...

3 S.C.R.

SUPREME COURT REPORTS 25

DALBIR SINGH AND OTHERS

THE STATE OF PUNJAB (B. P. 'INHA, o. J., :K. SuBBA RAo, N. RAJAGOPALA

AYYANGAR, , J. R. MuDHOLKAR and

T. L. VENKATARAMA AIYAR, JJ.)

Police Force-Breach of discipline-Law providing for penalty for such breach-Validity-Pepsu. Police (Incitement to disaffection) Act, 1953 (Pepsu 1 of 1953), s. 3-Constitution of India, Art. 19(1)(a), 19(2), 33.

Section 3 of the Pepsu Police (Incitement to disaffection) Act, 1953, provided: ''Whoever intentionally causes or attempts to cause, or does, any act whichhe knows is I_ikely to caue, disaffectioh towards any Government estabhshed bylaw in India amongst the members of a police force, or induces or attempts to induce, or does any act wh1ch he knows is likely to induce, any member of a police force to withhold hisservices or to commit a breach of Jiscipline shall be punishable with imprisonment .. ,.,,

After the administration of the State of Pepsu was taken over by the Presiclent under Art. 356 of the Constitution o[ India, Parliament enacted a law by which the power of the legislature of the State of Pepsu !was conferred on the President. By virtue of this power the President enacted the Pepsu Police (Incitement to Disaffection) Act, 1953, the object of which was to provide a penalty, inter alia, for spreading dis. affection among the police. The appellants were charged with having induced or attempted to induce members of the police force tO withhold their services and thus to commit a breach of discipline by staying away without doing their duty, and thereby having committed an offence under s. 3 of the Act.

They were convicted by the Magistrate and the conviction was confirmed by the High Court. The appellants challenged . the validity of the conviction on the ground that s. 3 was violative of the freedom guaranteed by Art. 19(l)(a) of the Constitution and was not saved by Art. 19(2).

Held, thats. 3 of the Pepsu Police (Incitement to disaffection) Act, 19j3, did not infringe Art. (19)(l)(a) of the Constitution and was intra 1)ires.

The Police service is an arm of the State charged with the duty of ensuring and maintaining public order and since ilny breach of discipline on. the part of its members mi&hi

February 6.

Dalbir _ Singh

v. 7 A~ State oj Punjab

AJya11ga1 J.

SCPREME COURT REPORTS [1962) SUPP.

result in a 1hreat to puLiic order, s. 3 nnist he held to be valid as having br.('n r:-naclrd "in the intr.rets of public order" within the meaning of Art. 19(2).

l9upr:rintendent, ('fntral /lrison, Frrll'.lu; arh v.

Rr1111 Manohar Lohia, (1960) 2 S. C.R. 821, relied on.

Held, furrhrr, that Art. 33 of the Conc; titution \Vas not applicable became Parliament had deh ga1ed the pow.rs of the legislature of ti.<: State to tl.e President and any law enacted by hiih \\ould riot have the force of Parliamentary legisla1ion contemplated by Art. 33.

Cnnni; AL A l'PJ:LLATE .J cn1s PICT!ON: Criminal Appeal No. I 02 of 1960.

 Appeal by special leave from the judgment and order daterl October 7, 1959,- of the Punjab High Court in Criminal Revision N:o. 610 of 1959.

Hardei.• Singh ancl Y. Knmar, for the appellants.

S. JJ. Sikri. Advocate.General for the Stat, e of Punjrtb, S. S. Rindm and P. I>. Menon, for the

respondent.

1962. February 6.

The .Tmlgment of the Court wa8 delirnr<cl. by

AYL1-.<Hll, .f.--This app<'al hy special bavc against th!l rleci•ion of tlw High Court of Punjab raises for considcation principally the contitu tional valirlitv of"· :~ <>f the Pepsu P<llicc~ : Incitement to dis11ffPction) Act. (Act, I nf Hl:>3 ), which will be referre<I to hereafter ns thP imp:igned Acr ..

The four app., llants were at one tiarn member• of the Peps11 P.J!ice force anrl wer<' chaqed, before the First Cla's Ma!!istrnte at Faridkot., with having committed three offunccs: (I) under s. :>6 of tho Pepsu Public S; ifoty Orilinancc (Xo. 7 of Sam 1at 2006), (2) under s. 33 of tlte said Ordinance,

JLnd (3) under"· 3 of the impugned Act.

Wt• shall he referring to th" provisinns of the r<levant enact monts in due course.

The accused pleaded not guilt.v and were tried by tho learned Magistrate who by bis judgment dawd. August ~8, IU58, l)eld thl'

prosecution case fully established against all the accused. He convicted the four appellants under s. 26 of .the Public Safety Ordinance and sentenced them to imprisonment for six months. The third appellant alone was convicted of the offence under s. 33 of the same Ordinance and was sentenced to imprisonmPnt for six months. Appellants 1, 2 and 4were further convicted of off onces under s. 3 of the impugned Act and sentenced to imprisonment for six months, the several entences against the respective accused being directed to run concurrently. The appellants filed an appeal to the Sessions Judge at Bhatinda who upheld the convictions but reduced the sentences. In respect of the offence under s. 26 of the Public Safety Ordinance the sentence passed against the four appellants was reduced to imprisonment 'for three months while in respect of the third accused who had been additionally sentenced under s. 33 of the Ordinance the same was reduced to imprisonment for 1-J /2 months and the sentences on appellants 1, 2 and 4 under s. 3 of the impugned Ac't was reduced to imprisonment for three months, the sentences again being directed to run concurrently. With these modifications the appeals stood dismissed.

The appellants thereafter preferred a revision to the High Court

and this was heard by a learned Single , Judge who while accepting the revision of the appelhnts in so far as it related to their conviction and sentence nnder s. 26 of the Ordinance. maintained the other convictions and sentences but reduced the sentences.

It is from this judgment of the High Court that this appeal has been preferred by the four appellants.

It would be seen from the above narrative that the appeal is concerned with the propriety of the conviction of appeilants 1, 2 and 4of an offence under s. 3 of the impugned Act and of the third appellant under s. 33 of the Ordinance, all the appellants having been acquitted by the High Qm1rt of the charge against t!iem under s, 26 of the

Dalbir Singh

v. 1'he ')fate of Punjab

Ayyangar J.

I>alb ir Singh

' T~ SL2tt of Pun, j"h

SUPREME COURT REPORTS [1962] SUPP.

Ordinance. It is therefore not necessary to refer to the terms of s. 26 or the offenco comtitut.ed by it. In the Courts below including the High Court no challenge was made as regards the legality of any of the provisions of law of the violation of which the appellanta were found guilty but before us though learned Counsel did not raise any contention regarding the validity of~. 33 of the Pepsu Public Safety Ordinance, challenged the constitutio11ality

of s. :i of the impugwd Pcpsu Polic~ (Incitement to disaffection) Act which appellants I, 2 and 4

were found to have violated and for which thev were sentenced to :t tcrm of imprisonment. •

Le1trned Counsel for the appellants raised for our co11sideration three points : ( l) the constitutional 1alidity of s.:J of thn irnpugnerl Act, (2) ifs. 3 were constitutional a11d vidid whether appcllant8 I,

2 and 4 were• pro1cd to have been guilty of an offence for 1iolating that provision, and(:!) whether appellant 3 was properly held guilty of an offone under "· 3:! of the p,, I' •u Public Safety Ord inn nee.

\Vn shall first take up for consideration the attack on the validity of s. :i of the impugned Act.

Patiah and East. Punj:Lb State Uuion, commonly oallecl Pepsu was one of the States specified in Part B of the First Sohrdulc to the Coustitution when the Constitution was brought into forco in .January

J!l;)(J, For reasons uot necesoarv to be stated here, the administration of Pepsu was taken over by the Prcsidc., nt under Art. :i.; G of the Constitution.

The powers of the State Lrgislature were declared by t:he Presidential Proclamation ismecl on ~Tarch 4, I 953. to be "exerciseable hy or under the authority of Parliament" (virl<1 Art. :r>G(l )(b) ).

Thereafter Parliament enacted Ac. XXII of 195:! which received the assent of the Pros1clent on i\Iay Ii, 195:1, which was entitled : "The Patiala and East Punjab States Union Legislaturn {D"lrgatiou of Powers) Act, ) 953." Section :i oft his enactment provided ;

3 'S.C.R.

SUPREME COURT REPOR'.l'S 29

"The power of the legislature of the State of Patiala and East Punjab States Union to make Jaws which has been declared by the proclamatioIJ.to be exercieable by or under the authority of the l!arliament is hereby conferred on the .l:'resident."

There are other provisions which are contained in the other sub-sections of s. 3 but these have no relevance for. this appeal. In exercise of the power thus delegated to him by Parliament the President enacted Pepsu Act l of 1953 whose long title runs :

"An Act to provide a penalty for spreading disaffection among the police and for kindred offences."

It is the 3rd section of this cnJ.ctm0nt whose vali- . dity is challenged in this appe1.l and that reads :

":1.

Penalty for causing disaffection, etc. -Whoever intentionally causes or attempts to cause, or .does any act which he knows is likely to cause, disaffection towards any Government establiRhed by law in India amongst the members of a police force, or induces or attempts to induce, or does any act which he knows is likely to induce, any member of a police force to withhold his services or to commit a breach of discipline shall be punishable with imprisonment which may extend to six months, or with fine, or with

both."

The attack upon the validity of this provision was rested on its •being violative of the freedom guaranteed by Art.• l9(l)(a), the submission being that the section was not saved by Art. 19(2).

Before considering the arguments advanced it is necessary 1to mention, for being put aside, that in construing the validity of s. 3 of the impugned Act

Ealbir Singh

v. 'The State of Punjab

Ayyangar J.

Da/bir ; Singh

Thi State nf Punjab

A)'J.lngar J.

30 SUPREME COURT .REPoRTs (1962] SU.PP.

the provision contained in Art. 3:l of the Constitution bus nu relevance. That 'Article enacts :

"Art. 33. Parliament may by law determine tn what Pxtcnt any of the rights conferred by this Part, shall in their application to the members of the Armed Forces or the Forces' charged with the maintenance of public order, be restricted or abrogated so as to ensuro the proper discharge of their duties and the maintenance of discipline among them." No doubt, the impugned provision is concerned with ensuring discipline among the forces charged with the nmintenance of public order but as the powers of the President were exercised by virtue of the delegation contained in s. 3 of Act XXII of 1953 under which only the powers of the State Legislature were v<'st-cd in him, any law enact-cd by him would not have the force of Parliamentary legislation eontomplated by Art. 33.

Article 3:l being out of the way the very short question that bas to be considered is whether the impugner! provision is saved by Art. 19(2), for it is common ground that that provision does not violate any freedom other than that of "free speech and expression" gunra.nteed by Art. 19 (I) (a).

Article 1!1(2) as it. stands after the amendment by the Constitution (First Amendment) Act of 1951 reads :

"19(2) Nothing in sub-clause (a) of clause (I) shall affect. the operation of any existing law, or prevent the State from making any law, in so for as such law imposes reasonable restrictions on tho exercise of the right conferred by the said sub-clause in the interest of the security of the State, friendly relations with foreign States, public order, de(l(•ney or morality, or in relation t-0 contempt of cou::t, defamation or incitement to an .offence," Of the criteria set out in this clause the one re)eyant

• ...

::i S.C.R.

SbPREMtll COURT REPoRTS 31

in the present context is that which refers to "in the interests of ............ public order". The contention urged hy learned Counselwas thats: 3 was too wide in that it embraced within itself not merely matters which might h<tve relevance to circumstances intimately connected with the maintenance of public order, but also those whoslil connection with it might .be remote or fanciful.

While not seriously disputing that seducing the loyalty of the police force, or inducing the mem hers thereof not to do their duty might imperil public order and so fall within the limit of restrictions permissible of imposition under Art. 19(2), learned Counsel laid stress on the fact that the impugned section made it an offence to induce a member of the police force to "commit a breach of discipline," laying special emphasis on the fact that the words "breach of discipline" besides being vague, might include within itself acts which might be innocent as wdl as others of varying degrees of culpability.

