3 S.C.R.

SUPREME COURT REPORTS

THE COMMISSIONER OF INCOME-TAX,

BOMBAY

DHARAMDAS HARGOVINDAS. (P. B. GAJENDRAGADKAR, A. K. SARKAR and

K. N. WANCHOO, JJ.)

Income Tax-Income already recehed outside taxable territory- Brought into or received in taxable territory--Liability to tax-If must be first receipt in taxable territory-Income-tax Act, I922 (II of I922). S. 4 (I)(b){iii).

The assessee, resident in British India, had some money in deposit with a concern in Bhavnagar, outside British India. On April 7, r947, he transferred part of it to a concern in Bombay.

He was assessed to tax on this amount under s. 4(1)\b)(iii) of the Income-tax Act. The assessee contended that to attract the application of s. 4(1)(b)(lii) the receipt in the taxable tefritory

must be the first receipt of income.

Held, th•t the assessee was liable to tax on this amount.

Per Gajendragadkar and Wanchoo, JJ.-Where a person, resident in the taxable territories, has already received, outside the taxable territories, any income etc. accruing or arising to him outside the taxable territories before the previous year brings that income into or receives that income in the taxable territories he would be chargeable to income-tax thereon. Though for the purposes of cl. (a) of s. 4 the receipt must be the first receipt of income in the taxable territories, for the purposes of cl. (b)(iii) the receiving in the taxable territories need not be the first receipt.

Keshav Mills ltd. v. Commissioner of Income-tax [1953] S.C.R 9 50, referred to.

Per Sarkar, J.-The income could not be said to have been "received" in the taxable territory within the meaning of cl. (b)(iii) as income could be received only once. But it is clear that the assessee "brought into" Bombay that income. It was immaterial in what shape he received the income in Bhavnagar and in what shape he brought it in Bombay.

Keshav Mills Ltd. v. Commissioner of Income-tax [1953] S.C.R. 950, Board of Revenue v. Ripon Press (1923) I.L.R. 46 Mad. 706 and _Sundar Das v. Collector of Gujrat (1922) l.L.R. 3 Lah. 349, applied.

Gresham Life Assurance Society ltd. v. Bishop [1902] A.C. 2 87 and Tennant v. Smith [18<)2] A.C. 150, referred to.

CIVIL APP]jJLLATE JURISDICTION: Civil Appeal No. 240 of 1955.

196r

February 3

r96r Appeal by special leave from the judgment and

C --:-- "order dated September 3, 1953, of the Bombay High ommissioner o1 C

. I R c Income-tax, ourt Ill ncome-tax eierence No. 15 of 1953.

Bombay Hardayal Hardy and D. Gupta, for the appellant.

Dha:mdas G. S. Pathak, S. P: Mehta, S. N. Andley, J.B. Dada- H••govindas chanji, Rameshwar Nath and P. L. Vohra, for the respondent.

1961. February 3. The Judgment of Gajendragadkar and Wanohoo, JJ. was delivered by

Wanehoo J.

WANCHOO, J.-In this matter by our order made on April 24, 1958, we had referred the case back to the Tribunal to submit a further statement of case on certain questions. That statement of case has now been drawn up by the Tribunal and sent to this Court.

The matter is now ready for decision.

This is an appeal by the Commissioner of Incometax, Bombay, against the judgment of the High Court

at Bombay given on a reference under s. 60(2) of the Income-tax Act answering the question referred, in the negative. That question was, "Whether, in any event, on the facts found by the Tribunal, there was any remittance by the petitioner to Bombay within the meaning of and assessable under s. 4(1) (b) (iii) of the Income-tax Act." The assessment year concerned was 1948-49, the accounting year being 2003 Sambat.

The facts found may now be stated. At the relev. ant time, Bhavnagar was a ruling State and therefore outside British India. There was a mill there which we shall, for brevity, call the Bhavnagar Mills. The assessee and his brother Gordhandas had large sums in deposit with the Bhavnagar Mills. These sums were profits earlier earned by the assessee and his brother in Bhavnagar. The amounts deposited belonged to the assessee and his brother in equal shares.

The Bhavnagar Mills kept an account of these deposits. This account showed that on April 7, 1947, a sum of Rs. 50,000/- had been paid out to Harkisondas Ratilal and another sum of the same amount to Dilipkumar Trikamlal. There is another mill in Bombay which we shall call the Bombay Mills. The account of the Bombay Mills showed that on April 3,

1947, Rs. 50,000/- had been received from each of Harkisondas Ratilal and Dilipkumar Trikamlal.

Harkisondas Ratilal and Dilipkumar Trikamlal were the benamidars for the assessee and his brother and the entries indicated that the moneys had been withdrawn from the Bhavnagar Mills by the assessee and his brother and advanced to the Bombay Mills'.

The assessee and his brother were in full control of both the Bhavnagar Mills and the Bombay Mi!ls.

On these facts the Tribunal had come to t.he conclusion that there had been a remittance of the a.ssessee's profits from Bhavnagar to Bombay, namely, Rs. 50,000/- being half of the amounts mentioned a.hove, on account of his share and such remittance was taxable under s. 4(1) (b) (iii). The assessee raised the question with which we a.re concerned in view of this decision.

The.High Court held that under the section income is taxable only when it is brought into or received in the taxable territory by the a.ssessee himself and not when it is so brought into or received on behalf of the assessee and that all that the facts found by the Tribunal showed was that the a.ssessee disposed of his accumulated income in Bha.vna.ga.r by directing his debtor, the Bha.vnaga.r Mills, to pay an a.mount not to himself but to a third party, namely, the Bombay Mills. According to the High Court, "The result wa.s that only one debtor was substituted for another. This did not amount to a receipt of the money by the assessee himself in Bombay or to a. bringing of it into Bombg.y by him." In this view of the matter, the High Court answered the question referred in the negative.

When the appeal wa.s heard by us on the earlier occasion, the learned .Advocate for the appellant contended that even on the ha.sis on which the High Court had proceeded, pa.mely, that there was only a substitution of one debtor for another, it has to be sa.ro that the money wa.s received by the assessee himself in Bombay. The contention was that the respondent could not become a. creditor of the Bombay Mills unless he advanced the moneys to them.

Commissioner of

Income-tax,

Bombay v.

Dharamdas Hargovindas

Wanchoo ].

'96r His point was that even assuming that the receipt

Comm-;;:, nerof of the cheque by the Bombay Mills drawn in its Income-tax, favour by the Bhavnagar Mills did not amount to Bombay receipt of moneys by the respondent, as soon as the v.

Bombay Mills credited the amount of it to the respond- Dharamdas ent, there was notionally a receipt of the money by Hargovindas h t e assessee and an advance of it by him to the Bom- Wanchoo J. bay Mills to create the debt. The learned advocate for the assessee said in answer to this contention that there was nothing to show that the agreement for the advance of the money by the assessee to the Bombay Mills had not been made at Bhavnagar. He also said that there was nothing to show as to how the money or the cheque came from Bhavnagar to Bombay and that it might have been that it was agreed between the assessee and the Bombay Mills at Bhavnagar that the money would be deposited in the Bombay Mills to the credit of the assessee and the cheque or the money might have been delivered to the Bombay Mills or its agent at Bhavnagar. His contention was that if such was the case-and on the evidence it could not be said that it was not-then tlie notional receipt of the money by the assessee and its advance by him to the Bombay Mills, if any, would have taken place in Bhavnagar and when the money was thereafter brought to ombay, it was the Bombay Mills' own money. In this view of the matter, according te the learned advocate for the assessee, the moneys could not be subject to tax under the section.

In this position of the arguments then advanced, we observed as follows :-

"It seems to us that this contention of the learned advocate for the respondent has to be dealt with before this appeal can be finally disposed of.

We therefore think it fit to refer the case back to the Tribunal to submit a further stement of case, after taking such evidence as may be necessary, as to show how the cheque was brought from Bhavnagar to Bombay and what agreement had been made between the parties concerned as a result of which the amount of the cheque was credited in the names

of Harkison Ratilal and Dilipkumar Trikamlal in the accounts of the Bombay Mills. The Tribunal will submit its report within four months.

In view of this order we refrain from expressing any opinion on any of the points argued at the bar." It is pursuant to this order that the further state. ment of case has been submitted by the Tribunal. In its statement of case now submitted the Tribunal found the following facts: The Bhavnagar Mills had an account in the Bank of India Limited at one of its Bombay Branches. A cheque book in respect of this account was with the assessee who had power to operate it on behalf of the Bhavnagar Mills. The assessee acting on behalf of the Bhavnagar Mills drew a cheque on the Bhavnagar Mills aforesaid account in the Bank of India Limited on April 3, 1947, in favour of self. This was done in Bombay. This cheque was handed over by the assessee to the Bombay Mills in Bombay for being credited in the account of the Bombay Mills in the names of Harkison Ratilal and Dilipkumar Trikamla.l which were really the benami names of the assessee and his brother. The Bombay Mills on the same date presented this cheque to another branch of the Bank of India Ltd. in Bombay where they had an account, for deposit in that account. The actual entries in the books of the different branches of the Bank were made on April 5,

1947. The Bombay Mills also made entries in their own books crediting the moneys received on the cheque, to Harkison Ratilal and Dilipkumar Trikamlal.

The assessee in his turn instructed the Bhavnagar Mills to debit the joint account of himself and his brother with it in the sum of Rs. 1 lac as having been paid to Harkison Ratilal and Dilipkumar Trikamlal.

This entry was actually made a little later, namely on April 7, 1947. The facts now found would show that nothing had been done at Bhavnagar. It was also found that as the Bombay Mills needed moneys and the assessee had m<mey with the Bhavnagar Mills, he utilised these latter moneys for an advanci> being made by him out of it to the Bombay Mills.

I')6I

Commissioney of Income-tax, Bombay v.

Dharamdas Har govindas

i-vanchoo ].

Commissiomr of

Ineome-tax~

Bt"Oboy

Dlsar.,,.das Hargoviadas

Wancboo ].

