whether ultra vim the

Const£tutiQn.

Held, that s. 8-A inserted in Rajasthan Ordinance XXVII of 1948 by s. 4 of Rajasthan Ordinance X of 1949 and as amended by s. 3 of Rajasthan Ordinance XV of 1949 is void under art. 14 of the Constitution.

Frank f. Bowman v. Edward A. Lewis (101 U.S. 22; 25 Law.

Ed. 989), Ramjilal v. Income Tax Officer, Mohindargarh ([1951] S.C.R. 127), The State of Punjab v. Ajaib Singh ([1953] S.C.R.

254) and Thakur Madan Singh v. Collector of Sikar (Rajasthan Law Weekly, 1954, p. 1), referred to.

CIVIL

APPELLATE JuRismcnoN : Civil Appeal No. 143 of 1952.

Appeal under article 132(1) of the Constitution of India from the Judgment and Order, dated the

article 31(2)

clause 25

R. H. D!tebar

SRIMA TI ORAMBA SUND ARI DASI

SRI SRI ISWAR GOPAL JIEU

MuKHERJEA

VrvIAN BosE

Bengal Money-Lenders Act, 1940

Bengal Act X of 1940

s. 36

s. 36

Bengal Money-Lenders Act, 1940

s. 36

N. C. Chatterjee

A. K. Dutt

Sukumar Ghose

Manmo!tan Mukherjee

P. K. Chatterjee

MuKHERJEA

Calcutta High Court

12th of August, 1948

Subordinate Judge of Burdwan

section 36

Shebait Ram Govinda Roy

Bonpash

Burdwan

Adwaita Charan Roy

Nanitosh Chakraborty

Adwaita

Satish Chandra Roy

Nanitosh

Satish Chandra

Mukhedea

Mukherjea

Ramjanaki Rnv

Ramjanaki

27th Septemher, 1929

1st October, 1929

14th January, 1930

A, lwaita

Aditya

Dhirendra

Subordinate Judge, Burdwan

23rd July, 1933

Aclitya

Dhircn

Srimati Oramba Sundari

Aghore Nath Roy

Oramba Sundari Dasi

26th of July, 1940

Oramba Sundari

28th August, 1941

section 36

section 36(2)

Srimati Oramba

Sundari Dasi

Iswar

Gopal Jieu

Srimati Oramba

Sundari Dasi

lswar

Gopal Jieu

section 36(2)

High Court of Calcutta

sections 109

Chatterjee

Oramba Sundari

Aghore

July 26, 1940

section 36

section 36

Section 36

section 36

section 36

section 36(2)

section 30

section 36

section 36(2)

Srimati Oramba

Sundari Dasi

MukherJea

Sundri Dasi

Iswar Gopol Jieu

Mukhei

iea

section 36(2)

section 36(2)

section 36(2)

Oramba Sundati

0Iamba Sundati

section 36

lswar Gopal Jitu

Srimati OramlitJ

Sundari Dasi

Iswar Gopal

section 36(2)

MEHR CHAND MAHAJAN

MuKHJ'

RJEA

S. R. DAs

VIVIAN BosE

GHULAM HASAN

Constitution of India

art. 14

Section 8

s. 8

s. 4

s. 3

art. 14

S. 22

CIVIL

APPELLATE JuRismcnoN

article 132(1)

Constitution of India


Srimati OramlitJ

Sundari Dasi

Sri Sri Iswar Gopal .7itu.

Mukhtlj1a ].

March 15.

SUPREME COURT REPORTS [1954]

Schedule properties, however, Oramba Sundari was the purchaser at the execution sale and whether or not the money for such purchase was paid by her husband becomes immaterial.

This was not the property purchased by the decreeholders and there is no proof of the decreeholders being in possession of the same either by themselves or through Oramba Sundari.

In these circumstances, clause (c) of section 36(2) cannot be attracted in favour of judgment-debtors so far as this property is concerned and the possession of it must remain with the appellant. We, therefore, allow the appeal in part and set aside the order for restoration of possession made by the courts below in respect to the Ga Schedule property.

The rest of the decision of the High Court will stand.

We make no order as to costs of these appeals.

A pp(a/ partly allo1ud.