The content of the expression "in the interests of. ........... public order" has been the subject of detailed and elaborate consideration by this 0ourt in Superintendent, Central Prison, Fatehgarh v.

Ram M anohar Lohia ( 1) where the effect of the First (Constitution) Amendment by which the words "for the maintenance of public order" were replaced by the words "in the interests of public order" was considered in the light of the previous decisions of thie Court on that topic. Subba Rao, J., speaking for this Court said that the expression "public order'' in the juxtaposition of the different grounds set out in Art. 19(2) was. synonymous with "public peace, safety and tranquillity". He also pointed out that the expression "in the interests of public order" though undoubtedly wider than the previous phrasing "for the maintenaP.ce of public order" could not mean that the existence of any . remote or fanciful connection between the impugned act

(I) [ 1960] 2 S.C.R. 821.

Dalbir Singh

v. 7 he State of Punjt1h

-1_vyanga1 J,

Dolhir Sin1h ..

The State of Punjab

Ay1angar J.

SUPREME COURT REPORTS (1962] SUPP.

and public order was sufficient to sustain the validity of the law, but that on the other hand, tho connection between the act prohibited or pnnalised and public order should be intimate; in other words there should be a reasonable and rational relat.ion between it and the object sought to be achieved, viz., public order. The nexus shoulrl thus bn proximate-not for-fetched, problcmaticlll or too remote in the chain of its relation with public order.

Keeping this exposition in mind. the question to bo considered is whether the connection between what is prohibited or penalised by the impugned provision and public order, i.e., the ensuring of tranquillity and orderly lifo is so remote or fanciful as to lead tu an inference that there is no proximate connection between the two.

We have no hesitation in answering this question against the appellants. The impugned enactment seeks to lay an embargo on certain >1ctivities in thti interests of the Police service which is tho <trm of tho State charged with the duty of ensuring and maintaining public order. The efficiency of that service and its utility in achieving the purpose for which it is form ed and cxista is sought to be secured by penalising attempts to undermine its loyalty and dissuad ing the members of that force from performing their functions and boing available to the State as a disciplined body.

Any breach in the discipline by its members must neceBBarily bn reflected in a threat to public order .and tranquillity. If the police force itself were indisciplined they could hardly servo as instruments for the maintenance of public order or function properly as the machinery through which order could bo maintained among the general public. As we have pointed out e•ulier, learned Counsel did not seriously contest that the impugned provision in so far as it penalised tho creation of disaffoctiun among members of the police force or the incitement of the members of the police forco to withhold their services from the government could properly be sustained as enacted

' 1

• '

"in the interests of public order," We consider that attempts to induce indiscipline among the police do not stand on any different footing.

Wo do not further consider well-founded the submission of learned Counsel that the word "discipline" or the phrase "breach of discipline" is vague. We have therefore no hesitation in rejecting this challenge to the validity of s. 3 of the impugned Act.

The next question that was urged by learned Counsel was that the High Court was wrong in considering that the three appellants 1, 2 and 4 were guilty of any contravention oi s. 3 of the Act.

We do not consider that this submission is justified.

It is needless to point out that in considering an appeal which comes before us by special leave this

Court normally accepts as final every finding of fact reached by the High Court as well as its appreciatiOn of oral testimony and that if there is evidence which could serve as a basic for any finding reached by the High Court the same cannot be canvassed before us. If the submission of learned Counsel is viewed in the light of this principle it appears to us that there is hardly any scope for argument as regards what might be termed the merits of the case. One of the witnesses whose evidence has been accepted by the Courts below and which is referred to in the judgment of the learned Judge in the High Court was Krishan Dayal P.W, 4 who deposed to the accused saying "Police brothers, come and join us, stop the office work; we will .sit here in dharma, start hunger strike ............ and would not allow the office work to run." It is clear from this evidence that the accused had induced or had attempted to induce members of the police. force to withhold their services as also to coi:nmit a breach of discipline by staying away without doing their duty. In our opinion, it is not shown that the conviction of appellants I, 2 and 4 of an offence under s. 3 of Act I of 1953 was improper or illegal.

Dalbir Singh

The State of Punjah

Avyarigar J.

lf/62

Dolbir Sin/lh

•• Tiu Slate aj Punjab

Ayyangor J,

SUPR~ME COURT REPORTS [1962] SUPP.

The last of the points arising in the appeal is as regards the conviction of Lal Siugh the third appellantof an offence under s. 3~ of tht• Ordinance. Soctiou 33 of the Ordinance runs :

"Whoever induces or attemptH: to i11uueu any public se1 rn.11t or any serva11t of local . authority to disregard 0·1 fail in his duties as. such servant shall be punishable with imprisonment which may extend to one year. or with fine or with both.''

As regards this appellant this is what th~· learned Judge qf tho High Court stated :

"As against Lal Siugh there is evidcni:e of P.W. II Kartar Singh and P.W. 18 Balwant Singh, Foot-Constable that he asked them to disobey their officers and should give up government work.

His offence under s. 3:J of the Ordinance is substantiated."

As we have pointed out earlier, th1 validity of s. ::ia (If the Ordinanre was not challcnµed and the 1mly qu<'Etion therefore was whether the th(rd appellant was properly held guilty of th1 offence.

It was not disputed that the two prosecution witnesses I l & 18 did state on oath the ma.ttern referred to by the learned Judge. In view of what we have stated earlinr as regards the manner in which this Court deals with appeals under Art. 13fi there is no ground shown for interfering with the conviction of the third appellant or the sentence passed.

Before parting with this case it is necessary to advert to one matter. In the course of his arguments learned Counsel for the appellant drew our

attntion to certain police rules framed by the State Government which prohibited policemen from joining unions and ought to raise a point that the said rule was unconstitutional as in violation of Art.19(l)(b) and that all the activities of the four

accused were in reality an attempt to form an union and that therefore we should consider the legality of this rule of the police force in considering the propriety of their convictions.

Though there is a reference to the rule in the judgment of the High Court, it is referred to only incidentally and as part of the narrative in detailing the activities of the accused. The offence with which the accused were charged was certainly not the violation of that rule, which it might be pointed out did not create any offence, so that the validity of that rule was wholly irrelevant to their guilt when charged with substantive offences under the various enactments we have noticed earlier. It need hardly be pointed out that the fact that a person is engaged in aseert ing a fundamental right affords no defence to a charge of having contravened a valid penal statute while so engaged. In the High Court the validity of the police rule was never challenged and in the circumstances we declined to permit learned Counsel to argue any question before us in relation to the validity of that rule.

The appeal fails and is dismissed.

Appeal dismissed.

196a

Dalbir Singh

•• The State of Punjab

Ayyangar J.

25

DALBIR SINGH AND OTHERS

THE STATE OF PUNJAB

K. SuBBA RAo

AYYANGAR, , J.

R. MuDHOLKAR

s. 3

Constitution of India

Art. 19(1)(a), 19(2), 33

Section 3

Art. 356

s. 3

s. 3

Art. 19(l)(a)

Art. 19(2)

s. 3

Art. 19(2)

(1960) 2 S. C.R. 821

Art. 33

Art. 33

s. 33

s. 26

s. 33

s. 3

s. 26

s. 33

s. 3

s. 26

s. 3

s. 33

s. 26

S 29

s. 3

Art. 19(2)

s. 3

Art. 3

Art. 33

s. 3

Art. 33

Article 3

Art. 19(2)

Art. 19

Article 1

Art. 19(2)

Art. 19(2)

1960] 2 S.C.R. 821

s. 3

s. 3

s. 3

s. 3

s. 3

Art. 13


1&6t

Apdl 17.

288 S"CPREME COURT REPOR'l S [1962] SUPP.

THE GOVERNjfE:XT OF ANDHRA PRADESH

SYED MOHD. KHA..~

(B. P. SINHA, c. J., P. B. GA.TENDRAGADKAR, K. N. WA:S-CHOO, N. RAJAGOPALA AYYANOAR and

T. L. VENKATARAMA AIYAR, JJ.)

. Citiu., hir>-Wh•th.r a P'rson acquired the Citizr.n,, hip of Foreign Stale-Question. to ,,, d1cided b11 Cmtral Goi:anment- Foreign J>a.lfsporl doe..ir not automaticali.11 pro1, p ata..tulory r, e, sser of lndian Ci1fro1s/11"r>-Citizen,, hipAct, 19.55('17 of 19.55) s. IJ(2) -CifizP.11shi7i Rule.If, 19.)6, k'; ch. III, r. 3.

The Govcmmrnt of Andhra Pradesh ordered the respondents, who had come to India with Pakistan Passport, to remove thcmelvcs out of India within a specified date. l'he

rcponcicnts filed writ petitions in the High Court against the saicl orclers and the single Judge who heard them held inter alia that as a result of s. 9 read with r. 3 in Sch. IJI of the Citizenship Rules as soon as it is shown that a person had ::tcquired a pa'isport from Pakistan Government there is an automatic statutory crssrr of his citizenship of India. This decision was challened in appral before the Division Bench of the High Court of Andhra. The Division Br.nch held that s. 9 was infra vi,.,,, but found that r. 3 of Sch. II I of Citizenship Rules was ultra t•irf.8.

However the High Court made it clrar that it-; decision in question \\'ould not

preclue the Central Govcrn'n1r.nt from deciding the 'lUestion , ... hether the present respondents had acquired citizenship of a foreign co11ntry or not, but it directed that the Central

Governmnt must ignorer. 3 of sch. Ill \vhich in its view was ultra l'irr."~.

It is against this decision of the Divi'.!ion Bench that the Andhra Governrriel'\t ha-; come up in appeal to this C'.onrt by certificate gra, lled by the Andhra Pradesh High Court.

TlrTrl., that the points rai-; ed in these appeals are concluded bv the decision of this Court in lzhar Ahmad K hrzn

v. [:.nion of lnrlir:r.

In all ca.ccs where action is proposed to be taken against persons residin.[{ in this country on the gro11nd that they have acquired Citizenship of a foreign state and have !Ost in consequence the citizenship of this country it is essential that that question should fin; t be considered hy the Cr.ntral Government.

In dealing \'lith the question the Central Government Would undoubte<lly be rntitlcd to give dfrct tor. 3 in Sch. III of the Citizehship Rules and deal

with the matrer in accordance with the other relevant rules framed under the Act

It cannot be said that by virtue of s. 9 of the Act as

oon as it is shown that a person has acquired a passport from the Pakistan Government, there is an automatic statu~ tory cesscr of his Citizenship of India.

The questi.on about the status of the respondents has to be tried by the Central GOvernrnent and it is 01ily after tJ e Central Government has rC!ached the conclusion that the respondents have acquired the citizenship of Pakistan that the authorities can issue order of deportation against such person.

CIVIL APPELLA'l'E J URISDIC'rION : Civil A ppcals Nos. 258 -27!l of 1961.

Appeals from the judgment and order dated September 4, HJ57, of the Andhra Pradesh High Court in Writ Appeals No. 46, 66 and 73of1957.

T. V. R. -Tatachaii and P. D. Menon, for the appellants.

P. Ram Reddy, for respondents in Appeals Nos. 258, 265, 261, 271, 273, 275 and 279 of 19til.

196!; April 17. The Judgment of the Court was delivered by

I96Z

TheGolle, nment of

A.ndhra P'f'fh/tsh

•• Sytd Mohd. J(h, n

GAJENDRAGADKAR, J.-This group of twenty- Gqjendwgadkar J. two appeals has been brought to this Court with certificates granted by the Andhra High Court, and they challenge the con ectness of the decision of the said High Court that r. 3 in Sch. III of the Citizenship Hules, 1956 is ultra vires.