As will appear from our earlier order hereinhefore set out, none of the points a.rising in the appeal ha.d been decided by us on that occasion. The question that we have to decide is whether on these facts it can be said that income ha.d been brought into or received in Bombay by the a.ssessee. The relevant portion of the section is in these terms :-

" 4. (1) Subject to the provisions of this Act, the total income of a.ny previous year of any person includes all income, profits and gains from what. ever source derived which-

(a) are received or are deemed to be received in the ta.xa.ble territories in such year by or on behalf of such person, or

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

(i) accrue or arise or are deemed to accrue or a.rise to him in the ta.xa.ble territories during such year, or

(ii) accrue or a.rise to him without the taxable territories during such year, or

(iii) having accrued or arisen to him without the taxable territories before the beginning of such year and after the 1st da.y of April, 1933, a.re brought into or received in the taxable territories by him during such year, or

(o) if such person is not resident in the taxable territories during such year, accrue or a.rise or a.re deemed to accrue or a.rise to him in the taxable territories during such year." In the present case we a.re concerned with cl. (b).

In order however to understand what the words "brought into or received in the taxable territories by

him" mean we have to consider the whole scheme of this sub:11ection. The sub-section ma.inly deals with the total income of any previous year which is charge. able to income-tax under s. 3 of the Act. It is divided into three parts. The first pa.rt, which is cl. (a.) provides that a.11 income, profits a.nd gains received or deemed to be received in the taxable territories in such year by or on behalf of such person will be included in the taxable income. So far as cl. (a.) is

concerned, it is immaterial whether the person is resident in the taxable territories or is not resident therein; as long as income etc. is received in the taxable territories by or on behalf of such person in the previous year, it is liable to be included in the computation of total income. Under this clause therefore it is the receipt in the previous year that is material and the residence of the person to be taxed is immaterial.

It has been held under this clause that receipt must be the first receipt in the taxable territories and if income etc. has been received elsewhere in the same year and is then brought into the taxa.ble territories it should not be considered to be income etc. received in such year in the taxable territories: (see Keshav ,'!fills Ltd. v. Commissioner of Income-tax(')). The basis of this decision obviously i11 that cl. (a.) is dealing with the receipt of income etc. in the, taxable territories in the year in which it has

accrued or arisen and in those circumstances it is the first receipt of such income in the taxable territories that gives rise to liability of the charge of income-tax.

If such income etc. accruing or arising in the previous year has already been received outside the taxable territories it cannot be said to be received again as such in the taxable territories, if it is brought from the place where it was received as such into the taxable territories.

The second part which is cl. (b) deals with the case of a person who is resident in the taxable territories during such year. In his case all income which accrues or a.rises or is deemed to accrue or arise to him in the taxable territories during such year is chargea.ble to income-tax ; besides, all income etc. which accrues or a.rises to him without the taxable territories during such year is also chargeable to income-tax.

Then comes the part with which we are directly concerned and which provides that all income etc. which having accrued or, arisen to such person with. out the taxable territor.ies before the beginning of such year and after the first day of April 1933 is brought

(l) [1953[5.C.R.950.

zg6z

Commissi01Ur uj

Imom#-111.x,

Boinbay

DharamdM H argovindas

Wandiooj.

738 SUPREME COURT REPOR'rS [1961]

x96x into or received in the taxable territories by him -. -. during such year will be chargeable to income-tax.

Commsssioner of '.I'h' · 1 · 1 t' t t 1 1 is 1s a speCia prov1s1on re a. mg o mcome e c.

';:~:;" which has accrued or arisen not in the previous year v. but in years previous to that though after April 1, Dhar•mdas

1933. This special provision relating to a. person Hargovindas resident in the taxable territories must be distinguished from the provision in cl. (a.) in connection with which IVanclloo J. it has been held that the receipt there meant must be the first receipt, for cl. (a) applies irrespective of whether the person is resident in the territories or not to income etc. of the previous year received in the tax' able territories in the same year. Clause (b)(iii) on the other hand refers to inco:ne etc. which accrued before the previous year and is brought into or received in the taxable territories in such year by a person resident therein, and obviously the considerations which led this Court to hold in Keshav Mills case(') thatthe receipt in cl. (a) means the first receipt would not apply to this special provision in cl. (b)(iii).

Mr. Pathak for the respondent however argues that the words in cl. (b)(iii) are the same as in cl. (a), namely, "are received" and therefore the receipt in

cl. (b)(iii) must also be the first receipt. These words however are not terms of a.rt and in our opinion their meaning must receive colour from the context in which they are used. In the context of cl. (a) these words could only refer to the first receipt ; but it does not follow from this that in the context of cl. (b)(iii) also they refer only to the first receipt.

Let us see what cl. (b)(iii) is meant to provide for.

It will be noticed that cl. (a), cl. (b)(i) and (ii) and cl. (c) deal only with income etc. which has arisen in the previous year while cl. (b)(iii) deals with a. special class of cases where a person resident within the taxable territories had income etc. accruing or a.rising to him without the taxable territories and which he did not bring in the taxable territories as and when it arose but does so many years later. In such a case it stands to reason that the income etc. having arisen to such person, may be years before the previous year, must

(1) [1953) S.C.R. 950.

3 S.C.R.

SUPHEME COURT HEPOR'rS 739

have been received by him outside the taxable territories; but it is urged that cl. (b)(iii) docs not speak of receipt outside the taxable territories but only speaks of incbme etc. having accrued or arisen to him without the taxable territories and that it is possible that though the income etc. might have accrued Jong ago it might not have been received ovn outside the taxable territories. This is theoretically possible; but in our opinion it is clear that when cl. (b)(iii) speaks of income etc. having accrned or arisen without the taxable territories it is implicit in it further that such income etc. having accrued or arisen without the taxable territories had already been received there. Considering that cl. (b)(iii) applies to all income having accrued or arisen after the first day of April 1933 (that is more than 27 years ago now) it does not seem reasonable to hold that the words "having accrued or arisen" usPd in that clause have no reference to its receipt also outside the taxable territories. It seems to us therefore that what cl. (b)(iii) provides is that if any income etc. had arisen or accrued outside the taxable territories and had been received there sometime before the previous year and if such income etc. is brought into or received in the taxable territories by such person in the previous year it will be liable to be charged under s. 3. In the circumstances, looking to the special provision of cl. (b)(iii) it would be reasonable to infer that what it contemplates is bringing into or receipt in the taxable territories in the previous year of income etc. which had already accrued or arisen without the taxable territories earlier than the previous year and may have also been received there. Any other interpretation would really make that part of cl. (b)(iii) which refers to "received in the taxable territories" more or less useless, for it is not likely that income having accrued or arisen outside the taxable territories before the previous year should not have been received also outside the taxable territories. Therefore, the reasonable interpretation of cl. (b)(iii) is that if a person resident in the taxable territories has already received without the taxable territories any income etc. accruing or arising to him without the taxable territories

Ig6I

Co1nmissi<mer o_

Income-tax,

Bombay v.

Dharamdas Hargouindas

Wanchoo J.

before the previous year brings that income into or receives that income in the taxable territories he would Commissioner of

Income-tax. be chargeable to income-tax under s. 3. Therefore, for Bombay the purpose of cl. (b){iii) the receiving in the taxable v. territories need not be the first receipt. We shall later Dharamdas consider what will be the effect of this interpretation on Hargovindas the facts of this case.

Wanchoo ].

Then there is cl. {c), which deals with the case of a person resident outside the taxable territories to w horn income etc. has accrued or arisen or is deemed to have accrued or arisen in the taxable territories during the previous year. It will thus be seen that cl. (a) deals with a person who may or may not be a resident in the taxable territories and makes the income etc. accruing or arising to him in the previous year liable to income-tax if it is received or deemed to be received by him in the taxable territories also within the same year; cl. (b) deal8 with the case of a person who is resident in the taxable territ, ories and gives a wider definition of the total income and cl. (c) deals with a person not resident in the taxable territories and makes only such of his income as accrues or arises or is deemed to accrue or arise in the previous year in the taxable territories liable to iucome-tax in addition to what is provided in cl. {a).

Let us now see on the facts of this case whether the respondent can be said to have received this sum of Rs. 50,000/- in the taxable territories during the previous year. The statement of tbe case shows that this sum was income etc. of the respondent which accrued to him outside the taxable territories and had been received by him there and deposited in the Bhavnagar Mills in his account. It is also clear from the facts which we have set out already that this money which was lyiug to the credit of the respondent in the Bhavnagar Mills was received by him by means of a cheque on the Bank of India Ltd., Bombay, in \vhich the Bhavnagar Mills had an account and on which the respondent had the authority to draw. Having thus drawn the money by a cheque on the said b; rnk, the respondent advanced it to the Bombay Mills :ind the cheque was cashed Qy the Bombay }!ills aud the

money was credited into the account of the respondent's benamidars in the Bombay Mills. There was thus Commissioner of clearly receipt in the previous year of income etc.

Income-tax, which had accrued to the respondent outside the tax- Bombay able territories before the previous year and he would Dha;; mdas therefore be chargeable under s. 3 of the Act with Hargovindas respect to this amount. _ The High Court has held that the income would be . Wanchoo f. taxable only when it is brought into or received in the taxable territories by the assessee himself and not when it was so brought or received on behalf of the assessee. The relevant words of cl. (b)(iii) with which we are concerned are these: "are brought into or received in the taxable territories by him during such year." We h:we held that this is a case of receipt by the respondent in the taxable territories; it is therefore unnecessary to consider in the present case whether t.he words " brought into the taxable territories by

him" mean that the income must be brought in by the person himself as held by the High Court. This being a case of receipt, there can be no doubt that income etc. was received by the respondent and the indirect. method employed in this case for receiving the money would none the less make it a receipt by the respondent himself. Reference in this connection may be made to Bipin Lal Kuthiala v. Commissioner of Income-tax, Punjab (1), where it was held that the money was received by the assessee even though in fact what bad happened there was that the assessee directed his debtor in Jubbal which was outside the taxable territories to pay money to his creditor in British India. It was held that in the circumstances there was receipt of income in Brit}sh India, though the method employed was indirect. We are therefore of opinion that the respondent is liable to pay incometax on the sum of Rs. 50,000/- under s. 4(1)(b)(iii) of the Act and the question framed therefore muRt be answered in the ai!irmative. The result is that the appeal is allowed and the order of the High Court set aside. The appellant will get the costs of this appeal and in the court below.

(r) A.LR. r956 S.C. 634.

Commissioner of I ncometax,

Bombay v.

Dharamdas Hargovi11d1is

Sa.rkar ].

SARKAR, J.-The facts necessary for this appeal are few aml simple. The assessee, who is the respondent in this appeal, was a resident of Bombay. He had certain income in .Bhavnagar, a place without the taxable territories, which he had kept in depPsit with a concern there.

Tbis concern had an account in a bank in Bombay. The assessee, presumably as one of the officers of the concern, could opcrntt' this ac :uunt.