THE STATE OF RAJASTHAN v.

RAO MANOHAR SINGHJL [MEHR CHAND MAHAJAN C. J., MuKHJ'.RJEA, S. R. DAs,

VIVIAN BosE and GHULAM HASAN JJ.] Constitution of India, art. 14-Section 8-A of Rajasthan Ordinance XXV/l of 1948 as amended-Whether ultra vim the

Const£tutiQn.

Held, that s. 8-A inserted in Rajasthan Ordinance XXVII of 1948 by s. 4 of Rajasthan Ordinance X of 1949 and as amended by s. 3 of Rajasthan Ordinance XV of 1949 is void under art. 14 of the Constitution.

Frank f. Bowman v. Edward A. Lewis (101 U.S. 22; 25 Law.

Ed. 989), Ramjilal v. Income Tax Officer, Mohindargarh ([1951] S.C.R. 127), The State of Punjab v. Ajaib Singh ([1953] S.C.R.

254) and Thakur Madan Singh v. Collector of Sikar (Rajasthan Law Weekly, 1954, p. 1), referred to.

CIVIL

APPELLATE JuRismcnoN : Civil Appeal No. 143 of 1952.

Appeal under article 132(1) of the Constitution of India from the Judgment and Order, dated the

11th December, 1951, of the High Court of Judicature, Rajasthan at Jodhpur in D. B. Civil Miscellaneous Case No. 1 of 1951.

M. C. Setalvad, Attorney-General for India and K. S. Hajela, Advocate-General of Rajasthan, (Porus A. Mehta, with them) for the appellant.

N. C. Chatterjee and U. M. Trivedi (Jiwan Sinha Chandra and Ganpat .Rai, with them) for the respondent.

1954. March 15.

The Judgment of the Court was delivered by

GHULAM HASAN J.-This appeal filed on a certificate granted by the High Court of Rajasthan under article 132(1) of the Constitution arises from the judgment and order of the said High Court (Wanchoo C.J. and Bapna J.) in a petition under article 226 of the Constitution, whereby the High Court held that section

8-A inserted, in Rajasthan Ordinance No.

XXVII of 1948 by section 4 of Rajasthan Ordinance No. X of 1949, and the amendment to section 8-A by section 3 of Rajasthan Ordinance XV of 1949 are void under article 14 of the Constitution and issued a writ restrammg the State of Rajasthan from collecting rents from the tenants of lands comprising the J agir of Bedla held by the respondent.

The respondent Rao Manohar Singhji is the owner of the Jagir of Bedla situate in the former State of Mewar, now included in the State of Rajasthan.

The former State of Mewar was integrated in April, 1948, to -form what was known as the former United State of Rajasthan.

In April and May, 1949, the latter State was amalgamated with the former States of Bikaner, Jaipur, Jaisalmer and Jodhpur and the former Union of Matsya to form the present United State of Rajasthan. Three Ordinances, No. XXVII of 1948 and Nos.

X and XV of 1949, were issued by the former State of Rajasthan in connection with State Jagirs.

The management of the Jagirs including the Jagir of Bedla was assumed by the former State of Rajasthan in virtue of the powers under these Ordinances. After the final formation of the State of Rajasthan in May,

!954

Till Stat• qf

Rajas than v.

Rao Manohar

Singhji.

195~

Tm Stale •f

RajtJSlhan ...

Rao ManohM

SU.ghji.

Ghulam Hasan J.

l949, the Ordinances remained in force in a part of the present area of Rajasthan with the result that while jagirs in a part of the area were managed by the State in that area, the J agirs in the rest of the State were left untouched and remained with the Jagirdars.

On 4th January, 1951, the respondent filed a petition under article 226 of the Constitution contending that the said Ordinances were ultra vires the Constitution and that they became void under article 13 (1) of the Constitution of India, read with articles 14 and 31. The respondent challenged the Ordinances firstly because they constitute an infringement of articles 14, 19 and 31 of the Constitution and secondly because the Jagirrlars only of the former State of Rajasthan which was formed in 1948 are prejudicially affected, while Jagirdars of the States which integrated later on are not at all affected (Para 9, K and L).

It was alleged that there was a denial of equality before the law and the equal protection of the laws by reason of these Ordinances and further that the State had taken possession of the property of the respondent without providing for compensation.