Twentytwo persons who are the rei, pectivc respondents in these appeals filed twenty-two writ petitions in the Andhra High Court challenging the validity of the orders passed by the appellant, Government of Andhra Pradesh, asking each one of them to remove themselves out of India before the date specified in the notices served on them in that behalf. It appears that all tht: said persons had come to India with a passport issued in their favour by the Govern ment of Pakistan, and the appellant's case before

il'G2

!'lit ancernment of

A11dhrt. Pradtsli

v. 8yt1l .\I ohd. Kltart

OajmdraraJlaw J.

the High Court was that as a result of tho conduct of the r('spondcnts in a pp lying for and obtain in/.! the Pakistani passport, they hacl lust the citizenship of this country and ha<l voluntarily acquired the citizenship of PakistiHl.

That is how the appellant justified tho notices served on the respondents call. ing upon them to )pq.ve India. .

The rrspon<lents, on thn other hand, eontc11<led that s.9 of thP Citizcn8hip Act, 1955 (57 of 1955) and r. :J in Sch. III of the Citizenship Rules were 1dtra virc.~ aml they urged that they had not acquiHd the citizenship of Pakistan ancl continued to be th" citizen8 of India. These writ petitions were tried by Bhimas:mkaran J. The h•arned Judge held tlrn.t the impugned section and tho l:tulc were intra .,,-irM and ho ca.me to the conelusion that as a result of s.9 read with r,3 in Sch. III of the Citizenship Rnles,

as soon as it is shown that a person hn, s acquired a passport from the Pakistan Government, there is an automatic statutory ccFser of his citizemhip

of India.

In the result, the learned , Judge upheld the validity of tho orders of deportation passed by the appellant agains~ the respondents and dismisecl the writ, petitions without costs.

This decision was challenged by the respond. en ts by preferring :!2 appeals before a Division bench of tho Andhra High Court.

The Uivision Bench which heard these appeals held thats. 9 was inf><• 1; ires, but found that. r. 3 of Sch. 3 of tlie Citizcmhip

Ruls was ultra vires.

In its opinion, the said Huie was outside the authority conferred on the Central Government by H. 9 (Ii and it also contravened Art.19 of th<' Conetitution. The consequence of these findings inevitably '1.as that the orders of depo1tatfon passed by th<· aprcllant against the rcspcndente were held to be invalid. That is why the appeals preferred by the respondents were allowed and

& writ of mandamus was issued directing thf'

3 S.C.R.

appellant to forbear from enforcing the said orders of deportation.

The Court of Appea.l has also observed that under the Citizenship Act and the Rules framed thereunder, the Central Government has been constituted as a Special Tribunal for deciding the qnes

tion as to whether a person has acquired the citizenship of a foreign country or not, and so, before issuing the orders of deportation, it was necessary that. the appellant should have obtained a decisi0n

of the Central Government on the point about the status of the respondents. The High Court accord ingly made it clear that its decision in the appeals in question would not preclude thff Central Government from determining the question whether the respondents have voluntarily acquired the citizenship of another country within the meaning of s. 9 (1), but it added that in deciding the question, the Central Government must ignore r. 3 of Sch. III which, in its opinion, was u.ltra "vires. It is against this decision of the Division Bench about the in

validity of the impugned Rule that the appellant has come to this Court.

The question about the validity of ection 9 of the Citizenship Aet and of r. 3 in Sch. III of the Citizenship Rules has been recently considerPd by this Court in petitions Nos. 101 and 136of1959 and 88 of 1961, and this Court has held that both s. 9(2) and r. 3 in t:lch. 3 are intra iires.

The point raised by the appellant in thfse appeals iP, therefore, concluded in its favour by this decision.

This position is not disputed by the respondents.

That raises the question about the proper order to be passed in the present appeals.

It has been urged before us by Mr. Tatachari for the appellant that the effect of our decision in the case of Izhar Ahmad Khan is that as soon as it is shown:

The Goue.rnment of

Andhra l'rodesh

Syed Mohd. Kkao

Go.jtn.dt'agadkar J,

f hf Gor1YnT1Ut1I of

A nt!hra PrD'ksh

•• S:1td Mo/Hi Khan

Gajnidrogadk4r J.

292 SUPREM:I<: COURT REPORTS [1962) SUPP.

that a person has acquired a passport from a forciizn Government, his citiwnship of India automatically comes to an end, and he contends that in such a case. it is not necessarv thrtt the Central Government should hold any enquiy an<l make a finding against the p"rson before the appelhnt. can issue an order

of deportation against him.

In om opinion, this contention is clearly misconceived. In dealing with tho question a.bout t.hc validity of tho impugned section and the Rule, this Court has, no doubt, stated that "the proof of the fact that a passport from a foreign count.ry has been obtained on a certain dat-0 CDnclusivdy <loterrnines the other fact that beforo that date he has voluntarily acquired the citizenship of that country.'' But in appreciating the effect of this observation, it must be borne in mind that in all the cases with which this Court was then dealing, the question about tho citizenship of the petitioners had been expressly referred to the Central Government-and the Central Government had made its findings on that question.

It was after tho Central Government had recorded a finding against the petitioners t.hat they had acquired the citizenship of Pakistan that the sai<l writ petitions came before this Court for final disposal and it is in the light of these facts that this Court proceeded t-0 consider tho contention about the validity of the impugned section am! the impugned rule.

It is plain, thercforo, that the observations on which

~Ir. Tatachari relied wero not intended to moan that as soon as it is alleged tha, t a. passport has been obtained by a person from a foreign Government, the State Government can immediately proceed to deport him without tho ncccssa ry enquiry by the Central Government..

Indeed, it is clear that in the couro of the judgment, this Court has empha sised the fact that the question as to whether a person has lost his citizenship of this country and has acquirc1! the citizenship of a foreign country has to be tried by the Central Government and it is

only after the Centrul Government has decided the point the. St1tte Government can deal with the person as a foreigner. It may be that if a passport from a foreign Government is obtained by a citizen, and the case falls under the impugned Rule, the conclusion may follow that he has acquired the citizenship of the foreign country ; . but that conclusion can be drawn only by the appropriate authority authorised under the Act to enquire into question. Therefore, there is no doubt that in all cases where action is proposed to be taken against persons residing in this country on the ground that they have acquired the citizenship of a foreign State and have lost in consequence the citizenship of this country, it is essential that that question should be first considered by the Central Government.

In dealing with the question, the Central Government would utldoubtedly be entitled to give effect to the impugned r. 3 in Sch. III and deal with the matter ir:t accordance with the other rf'levant Rules framed under the Act.

The decision of the Central Government about the status of the person is the basis on which any further action can be taken against him.

Therefore, we see no substance in the argument that the orders of deportation passed by the appellant against the repondents should be sustained even without an enquiry by the Central Government about their status. That is why w~ think, in substance, the direction of tha High Court is right, though the High Court was in error in holding that the Central Government should hold the enquiry without reference to r. 3.

In the result, the appeals succeed on the main pomt of law and the decision of the High Court that the impugned r. 3 in Sch. !If i~ invalid is set aside.

Even so, we cannot accept the view of the learned trial Judge that there is an automatic cesser of the respondents' citizenship by virtue of s. 9.

We hol.d that the ciuestion about tl\e statqs of the respondent~

The Government of Andhra PradeSh

Syed Mohd. Khm

Gajendrag1dtar J.

196Z

Tift Camnnunt of A..dAta Prodtsh

Sy1d Mohd. KA.Jn

Gajt.ndragadkar J,

bas to ho tried by the Central Government and it is only after the Central Goyernment has reached the conclusion that the rcspondentH have acquired the citizcnHhip of Pakistan that the appellnnt can issue orders of deportation against. them.

That . being our view, we confirm the writs issued by the

High Court restraining the <ippdlant from giving effect to the impuc:ncd orders of deportation until the question about tho respcmdents' status is deter mined by the Central Government.

There wou hi be no order aR to costs.

Appe-1ls allowed.

MRS. HEM NOLIN! JUDAH (SINCE Dl~CEASEDJ

AXD AFTER HER LEU AL ltEPRESE!'\TATIVE

MR. ?llARLEA!'\ WlLKIN::iON

t'.

MH.S. ISOLYNJ<; SAltO.J BASHINI BOt<;

AND OTHEHS

(P. B. GA.JE:>DHAGAJJI<AH, A. K. SAHKAit and

K. N. 'WAXL'llOO, JJ.)

lrilt-J>rnlirrfe-Leff ers of A rlmin isf7 a! inn -Est alili-'i h nunt of right-l..t:galrr.-Other 111'.rson.~· cla, niinq under leyrllt:c-JJar of cl11i1ns-l'r0Uate procr.t?rli ngs-Titlr--.\T ot dr.f crniin£d-Rcs-jud-icaJa-Estopp(/-l n<tir1n S"ccl!S-inn Act, !92:i(3.fl of J.92;)), s. 21.)

(1)-Co<ie of Cid/ l'roce.fore., 1rws (Acl, .-; nf JflflS) s. 11- .A Jnrlilln Etirl,, nce .1ct, 1872 (I of 1872), ' JJ.-;_

Onr- Dr. Mi~ Mitter \\'ho owncrl a house died leaving her mother and three sisters. The plaintiff repondent filed a

uit for a declaration that she \\'as the OYnier of the house.

Her case \\.'as that the dect:asr.d gave the hou:::c to frs. ~Ion1in (another sister) by a will and Mrs. fo; nin in turn gifted the house to the plaintiff. The cas.-· of Mrs. Judah, the defcndantappellant was that Dr. Miss Miller had bequeathed the house by a will in favour of hr 1noth('r who in turn bequeathed the house to her by a will. !\dmiucdly no probate . of either of the wills alleged to luvc bl'cn made by Dr. Miss

i'fit1er was taken out. The mother died and it was allegec!

SYED MOHD. KHA.

B. P. SINHA

The Govcmmrnt of Andhra Pradesh

s. 9

IJI of the Citizenship Rules

s. 9

II I of Citizenship Rules

s. 9

III of the Citizenship Rules

Citizenship Act

s. 9

III of the Citizenship Rules

s. 9(2)

s. 9

s. 21

s. 11


196Z

Tift Camnnunt of A..dAta Prodtsh

Sy1d Mohd. KA.Jn

Gajt.ndragadkar J,

294 SUPREME COURT REPORTS [1962] SUPP.

bas to ho tried by the Central Government and it is only after the Central Goyernment has reached the conclusion that the rcspondentH have acquired the citizcnHhip of Pakistan that the appellnnt can issue orders of deportation against. them.

That . being our view, we confirm the writs issued by the

High Court restraining the <ippdlant from giving effect to the impuc:ncd orders of deportation until the question about tho respcmdents' status is deter mined by the Central Government.

There wou hi be no order aR to costs.

Appe-1ls allowed.

MRS. HEM NOLIN! JUDAH (SINCE Dl~CEASEDJ

AXD AFTER HER LEU AL ltEPRESE!'\TATIVE

MR. ?llARLEA!'\ WlLKIN::iON

t'.

MH.S. ISOLYNJ<; SAltO.J BASHINI BOt<;

AND OTHEHS

(P. B. GA.JE:>DHAGAJJI<AH, A. K. SAHKAit and

K. N. 'WAXL'llOO, JJ.)

lrilt-J>rnlirrfe-Leff ers of A rlmin isf7 a! inn -Est alili-'i h nunt of right-l..t:galrr.-Other 111'.rson.~· cla, niinq under leyrllt:c-JJar of cl11i1ns-l'r0Uate procr.t?rli ngs-Titlr--.\T ot dr.f crniin£d-Rcs-jud-icaJa-Estopp(/-l n<tir1n S"ccl!S-inn Act, !92:i(3.fl of J.92;)), s. 21.)

(1)-Co<ie of Cid/ l'roce.fore., 1rws (Acl, .-; nf JflflS) s. 11- .A Jnrlilln Etirl,, nce .1ct, 1872 (I of 1872), ' JJ.-;_

Onr- Dr. Mi~ Mitter \\'ho owncrl a house died leaving her mother and three sisters. The plaintiff repondent filed a

uit for a declaration that she \\'as the OYnier of the house.