He drew, in Bomb<ty, tL cheque on this account which cheqne eventually found its way into the account of a concern in Bombay in a bank there and was credited in that account.

The Bombay concern there<tfter made entries in its own books of <iccount in respect of the <imount of the cheque in fa your of two persons of the names of Harkison Rati!til <ind Dilipkumar Trikam!al. The Bh<tvnagar concern, in its turn, a few days lator debited the account thi, t the assessee had with it in respect of the deposits, with the amount of the cheque as moneys paid to these two perwns.

These two persons however were only bemtmidars for the assessee. The trans<ictiuns, thcrefow, showed that the assessae had withdrawn the money from the concern at Bhavnagar out of its accnmubted income and advanced it to the concern in Bombav. The Tribunal found it as a fact that the <issesec had utilised in Bombay his income lying at Bhavnagar for making an tidvance in Bombay. These transactions took place in April 1947.

I have simplified the facts . a little for clarity.

Actually the account in the concern at Blrnv1rngar was in the joint names of the assessee <ind his brotlier and the advance to' the concern in Bombtiy was really in their joint names. The assessee's share was half of the amount of the cheque and with that shu, re u, lone

we <ire concerned in this c<ise.

On these facts half lhe :1mount of the cheque as representing the asscssee's sh:ue of the accumulated income, was included in his total income, for a.ssessrnent to income-tax for the year 1948-49 uudel' "· 4(1)(\i)(iii) of the lncorne-t ax Act, 1922. Thtit section

:-io fa!' a.~ iR 1naJc-l'inl i:-; in t hc:--;0 t.prn1:-;:

3 S.C.R.

SPPRE~IF. corRT HF.PORTS 74:3

S. 4. (1) Subject to the provisions of this Act, the total income of any previous year of any person includes all income, profits and gains from whatever source derived which-

(a) are received or are deemed to be received in the taxable territories in such year by or on behalf of such person, or

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

* * •

(iii) having accrued or arisen to him without the taxable territories before the beginning of such year and after the 1st day of April, 1933, are brought into or received in the taxable territories by him during such year, or

* . * * The only question is whether the assessee can be said to have "brought into" or "received" this income in Bombay within the meaning of sub-cl. (iii) of s. 4(l)(b).

No other objection to the assessment was raised.

The respondent first contends that he cannot be said to have "received" the income in Bombay. He contends that on the facts found it must be held that he had already "received" the income in Bha.vnagar and he could not " receive" it again in Bombay or anywhere else. It seems to me that this contention is well founded.

This Court has held that " Once an amount is received as income, any remittance or transmission of the amount to another place does not result in ' receipt', within the meaning of this clause, at the other place " : Keshav Mills Ltd. v. Commissioner of Income-tax, Bombay (1). No doubt, the observation was made with regard to cl. (a) of s. 4(1).

But I am unable to find any reason why the word should have a different meaning in sub-cl. (iii) of s. 4(l)(b).

On the contrary, the words "brought into" in subcl. (iii) would furnish a reason, if one was necessary, for the view that the word " received " there means received for the first time.

I venture to think that this Court did not in Keshat Mills case (1), hold that that word in B 4(l)(a) meant

<• > (1953J s.c.R. 950, 90,.

Connnissionerof

Income-tax,

Bombay v.

Dharamdas Hargovindas

Sarkar].

Commissioner of

Income-lax,

Bombay v.

Dharamdas Hargovindas

Sarkar ].

744,

SUPREME COURT REPORTR [1961]

"the first receipt after the accrual of the income", because of anything in the context in which the word occurred but because, in the nature of things, income can be "received" only once and not more than once, and a subsequent dealing with income after it has been received, can never be a "receipt" of income.

It seems to me that what was said in connection with the Act as it then stood, in Board of Revenue v. Ripon

Press (1), namely, "that you cannot receive the same sum of money qua income twice over, once outside British India and once inside it" expresses the inherent nature of receipt of income and still holds good and unless the context compels a different meaning, which I do not find the present con text to do, income can be received only once.

As, in the present case, it seems fairly clear that the a.ssessee had received the income in Bhavnagar, . I do not think he can be taxed on it on the basis that he "received" it in Bombay over again.

If, however, the assessee did not "receive" the income in Bombay, it seems clear to me that he " brought into" Bombay that income. He got in Bombay an amount which he had earlier received in Bhavnagar a.s income, for he advanced it to a concern in Bombay and this he could not do if he had not got it. The getting of the income in Bombay may not have been the receipt of it but how could he get it if he did not bring it in ?

After the assessee received the income in Bhavnagar, it remained all the time under his control and that is why he could not receive it again: see Sundar Das v.

Collector of Gujrat (•).

An assessee might, however, change the shape of the income received. Section 4(1) (b)(iii) does not require that in order that income may be brought into the taxable territories it is necessary that the shape of the income should not have been changed since it was first recflived. Indeed; it has not been contended to t.he contrary. Sub-clause (iii) of s. 4(l)(b) would have completely defeated itself if it required that the income had to be kept in the same shape in which it had been received. Whatever shape

(1) (1923) l.L.R. 46 Mad 706, 7II.

(2) (•922) !.L.R 3 Lah. 349.

the income had assumed, the a.ssessee had it with him all the time as incoue and for the purpose of sub-cl. (iii) it could be brought into the taxable territories in that

shape.

Now what the a.ssessee had done with the income in this case was to put it with a party in Bha.vnagar.

The income then took the shape of a debt dne to him.

It became a right to receive money or moneys worth.

When he had that debt discharged in Bombay, he must have had it brought into Bombay. Therefore he had brought the income into Bombay.

Suppose he had received the income in the shape of coins and had kept it in his safe at Bhavnagar and brought the coins in_to Bombay. There would have been no doubt that he had brought the income into Bombay. Suppose a.gain, he had put the income originally received by him at Bhavnagar in a bank there and then he obtained a draft from the bank payable in Bombay and brought the draft from Bha.vnagar to Bombay and cashed it there. Again, there would be little doubt that he had, by this process, brought the income into Bombay. It is well known that though income in income-tax law is generally contemplated in terms of money, it may be conceived in other forms. In fa.ct anything which represents and produces money and is treated as such by businessmen, would be income : see per Lord Lindley in GreslUlm Li/ e Assurance Society Ltd. v. Bishop (1) and per Lord Hals. bury L.C. in Tennant v. Smith('). If the bringing of the bank draft would be bringing of income, I am unable to see why the bringing of a right to receive the money would not be bringing of income when that right has been exercised and turned into moneys worth. Such a right would be based on a promise by the debtor to pay and though verbal, would be considered by businessmen to represent money.

The assessee in Bombay used that right and obtained moneys worth. He accepted the Bhavnagar concern's cheque in Bombay, gave it a pro tanto discharge for the debt owing by it to him. He used the cheque in acquiring a new asset, namely, a promise by the

11) (19<>1) A.C. z87, •96,

(2) (189•] A.C. 150, 156.

COf'9tmissiotur of

Ineo,,, e--ta#.

Bombay

Dha,.amdos Hargovi1'das

s.,~., J.

Commissioner of

Income-ta~,

Bombay v.

Dharamd1Js Ha1govindas

Sarkar ].

SUPREME COURT RFPORTS [1961]

Bombay concern to pay money. Therefore, in my view, the respondent aesessee was liable under s. 4(l)(a), (b)(iii) to be taxed on the amount of the cheque as income which he had brought into the taxable territories.

I would hence allow the appeal and answer the question referred, in the affirmative.

Appeal allowed.

' •

. ,

THE COMMISSIONER OF INCOME-TAX,

BOMBAY

A. K. SARKAR

K. N. WANCHOO, JJ.

Income-tax Act

S. 4

s. 4(1)

Income-tax Act

s. 4(1)(b)(lii)

s. 4

Per Sarkar

Bombay

Bhavnagar

Bombay Hardayal Hardy

D. Gupta

mdas G. S. Pathak

S. N. Andley

J.B. Dada- H••govindas chanji

Rameshwar Nath

P. L. Vohra

Wanohoo

Wanehoo

WANCHOO

High Court

at Bombay

s. 60(2)

Income-tax Act

s. 4(1)

Income-tax Act

British India

Bhavnagar Mills

Gordhandas

April 7, 1947

Harkisondas Ratilal

Dilipkumar Trikamlal

Bombay Mills

April 3,

1947

Bombay Mi!ls

s. 4(1)

Bha.vnaga.r Mills

Dharamdas Hargovindas

Wanchoo ].

'96r

Harkison Ratilal

Bank of India Limited

April 3, 1947

Dilipkumar Trikamla.l

Bank of India Ltd.

April 5,

1947

Dharamdas Har govindas

s. 3

DharamdM H argovindas

zg6z

Commissi01Ur uj

Imom-111.x,

Boinbay

DharamdM H argovindas

Wandiooj.

IVanclloo

Keshav Mills

Pathak

s. 3

Dharamdas Hargouindas

s. 3

Dharamdas

Hargovindas

s. 3

Jubbal

India

s. 4(1)(b)(iii)

SARKAR

Harkison Rati!til

Bombav

S. 4

1st day of April, 1933

1) Subject to the provisions of this Act, the total income of any previous year of any person includes all income, profits and gains from whatever source derived which-

(a) are received or are deemed to be received in the taxable territories in such year by or on behalf of such person, or

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

  •

(iii) having accrued or arisen to him without the taxable territories before the beginning of such year and after the 1st day of April, 1933, are brought into or received in the taxable territories by him during such year, or

 .

s. 4(l)(b)

Bha.vnagar

s. 4(1)

s. 4(l)(b)

Keshat Mills

Dharamdas Hargovindas

Section 4(1)

s. 4(l)(b)

Lindley

Bhavnagar concern

Dha,.amdos Hargovi1'das

s. 4(l)(a)


3 S.C.R.

SUPREME COUH.T H.EPORTS 747

THE STATE OF BOMBAY

FAKIR UMAR DHANSE. (J. L. KAPUR and J. C. SHAH, J, J.)

Unalienable agricultural land-Occupant-If could alter the user to non-agricultural purposes-Unauthorised structures-Nature of right of Revenue Authorities to evict-Words "eviction" and " Vacation" meaning of-The Bombay Land Revenue Code, r879 (V of r879), s. 66.

The respondent who was the occupant of an unalienated land had erected several structures on it without obtaining the prior permission of the Collector and became liable to be evicted. The Collector served a notice of eviction on the respondent under s. 66 of the Bombay Land Revenue Code and called upon him to remove the unau.thorisedstructures. On the respondent not having complied with the notice, he was evicted from the land and some of the buildings were demolished.