The reply of the State was that the fagir was a State grant held at the pleasure of the Ruler and that it reverted to the Ruler on the death of the holder of the Jagir and was regranted to his successor after the Ruler had recognized the succession.

The rights of the Jagirdars were non-heritable and nontransferable and the J agirs could not be partitioned amongst the heirs of the Jagirdar. It was pleaded therefore that even if the State took possession of the J agir, the J agirdar was not entitled to compensation under article 31 (2).

It was also alleged that the impugned Ordinances had merelv the effect of transferring the management of the Jagirs to the Government and did not deprive the Jagirdars of their property and they were consequently not hit by article 31 (2).

It was denied that there was any discrimination under article 14 of the Constitution.

The High Court held on the first question that the provisions of Ordinances Nos.

X ancl XV of 1949 are not void under article 31 (2) or 19 (1) (f). On the second point they recorded the conclusion that section 8-A which was introduced in Ordinance No. XXVII of 1948, by section

4 of Ordinance No. X of 1949, and the amendment to section 8-A by section 3 of'Rajasthan Ordinance. No.

XV of 1949, are void under article 13(1) of the. Constitution, read with article 14.

The High Court according! y allowed the petition and prohibited the State from collecting rents from the tenants of the land comprising the J agir of Bedla held by the respondent.

This judgment was given on 11th December, 1951, but we understand that since then the State has passed Acts abolishing J agirs throughout the State. The question however is of some importatice to the respondent inasmuch as it affects his 'right of collecting the rents even though for a short period.

In appeal it is contended by the learned Attorney- General on behalf of the State of Rajasthan that the decision of the High Court that the impugned section 8-A as amended was hit by article 14 of the Constitution is erroneous. Before deciding the validity of this contention it will be neccssary to refer briefly to the relative provisions of the Ordinances.

Ordinance No.

I of 1948 (the United State of Rajasthan Administration Ordinance, 1948) was made and promulgated on April 28, 1948, by the Rajprarqukh of Rajasthan to provide for the administration of the United State of Rajasthan after the latter came into existence.

On July 26, 1948, Ordinance No. XXVII of 1948, [the United State of Rajasthan Jagirdars (Abolition of Powers) Ordinance, 1948] was made and promulgated by the Rajpramukh providing for the abolition of judicial powers of J agirdars and executive powers in connection with the judiciary and vesting them in the Government.

Section 8 of this Ordinance authorised the Government to make orders with a view to carrying out and giving effect to the provisions and purpose~ of the Ordinance and the various powers enumerated in that section.

Then came section 8-A which was introduced by Ordinance X of 1949 [the United State of Rajasthan Jagirdars (Abolition of Powers) (Amendment) Ordinance, 1949].

It reads thus:- "Without prejudice to the generality of the foregoing provisions, it is hereby ' enacted that the revenue y.rhich was heretofore collected by Jagirdars shall

Th. Sute of

Rajasth111}

Rao Manohar

Singhji.

Ghwla( Hasan J.

The Sta" ef

Rajasthan

Rao Manohar

Singhji.

Ghulam Hasan J.

henceforward be collected by and paid to the Government; the Goverrurient will' after deducting the collection and other expenses pay it to the J agirdar concerned."

It was amended by section 3 of Ordinance No. XV of 1949 [the United State of Rajasthan Jagirdars (Abolition of Powers) (2nd Amendment) Ordinance, 1949] by adding to section 8-A after the word 'Revenue' the following :

"Including taxes, cesses and other revenue from forests." It is not denied that when the State of Rajasthan was formed in April and May, 1949, the Jagirdars of only a part of the present State of Rajasthan could not collect their rents while Jagirdars in other areas which were covered by Jaipur, Bikaner, J aisalmer and Jodhpur and Matsya Union were under no snch disability.

It appears that in the former State of Rajasthan provisions regarding the management by Government of Jagirs and the right to collect rents already existed, whereas there was no such provision in the former States of Jaipur, Bikaner, Jaisalmer and Jodhpur and Matsya Union, but when the integration took place in April and May, 1949, the discrimination exhibited itself not by virtue of anything inherent in the impugned Ordinances but by reason of the fact that Jagirdars of one part of the present State of Rajasthan were already subjected to a disability in the matter of management of their Jagirs while the other parts wer" wholly unaffected.