Her case \\.'as that the dect:asr.d gave the hou:::c to frs. ~Ion1in (another sister) by a will and Mrs. fo; nin in turn gifted the house to the plaintiff. The cas.-· of Mrs. Judah, the defcndantappellant was that Dr. Miss Miller had bequeathed the house by a will in favour of hr 1noth('r who in turn bequeathed the house to her by a will. !\dmiucdly no probate . of either of the wills alleged to luvc bl'cn made by Dr. Miss

i'fit1er was taken out. The mother died and it was allegec!

3 s.c.R.

SUPREME COURT REPoRTS 295

that she had executed three wills one in favour of each of three daughters.

Applications wore flied by each of the daugr1tcrs for letters of administration each claiming that the will m her favour was the last will of Mrs. Mitter.

Each of the alleged wills include the house in question among the properties of the decea1rd.

The application of the appellant

\\'.iS granted while the other two app1ication vvere rejected.

Appeals were filed by the two sisters whose application were rejected. The appellate court while rejecting their claims for granting letter.s of administration in favout'. of the present appellant. The appellant thereupon appealed to the Privy Council and the Privy Council allowed her appeal. The respondent then filed the suit out of which the present appeal has arisen claizning a declaration that she \Vas the owner of the hous"e in whole or to the extent of two-thirds. The trial

\OUrt found the <lefendantappellant became the owner of the nouse under the will of Mrs. Mitter and the suit of the plai11liff-respondent was barred by res-judicata and estoppel.

Tbe plaintiff-respondent took the matter in appeal to the High Com t. The High Court held that as the will of Dr. Miss Mitter in favour of her mother was not probated the latter did not acquire the house uner the will and therefore the mother alongwith her three da•1gh1ers took equal share in the house.

Since the appellant got the mother's share under lier will and she had got one fourth share of the house in her own right she was entitled to one half share of the house in all. The appellant has come upto this Court on a a certificate granted by the High Court. Apart from the pleos of rcs-judicata and estoppel the appellant contended that it \Vd.S not necessary to obtain probate of the will of Dr. Miss l\1ittcr in favour of her n1other in order to successfully claim the house under the will of her mother in her favour.

field, that s. 218 of the Indian Succession Act is a bar to the establishment of any right under a will by <1:n executor or legatee unless probate or letters of administration have

bt"en obtained. This bar operates irrespective of the fact that the right is claimed by a plaintiff or a defendant in a

uit. The bar .:s not restricted only to cases in whieh the clairn is made by a person directly claiming as a legatee or execL tor Lut it applies also ti) any person who might find it necessary in order to estabUsh the right of some legatee or executor from whom he might have derived title.

Questions of title are not decided in proceedings for the grant of probate or letters of administration and therefore t!ie clecision 9iven in such proceedins Cijnnot oper'l!e Ill

Mrs. B1mNolini

Judah v • ... M,~:Iso/.yn1

Sarojbasini Bos1

.96S

M11. Htm N1Jini

Juot.h

Mts. lsolrrw Sarojbashiru' Bose

If anchoo J.

296 SUPREME COURT REPORTS [1962] SUPP.

res-judicrita in subsequent proceedings relating to the dispute title.

Estoppel r.an arise as is clear fro1n !:. 115 Evidence A.r.1 when one person ha.; by hi-. clecJ..1ati')1, ace, or omissio:1 i11tenrionally c.u1sr.rl or pcnnittcd <1notl1cr pr.rs(>n to bclievr a thing to be true and tr> act on such hcl1ef.

No estopprl arose in the prrscnt c:Jse on the facts.

Ghanshamduss V, r;,,1,11, u; fl•ti, (1927) I. L. R. 50 Med. 'J27, approved.

CrvrL ArPF.LLATJ~ , fL, msoicnox : Civil Appeal No. 273 of 1959.

Appeal from the judgment and decron dated January I it.h 1957, of the Allahauad High Court (Lucknow Bench) 1it LucknDw in firAt Cil'il Appeal No. 16 of 1950 .

Sarjoo Pmsad, k. U<La:; arathnam and S. S.

Sh1tkla, for the appellant.

C. B. Ar1aru:al1 and D. N. :Yf1ikhe1Jee, for respondent Xo. J.

1902. Febrnarv ]().

The Judgment of th " Court wa.s deli 1•ered by

WANCllOO, J.-This appeal on a certificate grnntcd uy the Allahauad High Court arise8 out of a suit filed by l\frs. Bose (plaintiff-respondent) by which sho claimed a d"elarntim1 that she was the owner of house Xo. l!J:J Gh:osiarimancli Hoad, Lucknow, or in the altr, rnat.i1e a rkelaration that she 11as the owner of two-thirds of the housP.

The previouR history of litigation wit, h respect to

thi~ house is relmant and may be 8et down.

The hous<' originally belnned to Dr. :\fiss Mitt.er, who

died in July l\J25.

At th<J tim~ of her dPath she left three sisters, namely, \.he appdlant :\!rs .. Judah, the plaintiff respon, lent ~Irs. Bose and the defen- <lant.-responclent fr. ~Iomin, :incl lwr motlwr Mrs. 1\littor.

Tlw plaintiff'' c:aso was that Dr. Mi•s Mitter had madn a will in favour of 'Irs. :\Tomin in April I 921 by which she gave the whole house to her.

Mra. '.lfon:iin in turn m1•fo a gifo of the hous~

to the plaintiff who thus became the ownir of the house.

The defence of the appellant on tho othee baud was that Dr. :\Iisd Mittct ha<! executd a will in June 1925 beq1iecithi•1g thi ho:Be to h'r 1n0th'l' Mea. Mitter. Subsequently the mother ma.de a will in favour of the appell.int in April 1930. It appears that no 'probat;;; of the two alleged wills Ly Dr. Miso Mitter of April 1921 nnd June 192:i wern

taken out. It appJan forthcir th'Lt Mrs. Mittee was Ii viug in this house when she died in 1934. On her death three wills allege I to have been made by her wore propounded one in favour of each of hee three

daghters, namely, Mrs. Bose, Mrs. Judah and Mrs.

Momin.

Applications for letters of adminis•ration were made by the three sisters eilch claimiu.; that the will in her favour was the last will of Mrs.

Mittr, and among the property left by Mrs. Mitler by the three wills waq included. the house in dispute.

Ftll'ther the house in <Jnestion w11s also shown iu the applications made by the three si.<ter• for letterR of administration of the alleg2d wills in theie favour. Letters of administration WE're granted to the appellant while the applications of Mrs. Bose and .Mrs.

Momin were dismissed.

Tb.is was followed by appeals to the then Chief Court of Oudh.

The said Court rejected the 1ippeals of Mrs. Bose and Mrs. Momin. and thus their applications fOl' letters of adminisLJ ation on the b:isis of the wills propounded by them stood finally dismissed.

The Chief Court however allo, ved the appeal against. tho gr,1nt of lettera of administration to the appellant and dismissed hel' appli cation also.

The matter was then taken before their Lordships of the Privy Council by the appellant and in J 9i5 the appeal of the appetlant was all'lwcd and thr1 decree of the Chief Ccmrt was Set asido ancJ lint of the trial judge granting Jdtel'R of administration to the appelhmt was restoted.

Jn th\! meantime, howcver, certain other

196Z

Yrs, Hem Nolini

.!udah

v. .'t.frs. ljolyne SaroJbashini Bose

lVanchoo J,

._J96a

,..-- 4f.r1:Jl,1m, •Nolini

,1.ud.Ji

" ..,.M.r s. I tq{.vne 311tpjbashini Bose

'!!K..,,, oo J.

-29S SGPREM-E COBRT REPORTS [1962] SUPP. . '

events hd transpired.. In 1942, Mrs. Bose filed a suit for pMl iti<m.

This suit was still •pending whPn the JudicialDl11.Ilmittee of the Privy CJJuncil allowed the appeal oft.he appellant in March 1945. .ti.a in December I ~45 Mrs. Born made an application, to withdraw the partition mit with permission to bring a fresh suit, and she was allowed to _do -so .on th" condition that she would pay the costs , of the appellant before :fl.ling the fresh suit. In July 1946 :Mr.•. Momin made a gift of.her interest in the house in dispute in favour .of Mrs. Bose. Thereafter in the same year viz., 1946, Mrs. Bose filed an application for grant of letters of administration of the will alleged to have been executed by D:r. Miss .Mitter in Mrs. Momin's favonr.

This was objected to by the appellant and crtain preliminary issues were framed in 1947; but eventua\ly Mrs. Bose did not pursue ti.tis application for letters of administration .and it \vas dismissed in 1948.

In the meantime, Mrs. Bose had filed "'n application for the revocation of the letters of administration granted to the appellant but this was also dim; ssed..

About the same time in Sephimber ID l6, the present suit was filed by Mt's. praying for relifs alread, v set out. Eventually this suit was the only proc!Jeding which was pursued to the end by ill rs. Bose.

In th' trial court.-the case baed on tho will of'Dr. Miss Mitter was given up and the plaintiffrespondent only preS8°ed her alt-ernative prayer for a declaration that she was entitled to two-thirds of the house. The trial court however found that there was a will by Dr. Miss Mitter in favour of hor mother, though no probate or let.ters of administration were taken out in that behalf. The trial court also found that Mrs. Mitter made a will in favour of the appellant and that letters of administration, as ulready indicated, were granted to t)l.p appellal\t with respect to Mrs. Mitter's will b; v

the judgment of the Privy Council in 1945. The trial jnd!!e therefore hekl that the appellant was entitled to the house by virtue of the letters of admini, tration granted to her of Mrs. Milter's will.

It repelled the contenticn of the plaintiff-respondent that as no let It rs < f r.dministration were tak< n out of the will of Dr. Mi>H Mitter in fav<, ur of Mrs.

Mitter, no right to the housn could be established by the appellant on 1 he basis of the l..tters of administration grantul to lier. .The trial court also held that the suit was barred by the principles of res judicata and estoppel. It therefore dismissed the suit. The plaintiffrespondent then went in appeal . to the High Court, and the main contention rnised

on behalf of the respondtnt before the High Court was that in view of s. 213 of the Indian Succession

Act, No. 39 of 1925, (hereinafter referred to as the Act), the appellant could nnt claim any right to the house in dispute as the will of Dr. Miss Mitter in favour of her mother was neith!'r prubated nor letters of administration were obtained with respect thereto.

The Hiirh Court accepted this contention of the plaintiff.respondent. The High Court also negatived the other contentions raised on behalf of the appdlant aud nllowecl tho appeal in part.

The High Colli t pointe l out that on the d('ath of Dr. MiEs Mitter her three sisters and mother were alive and they \V<'Je entitled equally to the property left by her.

But as th" share of Mrs. Mitter must be de< med to have been willed away to the appellant and as tho sl1a1e of Mrs. Momin must be dcl'mrrl to have been gifted to the plaintiff.respondeJJt, the plaintiff-u, spondent was entitled to half the house.

The High Court therefore gave her a declaraLion that she was entitled to a half share in the house in dispute.

As tho dei:ree was one of reversal the appellant applied for and obtained a certificate Lo appeal to this Comt; and that is how tµ© matter has come before s.

19~2

Mrs.tHemNoliTl i

Judah ' v.

M r1 .. JsoJJn• Barajbashini 8011

Wanchoo J.

J!rs. Htm NoFni

J"dah ..

Mrs. l1ol; rit Sarojbashi111 Bn1t

JYanclwo J.

300 SUPHEJIIB COURT ItEPORTS (1962] SUPP.

Learnl'<l counsel for the appellant has urged only three eontentionR before UR, namely, (i) that the High C<111rt was not right in holding that if was

neccsary to obtain probate or lettors of administration of th" will executed by Dr. ~Iiss Mitter in favour of fr~. Mitter ancl that as neither probate nol' J., ttor.i of administration of that will were obtained i• was not open to the appollant is view of s. 213 of the Act to tako ad vantage of that will;

(ii) that the suit was bar rod hv re~ judicata, and (iii! that the plaintiff-respondent was estopped from contesting tho title of Mrs. Mitter to the propl•rty in dispute.