The High Court held that the order directing the removal of the structures was ultra vires of s. 66 of the Bombay Land Revenue Code and though the order of eviction was legal and intra vires but in spite of the eviction, the land or the buildings did not vest in the Government and the occupant continued to be the owner of the building and the land and the only consequence of eviction was physical removal of the occupant from the land.

The question was whether the occupier who had been evicted was required to remove the building and in default could the collector demolish the building and was liable to damage for such demolition.

Held, that on a true construction of ss. 65 and 66 of the Bombay Land Revenue Code an occupant was only entitled to the use and occupation of unalienated land for the purpose of agriculture, and could not alter the user to non-agricultural purposes except with the permission of the Revenue Authorities, and any such altered user entitled the Revenue Authorities to summarily evict the occupant from the land and once evicted the right of user and occupation could not be exercised by him.

The words "eviction" and "vacation " did not mean mere physical removal of the occupant, they meant that his rights came to an end. For the purpose of "vacation" it was necessary that any unauthorised construction put up must also be removed, and no specific powers were necessary for such removal, the power to remove them was incidental and ancillary to the powers to evict and to get the land.vacated.

The true effect of eviction was physical removal of the c.ccupant from the land with all the Gonsequences, i.e., demolition of all unauthorised superstructure,

February 3.

1961 The word " eviction " as used in s. 66 of the Code meant that on eviction, land had to be restored to the original position Stat• of Bombay so as to be used for the purpose for which it was given to the v. occupant.

Fakir Umar Dhans1 C A

!VIL

PPELLATE JURISDIOTION: Civil Appeal No. 377 ofl957.

Appeal from the judgment and decree dated September 24, 1954, of the Bombay High Court in First Appeal No. 355of1950.

R. Ganapathy Iyer, K. L. Hathi and D. Gupta, for the appellant.

B. D. Sharma, for the respondent. 1961. February 3. The Judgment of the Court was delivered by

Kapur J.

KAPUR, J.-This is an appeal against the judgment and decree of the High Court of Judicature at Bombay.

The appellant wa.s the defendant in a suit brought by the respondent who was the plaintiff and the facts giving rise to the appeal are these: The respondent was the occupant of unalienated land, Survey No. 145, Hissa No. 2 of Maha.d in the district of Cola.ha. He applied on November 1, 1941, to the Collector for permission to construct a temporary shed for one year on the above mentioned land and permission wa.s granted on January 9, 1942. The respondent ma.de another application for extension of the period of the permission by two yea.rs.

enuiry it wa.s found that the respondent ha.d constructed permanent structures without leaving a.n open space of 20 feet between the road a.nd the building a.nd when asked to lea. ve this space open he refused to do so and therefore the application dated September 9, 1942, was dismissed. On March 28, 1943, the respondent made another applica.tioll stating that he was prepared to remove the building which was within 20 feet of the road. The Collector accepted this request a.nd asked the respondent to remove that portion of the building which wa.s within 20 feet from the road. While the correspondence was going on between the respondent and the Collector, the respondent put up several structures which, for some re!lSOQ

or another, the Collector knew nothing about a.nd it 1961 wa.s in March, 1947, that the Collector asked the Siok 1 Bomb respondent to stop further building. On April 21,

v. <¥ 1947, the respondent ma.de another application tOFahirU_D......., the Collector stating that he had begun to construct another building and asked for permission to complete Kapur J. it. It was then that the Collector ma.de an inquiry and found that several buildings had been constructed deliberately without any permission. The Collector then asked the permission of the Government to take further action and on September 23, 1947, the Government accorded sanction in pursuance of which the Collector directed the Ma.mla.tda.r to evict the respondent. On October 19, 1947, the Ma.mla.tda.r served a. notice upon the respondent for evicting him.

The rcs~)ondent thereupon appealed to the Bombay Revenue Tribuna.I and his appeal was dismissed on April 2, 1941. Another notice was served on the respondent ca.Hing upon him to remove the unauthorised structures. As he did not comply with the notice, he was evicted from the land and some of the buildings were demolished.

The respondent in August, 1948, filed a. petition in the High Court and obtained an order of sta.y of the order of the Government and in execution of that order obtained possession of the land and then did not prosecute his petition. Thus in spite of his having flouted the orders ma.de by the Revenue authorities, the respondent managed to get the possession of the land from which he had been evicted. On November 23, 1948, the respondent filed a suit for declaration that the order passed by the Government directing his eviction was illegal and void and for injunction restraining the Government from ta.king any action pursuant to that order and for recovery '}f Rs. 7,000 as damages for the portion of the building demolished by the Revenue authorities. The Civil Judge held that the buildings erected were unauthorised as the respondent had not obtained the permission of the Collector but he held that the Collector had no power under s. 66 of the Bombay Land Revenue Code (hereinafter termed the Code) to demolish he building. He

r961 decreed the suit in regard to the eviction holding the order of the Government and by the Collector as uUra State of Bombay . d v. vires an inoperative and issued an injunction against Faki. Um•• Dhansethe appellant and also decreed the suit for Rs. 7,000 as

damages for demolition of the structures. The appel- Kapur f. !ant then took an appeal to the High Court and it was there held that the orders ; directing removal of structures wasultravires of s. 66 of the Code and the injunction was therefore confirmed as also the decree as to the award of damages. The High Court further held that the order of eviction was legal and intra vires but in spite of the eviction, the land or the buildings did not vest in the Government and the occupant continued to be the owner of the buildings and the land and the only consequence of eviction was the physical removal of the occupant from the land. To put it in the language of the High Court it was held:-

" The legal consequences of eviction therefore will be to deprive the occupant of his possession of the land but not of his ownership or proprietary rights, which will continue to vest in him. As a corollary it must follow that the building erected by the occupant on the land will also continue to belong to him. We are also of the opinion that the power given to the Collector to evict the occupant does not include the power to remove a building erected by him." It is against this judgment and decree that the appellant has come in appeal to this Court on a certificate of fitness by the High Court.

There is no dispute in this appeal as to the order of eviction. The question which was debated was the consequences of this eviction. Was the respondent required to •. remove the building and in default can the a.ppella.nt demolish the building and (2) is the appellant liable to dama.ges for the demolition of the portion which it had already demolished ? This would depend upon the interpretation to be put on some of the provisions of the Code. The Collector, after getting the permission of the Government directed, by his order dated October 10, 1947, the removal of

the structures unauthorisedly erected by the respon- '96' dent and the action purported to have been taken SJale of Bombay under s. 66 of the Code. Section 45 of the Code v. provides that all land whether used for purposes of Fakir Umar Dhans<, agriculture or other purposes and wherever situated is liable to payment of land revenue to Government Kapur J. and under s. 56 failure to pay land revenue makes the occupancy liable to forfeiture.

Sections 65 and 66 of the Code provide :

S. 65." An occupant of land assessed or held for the purpose of agriculture is entitled by himself, his servants, tenants, agents or other legal representatives to erect farm buildings, construct wells or tanks or make any other improvements thereon for the better cultivation of the land or its more convenient use for the purpose aforesaid.

But if any occupant wishes to use his holding or any part thereof for any other purpose, the Collector's permission shall in the first place be applied for by the occupant ....................................... "

S. 66. " If any such land be so used without the permission of the Collector being first obtained or before the expiration of the period prescribed by section 65 the occupant and any tenant or other person holding under or through him shall be liable to be summarily evicted by the Collector from the land so used and from the entire field or survey number of which it may form a part and the occupant shall also be liable to pay, in addition to the new assessment which may be leviable under the provisions of section 48 for the period during which the said land has been so used such fine as the Collector may subject to the general orders of the State Government direct.

Any tenant or any occupant or any other person holding under or through an occupant who shall without the occupant's consent use any such land for any such purpose and thereby render the said occupant liable to the penalties aforesaid, shall be responsible to the said occupant in damages." It has been found that the respondent erected several structures without obtaining the prior permi88ion of

L96x the Collector and he was liable to be evicted, and

51 1

B ba therefore the order passed by the Collector directing ate

0 v. om Y the eviction of the respondent was legal and intra vires .

.Fakir uma• D/saH" Under s. 65 an occupant of land held for the purpose of agriculture may erect farm buildings, construct wells Kapu• J. or tanks or make other improvements for the better cultivation of the land or for its more convenient use for the purpose of agriculture but he cannot alter the user to non-agricultural purposes except with the permission of the Revenue authoritioo. This shows that any user unconnected with agriculture is unlawful and under s. 66 therefore any such altered user entitles the Revenue authorities to summarily evict the occupant from the land and certain other consequences follow. Therefore on a true construction of ss. 65 and 66 an occupant is only entitled to the use and occupation of una.lienated land subject to the limitation above mentioned and if he is once evicted under the provi. sions of s. 66 of the Code the right of user and occupation cannot be exercised by him.

Section 202 of the Code lays down the procedure for evicting any person unla. wfully in possession of the land and provides as follows : S. 202. "Whenever it is provided by this, or by any other Act for the time being in force, that the Collector may or shall evict any person wrongfully in possession of land, such eviction shall be ma.de in the following manner, viz. : by serving a notice on the person or persons in possession requiring them within such time as may appear reasonable after receipt of the said notice to vacate the land,

" ·····•········••••········· This section therefore shows that eviction requires vacation of the land and vacation does not mean that &nything done upon the land which was unauthorised is to be allowed to remain and only the person responsible for doing the unlawful a.ct is to be removed from the la.nd. That the words "eviction" and" vacation" do not mean mere physical removal of the occupant is clear from the very nature of the right which th~ respondent in the present case had. His right was

confined to the use a.ad occupation of the land for the '96' purpose for which he held it from Government, i.e., s1111, of Bombay for a.gricultura.l purposes a.nd when he is 'evicted a.nd v. is asked to vacate the land, it must mean that his Fakir Um•r Dbt111 rights come to an end. For the purpose of va.ca.tion it is necessary that any unauthorised construction put Kapur J. up must also be removed otherwise there cannot be a.ny vacation of the land nor ca.n the land be put to effective use for the purpose for which a.gricultura.l lands a.re normally accepted to be used. It is not necessary to hold in this case as to whether on eviction the occupant also loses his right to the materials of the superstructure but it would be a misinterpretation of the words " eviction " and " vacation " of the land if it were held that although the occupant is evicted the structures erected by him cannot be removed a.nd if the Government tries to restore the land to the original purpose for which it was granted then it will do so only on the pa.in of being mulcted in damages. It is, in our opinion, not necessary to have any specific power to have the land vacated of all unauthorised superstructures; the power to remove them is incidental a.nd ancillary to the power to evict and to get the land vacated. It a.ppea.rs to us that the nature of the right of occupancy a.nd the limitation placed upon it by the provisions of the Code contained in ss. 40 and 41 by which the right to certain trees on una.liena.ted land is reserved to the State; in ss. 65 and 66 which have been quoted above a.nd ss. 68 and 69 which provide that an occupant is entitled to the use and occupation of the land for the period to which his tenure is limited shows that the true effect of eviction is the physical removal of the occupant from the land with all the consequences, i.e., demolition of all unauthorised superstructures. The High Court relied upon the difference in the language used illJ!s. 61 and 66 of the Code and to the amendment ma.de in the former section in 1919 by which the words "or to summary removal" were added in s. 61 and t.he relevant portion of the section now reads~

unde~;~

r961

Slate of Bombay

Fakir Umar Dhanse

/(apur. J.