This discrimination, however m1desirable, was not open to any exception until the Constitution came into force on January 26, 1950, when article 13 of the Constitution declared that "all laws in force in the territory of India immediately before the commencement of this Constitution, in so far as they are inconsistent with provisions of this Part, shall, to the extent of such inconsistency, be void." It becomes therefore necessary to see whether the impugned provision which is discriminatory on the face of it is hit by article 14 which declares that "the State shall not deny to an); person equality before the law or the equal protection of the laws within the territory of India." Such an obvious discrimination

can be supported on! y on the ground that it was based upon a reasonable classification.

It is now well settled by the decision of this court that a proper classification must always bear a reasonable and just relation to the things in respect of which it is proposed. Judged by this criterion it seems to us that the discrimination is based on no classification at all and is manifestly unreasonable and arbitrary. The classification might have been justified if the State had shown that it was based upon a substantial distinction, namely that the J agirdars of the area subjected to the disability were in some way different to those of the other area of Rajas.. tl1an who were not similarly situated. It was perfectly possible for the State to have raised a specific ground in order to get out of the mischief of article 14, that the discrimination was based upon what the learned Attorney-General called geographical consideration, that the Jagirs of the partiCular area were governed by different laws of tenure and thus constituted a class by itself and that that was a good ground for differentiation.

No such ground was ever put forward before the High Court, much less was any, attempt made to substantiate such a ground.

In the absence of any allegation supported by evidence we are unable to find in favour of the State that the J agirdars of the particular area to which category the respondent belongs were differently situated to other Jagirdars.

The preambles of the Ordinances do not purport to show tl1at the conditions in the former State of Rajasthan were such as to justify the imposition of the disability on the Jagirdars of that State while the conditions prevailing in the other States forbade such a course.

The High Court held that the Ordinance abolishing the Police and the Judicial powers and the administrative powers of the Jagirdars in respect to revenue in forests was open to no objection but there was no reason for taking away from the Jagirdars by section 8-A the power to collect rents to which they were entitled.

We agree with the High Court in holding that there was no real and substantial distinction why the J agirdars of a particular area should , continue to be

195+

Thi State of Raj'asthan v.

Ra1J Manohar' Singhji.

lihulam Hasan J ..

195f

The State of Rojasthan v.

Rao Manohar Singhji.

Ghulam Hasan J.

treated with inequality as compared with the Jagirdars in another area of Rajasthan. We hold therefore that no rational basis for any classification or differentiation has been made out.

Section 8-A of the impugned Ordinance as amended is a clear contravention of the respondent's right under article 14 of the Constitutior. and must be declared void.

The case of Frank J. Bowman v. Edward A Let11is( 1 ) relied upon by the learned Attorney-General on behalf of the State is inapplicable to the facts and circumstances of the present case.

By the Constitution and laws of Missouri the citizens residing in one hundred and nine counties of the State of Missouri had the right and privilege of an unrestricted appeal to the Supreme Court of the State, while at the same time the right of appeal was denied to the citizens of the State residing in four of the counties in the easterly portion of the State, as also to those residing in the Citv of St.

Louis.

It was contended that this feature of the judicial system of Missouri was in conflict with the 14th Amendment of the Constitution of tbe United States.

Bradley J. held that the equality clause in the 14th Amendment contemplates the protection of it persons against unjust discriminations by a State; it has no reference to territorial or municipal arrangements made for different portions of a State.

He went on to say :-"If a Mexican State should be acquired by treaty and added to an adjoining State or part of a State, in the United States, and the two should be erected into a new State, it cannot be doubted that such new State might allow the Mexican laws and judicature to continue unchanged in the one portion, and the common law and its corresponding judicature in the other portion.

Such an arrangement would not be prohibited by any fair construction of the 14th Amendment.

It would not be based on any respect of persons or classes, but on municipal considerations alone, and a regard to the welfare of all classes within the particular territory or jurisdiction."