Re. (i). \Ve have already pointed out that though it was said that Dr. ;\[iss ;\litter had executed a will in favour of her mother Mrs. Mitter in June 192!J heque11.thing the house in dispute to her, no probate orletters of :idministration were ever obtained by Jirs. :'\litter. It. ii! true that Mrs. Mitter in her tum made a will in favour of the appellant and she obtained

letters of administration of that will. In that will the house in dispute was ment.ioned as the property of l\Irs. illitt!'r an:! was bequeathed to tho appellant and in the letters of administration granted to her this propcrt.v w, is mentioned aq onl! of c:1e properties coming to her by the will of her mot.her.

Tho quest io11 tlwreforo that arises is whether it was necessary bPfnre the appellant could tako advantage of the !,,, quest in favour of Mrs. !\"fitter that letters of administration of tho will of Dr. Misd :\litter should havPbeP-n obtained by i\lrs. Mitter Section 21'.l (I) which governs this matter is in those

terms :-

"{!) o right 1is executor or h•g,1tco Pan be Ptahlighed in anv Court of Justian, Dnless a Conrt of competent .iurisdiction in India ha• granted probate of thA will nuder which the right is claimed, or has granted Jetteq

j -

'. 301

of administration with the will or with a eopy of an authenticated copy of the will annexed," This section clearly creates a bar to the establishment of any dght under a will by an executor or a legatee unless probate or letters of administration of the will have been obtained. It is now well-settler! that it is immaterial whether the right under the ill is claimed as a plaintiff or a defendant ; In either case s. 213 will be a bar to any right being claimed by a person under a will whether as a plaintiff or as a defendant unless probate or letters of administration of the will have been obtained: (see Ganshamdoss v.

Gulab Bi Bai) ('). But it is urged on behalf of the appellant that this section will not bar her because she obtained letters of administmtion of the will of her mother Mrs. Mitter under which she is claiming and that it was not . necessary for Mrs. Mitter to have obtained probate of the will of Dr. Miss Mitter in her favour. Now it is not in dispute that the grant of probate or letters of administration does not establish that the person making the will was the owner of the property which he may have given away by the will, and any person interested in the property included in the will can always file a suit to establish his right to the property to the exclusion of the testator in spite of tbe grant of probate or letters of admi- -nistration to the legatee or the executor, the reason being that proceedings for probate or letters of administration :ire not concerned with titles to property but are only concerned with the due execution of the will.. Therefore; when the plaintiff respondent contended in effect that the appellant could not establish her right to the full ownership of this property on the basis of the will of Mrs.

Mitter because Mrs. Mitter had not obtained probate or letters of administration of the will of Dr. Miss Mitter, she was really contending that Mrs. Mitter was not the full owner of this property so that

(1) (1927) I.LR. 50 Mad. 927.

196S

J.f rs. Hem N alini

 Judah v.

Mrs. lsol)ne Stlfojbashini Bose

Wanclwo J.

1962

• \frJ.· Hnn }lolim Jndali

M11. l•ol, Jn~ SnojbaJhi11i Bf>h

!{02 Sl'PRRME COURT RF.PORTS [1962) SUPP.

she could rli8p<>se it of as sho willed.

Tho plaintiffl'<'pnnrlP11t. was thus diput.ing the tit Io of :\Im . !llitt"r to di.'f'''s· of r.h., entire disputed house by hrr will on the .roull'I that Mrs. 'fitter was ncit the sole ow1wr of t-hi8 house ; ifter the de1t.h of Dr. :\IiH> .\Titter.

In ''rrlr therefore that the appcllnnt should rne01cd on the l.msi8 of tho lett,)rn of administration ,, f th<' will of .\Irs. litter which had been i.:ranted to hn with respfel to t.hi~ house, she had to show that frs. lliittn '"as the full owner of this house a.t the time she made the will in her favour. !\ow the app•llant could show this by other evi<l!!HCl; but if UH'. appellant wanted to relv on any will of Dr . .\Ii" .\lit lcr in fauur of ~[rs. litter, i<; proof of full •>WIH, rsl1ip of :Hrs. litter of this house, it would amount to this th11t the appelln11t was saying that Mrs.

Mitter was the own, r of t.he houso as t.he legatee under the will made hy Dr. l\Iiss Mitter.

The appellant. would tl11rn he asRcrting the ownership of ill rs. :\litter oft h" whole ho us" as a legatee, '.ind this is what snb-s. (I) of s. 213 clearly forbids, for it says that- 110righ1 a~ a legatee can be l'stabliRbed in a Court. of .lust.ice, unless the probutH or letters of a<lministrat-ion 'have beon obtained of the will undl!r which the right as a legatee is claim 0 d.

It is true that rn far as the will of llirs. Mit.tcr in favour of the appellant is concerned, she has obtained letters of aclministration of that and Phe can maintain her right as a J,•gatec under that will : but that will in her favour only gives her those properties which really and truly belonged to Mrs. :\litter, that will however do(S not create title in the appellant in properties which did not really

and truly belong to Mrs. l\Iitt!'l' but which l\frs.

]\fitter might have thought it fit to include in t.he will.

Therefore, as soon as the appellant, in order succeed on the basis of the will in her favour of which she obtairnd ldt<>rs of administration, alleges that Mrs. Mitter was full owner of the property able to will it away to her, ijhe had to prove the

title of Mrs. Mitter to the property. Now it that title rrnts on Mrs. !\fitter's being legatee of Dr. Miss Mitter the appellant will have to prove that Mrs.

Mittn had the right r•s a legatee under the will of Dr. Miss Mitter. As soon as the appellant wants to proye that, s. 213 will immediately stand in her way for no right as an executor or a legatee can be proved unless probate or letters of administration of the will under which such right is claimed have been obtained. The words of s. 213 arc not restricted only to those cases where the claim is made by a person directly claiming as kgah e.

The secti( n does not say that no pnson can claim as a legatee or as an Pxecutor unless be obtains piabatc or letters of administration of the will under \\hid1 he claims. What it says is that no right as au executor or legateee can be established in any Court of Justice, unless probate or letters of administration have been obtained of the will under whirh the right is claimed, and therefore it is immaterial who wishes to establish the right as a legatee or an executor.

Whosoever wishes to establish that right, whether it be a legatee or an executor himself or somebody else who might find it 11cccssary in . order to establish his right to establish the right of some legatee or executor from whom he might derived title, he cannot do so unless the v; ill under which the right as a legatee or executor is claimed has resulted in the grant of a probate or letters of administration. Therefore, as soon as the appel lant wanted to eshblish that Mrs. Mitter was the legatee of Dr. Miss Mitter and was therefore entitled to the whole house she could only do so if the will of Dr. Miss Mitter in favour of Mrs. Mitter had resulted in the grant of probate or letters of administration. Admittedly that did not happen and theroforo s. 213(1) would be a bar to the appellant showing that her mother was the full owner of the propPrty by virtue of the will made in her favour by Dr. Miss Mitter. The difference between a right

196B

Mrs. Hem NOlini

Julah ·

Airs. fsolyn~ S arojbashini Bose

J.1' anchoo J.

jfrs. Hnn Noli"i

Juda/I

Mrs. l "'1J111 S 1rojliashirii Beat

lf'ancl.oo J,

~04 SUPHEME COURT REPoRTS (l!J6~] SUPl'.

claim('(! a> <l ]Pgatoe under a will and a right which

rniht arioe othcnvi8c is clear in this very case. Tho

ri."ht. under tlw will which was claimt>rl was that Mm.

~Jitter lw!'ame thP 1mnr.r of thP. entire house. Of

ourse, wi1 hout t.hc will ~Irs. i\litter was an rqual ht ir with her d,1ughters of the prope1ty left hy Dr.

Mifis ~Itltt>r, as the latter would be taken to have died intestate, and would thUH be entitled to ono fourth. It will be i; ccn from the judgrn<nt of tho HiglJ Court that it. has held thnt the appellant is entit.lcd to the one-fourth share to which i\irs. Mitter was cntitkd as an heir to Dr. i\Iiss Mitter and grnntrrl the plaintiff.respondent a dcclarat ion with

r<'S[H'd to nuly hnlf the house. Therefor,,, the High Court was 1 igh t in holding that s. 213 would bar the af'pellant from totablishing the right of her mother aH a legatee from Dr. Miss !\'litter as no prt..- bate or lctt<lfs of adrninistr:ition had been obtained of tho alleged will of Dr. Mi8s i\Jittn in favour of i\lrs. }litter. The conlPnti<Jn of the appellant on this head must therf'fore fail. .

Re. (ii).

Turning now lo the question of res judiait,,, loamed counsel for the appellant has been unable to point out any judgment intn p:trtics in which

the question of tit le to this house has been dee ided and which would bar the plaintiff-respondent from raiAing the question of title which she has raised in the JH'csent suit.

As wn ha, e :tlrcady said qucs tions of title are not decided in proceedings for tho gmnt of probate or letters <if administration. What ever thPr<'fore might have happened in those proceedi11gs would not establish the title t.o the house oither of the appellant or of Jl.lrs. i\fitter.

Jn pnrticular, learned counsel for the appellant relied on tho order of the High CJurt dated Decembor II, l!l-18, by which the applic<1tion of the plaintiff.rt•spond ent for letters of administration of tt.e will of Dr.

Miss Mitter was dismissed. In that case certain

preliminary issues were framed one of which related to estoppel with respect to Mrs. Mitter's right to this property. What happened in that case was that Mrs. Bose who had made the application did not appear and thereupon her application was dismissed for that reason obviously under O. XVII . r. 2, of the Code of Civil Procedure. In these cir- . cumstances there can be no question of res fudi cata as to the title to the property in dispute. The contention on this head must therefore be rejected.

Re. liii).

As to estoppel, reliance is mainly placed on the applications of Mrs. Bose herself for the grant of letters of administration of a will alleged to have been made in her favour by Mrs. Mitter. In that application Mrs. Bose had shown the house as if it belonged to Mrs. Mitter. Her application was as we have already noted dismissed. It ma:v be that Mrs.

Bose in her application for letters of administration showed this house as the property of her mother Mrs. Mitter; but as we have already said. proceedings leading to the grant of probate or letters of administration have nothing to do with titles. Further estoppel can only arise a~ is clear from s. 115 of the Indian Evidence Act, when one person has by his declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief.

Therefore before Mrs. Bose can be estopped from pleading that Mrs. Mitter was not the owner of the entire property it must be shown that by her showing the house as the property of Mrs. Mitter in her application for letters of administration she intentionally 0aused or permitted the appellant to believe that thing to be true and to act on that belief. It is obvious that the appellant cannot be said to have acted in her turn with respect to :_this

Mrs. Hem Nolii

ludah

Mrs. lsolyne Sarojbashini Bos1

11' anchoo J.

Mr1. Htm Nalini

JiuJ.h . •• ilfrs. /solyru Sorojba.shini Bo!t

F1hru"1J 19.

306 SUPREME COURT REPORTS (I9e2) SUPP.

house simply because Mrs. Boso said in hnr appli

cation for letters of administration that the house belonged to Mrs. )fitter. It 11p1wars th:it after the death of Mrs. '.\Jitter the thrt>e sisterR put forward three separate wills each in her f:wour and there was no question of one sister acting on Any representation made by another. 'Ve are therefore Of Opinion that llO question of PS(Oppcl ariRf'8 in this case.

The appeal therefore fails and is hereby dismissed: N(• order as to costs.

Appeal dismissed.

;\tfS. SOORAJ!lfULL NAGAR:'IIULL

"· COM.\IISSIONER OF IXCO:llE-TAX, CALCUTTA

(And connected appeal)

(~. K. DAS, III. HIDAYATGLLAH and .J.C. SHAIJ, J.T.)