r96I

S. 61. "The person unauthorisedly occupying any such land may be summarily evicted by the Collector" and any crop raised in the land shall be liable to forfeiture, and any building, or other construction erected thereon shall also, if not removed by him after such written notice as the Collector may deem reasonable, be liable to forfeiture or to summary removal." From the addition of these words it was sought to be argued that these words were added to authorise the Collector to remove any building or other construction put up on that land by a person in unauthorised occupation an1 it was argued that those words were specifically added for the purpose. It is wholly unnecessary for us to go into the question as to why that particular power was given to the Collector. In this case we are concerned with the meaning of the word " eviction " as used in s. 66 and in our opinion the meaning of those words is that on eviction land has to be restored to the original position so as to be used for the purpose for which it was given to the occupant.

For the reasons given above this appeal is allowed and the decree of the High Court affirming that of the trial court is set aside. The appellant will have its costs throughout.

A ppeaJ, allowe.d.

M/S. JETHAN AND AND SONS

THE STATE OF UTTAR PRADESH.

(J. L. KAPUR and J. C. SHAH, JJ.)

Appeal to Supreme Court-Certificate of fitness by High Court -Remand order, if and when final order-Substantial question of. law-Power of High Court-Constitution of India, Art. r33-Code of Cioil Pra<edure. r908 (V of ri)OB), s. ro9.

Pursuant to an agreement between the parties a dispute relating to the supply of stone ballast was referred for adjudication to an arbitrator who was appointed under the agreement.

The arbitrator's awards were contested by the appellants but the trial court held that the dispute was properly referred and the awards were V'!lidly made. The High Court set aside the orders

747

THE STATE OF BOMBAY

FAKIR UMAR DHANSE

L. KAPUR

C. SHAH, J

s. 66

s. 66

s. 66

ss. 65 and 66

February 3.

1961

s. 66

Fakir Umar Dhans1

Bombay High Court

R. Ganapathy Iyer

K. L. Hathi

D. Gupta

B. D. Sharma

Kapur J.

KAPUR

High Court of Judicature at Bombay

Cola.ha.

November 1, 1941

January 9, 1942

September 9, 1942

March 28, 1943

April 21,

v. <¥

September 23, 1947

October 19, 1947

April 2, 1941

November 23, 1948

s. 66

Faki. Um•• Dhansethe

s. 66

October 10, 1947

Bombay

s. 66

Section 45

Kapur

s. 56

Sections 65 and 66

S. 65

S. 66

section 65

section 48

s. 65

s. 66

ss. 65 and 66

s. 66

Section 202

S. 202

ss. 40 and 41

ss. 65 and 66

ss. 68 and 69

s. 61 and 66

s. 61

Fakir Umar Dhanse

S. 61

s. 66

JETHAN

STATE OF UTTAR PRADESH

J. L. KAPUR

Supreme Court

Constitution of India


r961

Slate of Bombay

Fakir Umar Dhanse

/(apur. J.

r96I

SUPREME COURT REPORTS [1961]

S. 61. "The person unauthorisedly occupying any such land may be summarily evicted by the Collector" and any crop raised in the land shall be liable to forfeiture, and any building, or other construction erected thereon shall also, if not removed by him after such written notice as the Collector may deem reasonable, be liable to forfeiture or to summary removal." From the addition of these words it was sought to be argued that these words were added to authorise the Collector to remove any building or other construction put up on that land by a person in unauthorised occupation an1 it was argued that those words were specifically added for the purpose. It is wholly unnecessary for us to go into the question as to why that particular power was given to the Collector. In this case we are concerned with the meaning of the word " eviction " as used in s. 66 and in our opinion the meaning of those words is that on eviction land has to be restored to the original position so as to be used for the purpose for which it was given to the occupant.

For the reasons given above this appeal is allowed and the decree of the High Court affirming that of the trial court is set aside. The appellant will have its costs throughout.

A ppeaJ, allowe.d.

M/S. JETHAN AND AND SONS

THE STATE OF UTTAR PRADESH.

(J. L. KAPUR and J. C. SHAH, JJ.)

Appeal to Supreme Court-Certificate of fitness by High Court -Remand order, if and when final order-Substantial question of. law-Power of High Court-Constitution of India, Art. r33-Code of Cioil Pra<edure. r908 (V of ri)OB), s. ro9.

Pursuant to an agreement between the parties a dispute relating to the supply of stone ballast was referred for adjudication to an arbitrator who was appointed under the agreement.

The arbitrator's awards were contested by the appellants but the trial court held that the dispute was properly referred and the awards were V'!lidly made. The High Court set aside the orders

3 S.C.R.

SUl'RE:vIE COURT REPORTS 755

of the trial court and remanded the case for decision after framing all the issues and giving the parties an opportunity to produce evidence. The High Court then granted a certificate of fitness or appeal to this Court under Art. l33(1)(c) of the Constitution.

H e/d, that an order remanding a case without deciding any question relating to the rights of the parties is not a judgment, decree or final order within the meaning of Art. 133 of the Constitution. An order is final if it amounts to a final decision relating to the rights of the parties in dispute in the Civil proceeding.

The power under s. 109 of the Code of Civil Procedure having been expressly made subject to Ch. IV, Part V of the Constitution an appeal lay under that section to this Court only against judgments, decrees and final orders.

V. M. Abdul Rahman and Others v. V. D. K. Cassim and Sons and Another (1933) L.R. 60 I.A. 76, referred to.

As the orders passed by the High Court did not .raise any question of great public or private importance and even the question of interpretation of Para. 3 of the first schedule of the Indian Arbitration Act was 'left open to pe tried by the Civil Judge, no certificate of fitness to appeal to this Court could be granted under Art. 133 of the Constitution.

CIVIL

APPELLATE JURISDICTION: Civil Appeals Nos. 421 to 423 of 1957.

Appeals from the judgment and order dated February 18, 1955, of the Allahabad High Court (Lucknow Bench), at Lucknow in F.A.F.O. Nos. 11 to 13 of 1953.

J. B. Dadachanji, for the appellant.

C. B. Agarwala and 0. P. Lal, for the respondent.

1961. February 6. The Judgment of the Court was delivered by SHAH, J.-These three appeals were filed by the appellants M/s. J ethanand & Sons with certificate of fitness granted under Art. 133(1) (c) of the Constitution by the High Court of Judicature at Allahabad.

The appellants entered into three separate contracts with the Government of the United Provinces (now called the State of Uttar Pradesh) on March 20, 1947, May 27, 1947, and June 28, 1947, for the supply of stone ballast at Shankar Garh, District Allahabad.

The contracts which were in identical terms contained the following arbitration ci11ouse;

M/s. ]ethanand

and Sons v.

State of Uttar Pradesh

Shah ].

Jjs. ]ethanand

and Sotis

Stale of Uttar Pradesh

Shah].

SUPREME COURT REPOHT:::I [1961]

"All disputes between the parties hereto ansmg out of this contract whether during its continuance or after its rescission or in respect of the construction or meaning of any clause thereof or of tqe tender, specitications and conditions or any of them or any part thereof respectively or an:vthing arising out of or incident thereto for the decision of which no express provision has hereinbefore been nMrle, shall be referred to the Superintending Engineer of the Circle concerned and his decision sha,11 in all cases and at all times be final, binding and conclusive between the parties." Pursuant to the contracts, the appellants supplied stone ballast. Thereafter, purporting to act under

cl. (16) of the agreements, the Executive Engineer, Provincial Division, referred certain disputes between the appellants and the State of Uttar Pradesh, allegt'd to arise out of the performance of the contracts, to arbitration of the Superintending Engineer of the Circle concerned.

The Superintending Engineer required the appellants to appear before him at the time fixed in the notices. The appellants by their letter dated May 31, 1951, declined to submit to the jurisdiction of the Superintending Engineer, and informed him that if he hears and determines the cases ex parte, the " decisions will not be binding" on them. On February 7, 1953, the Superintending Engineer made and published three awards in respect of the disputes arising under the three contracts and filed the same in the court of the Civil Judge, Lucknow.

The appellants applied for setting aside the awards alleging that the con tracts were fully performed and that the dispute alleged by the State of Uttar Pradesh to have arisen out of the contracts could not arise after the contracts were fully performed and that the State could not refer those alleged disputes to arbitration. They also contended that the awards were not valid in law because on the arbitration agreements action was not taken under s. 20 of the Arbitration Act. The Civil Judge, Lucknow, held that the disputes between the parties were properly referred to the Superintending Engineer by the State of Uttar

3 8.C.R.

SUPREME COURT REPORT:-> 757

Pradesh and that the awards were validly made.

Against the orders passed by the Civil Judge, Lucknow, three appeals were preferred by the appellants to the High Court of Judicature at Allahabad.

The H, igh Court set aside the orders passed by the Civil Judge and remanded the cases to the Trial Judge with a direction that he do allow the appellants and if need be, the respondent to amend their pleadings, and frame all is8ues that arise out of the pleadings and allow the parties an opportunity to place such evidence as they desire and decide the case on such evidence. In the view of the High Court no proper notice of the filing of the awards was served upon the appellants and that they were "seriously handicapped in their reply by the course which had been adopted both by the court and the arbitrator in the conduct of the proceedings in court." On the applications filed by the appellants, the High Court granted leave to appeal to this court under Art. 133(l)(c) of the Constitution, certifying that the cases were fit for appeal to this court.

Counsel for the respondent has urged that the High Court was incompetent to grant certificate under Art. 133(1) (c) of the Constitution.