This passage . which was strongly relied upon by the learned Attorney-General does not advance his case

(1) 101 U.S. 22; 25 La, v. Ed. 989 . •

for in the present case there is no question of continu- 1 ing unchanged the old laws and judicature in one portion and a different law in the other. As we have already said there is nothing to show that there was any peculiarity or any special feature in the J agirs of the former State of Rajasthan to justify differentiation from the Jagirs comprised in the States which subsequently integrated into the present United State of Rajasthan.

After the new State was formed, there was no occasion to take away the powers of Jagirdars of a disfavoured area and to leave them intact in the rest of the area.

The case in Ramjilal v.

Income-tax . Officer Mohindargarh(') is distinguishable on the ground that, that case proceeded upon the principle that "pending proceedings should he concluded according to the law applicable at the time when the rights or liabilities accrued and the proceeding commenced was a reason- 1able law founded upon a reasonable classification of the assessees which is permissible under the equal protection clause." Such is however not the case here.

Reliance was also placed on the case of The State of Punjab v. Ajaib Singh and Another(')- In that case the Abducted Persons (Recovery and Restoration) Act of 1949 was not held to be unconstitutional under article 14 upon the ground that it extended only to the several States mentioned in section 1 (2), for in the opinion of the court clasification could well be made -0n a geographical basis. There the Muslim abducted persons found in those States were held to form one class having similar interests to protect and their 1nclusion in the definition of abducted persons could not be called discriminatory.

. The learned Attorney-General referred to two cases decided by the same Bench of the Rajasthan High Court, Thakur Madan Singh v. Collector of Sikar(') and an unreported judgment delivered on November 10, 1953, In re, Raja Hari Singh v. Rajasthan and argued

(1) [1951] S.C.R. 127.

(2) [1953] S.C.R. 254.

(3) Rajasthan Law \Veekly, 1954, p. I.

Thi StaU of

Rajas than

RM Manohar Singhji.

Ghulam Hasan].

The State of Rajasthan

Rao Manohar

Singhji.

Ghulam Hasan J.

that the Bench had not stuck to its view expressed in the judgment under appeal.

A careful perusal of the judgments in these cases will show that this is far from being the case.

The former case was distinguished from the case under appeal on the ground that there was a reasonable basis for classification in that case, while no such basis existed in the case before us. It appears that before Jaipur State merged into the present United State of Rajasthan there were District Boards existing in that State.

They were continued on the formation of the new State but there were no District Boards in the other States.

The argument that the Jaipur District Boards Act was invalid under article 14 of the Constitution was repelled it being held that the existence of District Boards in Jaipur was for the welfare of all classes within Jaipur, that Jaipur had reached a higher stage of development than many of the other States and it would have been a retrograde step• to deprive the people living in the former Jaipur State of the benefits of Local Self Government conferred by the District Boards Act.

Reliance was placed on the observations of Bradley J. in Frank J.

Bot,/Jman v.

Edward A. Lewis(') in connection with the illustration of the Mexican State and the learned Chief Justice referred with approval to the decision under appeal before us.

In the secono case the attack was on the alleged. discriminatory prov1S1on contained in the Mewar Tenancy Act and the Land Revenue Act.

Under these Acts the rent rates had been approved by the Board of Revenue and the Government and they were alleged to be detrimental to the interests of the Jagirdars.

The Jagirdars had challenged those Acts by a petition under article 226.

It appears that no such laws existed in the other parts of Rajasthan.

The decision of the High Court proceeded on the ground that it was not shown that there were no similar tenancy and Land Revenue laws in other parts of Rajasthan and the impugned Acts being ameliorative legislation designed to raise the economic status of the agriculturists in' Mcwar could not be ,-, aid to constitute any discrimination merely because no such legislatiol1l

(1) 101 U.S. 22; ~5 La'\'. Ed. 989.

S.C.R.

SUPREME COURT i, EPORTS 1005

existed in the other parts of Rajasthan. This difference between the two parts did not justify that such progressive and ameliorative measures for the welfare of the people existing in a particular area should be done away with and the State be brought down to the level of the unprogressive States.

The judgment shows that the Bench far from going back on its previous view adhered to it and expressly distinguished the case under appeal before us on its special facts.

As a result of the foregoing discussion we hold that the view taken by the High Court is correct. We accordingly dismiss the appeal with costs.