Income Tax-Order nf Tribu.nal--Application.s by a.<S<ssee and Commi., sioner of Income-tax to state a cn.se, diJJmissr.d byl lliqh Court-Appeal to Supreme rourt ag1inst nr.kr ofTri.huna -If maintainable-Indian /ncomr-ta.t Act, J.~22 (II of /.922)' ss. 33(4), 66(2)-Cons!itution of India, Art. 130.

The Income-tax Appellate Tribunal pa.scd an order •· 33(4) of the Indian Income-tax Act disposing of an appeal.

The asscssec as well as the Con1mis., ioner of Incorne-tax, Calcutta, applied to the High Court for orders requiring the Tribunal to state a case under s. 66(2), wl1ich applications were dismiss1:d by the 1-Iigh Court. l'hc asscssce ancl the Commissioner of Income-tax appealed to thr: Suprcu1c- Court against the order of the Tribunal, ":ith speci::tl leave. rhc main contention before the Supreme Go1:rt was that cvi:o:n if the appeal .agaiust the order of the Hih Court under s. 66(2) fails on merits, the court has pO\VCr to consider the appeal against the order of the Tribunal.

MRS. HEM NOLINI JUDAH (SINCE DECEASED AND AFTER HER LEGAL REPRESENTATIVE MR. MARLEAN WILKINSON

s. 21

s. 11

s. 218

Indian Succession Act

s. 213

s.

19

s. 213

Section 21

s. 213

s. 213

s. 213

s. 213

s. 213(1)

S 1

s. 213

the Code of Civil Procedure

s. 115

Indian Evidence Act

ss. 33(4), 66(2)

Art. 130

Income-tax Act

s. 66(2)

s. 66(2)


Mr1. Htm Nalini

JiuJ.h . •• ilfrs. /solyru Sorojba.shini Bo!t

F1hru"1J 19.

306 SUPREME COURT REPORTS (I9e2) SUPP.

house simply because Mrs. Boso said in hnr appli

cation for letters of administration that the house belonged to Mrs. )fitter. It 11p1wars th:it after the death of Mrs. '.\Jitter the thrt>e sisterR put forward three separate wills each in her f:wour and there was no question of one sister acting on Any representation made by another. 'Ve are therefore Of Opinion that llO question of PS(Oppcl ariRf'8 in this case.

The appeal therefore fails and is hereby dismissed: N(• order as to costs.

Appeal dismissed.

;\tfS. SOORAJ!lfULL NAGAR:'IIULL

"· COM.\IISSIONER OF IXCO:llE-TAX, CALCUTTA

(And connected appeal)

(~. K. DAS, III. HIDAYATGLLAH and .J.C. SHAIJ, J.T.)

Income Tax-Order nf Tribu.nal--Application.s by a.<S<ssee and Commi., sioner of Income-tax to state a cn.se, diJJmissr.d byl lliqh Court-Appeal to Supreme rourt ag1inst nr.kr ofTri.huna -If maintainable-Indian /ncomr-ta.t Act, J.~22 (II of /.922)' ss. 33(4), 66(2)-Cons!itution of India, Art. 130.

The Income-tax Appellate Tribunal pa.scd an order •· 33(4) of the Indian Income-tax Act disposing of an appeal.

The asscssec as well as the Con1mis., ioner of Incorne-tax, Calcutta, applied to the High Court for orders requiring the Tribunal to state a case under s. 66(2), wl1ich applications were dismiss1:d by the 1-Iigh Court. l'hc asscssce ancl the Commissioner of Income-tax appealed to thr: Suprcu1c- Court against the order of the Tribunal, ":ith speci::tl leave. rhc main contention before the Supreme Go1:rt was that cvi:o:n if the appeal .agaiust the order of the Hih Court under s. 66(2) fails on merits, the court has pO\VCr to consider the appeal against the order of the Tribunal.

Held, that when the aggrieved party approaches the High Court under a taxing statue for an order calling for a statement of the case and the High Court rejects the application, this Court in exercise of its powers under Art. 186 of the Constitution of India will not in the absence of special or exceptional circumstances allow the order of the High Court to be by-passed by entertaining an appeal directly against the order of the Tribunal under the taxing Act.

The Supreme Court will take this view even if an appeal has been filed aga>nst the order of the High Court as well.

Ohandi Prasad Ohhokhani v. State of Bihar, ( 1962) 2 S.C.R. 276, Dhakesv:ari OottonMills Ltd. v. Oommissioner of Incomelax, West Bengal, [1955] I S.C.R. 941 and Sardar Baldev Singh v. Oommissioner of Income-tax, Delhi and Ajmer, [1961]1 S.C.R. 482, followed.

CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 238 and 239 of 1961.

Appeals by special leave from the judgment and order dated March 28, 1957, of the Income-tar Appellate Tribunal (Calcutta Bench) in I.T.A. Nos. 722 and 7341 of 1954-55.

R. J. Kol, ah, D. H. Dwarkadas and B.P. Mahe, shwari, for the appellant in C.A. No. 238 of 1961 and the respondent in C.A. No. 239 of 1961.

K. N. Rajagopala Sastri and D. Gupta, for the respondent in C.A. No. 238 of 1961 and respondent in C.A. No. 239 of 1961.

1962. February 19. The Judgment of the Court was delivered by

SHAH, J.-The assessees and the Commissioner have preferred appeals against the order of the Tribunal passed under s. 33( 4) of the Indian Income-tax Act, after their applications of the High Court of Calcutta for orders requiring the Tribunal to state a case under s. 66(2) Wtlre dismissed.

Counsel for the :1Ssessees contends that everi if his appeal against the order of tbe High Court under s. 66(2) fails on the merits, this Court has

M/s. Soorajmull Nagarmull v.

OommiJsiontr of lncometax, Calcuttr

Shch J,

/&Ifs. Sootajrn-l!i

Nag"rmull

•• Com'ninionr rJ

Jncomtat, Ca/c 1t'

Sh2h J,

308 SUPREME COURT REPORTS [l!l62] SUPJ'.

power to consider their appeal against the order of the Tribunal. This Court in Chandi Prawd Chhokhani v. The State of Bihm,(') in dealing with cirnes where against the order passed by a Tax Tribunal, without appealing against the order of the High Court refusing tr, call for the statement of the case set out the practice as follows:

(a) When• the aggrieved party approaches the High Court under a taxing Stntute

for an order cnlling for a statement of the caso and the High Court r<jects the appiication, this Court in exercise of itll powers under Art. 136 will not ordinarily allow the order of tho High Court to be by-passed by entertaining an appeal directly against the order of the Tribunal.

Such exercise of power wou Id be particularly inadvisable where the result may be conflict of decisions of two Courtil of competent jurisdiction. The schemo of tho taxing statutes is to avoid such a conflict by making the derision of the taxing authorities on questions of fact final subject to appeal, revision or review 118 provided by the statutes and the decision of tho High Court subject to appeal lo this Court final on questions of law.

(b) This rule does not Lar the Court from

granting special leave where circumstances are exceptional, such as, in Dlwkeswari Cotton Mills Dd. v. Commissioner of Income 'Ia; r,, IV e.st Bengal, (') ll'herc the

Tribunal had violated fundame11tal rul<'s

of justice or as in Srudnr Ba/Jiev Singh v ..

Commissioner of hmmzetax, Delhi & Ajmer ('), where on uccount of special circumstances over which the aggrieved party has no control the High Court was

(I) [1962] 2 S.C.R. 2;6. (2:

[19551 I. S.C.R. 94:.

(:J) [1%1) I SC.R.48!.

unable to consider the application for

196S calling for a statement of the case on the .M /s. &moJmu/l merits, and the right of the party to N, garmutl approach the High Court was thereby Cammi~;-, • ., of lost. _Income-tax, Calcuua

Counsel for the assesses contended that in Ghhokha.ni's case(') no appeal at all was filed by the assessees against the order of the High Court and the principle of that case is inapplicable in a case where the aggrieved party has appealed against the order of the High Court as well as against the order of the Tribunal. It is true that in the case before us appeals have been filed against the order of the Tribunal deciding the appeal under s. 33(4) of the Indian Income-tax Act as well as the order of the High Court under s. 66(2) refusing to require the Tribunal to state a case: but we fail to see any distinction in principle between a case in which in appealing against the order of the Tribunal no appeal is filed against the order of the High Court and a case in which an appeal is filed against the order of the Tribunal as well as against the order of the High Court and the latter appeal is dismissed because it has no merit.

Counsel has not invited our attention to any special or exceptional circumstances in this case.

We have heard elaborate arguments on behalf of the assessees and the Commissioner on their respective contentions and for reasons already set out are of opinion that no case is made out for calling for a statement of the case from the Tribunal. If we proceed to hear the appeal against the order of the Tribunal after upholding the order of the High Court that no question of law arose out of the order of the Tribuna I, it would be a departure from the well-settled rule that ordinarily we do not exercise of our jurisdiction under Art. 136, enter upon a reappraisal of the evidenceon which the order of

(l) [!961] 2. S.C.R. 276.

JY62.

M /s~ SooraJmull

.Nagai mull

v. . Commi.s.fiontr pf

lncome-ta.t, Calcutt..i

Shah J.

FebruaT)' 191 '

' SlO SUPREME COURT REPORTS (1962] SUPP. ,, .

the Oovrt or Tribunal is founded.

The Legi.slature has expressly entrusted th~ powei:- of appraisal of f!Vidence to the T.axing authorities, and the decision

of those authorities would orqinarily be regarded as final.

This is not to say that in a proper case this Court m; i.y not, in the interest of justice. when occasion demands it, review the evidence. "Tli:e" power of this Court unde~ Art. 136 is not restricted; but it is only in very exceptional cases that this Court enters upon appraisal of evidence in appeals filed with special leave and this case does not disclose any such exceptional circumstances. ' On this ground the appeals Nos. 238 and 239 of 1961 filed by the assessees and the Commissioner against the order of the Tribunal must fail and are dismissed with costs. One hearing fee.

Appeals dismissed.

INDORE MALWA UNITED MILLS LTD.

THE COMMISSIONER OF INCOME-TAX

(CEN'J."'RAL) BOMBAY

...

(S. K. DAS, M. HIDAYATULLAH and J.C. SHAH, JJ.) 1

Income Tax-Propeedings under s. 24 of the Indian Income-ta:& Act,-Scope and effect of section and its proviso- Set-off of loss-Indian Income-ta:& Act, 1922 (11 of 1922). as 24(1), (2), 14(2) (c), 4(1) (a); (c)l . ' The assessce company carried on a business of manufacture and sale of textile goods. The manufacture was111ade ac its mills in Indore which was an Indian State before integra• tion and had its own law as to income-tax known as the Indore Industrial 'rax R,; les, 1927.

The sales of textile goods so manufacttlred wer~ made 'at various places, some inside and some outside the taxable territories of the then British India.

For and tipfo assessment' year 1949-50 the assessee company was treated as a pon-resident.

Indore became a part of the taxable territories within the meaning of the Indian

COMMISSIONER OF INCOME-TAX, CALCUTTA (And connected appeal)

K. DAS

ss. 33(4), 66(2)

Art. 130

Income-tax Act

s. 66(2)

s. 66(2)

Art. 186

Constitution of India

1962) 2 S.C.R. 276

s. 33( 4)

Income-tax Act

s. 66(2)

s. 66(2)

Art. 136

[1962] 2 S.C.R. 2

s. 33(4)

Income-tax Act

s. 66(2)

Art. 136

Art. 136

s. 24


JY62.

M /s~ SooraJmull

.Nagai mull

v. . Commi.s.fiontr pf

lncome-ta.t, Calcutt..i

Shah J.

FebruaT)' 191 '

' SlO SUPREME COURT REPORTS (1962] SUPP. ,, .

the Oovrt or Tribunal is founded.