The order passed by the High Court was manifestly passed in exercise of the inhen, nt power to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court. Undel

Art. 133 of the Constitution, an appeal lies to thi~ court from any judgment, decree or final order in a civil proceeding of a High Court if the High Court certifies that:

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

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

(c) "the case is a fit one for appeal to the Supreme Court." In our view, the order remanding the cases under s. 151 of the Civil Procedure Code is not a judgment, decree or final order within the meaning of Art. 133 of the Constitution. By its order, the High Court did not decide any question relating to the rights of the parties to the dispute.

The High Court merely

Iy6I

Mfs. }61hanan4

antl Sons v.

Stat• of U1ta1 PYadesA

Shah].

M /s. ]ethanand

and Sons v.

Stale of Uttar Pradesh

Shah ].

remanded the cases for retrial holding that" there was no proper trial of the petitions filed by the appellants for sett.jug aside the awards. Such an order remanding the cases for retrial is not a final order within the meaning of Art. 133(l)(c).

An order is final if it amounts to a final decision relating to the rights of the parties in dispute in the civil proceeding. If after the order, the civil proceeding still remains to be tried and the rights in dispute between the parties have to be determined, the order is not a fihal order within the meaning of Art. 133. The High Court assumed that a certificate of fitness to appeal to this court may be issued under s. 109(l)(c) of the Code of Civil Procedure, even if the order is not final, and in support of that view, they relied upon the judgment of the Judicial Committee of the Privy Council in V. M.

Abdul Rahman v. D. K. Oassim & Sons (1). Buts. 109 of the Code is now made expressly subject to Ch. IV, Part V of the Constitution and Art. 133 (1) (c) which occurs in that chapter authorises the grant of a certificate by the High Court 011ly if the order is a final order. The inconsistency between s. 109 Civil Procedure Code and Art. 133 of the Constitution has now been removed by the Code of Civil Procedure (Amendment) Act 66 of 1955. But even before the amending Act, the power under s. 109(1) (c) being expressly made subject to the Constitution, an appeal lay to this Court only against judgments, decrees and final orders.

Again, the orders passed by the High Court did not raise any question of great public or private importance. In the view of the High Court, the applications for setting aside the awards filed by the appellants were not properly tried and therefore the cases deserved t.o be remanded to the court of first instance for trial de nova.

The High Court granted leave to the parties to amend their pleadings; they al;; o directed the Civil Judge to frame " all the is.mes that arise and allow the parties an opportunity of adducing such evidence as they desired." It was an order for trial de nova on frtlsh pleadings and 011 all iss:ues that may

(1) (1933) L.R. 60 I.A. 76.

arise on the pleadings. Evidently, any decision given by the High Court in the course of the order would not in that trial de nova be binding and the cases will have to be tried afresh by the Civil Judge. The High

Court. was of the view that the interpretation of para. 3 of the first schedule of the Indian Arbitration Act rnised a substautbl question of law. But by the direction of the High Court, this quest.ion was also left open to be tried before the Civil Judge.

We fail to appreciate how an observation on a question which is directed to be retried can still be regarded as raising a question of law of great public or private. importance justifying grant of a certificate under Art. 133 (1) (c) of. the Constitution.

We accordingly vacate the certificate granted by the High Court and dismiss these appeals with costs.

One hearing fee.

Appeals dismissed.

HAZRAT SYED SHAH MASTERSHlD ALI

AL QUADARI

THE COMMISSIONER OF W AKFS,

WEST BENGAL. (J. L. KAPUR, M. HIDAYATULLAH and J.C. SHAH, JJ.)

M utawalli - Temporary. appointment-II' hen can be made by the Commissioner-Delegation of powers-Duty interwoven rvith power-Distinction-Bengal ll'akf Act, r934 (Ben. XIII of r934),

SS. 29, 40.

During controversy between two brothers each of \Vhom claimed to be appointed Mutawalli, the Commissioner of Wakfs appointed a third brother as a temporary Mutawalli under s. 40 of the Bengal Wakf Act, which appointment was challenged on the ground that the order of the Commissioner appointing a temporary Mutawalli was illegal because under the rules framed by the Government of West Bengal the Board constituted under Bengal Wakf Act could alone make the appointment and the Commissioner could only make a report and recommendation to the Board.

Held, that under the provisions of s. 40 read with s. 29 of the Bengal Wakf Act, a temporary Mutawalli can be appointed by the Commissioner to whom the powers and duties have been

IV! /s. f ethanand

and Sons

State of littar Pradesh

Shah J.

Ig61

February 6.

S. 61

s. 66

M/S. JETHAN AND AND SONS

THE STATE OF UTTAR PRADESH

L. KAPUR

C. SHAH, JJ.

Supreme Court

Constitution of India

Art. 133

s. 109

the Code of Civil Procedure

(1933) L.R. 60 I.A. 76

Art. 133

J. B. Dadachanji

C. B. Agarwala

P. Lal

SHAH

J ethanand

Art. 133(1)

High Court of Judicature at Allahabad

Government of the United Provinces

March 20, 1947

May 27, 1947

June 28, 1947

State of Uttar Pradesh

May 31, 1951

February 7, 1953

Civil Judge, Lucknow

s. 20

Art. 133(l)(c)

Art. 133(1)

Art. 133

s. 151

Art. 133

ethanand

Stale of Uttar Pradesh

Art. 133(l)(c)

Art. 133

s. 109(l)(c)

the Code of Civil Procedure

Art. 133

s. 109

Civil Procedure Code

Art. 133

the Code of Civil Procedure

s. 109(1)

(1933) L.R. 60 I.A. 76

Art. 133

COMMISSIONER OF W AKFS,

WEST BENGAL

M. HIDAYATULLAH

J.C. SHAH

M utawalli

SS. 29, 40

s. 40

Government of West Bengal

s. 40

s. 29

State of littar Pradesh

Shah


3 S.C.R.

SUPREME COURT R.EPORTS 759

arise on the pleadings. Evidently, any decision given by the High Court in the course of the order would not in that trial de nova be binding and the cases will have to be tried afresh by the Civil Judge. The High

Court. was of the view that the interpretation of para. 3 of the first schedule of the Indian Arbitration Act rnised a substautbl question of law. But by the direction of the High Court, this quest.ion was also left open to be tried before the Civil Judge.

We fail to appreciate how an observation on a question which is directed to be retried can still be regarded as raising a question of law of great public or private. importance justifying grant of a certificate under Art. 133 (1) (c) of. the Constitution.

We accordingly vacate the certificate granted by the High Court and dismiss these appeals with costs.

One hearing fee.

Appeals dismissed.

HAZRAT SYED SHAH MASTERSHlD ALI

AL QUADARI

THE COMMISSIONER OF W AKFS,

WEST BENGAL. (J. L. KAPUR, M. HIDAYATULLAH and J.C. SHAH, JJ.)

M utawalli - Temporary. appointment-II' hen can be made by the Commissioner-Delegation of powers-Duty interwoven rvith power-Distinction-Bengal ll'akf Act, r934 (Ben. XIII of r934),

SS. 29, 40.

During controversy between two brothers each of \Vhom claimed to be appointed Mutawalli, the Commissioner of Wakfs appointed a third brother as a temporary Mutawalli under s. 40 of the Bengal Wakf Act, which appointment was challenged on the ground that the order of the Commissioner appointing a temporary Mutawalli was illegal because under the rules framed by the Government of West Bengal the Board constituted under Bengal Wakf Act could alone make the appointment and the Commissioner could only make a report and recommendation to the Board.

Held, that under the provisions of s. 40 read with s. 29 of the Bengal Wakf Act, a temporary Mutawalli can be appointed by the Commissioner to whom the powers and duties have been

IV! /s. f ethanand

and Sons

State of littar Pradesh

Shah J.

Ig61

February 6.

1961 delegated by the Board. The Rules cannot affect the powers of - the Board to delegate its functions under s. 29 of the Act to the Hazrat Syed Shah Commissioner, and once the delegation is made the rules cease

Mastershid Ali to apply.

Al Quadari f .

Held, urther, that where power and duty are rnterv.

Ctnnmissioner of

Wakfs, Wesl Bengal

connected and it is not possible to separate one from the other in such wise that power can be delegated while duty is retained and vice versa, the delegation of powers takes with it the duties.

CIVIL APPELLATE JuRisDlC'l'ION: Civil Appeal No. 237 of 1956.

Appeal by special leave from the judgment and order dated December 13, 1954, of the Ca.Jcutta High Court in Appeal from Original Order No. 117 of 1954.

B. Sen, P. K. Chatterjee and S. N. Jlfukherjee, for the appellant.

B. 0. Mitter and D. Mukherjee, for respondent No. l.

1961. February 6. The Judgment of the Court was delivered by

Hidayat1tllah J.

HIDAYATULLAH, J.-This appeal is as much without subRtance, as it was unnecessary.

Hazrat Syed Mastershid Ali Al Quadctri (the appellant) is the eldest son of one Hazrat Sahib Sved Shah l\Iastershid Ali Al Quadari (shortly, Hazrnt Sn.bib), the first Mut.awalli of a wakf created on August 9, 1931, for the maintenance of the shrine of a Muslim Pir in the town of Midnapur.

After the death of Hazrat Sahib, the appellant, claiming to succeed to his fath<r as Sajjadanashin, being his eldest son, made an application to the Commissioner ' under the Bengal Wakf Act. His yotrnger brother, Syed Shah Rushaid Ali Al Quarlari, opposed his claim, the ground being that be was nominated as the successor by Hazrat Sahib. vVhile this controversy was afoot, the Commissioner, acting under s. 40 of the Bengal Wakf Act, appointed Syed Shah Rasheed Ali Al Qnarlari (the third son of Hazrat Sahib) as a temporary i\Iutawalli. The appellant then moved a petition in the C>1.lcutta High Court under Art. 226 ofthe Constitution against the appointment, which was allowed by Sinha, J. and the order of the Commissioner was set aside. On appeal to the Divisional Bench, consisting of Chakrava.rti, C. J. and Lahiri, J. (as he then

was), the order of Sinha, J. was reversed, and the I96z petition was dismissed. This appeal has been filed H - · h ' 1 azrat Syed Shah wit spema leave.

Ma•tershid Ali It is contended in this appeal that the order of the Al Quadari Commissioner appointing a temporary Mutawalli was v. illegal, because under the Rules framed by the Govern- Commissioner of ment, ouly the Board constituted under the Bengal Wakfs, Wakf Act could make the appointment. This argu- West Bengal ment, in our opinion, is wholly unsound. The learned Hidayatullah J.