Appeal dismissed.

Agent for the appellant : R. H. Dhebar.

THE COMMISSIONER, HINDU RELIGIOUS

ENDOWMENTS, MADRAS

ti.

SRI LAKSHMINDRA THIRTHA SW AMIAR

OF SRI SHIRUR MUTT.

[MEHR CHAND MAHAJAN C. J., MuKHERJEA,

S. R. DAs, VIVIAN BosE, GHULAM HASAN,

BHAGW~TI and VENKATARAMA AYYAR JJ.]

Constitution of India, arts. 19(1)(f), 25, 26, 27-Madras Hindu Religious and Charitable Endowments Act, 1951 (Madras Act XIX of 1951), ss. 21, 30(2), 31, 55, 56 and 63 to 69, 76--Whether ultra vires the Constitution-Work "property" in art 19(1) (f) meaning of-Tax and fee, meaning of-Distinction bet1vcen.

Held, that ss. 21, 30(2), 31, 55, 56 and 63 to 69 of the Madras Hindu Religious and Charitable Endowments Act, 1951 (Madras Act XIX of 1951) are ultra vires arts. 19(\)(f), 25 and 26 of the Constitution cf India.

Section 76( I) of the Act is void as the provision relating to tlie payment of annual contribution contained in it is a tax and not a fee and so it was beyond the legislative competence of the Madras

Stac Legislature to enact such a provision.

That on the facts of the present case the imposition under s. 76( I) of the Act, although it is a tax, does not come within the hitter part of art. 27 because the t>bject of the contribution under the section is not the fostering or preservation of the Hindu reli gion or any denomination under it but the proper administration

ot rc.li<i; iam. tnms and institutions wherever they exist.

TheStateof

RaJasthan

Rao Manohcr

Sinthji.

Ghulam Hasan] •.

March 16.

Iswar Gopal

Oramba Sundari

section 36(2)

THE STATE OF RAJASTHAN

RAO MANOHAR SINGHJL

MEHR CHAND MAHAJAN

S. R. DAs

VIVIAN BosE

GHULAM HASAN JJ.

Constitution of India

art. 14

Section 8

s. 8

s. 4

s. 3

art. 14

S. 22

article 132(1)

Constitution of India

M. C. Setalvad

K. S. Hajela

Porus A. Mehta

N. C. Chatterjee

U. M. Trivedi

Jiwan Sinha Chandra

Ganpat .Rai

High Court of Rajasthan

article 132(1)

Wanchoo C.J.

Bapna

article 226

section

8

section 4

section 8

section 3

article 14

State of Rajasthan

Rao Manohar Singhji

Mewar

Bikaner

Jaipur

Jaisalmer

Jodhpur

Rao Manohar

Rao ManohM

Ghulam Hasan

4th January, 1951

article 226

article 13

Constitution of India

articles 14 and 31

articles 14, 19 and 31

article 31

article 31

article 14

article 31

section 8

section

4

section 8

section 3

article 13(1)

article 14

11th December, 1951

section 8

article 14

April 28, 1948

July 26, 1948

Rajpramukh

Section 8

section 8

Ghwla( Hasan

section 3

section 8

Rajasthan

J aisalmer

Matsya Union

January 26, 1950

article 13

India

article 14

article 14

section 8

lihulam Hasan

Section 8

article 14

Missouri

Supreme Court

Bradley

United States

S. 22

article 14

section 1

November 10, 1953

Rajasthan Law \Veekly, 1954

Ghulam Hasan

State of Rajasthan

Rao Manohar

Jaipur State

article 14

article 226

S. 22

R. H. Dhebar

LAKSHMINDRA THIRTHA SW AMIAR

MEHR CHAND MAHAJAN

MuKHERJEA

GHULAM HASAN

VENKATARAMA AYYAR

Constitution of India

arts. 19(1)(f), 25, 26, 27

Madras Act XIX of 1951

art 19(1)

ss. 21, 30(2), 31, 55, 56 and 63 to 69

Madras Act XIX of 1951

arts. 19(\)(f), 25 and 26

Section 76( I)

Madras

s. 76( I)

art. 27

TheStateof

RaJasthan

Rao Manohcr

Ghulam Hasan