The Legi.slature has expressly entrusted th~ powei:- of appraisal of f!Vidence to the T.axing authorities, and the decision

of those authorities would orqinarily be regarded as final.

This is not to say that in a proper case this Court m; i.y not, in the interest of justice. when occasion demands it, review the evidence. "Tli:e" power of this Court unde~ Art. 136 is not restricted; but it is only in very exceptional cases that this Court enters upon appraisal of evidence in appeals filed with special leave and this case does not disclose any such exceptional circumstances. ' On this ground the appeals Nos. 238 and 239 of 1961 filed by the assessees and the Commissioner against the order of the Tribunal must fail and are dismissed with costs. One hearing fee.

Appeals dismissed.

INDORE MALWA UNITED MILLS LTD.

THE COMMISSIONER OF INCOME-TAX

(CEN'J."'RAL) BOMBAY

...

(S. K. DAS, M. HIDAYATULLAH and J.C. SHAH, JJ.) 1

Income Tax-Propeedings under s. 24 of the Indian Income-ta:& Act,-Scope and effect of section and its proviso- Set-off of loss-Indian Income-ta:& Act, 1922 (11 of 1922). as 24(1), (2), 14(2) (c), 4(1) (a); (c)l . ' The assessce company carried on a business of manufacture and sale of textile goods. The manufacture was111ade ac its mills in Indore which was an Indian State before integra• tion and had its own law as to income-tax known as the Indore Industrial 'rax R,; les, 1927.

The sales of textile goods so manufacttlred wer~ made 'at various places, some inside and some outside the taxable territories of the then British India.

For and tipfo assessment' year 1949-50 the assessee company was treated as a pon-resident.

Indore became a part of the taxable territories within the meaning of the Indian

3 S.C.R.

SUPBE:ME_ COURT REPORTS 311

Tncome-tax Act, 1922 in the two assessment years 1950-51 and 1951-52 and the assessee company was held to be "resident and ordinarily resi8.ent" wi, thin the meaning of that Act.

Upto the asseisment , year 1949-50 that part of its profits which was received by the'assessee company in British India was s_ubjected to tax together with its other income which accrued in British India. In making the calculation of busi-. nesS' profits or loss received or arising in the taxable territories, a proportion Was struck betWeen the total turnover and its sales the proceeds whereof were receivfd in the taxable territories.

The assessee company raised two questions in the_ course of the assessment proceedings, one of which with regard. to the entile loss of Rs. 5119,590/- of the year 1948-49 whih it ' claimed to set-off against the profits made. in its "busines in the two assessment years.

The a'Ssessee company contCnded that ihe business was one arid under s. 2-4it \Vas entitled to set off the losses which it hlid sustained in- 1948-49;- :fhe High i:; ourt decided this question against the assessee compai; iy, but gave a certif[cate under s. 66A of the .Act.

Held, on app~~J, that the High Gourt, correctly answered the question. The pro'Oisions of s. 24 of the Act read with tlie provisions ins. 4(1) (a) and (c) and s. 14(2)(c) make it clear that sub-s(l) of s. 24 when it talks of profits or gains has reference to. iaxab]e profits or tB.xablc gains ; it has no reference to incorrie accruing or arising withollt t}J.e taxable t., crritories which were not liable to be assessed in the case of non-residents.

In determining the natllre of the loss.cs under consi'deration in these appeals the_ relevant year was 1948-49, the year irt wh\ch the Ioses occurred, andth' High (four! rightly took the View that for the app!ip>tion of sub-s (2) of s. 24, the losses must be

uch losses as cpuld have been set-off under ,:; ub-s.( I) o~ s. 24.

Nos.

CIVIL APPELLATE J~ISDICToi{: Civil Appeals 149 and 150 of 1961. . - , Appeals from the judgment and order dated September 23, 195~, of the Bdmbay High Court in I.T.R. No. 86 of the 1957. " '

R. J. Kolah, J. B. Da_dachanji, 0. 0. Math'Ur and Ravinder Narain, for lhe appellants.

• ' J K. N. Rajagopala Sastri and D. Gupta, for the respondent. ·

lndp1t II a/wa Tlnited

Mills Ltd v.

The Commissioner of Incum1-tax (Oentral)

. Bombay

1~6t

/ndurt .~!alu:a Ln:rcd

.\Jilh Ll.

v. rhe < ... :-:i:11mi11, iot;!r 01

/1,(//Tn(-lt, X (c /11:r'1l.

Bombay '

lJa• J,

312 SUPltE~IE COURT HEPORTS [1962] SUPP.

l!J(i2. February 19. The Judgment of the Court was dclivtre<l by. ·

S. K. D.i.s, J.-These are two appeals on a certific'l.te of fitness granted by the High Cour• of Ju<lica tu re at Bombay under s. ti6A(2) of the Indian Income-tax Act, 19:!2. The relernnt facts which have given rise to them arc shortly stated below.

The Indore !'lfahrn United l\Iills, a limitfd liability company, is the appellant before us and will be referred to in this judgment as the assessee company. Tho respondent i• the Commissioner of Income-tax(Central), Bombay. The assessec company carried on a business of m1mufacture and sale of textile goods.

The manufacture was made at its mills in Indore which was Indian State before integration and had its own law as to income-tax kwiwn all the Indore Industrial Tax Rules, 1927. 'fho sales of texti!o goods. were made at various places, some inside and some outside the taxable 1.-0rritories of Britih India. For and upto the assessment.year 1949-50 the assesHec company was treated as a non.resident within the meaning of s.4A of the Indian Incomo-t1J.x Act,

HJ22.

For tho

aSBssment years 1950-:jl, and 1951-5~ which are two

assessment years under consideration, the accow1t years were the calendar years 1946 and 1950 rsspec tively.

Indore became a part of the taxable territories within the meaning of the Indian Incomo tax Act is the two assessment years and the assesseo company was held to be "resident and ordinarily res; dent" with the meaning of that Act.

Upto tho a.asossment year HJ49-50 that part of its profits which Wad received in British India was subj!'cted to tax together with it& other incomo which accrued in British India, namely, interest on sec:urities and intereet on bank accounts. In the assessmcnta made for the assessment years Hl48-49 and 19!9-50 the

position of the assessee company was statd to be as follows:

1948-49

Income under the head 'Interest on securities' Rs. 1,032

Income under the head 'Other sources' interest from banks ... Rs. 231

Rs. 1,263

Business loss Rs. l,992/-.

Balance of loss Hs. 729/- carried forward.

1949-50

Interest on securities Bank interest

Less : loss of 1948-49 set off

Tota.I income '''

Rs. J,023

Rs. 213

Rs. 1,236

Rs. '129

Rs. 507 ----

In ma.king the calculation of business profits or loss received or arising in the taxable territories, a proportion was struck between the total turn-over of the a.ssessee company and its sales the proceeds whereof were received in the taxable territories.

The following table, which is part of the order of assessment of 1950-5 l, shows clearly how the calculation was ma.de.

J96B

Indore Malwa Unit1d

Mills Ltil,

The Commis.5ioner of 1 ncome-tax (Central)

Bombay

Das J,

°'° Net profit Deprccia- Jlusi- Total Sales for Business profit Other Total in- .... of the tion as per neas turnover which considered as income come for Assess• company the Indian income of the proceeds having been accruing the purpose r:n ment before al- Incomeof the company wero received in the in the of assess- Cl "' year lowance tax Act comreceived taxablo t.erl'itaxable ment under :;;; of deprcpany in the tories(by apporterritbo Indian l:tj ciation (Col. 2 taxable tioning tho tories Income-tax .....

l:tj minus territories amount in Act.(Col.7 8 ool.3) col- 4 in the plui; col. 8) Cl proportion of :;:;; col 5 : col. 6) ""3 :;:;; l 2 3 4 5 6 7 8 9 - ,-, "" Rs.

Rs.

Rs.

Rs.

Rs.

Rs.

Ra_ Hs. 0 :;;; ---- ·--·- ""3 r:n 1946-47 1,81,71,152 52,68,048 5,05,296 1,854 5,07, lfiO ,..-,

'"' C> 1947-48 1,45,22,377 5,46,322 l,028 1,467 22,495 "" ~

w 1948-49 Loss -

I ,57,82,905 60,000 1,992 I ,21i3 729 Cl "" (loBs) (loss) ;:i

' • \

D11ring the course of the assessment proceedings for

1950-5 l the assessee company claimed lhat it was en titled to a set off of the entire losses of the assessm.ent year 1948-49 which, it was common ground before the Tribunal, came to Rs. 5,19,590/-,

and not merely the proportionate loss. The assessee company also claimed that the depreciation allowances of the two years 1948-49 and 1949-50 to which effect could not be given in those years and which had, therefore, to be carried forward should be added to the depreciation allowance of 1950-51 and be set off against the profits and gains of the assrssee company liable to assessment in the assessment years in question. It is to be noted that the assessment of the assessee company for the assessment years 1948-49 and 1949-50 was made both under the Indian Income-tax Act and under the Indore Industrial Tax Rules, Hl27. Now the assessee company made two claims in the course of the assessment proceedings for 1950-51. One was with regard to the loss of Rs. 5,19,590/- and the assessee company's contention was that it was entitled to set off this loss against the profits made in its business in that year and it also contended that it was entitled to carry forward the unabsorbed depreciation into that year. The first contention of the assessee company was rejected by the Tribunal but the second was allowed. Two questions were then raised, one at the instance of the assessee company aud the other at the instance of the Commissioner, dealing with the aforesaid two claims of the asseessee company.· These two questions were:

"1. Whether the loss of Rs. 5,19,590/- of the year 1948-49 is liable to be set off against the assessee's business income for the assessment years 1950-51 and 1951-52 ?

2. Whether the unabsorbed depreciation of the years 1948-49 and 1949-50 is liable to

. 1962

Indore ~1 afwa Ui:ited

i:ll tl ls Ltd.

The Commissioner of Incame-tax ( Genfrill)

Bombay

Das J.

lnrt JI alua Uniltd

.Mi/Ir U<l.

Tiu CommisJiontr of

lnccmt-tox (Ctt1traJ)

Bombay

Dtu J.

316 SUPRE.'.IIE COURT REPOWrs (1962] SUPP.

he set• off against the income of the assessee for the assessment years 1950-51 and HliH-52." On being satisfied that aforesaid two questions arose out of its order, tho income-tax Appellato Tribunal, Bombay Bench A. referred them to the High Court of Bombay under s, 66( 1) of the Indian Incometax Act.

The High Court answered the first question against the assesseo company and the second question in its favour by its judgmont and order dated September 23, 1958. The assessee company then moved the High Court for a certificate under s. 66A(2) of tho Indian Incomn-tax Act with regard to the answer given by the High Court to the first question and having obtained a certificate of fitness has preferred the two appeals to this Court. We are concerned in these two appeals with the correctness or otherwise of the answer given by foe High Court to the first question; the second question does not fall for our consideration.

On behalf of the assessce company s. 24(2) of the Indian Income-tax Act has been relied on in support of the claim that the assessoe company is entitled to carry forward and set off the entire loss of Rs. 5,19,590/- incurred in the year 1948-49 against the assesseo company's business income for tho

assesment yea.rs 1950-51 and 1951-52. .Mr. Kolah appearing on behalf of the assessce company has put his argumfnt in the following way.

First of all, ho has submitted that the Income-tax Officer wrongly proceeded 011 the footing as though the assessec company was carrying on two separate businesses, 011e within the taxable tPrritories and the other outside them. lift'. Kolah has contended that the business was one business within the m(aning of s. 1\1 of the Indian Income-tax Act and in the two assessment years in question Indoro having become a. part of the taxable territories. the provisions in sub-s. (2) of s. 24 came into operation; therefore, the losses whioh the asseSBee

company sustained in 1948-49, being a previous year not earlier than the previous year mentioned in the sub-section and the losses not having been set off under sub-s.(l) of s. 24, the assessee company was entitled to carry forward the losses and set them off against the profits and gains of the assessee company from the same business under any other head, as the time limit of six years had not expired.