Chief Justice of the High Court examined the matter at great length in reaching his conclusion; but, in our opinion, the reasons can be stated within a narrow compass.

We are concerned with sections 40 and 29 of the Bengal Wakf Act. Section 40 reads as follows:

"In the case of any Wakf of which there is no Mutwalli or where there appears to the Board to be an impediment to the appointment. of a Mutwalli the Board, subject to any order of a competent Court, may appoint for such period as it thinks fit a person to act as Mutwa!li." Section 29 provides :

"The Board may, from time tu time, authorize the Commissioner to exercise and perform, subject to the control of the Board, any of the powers and duties conferred or imposed on the Board by or under this Act." On April 24, 1936, the Board adopted the following resolution :

" (2). In exercise of the powers vested in them under Section 29 of the At, this Board resolve that the Commissioner of Wakfs be authorised to exercise and perform, subject to the control and approval of this Board, the following powers and duties conferred or imposed on this Board by the sectionsof the Act mentioned against each case:- * • •

(c) The powers of this Board under section 40 to appoint a temporary mutwalli." These two provisions of the Act show only too plainly that a temporary Mutawalli can be appointed either by the Board, or, if the powers and duties be

r96r delegated to the Commissioner, by the Commissioner.

H azrae-;-;, d Shah The appellant contends that the Cum missioner can 1• Mas!ershidAli only make a report to the Board, and the Board alone

AIQuadan can make the appointment, and refers to two Hules v. framed by Government. These Rules are : Ccmmissioner of "l. If it appears to the Commissioner that there

Wakfs, is no mutwalli, in the ease of any wakf~ or that a IVest Bengal a vacancy in the office of the mutw<tlli h, w been Hidayatullah J. caused by death, resignation, retirement or removal of the former mutwalli, and a dispute has arisen between two or more rival claimants to the vacancy, and such dispute is likely to affect the interests of the \Vakf, he may institute an enquiry , and report the result thereof to the Board with his \c recommendation. 2.

On receipt of the report and the recommendation from tlw Commissioner, or on il:; own motion, the Board may appoint a mutwalli under section 40 of the Act." It is argued that under the second Rule the Commissioner was bound to make his report and recommendaii tion, but the Board alone was empowered to appoint a temporary l\Iutawalli under s. 40. The last words of the second Huie, it is said, are clear. This is, no doubt, true of those cases where the Board has not delegated its functions under s. 40 to the Commissioner. Once that delegation has been rnadA, the Commissioner acts for and on behalf of the Board, and the Rules cease to apply. The Hules cannot affect the power of the Board to delegate its fun<>tions under s. 29, and harmonious construction requires that the Iiules should give way, when there is a delegation of the powers of the Board. The Commissioner was thus competent to make the appointment.

Mr. Sen, however, contencls that the appointment of a temporary Mutawalli could only be made if there was an" impediment" to the appointment of a permanent Mutawalli, and that there was no impediment to such an appointment but "a challenge to the appellant as a canclida.te." The word " impediment" means hindrance or obstruction, and there was certainly an obstruction to th" appointment of a perooanent

Mutawalli, while the dispute remained undecided. r96r This point has no force whatever. - The question which seemed to have largely engaged HaMzrat Syedd sh.ah t . . h H. h C 1 h h th d 1 as Im hi Ali a tent10n m t e 1g ourt, name y, w et er e e e- Al Quad•ri gation was only of powers or also of duties of the v.

Board, was not argued before us, though it formed the Commissioner of subject of considerable discussion in the statements of Wakfs. the case. It is without substance. Where powers and West Bengal duties are interconnected and it is not possible to Hidayatullah f separate one from the other in such wise that powers may be delegated while duties are retained and vice versa, the delegation of powers takes with i\ the duties.

The proposition hardly needs authority ; but if one were necessary, reference may be made to Mungoni

v. Attorney-General of Northern Rhodesia (1).

In our opinion, the appeal has no force whatever.

The appellant chose the extraordinary course of dragging the respondents twice to the High Court and again to this Court merely to challenge an order of temporary duration, while the main controversy remained outstanding for years and could have been decided by now. The appeal fails, and is dismissed. The appellant shall pay the costs of the respondents, who have entered appearance.

Appeal dismissed.

MAHANTH RAM DAS

GANGA DAS. (J. L. KAPUR, M. HrnAYATULLAH and J.C. SHAH, JJ.)

Court Jee-Appeal to stand dismissed if court Jee not paid within time granted-Extension of time, if can be granted-Code of Civil Procedure, r908 (V of r908). ss. r48, I49, I5I, 0. 47, r. r.

The High Court passed a peremptory order that "the appeal will stand dismissed " if a certain amount of court fee was not paid within the time granted by the court. The appellant being unable to find money made an application for extension of time before the expiry of the time granted, Md offering to make a partial payment asked for further time, The application was

(r) [1060) A.C. 336 g8

I96I

February 7,

Art. 133

THE COMMISSIONER OF W AKFS,

WEST BENGAL

L. KAPUR

M. HIDAYATULLAH

SS. 29, 40

s. 40

Government of West Bengal

s. 40

s. 29

State of littar Pradesh

Shah

s. 29

Hazrat Syed Shah

B. Sen

P. K. Chatterjee

S. N. Jlfukherjee

Mitter

D. Mukherjee

HIDAYATULLAH

Hazrat Syed Mastershid Ali Al Quadctri

Hazrat Sahib

Sajjadanashin

Syed Shah Rushaid Ali Al Quarlari

s. 40

Syed Shah Rasheed Ali Al Qnarlari

C>1.lcutta High Court

Art. 226

Sinha

Chakrava.rti,

Lahiri

azrat Syed Shah

Hidayatullah

sections 40 and 29

Section 40

Section 29

April 24, 1936

Section 29

section 40

AIQuadan

section 40

s. 40

s. 40

s. 29

Sen

HaMzrat Syedd

Wakfs

West Bengal

Hidayatullah

MAHANTH RAM DAS

GANGA DAS

J. L. KAPUR

M. HrnAYATULLAH

Code of Civil Procedure


3 S.C.R.

SUP.REME COURT REPORTS 763

Mutawalli, while the dispute remained undecided. r96r This point has no force whatever. - The question which seemed to have largely engaged HaMzrat Syedd sh.ah t . . h H. h C 1 h h th d 1 as Im hi Ali a tent10n m t e 1g ourt, name y, w et er e e e- Al Quad•ri gation was only of powers or also of duties of the v.

Board, was not argued before us, though it formed the Commissioner of subject of considerable discussion in the statements of Wakfs. the case. It is without substance. Where powers and West Bengal duties are interconnected and it is not possible to Hidayatullah f separate one from the other in such wise that powers may be delegated while duties are retained and vice versa, the delegation of powers takes with i\ the duties.

The proposition hardly needs authority ; but if one were necessary, reference may be made to Mungoni

v. Attorney-General of Northern Rhodesia (1).

In our opinion, the appeal has no force whatever.

The appellant chose the extraordinary course of dragging the respondents twice to the High Court and again to this Court merely to challenge an order of temporary duration, while the main controversy remained outstanding for years and could have been decided by now. The appeal fails, and is dismissed. The appellant shall pay the costs of the respondents, who have entered appearance.

Appeal dismissed.

MAHANTH RAM DAS

GANGA DAS. (J. L. KAPUR, M. HrnAYATULLAH and J.C. SHAH, JJ.)

Court Jee-Appeal to stand dismissed if court Jee not paid within time granted-Extension of time, if can be granted-Code of Civil Procedure, r908 (V of r908). ss. r48, I49, I5I, 0. 47, r. r.

The High Court passed a peremptory order that "the appeal will stand dismissed " if a certain amount of court fee was not paid within the time granted by the court. The appellant being unable to find money made an application for extension of time before the expiry of the time granted, Md offering to make a partial payment asked for further time, The application was

(r) [1060) A.C. 336 g8

I96I

February 7,

1961 heard after the expiry of the time and was dismissed on the ground that the appeal had already "stood dismissed " owing to Mahanth Ram Das non-payment within the time allowed. The appellant's applicav. tions under s. r5r and 0. 47, r. r of the Code of Civil Procedure Ganga Das were also dismissed on the same ground although the court expressed sympathy for the appellant. On appeal with a certificate of High Court : Held, that such procedural orders though peremptory (conditional decrees apart) are, in essence, in terrorem, so that dilatory litigants might put themselves in order and avoid delay but they do not completely estop a court from taking note of events and circumstances which happen within the time fixed and time should have been extended in the circumstances of the case and the court was not powerless to deal with events happening after the peremptory order.

Lachmi Narain Marwari v. Balmakund Marwari (r925) I.L.R. 4 Pat. 6r (P.C.). referred to.

Section 148 of the Code of Civil Procedure, in terms, allows extension of time, even if the original period fixed expired and s. r49 is equally liberal; the High Court had ample power to apply those sections and to exercise its inherent powers under s. r5r in order to do justice to a litigant for whom it had expressed considerable sympathy.

Latham v. f ohnson [r9r3] r K.B. 39$, referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 432 of 1957.

Appeal from the judgment and order dated September 27, 1955, of the Patna High Court in Civil Revision No. 24 of 1954.

R. C. Prasad, for the appellant.

The respondent did not appear.

1961. February 7. The Judgment of the Court was delivered by

Hidayatul/ah J.

HrnAYATULLAII, J.-The appellant who was plaintiff in a title suit in the Court of the Subordinate Judge II, Gaya, has appealed against the dismissal of hissuit by the High Court at Patna, with a certificate from that Court. In the suit he had asked for a declaration that he was nominated Mahant of Moghal Juan Sangat by his Guru, Mahanth Guiab Das, by a registered deed dated October 21, 1944, and that he had thus the right to manage the Sangat and other off-shoots thereof.

His suit was dismissed by the trial Judge on May 31,

1947. He then appealed to the High Court at Patna, and on November 26, 1951, the appeal was decided in

" •

1961 his favour on condition that he paid court fee on the amended relief of possession of properties involved in Mahanlh Ram n.. the suit, for which purpose the case was sent to te v.

Court of First Instance for determining the value of GMlga Das the properties and for fixing the amount of court fee to be paid. After the report from the Subordinate Hidayatullah J.