As against this argument, t.he contention on behalf of the respondent has been that s.24 has no application in thll facts of the present case inasmuch as in the year 1948-49 in which year the losses had occurred, the assessee company was treated as a nonresident. On behalf of the respondent it has been submitted that the provisions of s. 24 are applicable only to profits and gains which are assessable under the Indian Income-tax Act and in the case of nonresidents who were assessees in British India or in the taxable territories.

The claim to set off is only allowable in respect of loss of profits or gains incurred by the non-residents under any of the heads mentioned in s. 6, and s. 24 is applicable only to such loss of profits and gains which if they had been profits and gains would have been assessable in British India or the taxable territories.

It is contended that in the case of non-residents, income accruing or arising without British India or without taxable territories is not liable to be assessed and t.he loss of such profits and gains is not contemplated to be set off within the provisions of sub-ss. (1) and (2) of s. 24 of the Indian Incometax Act.

Before we consider these contentions it is necessary to set out the material provisions of the Indian Income-tax Act as they stood at the relevant time.

"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

Indore M alwa United

Mills Ltd.

The Commi8sioner of IncomeaTax (Centra{)

Bamba~

Das J.

J9Gt

lndort Malua Uniftd

M i//s LJd ..

Tht Comn1ij.iionrr 11f ln<Omt-Ttu. : C'tn'ral)

Bomiay

Vas J.

318 SUPREME COURT REPORTS (1962] SOPP.

which- ( a) aro received or deemed to be receivod in British India in such year by or on behalf of such perRon, or

(h) x x x x

(c) if Auch person is not resident in Briti8h India during suoh yeur, accrue or arise or are deemed to accrue or arise to him in British India dnring such year:

14, (I)

(2)

x x x x x x The tax shall not be payable by an

asscssee~ (al x x x (b} x x x (cl in respect of any income, profits or

gains 1tccruin!! or 1trising to him within an Tn<lian State, unless such income, profitA or gains are received or decmPcl to be rPceived in or are brought intn Rritish India in the previous year by or on behalf of the nssessce, or arc asseBBable unrl<'r section 12R or8cction 42.

24. (I) Where any assessec sustains loss of profits or gains in any year under any of the heads mentioned in Bectiou (i, hn shall be entitled to ha v<' the amount of tho loss set off against his income, profits or gains under any other head in that year :

Provided that, where tho loss sustained is a loss of profit,; or gains which would but. for the loss hnvc accrued or arisen within an Indian State and woulcl, under the prcni8ions of elause (c) of eub- Rection (2) of section 14, have been exempted from tax, such lo8S shll not be set off except against profits or gains accruing or arising within an Indian

State and exempt from tax under the said provisions. x x x

(2) Where any assessee sustains a loss of profit .or gains in any year, being a previous year not earlier than the previous year for the assessment for the year ending on the 31st <lay of March, 1940, under the head "Profits and gains of business, profession or vocation", and the loss cannot be wholly set off under sub-section (1) the portion not so set off shall be carried forward to the following year and set off against the profits and gains, if any, of the assessee from the same business, profession or vocation for that year; and if it cannot be wholly so set off, the amount of loss not so set off shall be carrie.d forward to the following year, and so on; but no loss shall be so carried forward for more than six years:

Provided that- ( a) Where the loss sustained is a loss of profits and gains of a business, profession or vocation to which the first proviso to sub-section (1) is applicable and the profits and gains of that business, profession or vocation are, under the provisions of clause ( c) of sub-section (2) of section 14, exempt from tax, such Joss shall not be set off except against profits and gains accruing or arising in an Indian State from the same business, profession or vocation and exempt from tax under the said provisions;

(b) \Vhere depreciation allowance is, under . clause (b) of proviso to clause (vi) of sub-section

(2) of section 10, also to be carried forward, effect shall be given to the provisions of this sub-section; x x x ." It may perhaps be stated here that Mr. Kolah has placBd no reliance on the provisions of the Taxation Laws (Part B States) (Removal of

1!62

Indore Motwa United

Mill< Ltd v.

The Commiss1"ont" of Income-Tax (Cent1ol)

Bombay

Das J.

19~2

lndort Jtarwa UnitJrf.

.\Ii/ls fJd.

Tf.1 Commfs_rinflt' o/

fnC{)mt rax (ntral)

Bombay

DsJ.

320 SUPREME COURT REPORTS [1962] SUPP.

Difficulties) Order, 1950. Clause 3 of the said Order

provides that losses suffered in Indian States oan bo carried forward and set off only if under the

8tte law they could be so carried forward or set off.

Admittedly, under the Indore Industrial Tax Rules, 1927 there was no provision for the carrying forward of lossPs; therefore, cl. 3 of the Taxation Laws (Part R States)(Removal of Difficulties) Order, l!lGO was of no assistance to the assessce company. This view of the High Court has not been contested before us and wo need, therefore, make no further reference to this aspect of the case.

The answer to the question which we have to consider depends on the true scope !\lld effect of s. 24 of the Indian Income-tax Act.

Under the Indian Income-tax Act, 1922, assessees are divided into three categories: (a) resident and ordinarily resident, (b) rcRident but not ordinarily resident, and (c) not resident.. We are concerned in the prPsent case with an assessee who in the year in which the loss which is sought to be carried forward occurred, was a non-resident. Sub-section (l} of s. 4, the material port inn of which we have quoted earlier, states that pc1s1_, ns who are not resident in India are liable t.o charge ullller cl. (a) or cl.(c} of the said sub-section. Thoy may be taxed under

cl. (a} on income received or deemed to be received in India even if it acrrues elsewhere, or under rl.( c) on income which accrues or arises or is deemed to acoruo or arise in India oven if it is receiv<'d elsewhere.

The liability to t.ax in rnopect of income received in India is common to both resident; i and non-residents 11nd is imposed by the general clause (a).

A non-resident, unlike a rcsi<lent, is not chargeable in r<'spect of incorn<> accruing or arising without India and not recehed in India. Section 14(2} (c), which is now deleted, had great importance when Rritif'h Ind\a was distinct from Indian States, because it exempted income which accrued

or was received in the Indian Stcttes but was not brought into British fnrlia.

Tim deletion of this clause became inevitable upon the m<rger of the Indian States. This clause which waH inHerted in 194 l exempted income accq1ing or arising withiu the Indian States; but the exemption did not apply if the income was received or deemed to be reee; v<d in or was brought into the taxable territories in the previous year by or on behalf of the assessee or if the income was assessable under s. 128 ors. 42.

The position, therefore, was that losses made in British India could not be reduced by adjusting against them the profits in the Indian 8tates which were exempted under the clause, but the income exempted from the clause had, however, to be included in the assessee's total income for tho purpose of determining the ra.te applicable to his . taxable income. But so far as a non-resident was concerned the clause had no application, because a non resident was not chargeable in respect of income accruing or arising without India and not received in India. Now, we come to s. 24, subss.(l} and (2) with the provisos appended thereto which we h, ave.quoted earlier in this judgment. It appears that prior to 1950 profits accruing in the Indian States, later called Part B States, were exempt from tax under s. 14(2)(c), unless they were received in or brought into the territories then referred to as British India or were assessable under s. 128 ors. 42.

The first proviso to sub-s.(l) as it stood at the relevant time dealt with losses accruing in the quondam Indian States _and provided that losses incurred in the Indian States should be set off only against profits accruing in the Indian States.

This was a reasonable provision, because an assessee who was not liable to tax in respect of his profits arising in the Indian States could not be allowed to set off his losses incurred in the Indian States against his profits arising in British India.

Similarly, cl.(R.) of the proviso to sub-s. (2) enacted that losses incurred in an Indian State could be

I96t

Ind ire Ma/wo Uni e

Milla Lti.

The C ommi.ssioner n f lncome:..1ox (CentrdJ)

Bombay

l.Jas J.

/nd-0r1 ,, falwa ffnittd

Mills Ltd.

•• Tht Commisjione•.nf

lricomt'" Tox (Ct11halj

Bomba)·

DuJ.

g22 SUPREME COuRT REPoRTS [1962) SUPP.

carried forward and set off only againRt profits accruing in 11.n Indian State from the same business in a subsequent yrac. Tht aqrnment on behalf of the

rrspondent is that so far as a non-rrsidcnt is eonccmcd, he is not durgeabl<> in respect of inC'ome accruing or arising without India and not received in India.

The1efore, in his case it is unnecessary to go to the provisos, buts. 24 itself has no appi'ication because sub-s. ( 1) of s. 24 when it rcforn to loss of profits or gains, has reference to taxable profits er taxable gains and sub-s.(2) of s. 24 can only Le applied in a case where the loSB cannot be set off under sub-s.( I) because of the absence or inadequacy of profits t'tc.

In other words, the argument is thats. 24. is applicable only to such loss of profits and gains which if they had been profits and gains would have been assessable in British India or the taxable territories; but in t.he case of non-resident;;, income accruing or arising without British India or without the taxable territories not being liable to Le assessed, the loss of such profits and gains is not contemplated to be set

0ff within the provisions of s. 24, su b-ss. (I) and

(2) •

. . \fr. Kolah has pointed out that sub-s.(2) of s. 24 as also sub-s.( I) talk of "any assessee" and he has argued that there is no reason why the provisions of sub-a.( 2) of s. 24 should not be applicahlP to a non-resident assessee. He has fur.ther argued that whatever might have been the effect of the provisos in l!J48-49, in 1950-51 Indore becam0 part of the taxable. territories and the asseee company became entitled to carry forward the losses up to six years and there is nothing ins. 24(2) to prcYrnt.

him from making the claim. We are unablt to accept this argumct as corre_c~. R'. ading the provisions in s. 24 with the provrn10ns m s.4( I )(a) ands. l4(2)(c) it seems clear to us thats. (24)(1) when it talks of profits or gains has reference to

• .Ji

3 s.C.R. stiPREME couRT REP61its

taxable profits or taxable gctins; in other words, it has reference to such profits and gains as would have been assessable in British India or the taxable territories. It has no reference to iucome accruing or arising without British. India or without the taxable territories which were not liable to be assessed in the case of non-residents.

We are further of the view that for determining the nature of the losses under consideration in the present appeals, the relevant year was 1948-49, the year in which the losses occurred and the High Court rightly took the view that for the application of sub-s. (2) of s. 24, the losses must be such losses as could have been set off under sub-H.( l) of s. 24.

We agree with the .view expressed by the High Court that the loss amounting to Rs. 5,19,590/- was not such a loss as could have been set off either under sub-s. ( 1) or sub-s. (2) of s. 24.

We have, therefore, come to the conclusion . that the High. Court correctly answered the question which was referred to it.

Accordingly, the appoals fail and are dismissed with costs, one hearing fee.

Appeals di, smissed.

luJort Malwa United

Millr Ltd,

The Commissio1t1r oj !neorne .. tax (Central)

Bom6ay

D"s J.

Shah J.

Art. 136

INDORE MALWA UNITED MILLS LTD

THE COMMISSIONER OF INCOME-TAX(CENTRAL) BOMBAY

S. K. DAS

M. HIDAYATULLAH

s. 24

Tncome-tax Act, 1922

s. 2

s. 66A

s. 24

s. 14(2)(c)

s. 24

s. 24

s. 24

Income-tax Act

Income-tax Act

s. 66A(2)

Indian Incomn-tax Act

s. 24(2)

Income-tax Act

s. 1

Income-tax Act

s. 24

s. 24

s. 24

Income-tax Act

s. 6

s. 24

s. 24

Income-tax Act

section 12R

section 14

section 14

section 10

Clause 3

Indore Industrial Tax Rules, 1927

cl. 3

s. 24

Income-tax Act

Indian Income-tax Act, 1922

s. 4

Section 14(2} (c)

s. 128

s. 24

s. 14(2)(c)

s. 128

s. 24

s. 24

s. 24

s. 24

s. 24

s. 24

s.4( I )(a)

s. 24

s. 24

s. 24