Judge was received, the case was placed for final orders before the High Court. V. Rama&wami, J. and C. P. Sinha, J. (as they then were) held that the valuation for the purpose of the suit was Rs. 12,178-4-0, and that ad valorem court fee was payable on it. They, therefore, made a direction as follows :

" The High Court office will calculate the amount of .court fee payable on the valuation we have given all(! communicate to the counsel for plaintiff-appellan t what is the amount of the court-fee he has got to pay both on the plaint and on the memorandum of appeal. We grant the plaintiff three months' time to pay the court-fee for the Trial Court and also for the High Court. The time will be computed from the date counsel for appellant is informed of the calculation by the Deputy Registrar of the High Court. If the amount is not paid within the time given, the appeal will stand dismissed. If the court fee is paid within the time given, the appeal will be allowed with costs and the suit brought by the plaintiff will stand decreed with costs and the plaintiff will be granted a decree declaring ...... " The office of the High Court gave intimation on April 8, 1954, that the deficit court fee payable was Rs. 1,987-8-0. The time was to expire on July 8, 1954; but the appellant was not able to find the money. It appears that the appellant's advocate in the High Court asked the case to be mentioned before the Vacation Judge on July 8, 1954, so that a request for extension of time could be made. No Division Bench, however, was sitting on that date, and the appellant filed an application on July 8, 1954, requesting that he be allowed to pay Rs. 1,400 immediately, and the balance, within a month thereafter. This application was placed before a Division Bench consisting of Ramaswami and Ahmad, JJ ., when the following order was passed:

z96I " This application for extension of time must be

Mahantk Ram Das dismissed; By virtue of the order of the Bench dated the 30th March, 1954, the appeal has already stood dismissed as the. a.mount was not pa.id within the time given."

Ganga Das

Hidayatullah J. The appellant then moved an application under s. 151, which was rejected by Imam, C.J. and Narayan, J:, on September 2, 1954. They, however, felt that the proper remedy was review. The appellant then filed another petition under s. 151, read with 0. 47, R. 1 of the Code of Civil Procedure, setting out the reasons why he was unable to find the money .. He stated that he was seriously ill, and though he had attempted to raise a loan, he was unable to get sufficient money, as the grain market had slumped suddenly, and people were unable to advance money. He offered to pay the deficit court fee within such further time as the High Court might fix.

This application for review was heard on September 27, 1955, by Rama.swami and Sinha, J, J. They first considered it from the viewpoint of 0. 4 7, R. 1 of the Code of Civil Procedure, and held that the application did not fall within the Order. The argument of counsel that time could have been extended under s. 148 or s. 149 of the Code of Civil Procedure was also not accepted. The learned Judges held that these sections applied only , to cases which were not finally disposed of, and that time under them could be extended only before the final order was actually ma.de. The request to extend the time under the inherent powers of the Court was also rejected for the same reµ.son.

Rama.- swami, J., concluded his order by saying:

" I have considerable sympathy towards the plaintiff petitioner who ha.s placed himself in an unfortunate position, but we must be careful not to allow our sympathy to affect our judgment. To quote the language of Fa.rweft, J. in another context 'sentinient is a dangerous will-o-the wisp to take as a guide in the search for legal principles ' (Latham v. Johnsan('))."

(1) (1913) xK. B .. ~98.

In the result, the petition was dismissed, but without z96z costs. .

M ahanth Ram Das The appellant then moved the High Court for a v. certificate, a.nd the case was heard by K. K. Banerji Gang• Das and R. K. Chaudha.ry, JJ. Though the decree wa.s one . - of a.ffirma.nce, the learned Judges fortunately found it Hidayatullah J. possible to grant a certificate, and the present appeal has been filed.

The case is an unfortunate and unusual one.

The application for extension of time was ma.de before the time fixed by the High Court for payment of deficit court fee had actually run out.

Tha.t application appears not to ha.ve been considered a.t a.II, in view of the peremptory order which ha.d been passed earlier by the Division Bench hearing the appeal, mainly because on the da.te of the hearing of the petition for extension of time, the period had expired. The short question is whether the High Court, in the circum 11ta.nces of the case, was powerless to enlarge the time, even though it ha.d peremptorily fixed the period for payment. If the Court had considered the application a.nd rejected it on merits, other.considerations might have a.risen; but the High Court in the order quoted, went by the letter of the original order under which time for payment had been fixed. Section 148 of the Code, in terms, a.Hows extension of time, even if the original period fixed has expired, and s. 149 is equally libero.I. .A fortiori, those sections could be invoked by the a.pplica.nt, when the time ha.d not a.ctua.Ily expired.

Tha.t the application was filed in the va.ca.tion when a Division Bench wa.s not sitting should ha.ve been considered in dee.ling with it even on July 13, 1954, when it was actually heard. The order, though passed after the expiry of the time fixed by the original judgment, would have operated from July 8, 1954. How undesirable it is to fix time peremptorily for a. futw:e happening which leaves the Court powerless to deal with evenj; s tha.t might a.rise in between, it is not necessary to decide in this a.ppea.l. These orders turn out, often enough to be inexpedient. Such procedure.I orders, though peremptory (conditional decrees a.pa.rt) a.re, in essence, in terrorem, so tha.t dilatory litigants might

z96x put themselves in order and avoid delay. They do not,

M 114 IA R D however, completely estop a Court from taking note- • n v. am as of events and circumstances which happen within the

Ganga Das time fixed. For example, it cannot he said that, if the appellant had started with the full money ordered to HidayatullaA J. he paid and came well in time but was set upon and robbed by thieves on the day previous, he could not ask for extension of time, or that the Court was powerless to extend it. Such orders are not like the law of the Medes and the Persians. Cases are known in which Courts have moulded their practice to meet a situation such as this and to have restored a suit or proceeding, even though a final order had been passed. We need cite only one such case, and that is Lachmi Narain Marwari v. Balmakund Marwari (').

No doubt, as observed by Lord Phillimore, we do not wish to place an impediment in the way of Courts in enforcing prompt obedience and avoidance of delay, any more than did the Privy Council. But we are of opinion that in this case the Court could have exercised its powers first on July 13, 1954, when the petition filed within time was before it, and again under the exercise of its inherent powers,. when the two petitions under s. 151 of the Code of Civil Procedure were filed. If the High Court had f(llt disposed to take action on any of these occasions, ss. 148 and 149 would have clothed them with ample power to do justice to a litigant for whom it entertained considerable sympathy, but to whose aid it erroneously felt unable to come.

In our opinion, the High Court was in error on both the occasions. Time should have been extended on July 13, 1954, if sufficient gause was made out and again, when the petitions were made for the exercise of the inherent powers. We, therefore, set aside the order of July 13, 1954, and the orders made subsequently. We need not send the case back for the

trial of the petition made on July 8, 1954, because that would be only productive of more delay. Non..e has appeared to contest the appeal in this Court. We have

perused the application and the affidavit, and we are satisfied that sufficient cause had been made out for

(1) (19z5) 1.1 .. R. 4 Patna 61 (P.C.).

extension of time.

We, accordingly, set aside the r96r dismissal of the appeal and the suit, and grant the - appellant two months' time from today for payment Mahanth Ram Das of the defi_cit court fee.

We only hope that,. after the Gan;~ Das lesson whrnh the appellant has learnt, he will not ask the Court perhaps vainly, to show him any more Hidayatullah J. indulgence. There will be no order about costs in this Court as the appeal was heard ex parte.

Appeal allowed.

KAUSHALYA DEVI AND OTHERS

BAIJNATH SAYAL AND OTHERS. (P. B. GAJENDRAGADKAR and K. N. WANCHOO JJ.)

Suit against Minor-Preliminary decree on consent by guardian without leave of court-If a nullity-If can be set aside in appeal against final decree-Code of Civil Procedure, r908 (Act V of r908),

s. 97, 0. 32, r. 7.

Order 32, r. 7(2) of the Code of Civil Procedure, which is intended to protect the interest of the minor, really means that an agreement or compromise entered into on behalf of the minor in contravention of 0. 32, r. 7(1) is voidable only at the instance of the minor and not at the instance of any other party to it.

Such contravention does not render the agreement or decree a nullity and the same has to be avoided in an appropriate proceeding.

Manohar Lal v. Jadu Nath Singh (19o6) L.R. 33 I.A. 128, referred to.

Chhabba Lal v. Kallu Lal (1946) L.R. 73 I.A. 52, Jamna Bai

v. Vasanta Rao (1916) L.R: 43 I.A. 99 and Khiarajmal v. Daim

(1904) L.R. 32 I.A. 23, held inapplicable.

Where a preliminary decree is passed in non-compliance with the provision of 0. 32, r. 7(1), the remedy of the minor is by way of an appeal against that decree and not against the final decree since s. 97 of the Code is a bar to the challenging of the preliminary decree in an appeal against the final decree.

Consequently, in a suit for the partition where preliminary decree by consent was passed against the minor in contravention o't.O. 32, r .. 7(1) and that decree having been sought to be set aside in an appeal from the final decree the High Court held that s. 97 of the Code precluded the appellant from doing so.

Held, that the decision of the High Court was correct and inust be affirmed. ·

Februaf'y 9.

HaMzrat Syedd

it is not possible to Hidayatullah

MAHANTH RAM DAS

L. KAPUR

C. SHAH, JJ.

Code of Civil Procedure

February 7,

1961

Mahanth Ram Das

the Code of Civil Procedure

Section 148

the Code of Civil Procedure

R. C. Prasad

Hidayatul/ah

HrnAYATULLAII

Subordinate Judge II, Gaya

High Court at Patna

Moghal Juan Sangat

Mahanth Guiab Das

May 31,

1947

November 26, 1951

Mahanlh Ram

Hidayatullah

V. Rama&wami

C. P. Sinha

April 8, 1954

July 8, 1954

Ramaswami

Ahmad

Mahantk Ram Das

30th March, 1954

Ganga Das

s. 151

Imam

Narayan

September 2, 1954

s. 151

the Code of Civil Procedure

September 27, 1955

Rama.swami and

Sinha

the Code of Civil Procedure

s. 148

s. 149

the Code of Civil Procedure

Rama.- swami

Fa.rweft

M ahanth Ram Das

K. K. Banerji Gang• Das

R. K. Chaudha.ry

Section 148

s. 149

July 13, 1954

Ganga Das

HidayatullaA

Phillimore

s. 151

the Code of Civil Procedure

ss. 148 and 149

Das

KAUSHALYA DEVI

BAIJNATH SAYAL

P. B. GAJENDRAGADKAR

K. N. WANCHOO

Code of Civil Procedure

s. 97, 0

the Code of Civil Procedure

L.R. 33 I.A. 128

(1946) L.R. 73 I.A. 52

(1904) L.R. 32 I.A. 23

s. 97

s. 97